Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | STERLING CONSTRUCTION CO INC | |
Entity Central Index Key | 0000874238 | |
Trading Symbol | strl | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,416,472 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 223,949 | $ 222,492 |
Cost of revenues | (204,446) | (202,658) |
Gross profit | 19,503 | 19,834 |
General and administrative expenses | (12,489) | (12,340) |
Other operating expense, net | (2,294) | (815) |
Operating income | 4,720 | 6,679 |
Interest income | 364 | 129 |
Interest expense | (3,060) | (3,087) |
Income before income taxes | 2,024 | 3,721 |
Income tax expense | (163) | (41) |
Net income | 1,861 | 3,680 |
Less: Net income attributable to noncontrolling interests | (46) | (1,191) |
Net income attributable to Sterling common stockholders | $ 1,815 | $ 2,489 |
Net income per share attributable to Sterling common stockholders: | ||
Basic (USD per share) | $ 0.07 | $ 0.09 |
Diluted (USD per share) | $ 0.07 | $ 0.09 |
Weighted average number of common shares outstanding used in computing per share amounts: | ||
Basic (in shares) | 26,377 | 26,854 |
Diluted (in shares) | 26,723 | 27,078 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 56,764 | $ 94,095 |
Receivables, including retainage | 147,001 | 145,026 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 44,133 | 41,542 |
Inventories | 2,699 | 3,159 |
Receivables from and equity in construction joint ventures | 11,625 | 10,720 |
Other current assets | 6,696 | 8,074 |
Total current assets | 268,918 | 302,616 |
Property and equipment, net | 52,011 | 51,999 |
Operating lease right-of-use assets | 15,290 | |
Goodwill | 85,231 | 85,231 |
Intangibles, net | 41,818 | 42,418 |
Other assets, net | 246 | 309 |
Total assets | 463,514 | 482,573 |
Current liabilities: | ||
Accounts payable | 81,870 | 99,426 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 55,598 | 62,407 |
Current maturities of long-term debt | 393 | 2,899 |
Current portion of long-term lease obligations | 7,009 | |
Income taxes payable | 340 | 318 |
Accrued compensation | 10,500 | 9,448 |
Other current liabilities | 6,300 | 4,676 |
Total current liabilities | 162,010 | 179,174 |
Long-term debt, net of current maturities | 76,923 | 79,117 |
Long-term lease obligations | 8,466 | |
Members’ interest subject to mandatory redemption and undistributed earnings | 47,132 | 49,343 |
Deferred taxes | 1,591 | 1,450 |
Other long-term liabilities | 1,115 | 1,229 |
Total liabilities | 297,237 | 310,313 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.01 per share; 1,000 shares authorized, none issued | 0 | 0 |
Common stock, par value $0.01 per share; 38,000 shares authorized, 27,056 and 27,064 shares issued, 26,424 and 26,597 shares outstanding | 271 | 271 |
Additional paid in capital | 233,502 | 233,795 |
Treasury Stock, at cost: 632 and 467 shares | (7,182) | (4,731) |
Retained deficit | (63,119) | (64,934) |
Total Sterling stockholders’ equity | 163,472 | 164,401 |
Noncontrolling interests | 2,805 | 7,859 |
Total stockholders’ equity | 166,277 | 172,260 |
Total liabilities and stockholders’ equity | $ 463,514 | $ 482,573 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 38,000,000 | 38,000,000 |
Common stock, shares issued (in shares) | 27,056,000 | |
Shares, Outstanding | 27,064,000 | |
Common stock, shares outstanding (in shares) | 26,424,000 | 26,597,000 |
Treasury stock (in shares) | 632,000 | 467,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,861 | $ 3,680 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 4,389 | 4,124 |
Amortization of deferred loan costs | 833 | 801 |
Gain on disposal of property and equipment | (38) | (250) |
Deferred tax expense | 141 | 0 |
Stock-based compensation expense | 1,021 | 617 |
Changes in operating assets and liabilities (Note 15) | (27,449) | (31,464) |
Net cash used in operating activities | (19,242) | (22,492) |
Cash flows from investing activities: | ||
Additions to property and equipment | (3,814) | (1,897) |
Proceeds from sale of property and equipment | 137 | 886 |
Net cash used in investing activities | (3,677) | (1,011) |
Cash flows from financing activities: | ||
Repayments on long-term debt | (5,610) | (4,679) |
Distributions to noncontrolling interest owners | (5,100) | 0 |
Purchase of treasury stock | (3,201) | 0 |
Other | (501) | (309) |
Net cash used in financing activities | (14,412) | (4,988) |
Net decrease in cash and cash equivalents | (37,331) | (28,491) |
Cash and cash equivalents at beginning of period | 94,095 | 83,953 |
Cash and cash equivalents at end of period | $ 56,764 | $ 55,462 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Retained Deficit | Treasury Stock | Total Sterling Stockholders’ Equity | Noncontrolling Interests |
Beginning balance at Dec. 31, 2017 | $ 146,189 | $ 271 | $ 231,183 | $ (90,121) | $ 0 | $ 141,333 | $ 4,856 |
Beginning balance (in shares) at Dec. 31, 2017 | 27,051,000 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 3,680 | 2,489 | 2,489 | 1,191 | |||
Share-based compensation | 617 | 617 | 617 | ||||
Stock-based compensation (in shares) | (3,000) | ||||||
Distributions to owners | 0 | ||||||
Shares withheld for taxes | (194) | $ (1) | (193) | (194) | |||
Shares withheld for taxes (in shares) | (13,000) | ||||||
Ending balance at Mar. 31, 2018 | 150,292 | $ 270 | 231,607 | (87,632) | $ 0 | 144,245 | 6,047 |
Ending balance (in shares) at Mar. 31, 2018 | 27,035,000 | 0 | |||||
Beginning balance at Dec. 31, 2018 | $ 172,260 | $ 271 | 233,795 | (64,934) | $ (4,731) | 164,401 | 7,859 |
Beginning balance (in shares) at Dec. 31, 2018 | 27,064,000 | 26,597,455 | 467,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 1,861 | 1,815 | 1,815 | 46 | |||
Share-based compensation | 1,021 | 1,021 | 1,021 | ||||
Stock-based compensation (in shares) | (1,000) | ||||||
Distributions to owners | (5,100) | (5,100) | |||||
Purchase of treasury stock | (3,201) | $ (3,201) | (3,201) | ||||
Purchase of treasury stock (in shares) | (250,000) | 250,000 | |||||
Issuance of stock | 0 | (1,314) | $ 1,314 | ||||
Issuance of stock (in shares) | 130,000 | (130,000) | |||||
Shares withheld for taxes | (564) | $ 0 | $ (564) | (564) | |||
Shares withheld for taxes (in shares) | (52,000) | 45,000 | |||||
Ending balance at Mar. 31, 2019 | $ 166,277 | $ 271 | $ 233,502 | $ (63,119) | $ (7,182) | $ 163,472 | $ 2,805 |
Ending balance (in shares) at Mar. 31, 2019 | 26,424,000 | 632,000 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Business and Significant Accounting Policies | 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Business Summary Sterling Construction Company, Inc. (“Sterling” or “the Company”), a Delaware corporation, is a construction company that specializes in heavy civil infrastructure construction and infrastructure rehabilitation as well as residential construction projects. We operate primarily in Arizona, California, Colorado, Hawaii, Nevada, Texas and Utah, as well as other states in which there are feasible construction opportunities. Heavy civil construction projects include highways, roads, bridges, airfields, ports, light rail, water, wastewater and storm drainage systems, foundations for multi-family homes, commercial concrete projects and parking structures. Residential construction projects include concrete foundations for single-family homes. Significant Accounting Policies Presentation— The Condensed Consolidated Financial Statements included herein have been prepared by the Company, without audit, in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been either condensed or omitted pursuant to SEC rules and regulations. The Condensed Consolidated Financial Statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly the Company’s financial position at March 31, 2019 and the results of operations and cash flows for the periods presented. The December 31, 2018 Condensed Consolidated Balance Sheet data herein was derived from audited financial statements, but as discussed above, does not include all disclosures required by GAAP. Interim results may be subject to significant seasonal variations and the results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full year or subsequent quarters. Values presented within tables, excluding per share data, are in thousands. Principles of Consolidation— The accompanying Condensed Consolidated Financial Statements reflect all wholly owned subsidiaries and those entities the Company is required to consolidate. See the “Consolidated 50% Owned Subsidiaries” and “Construction Joint Ventures” section of this footnote for further discussion of the Company’s consolidation policy for those entities that are not wholly owned. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Consolidated 50% Owned Subsidiaries— The accompanying Condensed Consolidated Financial Statements include the accounts of two subsidiaries in which the Company has 50% ownership interest and exercises control over such entities. Therefore, the Company has consolidated these two entities. Both subsidiaries have individual provisions which, under circumstances that are certain to occur, obligate the Company to purchase each partner’s 50% interests. The Company has classified these obligations as mandatorily redeemable and has recorded a liability in “Members’ interest subject to mandatory redemption and undistributed earnings” on the Condensed Consolidated Balance Sheets. Each partner’s portion of net income (loss) is reflected in the Condensed Consolidated Statements of Operations line item “Other operating expense, net”. Construction Joint Ventures— In the ordinary course of business, the Company executes specific projects and conducts certain operations through joint venture arrangements (referred to as “joint ventures”). The Company has various ownership interests in these joint ventures, with such ownership typically proportionate to the Company’s decision making and distribution rights. Each joint venture is assessed at inception and on an ongoing basis as to whether it qualifies as a Variable Interest Entity (“VIE”) under the consolidations guidance in ASC Topic 810. If at any time a joint venture qualifies as a VIE, the Company performs a qualitative assessment to determine whether the Company is the primary beneficiary of the VIE and therefore needs to consolidate the VIE. If the Company determines it is not the primary beneficiary of the VIE or only has the ability to significantly influence, rather than control the joint venture, it is not consolidated. The Company accounts for unconsolidated joint ventures using a pro-rata basis in the Condensed Consolidated Statements of Operations and as a single line item (“Receivables from and equity in construction joint ventures”) in the Condensed Consolidated Balance Sheets. This method is a permissible modification of the equity method of accounting which is a common practice in the construction industry. Use of Estimates— The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Certain of the Company’s accounting policies require higher degrees of judgment than others in their application. These include the recognition of revenue and earnings from construction contracts over time, the valuation of long-term assets, income taxes, and purchase accounting, including intangibles and goodwill. Management continually evaluates all of its estimates and judgments based on available information and experience; however, actual results could differ from these estimates. Reclassification— Reclassifications have been made to historical financial data on the Company’s Condensed Consolidated Financial Statements to conform to the Company’s current year presentation. Heavy Civil Construction Revenue Recognition— The Company engages in various types of heavy civil construction projects principally for public (government) owners. Revenues are recognized as performance obligations are satisfied over time (formerly known as percentage-of-completion method), using the ratio of costs incurred to estimated total costs for each contract. This cost to cost measure is used because management considers it to be the best available measure of progress on these contracts. Contract costs include all direct material, labor, subcontract and other costs and those indirect costs determined to relate to contract performance, such as indirect salaries and wages, equipment repairs and depreciation, insurance and payroll taxes. Administrative and general expenses are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and associated change orders and claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. Change orders may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Either the Company or its customers may initiate change orders. Change orders that are unapproved as to both price and scope are evaluated as claims. The Company estimates variable consideration for a performance obligation at the most likely amount to which the Company expects to be entitled (or the most likely amount the Company expects to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which the Company will be entitled (or will be incurred in the case of liquidated damages). The Company includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company. The Company considers claims to be amounts in excess of approved contract prices that the Company seeks to collect from its customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in the Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. The Company has projects that it is in the process of negotiating, or awaiting final approval of, unapproved change orders and claims with its customers. The Company is proceeding with its contractual rights to recoup additional costs incurred from its customers based on completing work associated with change orders, including change orders with pending change order pricing, or claims related to significant changes in scope which resulted in substantial delays and additional costs in completing the work. Unapproved change order and claim information has been provided to the Company’s customers and negotiations with the customers are ongoing. If additional progress with an acceptable resolution is not reached, legal action will be taken. Contract modifications are routine in the performance of the Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. Assurance-type warranties are the only warranties provided by the Company and, as such, the Company does not recognize revenue on warranty-related work. The Company generally provides a one to two year warranty for workmanship under its contracts when completed. Warranty claims historically have been insignificant. Pre-contract costs are generally charged to expense as incurred, but in certain cases their recognition may be deferred if specific probability criteria are met. The Company had no significant deferred pre-contract costs at March 31, 2019 . Residential Construction Revenue Recognition— Residential construction revenue and related profit are recognized when construction on the concrete foundation unit is completed (i.e., at a point in time). The time from starting construction to finishing is typically less than one month. Leases— Effective January 1, 2019, the Company determines if an arrangement is a lease at inception. The operating lease right-of-use (“ROU”) assets are included within the Company’s other non-current assets and lease liabilities are included in current or noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets. Finance leases are included in property and equipment, current maturities of long-term debt, and long-term debt, net of current maturities on the Company’s Condensed Consolidated Balance Sheets. ROU assets represent the Company’s right to use, or control the use of, a specified asset for the lease term. Lease liabilities are the Company’s obligation to make lease payments arising from a lease, and are measured on a discounted basis. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term on the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate was used based on the information available on the commencement date in determining the present value of lease payments. For future leases, the implied rate in the lease will be used to determine the present value. The operating lease ROU asset includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments continues to be recognized on a straight-line basis over the lease term. Recently Adopted Accounting Guidance— In February 2016, the Financial Accounting Standards Board (“FASB”) issued its new lease accounting guidance in ASU 2016-2, “Leases” (ASC 842). Under the new guidance, lessees are required to recognize all leases (with the exception of short-term leases) on the balance sheet. The Company adopted ASC 842 effective January 1, 2019 using the modified retrospective method. The new guidance has been applied to leases that exist or were entered into on or after January 1, 2019 without adjusting comparative periods in the financial statements. As an accounting policy, the Company has elected not to apply the recognition requirements to short-term leases (leases with terms of 12 months or less). Instead, the Company recognizes the lease payments in the consolidated Statement of Operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The Company has elected to utilize the package of practical expedients that allows entities to not reassess 1) the classification of leases existing at the date of adoption; 2) the initial direct costs for any existing leases; and 3) whether any expired or existing contracts are or contain leases. At January 1, 2019, the Company recorded an ROU asset, current maturity of operating lease liability and long-term operating lease liability of $13,600 , $6,200 and $7,400 , respectively on its consolidated balance sheet, related to its existing operating leases. The adoption of this standard did not have a material impact on the Company’s Consolidated Statements of Operations. As of March 31, 2019 , the weighted average remaining lease terms for the Company’s various operating leases extends out over the next 2.9 years . The weighted average discount rate used to determine the present value of the Company’s operating leases’ future payments was approximately 6% . |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | 2. REVENUE FROM CONTRACTS WITH CUSTOMERS Performance Obligations Satisfied Over Time —Revenue for the heavy civil construction segment contracts that satisfy the criteria for over time recognition is recognized as the work progresses. The majority of the revenue is derived from long-term, heavy civil construction contracts and projects that typically span between 12 to 36 months . Revenue from products and services transferred to customers over time accounted for 81% and 84% of revenue for the three months ended March 31, 2019 and 2018 , respectively. Performance Obligations Satisfied at a Point in Time —Revenue for the residential construction segment contracts that do not satisfy the criteria for over time recognition is recognized at a point in time and utilizes an output measure for performance based on the completion of a unit of work (e.g., residential foundation). The typical time frame for completion of a residential foundation is less than one month. Revenue from products and services transferred to customers at a point in time accounted for 19% and 16% of revenue for the three months ended March 31, 2019 and 2018 , respectively. Backlog —On March 31, 2019 , the Company had approximately $808,700 of remaining performance obligations in its heavy civil construction segment, which is also referred to as backlog. The Company expects to recognize approximately 78% of its backlog as revenue during the next twelve months, and the balance thereafter. Contract Estimates —Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials and the performance of subcontractors. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated revenues and gross margin resulted in a net decrease of approximately $200 and a net increase of approximately $1,300 for the three months ended March 31, 2019 and 2018 , respectively, included in “Operating income” on the Condensed Consolidated Statements of Operations. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Variable Consideration —The transaction price for contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Based upon the Company’s review of the provisions of its contracts, specific costs incurred, and other related evidence supporting the unapproved change orders and claims, the Company concluded that it was appropriate to include in project price amounts of approximately $9,300 at both March 31, 2019 and December 31, 2018 , in “Costs and estimated earnings in excess of billings on uncompleted contracts” on its Condensed Consolidated Balance Sheets, primarily relating to extended delays on a bridge project in Texas. However, unapproved change order and claim amounts are subject to negotiations which may cause actual results to differ materially from estimated and recorded amounts. Revenue by Heavy Civil Construction Category —The Company’s heavy civil construction segment’s portfolio of products and services consists of approximately 150 active contracts. The following series of tables presents the Company’s heavy civil construction revenue disaggregated by several categories: Revenue by major end market Three Months Ended March 31, 2019 2018 Heavy Highway $ 93,610 $ 107,408 Commercial 30,850 28,519 Aviation 29,937 23,252 Water Containment and Treatment 15,234 14,995 Other 11,553 13,067 Total Heavy Civil Construction Revenue $ 181,184 $ 187,241 Revenue by contract type Three Months Ended March 31, 2019 2018 Fixed Unit Price $ 141,219 $ 160,236 Lump Sum and Other 39,965 27,005 Total Heavy Civil Construction Revenue $ 181,184 $ 187,241 Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with lump-sum contracts. However, these types of contracts offer additional profits when the work is completed for less than originally estimated. Under fixed-unit price contracts, the Company’s profit may vary if actual labor-hour costs vary significantly from the negotiated rates. Also, because some contracts can provide little or no fee for managing material costs, the components of contract cost can impact profitability. Contract Balances —The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the Condensed Consolidated Balance Sheet. In the Company’s heavy civil construction segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, the Company occasionally receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities). These assets and liabilities are reported on the Condensed Consolidated Balance Sheet on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the three month period ended March 31, 2019 , were not materially impacted by any other factors. The table below reconciles the net excess billings to the amounts included in the Condensed Consolidated Balance Sheets at those dates: March 31, December 31, Costs and estimated earnings in excess of billings on uncompleted contracts $ 44,133 $ 41,542 Billings in excess of costs and estimated earnings on uncompleted contracts (55,598 ) (62,407 ) Net amount of billings in excess of costs and estimated earnings on uncompleted contracts $ (11,465 ) $ (20,865 ) Revenues recognized and billings on uncompleted contracts include cumulative amounts recognized as revenues and billings in prior periods. This revenue primarily represents progress on the Company’s construction jobs. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with original or remaining maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents includes cash balances held by consolidated 50% owned subsidiaries and the Company’s majority owned construction joint ventures. At March 31, 2019 and December 31, 2018 , cash and cash equivalents included approximately $13,300 and $31,000 , respectively, attributable to consolidated 50% owned subsidiaries. At March 31, 2019 and December 31, 2018 , cash and cash equivalents included approximately $3,100 and $20,500 , respectively, attributable to its majority owned construction joint ventures. Majority owned construction joint ventures and consolidated 50% owned subsidiaries cash balances are limited to joint venture activities and are not available for other projects, general cash needs or distribution to the Company without approval of the board of directors, or equivalent body, of the respective joint ventures. Restricted cash of approximately $3,900 is included in “ Other current assets ” on the Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018 . This represents cash deposited by the Company into separate accounts and designated as collateral for standby letters of credit in the same amount in accordance with contractual agreements. The Company holds cash on deposit in U.S. banks, at times, in excess of federally insured limits. Management does not believe that the risk associated with keeping cash deposits in excess of federal deposit insurance limits represents a material risk. |
Consolidated 50% Owned Subsidia
Consolidated 50% Owned Subsidiaries | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Consolidated 50% Owned Subsidiaries | 4. CONSOLIDATED 50% OWNED SUBSIDIARIES The Company has a 50% interest in two subsidiaries (Myers and RHB); both subsidiaries have individual provisions which obligate the Company to purchase each partner’s 50% interests for $20,000 ( $40,000 in the aggregate), due to circumstances outlined in the partner agreements that are certain to occur. Therefore, the Company has consolidated these two entities and classified these obligations as mandatorily redeemable and has recorded a liability in “ Members’ interest subject to mandatory redemption and undistributed earnings ” on the Condensed Consolidated Balance Sheets. In addition, all undistributed earnings at the time of the noncontrolling owners’ death or permanent disability are also mandatorily payable. In the event of either Mr. Buenting’s or Mr. Myers’s death, the Company purchased two separate $20,000 death and permanent total disability insurance policies to mitigate the Company’s cash draw if such events were to occur. The liability consists of the following: March 31, December 31, Members’ interest subject to mandatory redemption $ 40,000 $ 40,000 Net accumulated earnings 7,132 9,343 Total liability $ 47,132 $ 49,343 Fifty percent of the earnings of these consolidated 50% owned subsidiaries for the three months ended March 31, 2019 and March 31, 2018 were approximately $1,300 , and $600 , respectively. These amounts were included in “Other operating expense, net” on the Company’s Condensed Consolidated Statements of Operations. The Company must determine whether any of its entities, including these two 50% owned subsidiaries, in which it participates, is a variable interest entity (“VIE”). The Company determined Myers is a VIE, as Sterling is the primary beneficiary, as pursuant to the terms of the Myers Operating Agreement, the Company is exposed to the majority of potential losses of the partnership. The following tables present the condensed financial information of Myers, which is reflected in the Company’s Condensed Consolidated Balance Sheets and Statements of Operations: March 31, December 31, Assets Current assets: Cash and cash equivalents $ 3,603 $ 8,745 Receivables, including retainage 24,900 24,109 Other current assets 13,679 14,533 Total current assets 42,182 47,387 Property and equipment, net 6,818 7,219 Operating lease right-of-use assets 3,297 — Goodwill 1,501 1,501 Total assets $ 53,798 $ 56,107 Liabilities Current liabilities: Accounts payable $ 19,588 $ 22,211 Other current liabilities 11,032 9,811 Total current liabilities 30,620 32,022 Other long-term liabilities 1,854 1,976 Total liabilities $ 32,474 $ 33,998 |
Construction Joint Ventures
Construction Joint Ventures | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Construction Joint Ventures | 5. CONSTRUCTION JOINT VENTURES The Company participates in joint ventures with other major construction companies and other partners, typically for large, technically complex projects, including design-build projects, when it is desirable to share risk and resources in order to seek a competitive advantage. Joint venture partners typically provide independently prepared estimates, furnish employees and equipment, enhance bonding capacity and often also bring local knowledge and expertise. These projects generally have joint and several liability. The Company selects its joint venture partners based on its analysis of their construction and financial capabilities, expertise in the type of work to be performed and past working relationships with the Company, among other criteria. For these joint ventures, the equity held by the remaining owners and their portions of net income (loss) are reflected in the Condensed Consolidated Balance Sheets line item “ Noncontrolling interests ” in “Stockholders’ equity” and the Statement of Operations line item “Net income attributable to noncontrolling interests”, respectively. The following table summarizes the changes in noncontrolling interests: Three Months Ended March 31, 2019 2018 Balance, beginning of period $ 7,859 $ 4,856 Net income attributable to noncontrolling interest included in equity 46 1,191 Distributions to noncontrolling interest owners (5,100 ) — Balance, end of period $ 2,805 $ 6,047 Where the Company is a noncontrolling venture partner, the Company accounts for their share of the operations of such construction joint ventures on a pro-rata basis using proportionate consolidation on its Condensed Consolidated Statements of Operations and as a single line item (“ Receivables from and equity in construction joint ventures ”) in the Condensed Consolidated Balance Sheets. This method is an acceptable modification of the equity method of accounting which is a common practice in the construction industry. Condensed combined financial amounts of joint ventures in which the Company has a noncontrolling interest and the Company’s share of such amounts which are included in the Company’s Condensed Consolidated Financial Statements are shown below: March 31, December 31, Total combined: Current assets $ 70,482 $ 64,815 Less current liabilities (81,857 ) (74,543 ) Net liabilities $ (11,375 ) $ (9,728 ) Sterling’s receivables from and equity in noncontrolling construction joint ventures $ 11,625 $ 10,720 Three Months Ended March 31, 2019 2018 Total combined: Revenues $ 31,384 $ 31,357 Income before tax 1,969 3,404 Sterling’s noncontrolling interest: Revenues $ 15,684 $ 15,065 Income before tax 984 1,691 The caption “ Receivables from and equity in construction joint ventures ” includes undistributed earnings and receivables owed to the Company. Undistributed earnings are typically released to the joint venture partners after the customer accepts the project as complete and the warranty period, if any, has passed. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: March 31, December 31, Construction and transportation equipment $ 148,138 $ 144,630 Buildings and improvements 11,139 11,072 Land 2,720 2,720 Office equipment 2,627 2,711 Total property and equipment 164,624 161,133 Less accumulated depreciation (112,613 ) (109,134 ) Total property and equipment, net $ 52,011 $ 51,999 |
Intangibles
Intangibles | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangibles | 7. INTANGIBLES The following table presents the Company’s acquired finite-lived intangible assets at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Weighted Gross Gross Customer relationships 23 years $ 40,823 $ (3,610 ) $ 40,823 $ (3,159 ) Trade name 13 years 5,307 (1,050 ) 5,307 (919 ) Non-competition agreements 7 years 487 (139 ) 487 (121 ) Total 22 years $ 46,617 $ (4,799 ) $ 46,617 $ (4,199 ) The Company's intangible expense was approximately $600 for each of the three months ended March 31, 2019 and March 31, 2018 . |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT The Company’s outstanding debt at March 31, 2019 and December 31, 2018 was as follows: March 31, December 31, Oaktree Facility $ 71,602 $ 74,571 Notes and deferred payments to sellers, Tealstone acquisition 11,460 13,572 Notes payable for construction and transportation equipment 474 612 Total debt 83,536 88,755 Less - Current maturities of long-term debt (393 ) (2,899 ) Less - Unamortized deferred loan costs (6,220 ) (6,739 ) Total long-term debt $ 76,923 $ 79,117 Oaktree Facility —At March 31, 2019 , the Company had $71,602 outstanding under a $85,000 term loan with Wilmington Trust, National Association, as agent, and the lenders party thereto (the “Oaktree Facility”). The Oaktree Facility is secured by substantially all of the assets of the Company and its subsidiaries. Interest on the Oaktree Facility is equal to the one-, two-, three- or six-month London Interbank Offered Rate, or LIBOR, plus 8.75% per annum on the unpaid principal amount of the Oaktree Facility, subject to adjustment under certain circumstances, and is generally payable monthly. There are no amortized principal payments; however, the Company is required to prepay the Oaktree Facility, and in certain cases pay a prepayment premium thereon, with proceeds received from the issuances of debt or equity, transfers, events of loss and extraordinary receipts. The Company is required to make an offer quarterly to the lenders to prepay the Oaktree Facility in an amount equal to 75% of its excess cash flow, plus accrued and unpaid interest thereon and a prepayment premium. Notes and Deferred Payments to Sellers —At March 31, 2019 , the Company had $11,460 outstanding of the $5,000 of Promissory Notes and approximately $9,900 of deferred cash payments net of debt discounts, issued as part of the Tealstone Acquisition. During the three months ended March 31, 2019 , the Company paid approximately $2,400 of the deferred cash payments. The remaining principal amounts of $5,000 of Promissory Notes and $7,500 of deferred cash payments are due on April 3, 2020. Based on a 12% discount rate, the Company recorded $11,600 as notes and deferred payments to sellers in long-term debt on its Condensed Consolidated Balance Sheet at the acquisition closing date. Accreted interest for the period was approximately $300 for each of the three months ended March 31, 2019 and 2018 , and was recorded as interest expense. Notes Payable for Construction and Transportation Equipment —The Company has purchased and financed various construction and transportation equipment to enhance the Company’s fleet of equipment. The total long-term notes payable related to the purchase of financed equipment was approximately $500 and $600 at March 31, 2019 and December 31, 2018 , respectively. The purchases have payment terms ranging from 3 to 5 years and the associated interest rates range from 2.99% to 6.92% . Compliance —The Oaktree Facility contains various covenants that limit, among other things, the Company’s ability and certain of its subsidiaries’ ability to incur certain indebtedness, grant certain liens, merge or consolidate, sell assets, make certain loans, enter into acquisitions, incur capital expenditures, make investments, and pay dividends. In addition, the Company is required to maintain the following principal financial covenants: • a ratio of secured indebtedness to EBITDA of not more than 2.00 to 1.00 for the trailing four consecutive fiscal quarters ending March 31, 2019, reducing to 1.80 to 1.00 for the four consecutive quarters ending September 30, 2019 through maturity in 2022; • daily cash collateral of not less than $15,000 ; • gross margin in contract backlog of not less than $70,000 for the average of the trailing four consecutive fiscal quarters; • net capital expenditures during the trailing four consecutive fiscal quarters shall not exceed $15,000 ; • bonding capacity shall be maintained at all times in an amount not less than $1,000,000 ; and • the EBITDA of Tealstone Residential Concrete, Inc. shall not be less than $12,000 for each of the trailing four consecutive fiscal quarters. The Company is in compliance with these covenants at March 31, 2019 . |
Lease Obligations
Lease Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease Obligations | 9. LEASE OBLIGATIONS The Company has operating and finance leases primarily for construction and transportation equipment as well as office space. The Company’s leases have remaining lease terms of 1 month to 5 years , some of which include options to extend the leases for up to 10 years . The components of lease expense were as follows: Three Months Ended March 31, 2019 Operating lease cost $ 2,211 Short-term lease cost $ 4,743 Finance lease cost: Amortization of right-of-use assets $ 32 Interest on lease liabilities 2 Total finance lease cost $ 34 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,383 Operating cash flows from finance leases $ 2 Financing cash flows from finance leases $ 32 Right-of-use assets obtained in exchange for lease obligations (noncash): Operating leases $ 3,101 Finance leases $ 76 Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Operating lease right-of-use assets $ 15,290 Current portion of long-term lease obligations $ 7,009 Long-term lease obligations 8,466 Total operating lease liabilities $ 15,475 Finance Leases Property and equipment, at cost $ 740 Accumulated depreciation (323 ) Property and equipment, net $ 417 Current maturities of long-term debt $ 134 Long-term debt, net of current maturities 72 Total finance lease liabilities $ 206 Weighted Average Remaining Lease Term Operating leases 2.9 Finance leases 1.9 Weighted Average Discount Rate Operating leases 6.0 % Finance leases 3.8 % Maturities of lease liabilities are as follows: Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 5,179 $ 121 2020 5,903 54 2021 4,163 31 2022 2,025 8 2023 289 — Thereafter 10 — Total lease payments $ 17,569 $ 214 Less imputed interest (2,094 ) (8 ) Total $ 15,475 $ 206 |
Lease Obligations | 9. LEASE OBLIGATIONS The Company has operating and finance leases primarily for construction and transportation equipment as well as office space. The Company’s leases have remaining lease terms of 1 month to 5 years , some of which include options to extend the leases for up to 10 years . The components of lease expense were as follows: Three Months Ended March 31, 2019 Operating lease cost $ 2,211 Short-term lease cost $ 4,743 Finance lease cost: Amortization of right-of-use assets $ 32 Interest on lease liabilities 2 Total finance lease cost $ 34 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,383 Operating cash flows from finance leases $ 2 Financing cash flows from finance leases $ 32 Right-of-use assets obtained in exchange for lease obligations (noncash): Operating leases $ 3,101 Finance leases $ 76 Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Operating lease right-of-use assets $ 15,290 Current portion of long-term lease obligations $ 7,009 Long-term lease obligations 8,466 Total operating lease liabilities $ 15,475 Finance Leases Property and equipment, at cost $ 740 Accumulated depreciation (323 ) Property and equipment, net $ 417 Current maturities of long-term debt $ 134 Long-term debt, net of current maturities 72 Total finance lease liabilities $ 206 Weighted Average Remaining Lease Term Operating leases 2.9 Finance leases 1.9 Weighted Average Discount Rate Operating leases 6.0 % Finance leases 3.8 % Maturities of lease liabilities are as follows: Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 5,179 $ 121 2020 5,903 54 2021 4,163 31 2022 2,025 8 2023 289 — Thereafter 10 — Total lease payments $ 17,569 $ 214 Less imputed interest (2,094 ) (8 ) Total $ 15,475 $ 206 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENT AND CONTINGENCIES The Company is required by its insurance providers to obtain and hold a standby letter of credit. These letters of credit serve as a guarantee by the banking institution to pay the Company’s insurance providers the incurred claim costs attributable to its general liability, workers compensation and automobile liability claims, up to the amount stated in the standby letters of credit, in the event that these claims were not paid by the Company. The Company has cash collateralized the letters of credit, resulting in the cash being designated as restricted. The Company is the subject of certain other claims and lawsuits occurring in the normal course of business. Management, after consultation with legal counsel, does not believe that the outcome of these actions will have a material impact on the Condensed Consolidated Financial Statements of the Company. |
Income Taxes and Deferred Tax A
Income Taxes and Deferred Tax Asset/Liability | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes and Deferred Tax Asset/Liability | 11. INCOME TAXES AND DEFERRED TAX ASSET/LIABILITY The Company and its subsidiaries file U.S. federal and various U.S. state income tax returns. Current income tax expense (benefit) represents federal and state taxes based on tax paid or expected to be payable or receivable for the periods shown in the Condensed Consolidated Statements of Operations. Due to net operating loss carryforwards, the Company does not expect a current federal liability. The Company may incur current state tax liabilities in states in which the Company does not have net operating loss carry forwards. Current income tax expense of $22 and $41 was recorded for the three months ended March 31, 2019 and 2018 , respectively. The Company’s deferred tax expense reflects the change in deferred tax assets and liabilities. The Company performs an analysis at the end of each reporting period to determine whether it is more likely than not the deferred tax assets are expected to be realized in future years. Based upon this analysis, a valuation allowance has been applied to the Company’s net deferred tax assets as of March 31, 2019 and December 31, 2018 . As part of this analysis, the Company monitors its quarterly results. Based on the Company’s continued positive income trend and current forecast for the full year of 2019, we believe that there could be enough positive evidence to remove the valuation allowance in the fourth quarter of 2019. Deferred tax liabilities are a consideration in the analysis of whether to apply a valuation allowance because taxable temporary differences may be used as a source of taxable income to support the realization of deferred tax assets. A deferred tax liability that relates to an asset with an indefinite life, such as goodwill, may not be considered a source of income and should not be netted against deferred tax assets for valuation allowance purposes. The Company expects to have a deferred tax liability for the excess of book over tax basis difference in its goodwill. A $141 deferred tax expense for the three months ended March 31, 2019 has been recorded to reflect this liability. The effective income tax rate varied from the statutory rate primarily as a result of the change in the valuation allowance, net income attributable to noncontrolling interest owners which is taxable to those owners rather than to the Company, state income taxes and other permanent differences. For interim periods, the Company estimates an annual effective tax rate and applies that rate to year-to-date operating results. As a result of the Company’s analysis, management has determined that the Company does not have any material uncertain tax positions. |
Stock Incentive Plan and Other
Stock Incentive Plan and Other Equity Activity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stock Incentive Plan and Other Equity Activity | 12. STOCK INCENTIVE PLAN AND OTHER EQUITY ACTIVITY General —The Company has a stock incentive plan (the “Stock Incentive Plan”) that is administered by the Compensation and Talent Development Committee of the Board of Directors. Under the Stock Incentive Plan, the Company can issue shares to employees and directors in the form of restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and performance based shares (“PSUs”). Changes in common stock, additional paid in capital, and treasury stock during the three months ended March 31, 2019 primarily relate to activity associated with the Stock Incentive Plan and share repurchases. Share Grants —During the three months ended March 31, 2019 , the Company had the following share grants associated with the Stock Incentive Plan: Shares Weighted Average Grant-Date Fair Value per Share RSAs 3 $ 10.89 RSUs 138 $ 10.96 PSUs 185 $ 10.89 Total shares granted 326 Share Issuances —During the three months ended March 31, 2019 , the Company had the following share issuances associated with the Stock Incentive Plan: Shares RSA (issued upon grant) 3 RSUs (issued upon vesting) 73 PSUs (issued upon vesting) 54 Total shares issued 130 Stock-Based Compensation Expense —During the three months ended March 31, 2019 and March 31, 2018 , the Company recognized $1,021 and $617 , respectively, of stock-based compensation expense, primarily within general and administrative expenses. The Company recognizes forfeitures as they occur, rather than estimating expected forfeitures. Share Repurchases —During the three months ended March 31, 2019 , the Company repurchased 250 shares of the Company’s outstanding common stock for $3,201 under the stock repurchase plan. The Company also repurchased 52 shares for taxes withheld on stock-based compensation vestings for $564 . |
Net Income Per Share Attributab
Net Income Per Share Attributable to Sterling Common Stockholders | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Sterling Common Stockholders | 13. NET INCOME PER SHARE ATTRIBUTABLE TO STERLING COMMON STOCKHOLDERS The following table reconciles the numerators and denominators of the basic and diluted per common share computations for net income attributable to Sterling common stockholders: Three Months Ended March 31, 2019 2018 Numerator: Net income attributable to Sterling common stockholders $ 1,815 $ 2,489 Denominator: Weighted average common shares outstanding — basic 26,377 26,854 Shares for dilutive unvested stock and warrants 346 224 Weighted average common shares outstanding and incremental shares assumed repurchased — diluted 26,723 27,078 Basic income per share attributable to Sterling common stockholders $ 0.07 $ 0.09 Diluted income per share attributable to Sterling common stockholders $ 0.07 $ 0.09 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 14. SEGMENT INFORMATION Segment reporting is aligned based upon the services offered by two operating groups, which represent the following reportable segments: heavy civil construction and residential construction. The Company’s Chief Operating Decision Maker (“CODM”) evaluates the performance of the aforementioned operating groups based upon revenue and income from operations. Each operating group’s income from operations reflects corporate costs, allocated based primarily upon revenue. The following table presents total revenue and income from operations by reportable segment for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 Revenue Heavy Civil Construction $ 181,184 $ 187,241 Residential Construction 42,765 35,251 Total Revenue $ 223,949 $ 222,492 Operating Income Heavy Civil Construction $ (847 ) $ 1,945 Residential Construction 5,567 4,734 Total Operating Income $ 4,720 $ 6,679 The following table presents total assets by reportable segment at March 31, 2019 and December 31, 2018 : March 31, December 31, Assets Heavy Civil Construction $ 326,841 $ 355,011 Residential Construction 136,673 127,562 Total Assets $ 463,514 $ 482,573 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 15. SUPPLEMENTAL CASH FLOW INFORMATION Operating assets and liabilities— The following table summarizes the changes in the components of operating assets and liabilities: Three Months Ended March 31, 2019 2018 Receivables, including retainage $ (1,976 ) $ (6,946 ) Net amount of billings in excess of costs and estimated earnings on uncompleted contracts (9,400 ) (10,586 ) Receivables from and equity in construction joint ventures (905 ) (1,105 ) Other assets 1,902 3,861 Accounts payable (17,556 ) (12,334 ) Accrued compensation and other liabilities 2,697 (891 ) Member’s interest subject to mandatory redemption and undistributed earnings (2,211 ) (3,463 ) Changes in operating assets and liabilities $ (27,449 ) $ (31,464 ) |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Presentation | Presentation— The Condensed Consolidated Financial Statements included herein have been prepared by the Company, without audit, in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been either condensed or omitted pursuant to SEC rules and regulations. The Condensed Consolidated Financial Statements reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly the Company’s financial position at March 31, 2019 and the results of operations and cash flows for the periods presented. The December 31, 2018 Condensed Consolidated Balance Sheet data herein was derived from audited financial statements, but as discussed above, does not include all disclosures required by GAAP. Interim results may be subject to significant seasonal variations and the results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full year or subsequent quarters. |
Principles of Consolidation | Principles of Consolidation— The accompanying Condensed Consolidated Financial Statements reflect all wholly owned subsidiaries and those entities the Company is required to consolidate. See the “Consolidated 50% Owned Subsidiaries” and “Construction Joint Ventures” section of this footnote for further discussion of the Company’s consolidation policy for those entities that are not wholly owned. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Consolidated 50% Owned Subsidiaries— The accompanying Condensed Consolidated Financial Statements include the accounts of two subsidiaries in which the Company has 50% ownership interest and exercises control over such entities. Therefore, the Company has consolidated these two entities. Both subsidiaries have individual provisions which, under circumstances that are certain to occur, obligate the Company to purchase each partner’s 50% interests. The Company has classified these obligations as mandatorily redeemable and has recorded a liability in “Members’ interest subject to mandatory redemption and undistributed earnings” on the Condensed Consolidated Balance Sheets. Each partner’s portion of net income (loss) is reflected in the Condensed Consolidated Statements of Operations line item “Other operating expense, net”. Construction Joint Ventures— In the ordinary course of business, the Company executes specific projects and conducts certain operations through joint venture arrangements (referred to as “joint ventures”). The Company has various ownership interests in these joint ventures, with such ownership typically proportionate to the Company’s decision making and distribution rights. Each joint venture is assessed at inception and on an ongoing basis as to whether it qualifies as a Variable Interest Entity (“VIE”) under the consolidations guidance in ASC Topic 810. If at any time a joint venture qualifies as a VIE, the Company performs a qualitative assessment to determine whether the Company is the primary beneficiary of the VIE and therefore needs to consolidate the VIE. If the Company determines it is not the primary beneficiary of the VIE or only has the ability to significantly influence, rather than control the joint venture, it is not consolidated. The Company accounts for unconsolidated joint ventures using a pro-rata basis in the Condensed Consolidated Statements of Operations and as a single line item (“Receivables from and equity in construction joint ventures”) in the Condensed Consolidated Balance Sheets. This method is a permissible modification of the equity method of accounting which is a common practice in the construction industry. |
Use of Estimates | Use of Estimates— The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Certain of the Company’s accounting policies require higher degrees of judgment than others in their application. These include the recognition of revenue and earnings from construction contracts over time, the valuation of long-term assets, income taxes, and purchase accounting, including intangibles and goodwill. Management continually evaluates all of its estimates and judgments based on available information and experience; however, actual results could differ from these estimates. |
Reclassifications | Reclassification— Reclassifications have been made to historical financial data on the Company’s Condensed Consolidated Financial Statements to conform to the Company’s current year presentation. |
Revenue Recognition | Heavy Civil Construction Revenue Recognition— The Company engages in various types of heavy civil construction projects principally for public (government) owners. Revenues are recognized as performance obligations are satisfied over time (formerly known as percentage-of-completion method), using the ratio of costs incurred to estimated total costs for each contract. This cost to cost measure is used because management considers it to be the best available measure of progress on these contracts. Contract costs include all direct material, labor, subcontract and other costs and those indirect costs determined to relate to contract performance, such as indirect salaries and wages, equipment repairs and depreciation, insurance and payroll taxes. Administrative and general expenses are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and associated change orders and claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. Change orders may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Either the Company or its customers may initiate change orders. Change orders that are unapproved as to both price and scope are evaluated as claims. The Company estimates variable consideration for a performance obligation at the most likely amount to which the Company expects to be entitled (or the most likely amount the Company expects to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which the Company will be entitled (or will be incurred in the case of liquidated damages). The Company includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company. The Company considers claims to be amounts in excess of approved contract prices that the Company seeks to collect from its customers or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope and price, or other causes of unanticipated additional contract costs. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in the Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. The Company has projects that it is in the process of negotiating, or awaiting final approval of, unapproved change orders and claims with its customers. The Company is proceeding with its contractual rights to recoup additional costs incurred from its customers based on completing work associated with change orders, including change orders with pending change order pricing, or claims related to significant changes in scope which resulted in substantial delays and additional costs in completing the work. Unapproved change order and claim information has been provided to the Company’s customers and negotiations with the customers are ongoing. If additional progress with an acceptable resolution is not reached, legal action will be taken. Contract modifications are routine in the performance of the Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. Assurance-type warranties are the only warranties provided by the Company and, as such, the Company does not recognize revenue on warranty-related work. The Company generally provides a one to two year warranty for workmanship under its contracts when completed. Warranty claims historically have been insignificant. Pre-contract costs are generally charged to expense as incurred, but in certain cases their recognition may be deferred if specific probability criteria are met. The Company had no significant deferred pre-contract costs at March 31, 2019 . Residential Construction Revenue Recognition— Residential construction revenue and related profit are recognized when construction on the concrete foundation unit is completed (i.e., at a point in time). The time from starting construction to finishing is typically less than one month. |
Leases | Leases— Effective January 1, 2019, the Company determines if an arrangement is a lease at inception. The operating lease right-of-use (“ROU”) assets are included within the Company’s other non-current assets and lease liabilities are included in current or noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets. Finance leases are included in property and equipment, current maturities of long-term debt, and long-term debt, net of current maturities on the Company’s Condensed Consolidated Balance Sheets. ROU assets represent the Company’s right to use, or control the use of, a specified asset for the lease term. Lease liabilities are the Company’s obligation to make lease payments arising from a lease, and are measured on a discounted basis. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term on the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate was used based on the information available on the commencement date in determining the present value of lease payments. For future leases, the implied rate in the lease will be used to determine the present value. The operating lease ROU asset includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments continues to be recognized on a straight-line bas |
Recently Adopted Accounting Guidance | Recently Adopted Accounting Guidance— In February 2016, the Financial Accounting Standards Board (“FASB”) issued its new lease accounting guidance in ASU 2016-2, “Leases” (ASC 842). Under the new guidance, lessees are required to recognize all leases (with the exception of short-term leases) on the balance sheet. The Company adopted ASC 842 effective January 1, 2019 using the modified retrospective method. The new guidance has been applied to leases that exist or were entered into on or after January 1, 2019 without adjusting comparative periods in the financial statements. As an accounting policy, the Company has elected not to apply the recognition requirements to short-term leases (leases with terms of 12 months or less). Instead, the Company recognizes the lease payments in the consolidated Statement of Operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The Company has elected to utilize the package of practical expedients that allows entities to not reassess 1) the classification of leases existing at the date of adoption; 2) the initial direct costs for any existing leases; and 3) whether any expired or existing contracts are or contain leases. At January 1, 2019, the Company recorded an ROU asset, current maturity of operating lease liability and long-term operating lease liability of $13,600 , $6,200 and $7,400 , respectively on its consolidated balance sheet, related to its existing operating leases. The adoption of this standard did not have a material impact on the Company’s Consolidated Statements of Operations. As of March 31, 2019 , the weighted average remaining lease terms for the Company’s various operating leases extends out over the next 2.9 years . The weighted average discount rate used to determine the present value of the Company’s operating leases’ future payments was approximately 6% . |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue by major end market Three Months Ended March 31, 2019 2018 Heavy Highway $ 93,610 $ 107,408 Commercial 30,850 28,519 Aviation 29,937 23,252 Water Containment and Treatment 15,234 14,995 Other 11,553 13,067 Total Heavy Civil Construction Revenue $ 181,184 $ 187,241 Revenue by contract type Three Months Ended March 31, 2019 2018 Fixed Unit Price $ 141,219 $ 160,236 Lump Sum and Other 39,965 27,005 Total Heavy Civil Construction Revenue $ 181,184 $ 187,241 |
Costs in Excess of Billings and Billings in Excess of Costs | The table below reconciles the net excess billings to the amounts included in the Condensed Consolidated Balance Sheets at those dates: March 31, December 31, Costs and estimated earnings in excess of billings on uncompleted contracts $ 44,133 $ 41,542 Billings in excess of costs and estimated earnings on uncompleted contracts (55,598 ) (62,407 ) Net amount of billings in excess of costs and estimated earnings on uncompleted contracts $ (11,465 ) $ (20,865 ) |
Consolidated 50% Owned Subsid_2
Consolidated 50% Owned Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of Components of Agreement Obligation | The liability consists of the following: March 31, December 31, Members’ interest subject to mandatory redemption $ 40,000 $ 40,000 Net accumulated earnings 7,132 9,343 Total liability $ 47,132 $ 49,343 |
Summary of Financial Information of Variable Interest Entities | The following tables present the condensed financial information of Myers, which is reflected in the Company’s Condensed Consolidated Balance Sheets and Statements of Operations: March 31, December 31, Assets Current assets: Cash and cash equivalents $ 3,603 $ 8,745 Receivables, including retainage 24,900 24,109 Other current assets 13,679 14,533 Total current assets 42,182 47,387 Property and equipment, net 6,818 7,219 Operating lease right-of-use assets 3,297 — Goodwill 1,501 1,501 Total assets $ 53,798 $ 56,107 Liabilities Current liabilities: Accounts payable $ 19,588 $ 22,211 Other current liabilities 11,032 9,811 Total current liabilities 30,620 32,022 Other long-term liabilities 1,854 1,976 Total liabilities $ 32,474 $ 33,998 |
Construction Joint Ventures (Ta
Construction Joint Ventures (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Change in non-controlling interest | The following table summarizes the changes in noncontrolling interests: Three Months Ended March 31, 2019 2018 Balance, beginning of period $ 7,859 $ 4,856 Net income attributable to noncontrolling interest included in equity 46 1,191 Distributions to noncontrolling interest owners (5,100 ) — Balance, end of period $ 2,805 $ 6,047 |
Condensed Balance Sheet | Condensed combined financial amounts of joint ventures in which the Company has a noncontrolling interest and the Company’s share of such amounts which are included in the Company’s Condensed Consolidated Financial Statements are shown below: March 31, December 31, Total combined: Current assets $ 70,482 $ 64,815 Less current liabilities (81,857 ) (74,543 ) Net liabilities $ (11,375 ) $ (9,728 ) Sterling’s receivables from and equity in noncontrolling construction joint ventures $ 11,625 $ 10,720 |
Condensed Income Statement | Three Months Ended March 31, 2019 2018 Total combined: Revenues $ 31,384 $ 31,357 Income before tax 1,969 3,404 Sterling’s noncontrolling interest: Revenues $ 15,684 $ 15,065 Income before tax 984 1,691 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment are summarized as follows: March 31, December 31, Construction and transportation equipment $ 148,138 $ 144,630 Buildings and improvements 11,139 11,072 Land 2,720 2,720 Office equipment 2,627 2,711 Total property and equipment 164,624 161,133 Less accumulated depreciation (112,613 ) (109,134 ) Total property and equipment, net $ 52,011 $ 51,999 |
Intangibles (Tables)
Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table presents the Company’s acquired finite-lived intangible assets at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Weighted Gross Gross Customer relationships 23 years $ 40,823 $ (3,610 ) $ 40,823 $ (3,159 ) Trade name 13 years 5,307 (1,050 ) 5,307 (919 ) Non-competition agreements 7 years 487 (139 ) 487 (121 ) Total 22 years $ 46,617 $ (4,799 ) $ 46,617 $ (4,199 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s outstanding debt at March 31, 2019 and December 31, 2018 was as follows: March 31, December 31, Oaktree Facility $ 71,602 $ 74,571 Notes and deferred payments to sellers, Tealstone acquisition 11,460 13,572 Notes payable for construction and transportation equipment 474 612 Total debt 83,536 88,755 Less - Current maturities of long-term debt (393 ) (2,899 ) Less - Unamortized deferred loan costs (6,220 ) (6,739 ) Total long-term debt $ 76,923 $ 79,117 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Expenses | The components of lease expense were as follows: Three Months Ended March 31, 2019 Operating lease cost $ 2,211 Short-term lease cost $ 4,743 Finance lease cost: Amortization of right-of-use assets $ 32 Interest on lease liabilities 2 Total finance lease cost $ 34 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,383 Operating cash flows from finance leases $ 2 Financing cash flows from finance leases $ 32 Right-of-use assets obtained in exchange for lease obligations (noncash): Operating leases $ 3,101 Finance leases $ 76 Supplemental balance sheet information related to leases was as follows: March 31, Operating Leases Operating lease right-of-use assets $ 15,290 Current portion of long-term lease obligations $ 7,009 Long-term lease obligations 8,466 Total operating lease liabilities $ 15,475 Finance Leases Property and equipment, at cost $ 740 Accumulated depreciation (323 ) Property and equipment, net $ 417 Current maturities of long-term debt $ 134 Long-term debt, net of current maturities 72 Total finance lease liabilities $ 206 Weighted Average Remaining Lease Term Operating leases 2.9 Finance leases 1.9 Weighted Average Discount Rate Operating leases 6.0 % Finance leases 3.8 % |
Maturities of Lease Liabilities, Operating Leases | Maturities of lease liabilities are as follows: Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 5,179 $ 121 2020 5,903 54 2021 4,163 31 2022 2,025 8 2023 289 — Thereafter 10 — Total lease payments $ 17,569 $ 214 Less imputed interest (2,094 ) (8 ) Total $ 15,475 $ 206 |
Maturities of Lease Liabilities, Finance Leases | Maturities of lease liabilities are as follows: Operating Leases Finance Leases Year Ending December 31, 2019 (excluding the three months ended March 31, 2019) $ 5,179 $ 121 2020 5,903 54 2021 4,163 31 2022 2,025 8 2023 289 — Thereafter 10 — Total lease payments $ 17,569 $ 214 Less imputed interest (2,094 ) (8 ) Total $ 15,475 $ 206 |
Stock Incentive Plan and Othe_2
Stock Incentive Plan and Other Equity Activity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Grants and Issuances | During the three months ended March 31, 2019 , the Company had the following share issuances associated with the Stock Incentive Plan: Shares RSA (issued upon grant) 3 RSUs (issued upon vesting) 73 PSUs (issued upon vesting) 54 Total shares issued 130 During the three months ended March 31, 2019 , the Company had the following share grants associated with the Stock Incentive Plan: Shares Weighted Average Grant-Date Fair Value per Share RSAs 3 $ 10.89 RSUs 138 $ 10.96 PSUs 185 $ 10.89 Total shares granted 326 |
Net Income Per Share Attribut_2
Net Income Per Share Attributable to Sterling Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators of the basic and diluted per common share computations for net income attributable to Sterling common stockholders: Three Months Ended March 31, 2019 2018 Numerator: Net income attributable to Sterling common stockholders $ 1,815 $ 2,489 Denominator: Weighted average common shares outstanding — basic 26,377 26,854 Shares for dilutive unvested stock and warrants 346 224 Weighted average common shares outstanding and incremental shares assumed repurchased — diluted 26,723 27,078 Basic income per share attributable to Sterling common stockholders $ 0.07 $ 0.09 Diluted income per share attributable to Sterling common stockholders $ 0.07 $ 0.09 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents total revenue and income from operations by reportable segment for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 Revenue Heavy Civil Construction $ 181,184 $ 187,241 Residential Construction 42,765 35,251 Total Revenue $ 223,949 $ 222,492 Operating Income Heavy Civil Construction $ (847 ) $ 1,945 Residential Construction 5,567 4,734 Total Operating Income $ 4,720 $ 6,679 The following table presents total assets by reportable segment at March 31, 2019 and December 31, 2018 : March 31, December 31, Assets Heavy Civil Construction $ 326,841 $ 355,011 Residential Construction 136,673 127,562 Total Assets $ 463,514 $ 482,573 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table summarizes the changes in the components of operating assets and liabilities: Three Months Ended March 31, 2019 2018 Receivables, including retainage $ (1,976 ) $ (6,946 ) Net amount of billings in excess of costs and estimated earnings on uncompleted contracts (9,400 ) (10,586 ) Receivables from and equity in construction joint ventures (905 ) (1,105 ) Other assets 1,902 3,861 Accounts payable (17,556 ) (12,334 ) Accrued compensation and other liabilities 2,697 (891 ) Member’s interest subject to mandatory redemption and undistributed earnings (2,211 ) (3,463 ) Changes in operating assets and liabilities $ (27,449 ) $ (31,464 ) |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Operating lease right-of-use assets | $ 15,290 | $ 13,600 |
Current portion of long-term lease obligations | 7,009 | 6,200 |
Long-term lease obligations | $ 8,466 | $ 7,400 |
Weighted average remaining lease terms | 2 years 10 months 13 days | |
Weighted Average Discount Rate: Operating lease | 6.00% | |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Warranty, term | 1 year | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Warranty, term | 2 years |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)contract | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Remaining performance obligation | $ 808,740 | ||
Heavy Civil Construction | |||
Disaggregation of Revenue [Line Items] | |||
Number of contracts (more than) | contract | 150 | ||
Costs and Estimated Earnings in Excess of Billings | |||
Disaggregation of Revenue [Line Items] | |||
Contracts receivable unpaid project contract price | $ 9,300 | $ 9,300 | |
Operating income (Loss) | |||
Disaggregation of Revenue [Line Items] | |||
Estimated construction gain (loss) before tax | $ (200) | $ 1,300 | |
Transferred over Time | Product Concentration Risk | Revenue from Contract with Customer | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 81.00% | 84.00% | |
Transferred at Point in Time | Product Concentration Risk | Revenue from Contract with Customer | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percentage | 19.00% | 16.00% | |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognition, contract term | 12 months | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognition, contract term | 36 months |
Revenue From Contracts With C_4
Revenue From Contracts With Customers - Performance Obligations (Details) | Mar. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected to be recognized in the remainder of 2019 | 78.00% |
Revenue From Contracts With C_5
Revenue From Contracts With Customers - Revenue By Major Market End (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 223,949 | $ 222,492 |
Heavy Civil Construction | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 181,184 | 187,241 |
Heavy Civil Construction | Heavy Highway | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 93,610 | 107,408 |
Heavy Civil Construction | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 30,850 | 28,519 |
Heavy Civil Construction | Aviation | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 29,937 | 23,252 |
Heavy Civil Construction | Water Containment and Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 15,234 | 14,995 |
Heavy Civil Construction | Other Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 11,553 | $ 13,067 |
Revenue From Contracts With C_6
Revenue From Contracts With Customers - Revenue By Contract Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 223,949 | $ 222,492 |
Heavy Civil Construction | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 181,184 | 187,241 |
Heavy Civil Construction | Fixed Unit Price | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 141,219 | 160,236 |
Heavy Civil Construction | Lump Sum and Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 39,965 | $ 27,005 |
Revenue From Contracts With C_7
Revenue From Contracts With Customers - Net Excess Billings (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 44,133 | $ 41,542 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (55,598) | (62,407) |
Net amount of billings in excess of costs and estimated earnings on uncompleted contracts | $ (11,465) | $ (20,865) |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Other current assets | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash and cash equivalents | $ 3.9 | $ 3.9 |
Less than wholly-owned subsidiaries | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash and cash equivalents | 13.3 | 31 |
Majority-owned Joint Ventures | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash and cash equivalents | $ 3.1 | $ 20.5 |
Consolidated 50% Owned Subsid_3
Consolidated 50% Owned Subsidiaries - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||
Members’ interest subject to mandatory redemption | $ 40,000 | $ 40,000 | |
Total disability insurance policies, per policy amount | 20,000 | ||
Myers | |||
Noncontrolling Interest [Line Items] | |||
Net accumulated earnings | 1,300 | $ 600 | |
Myers | Variable Interest Entity, Primary Beneficiary | |||
Noncontrolling Interest [Line Items] | |||
Members’ interest subject to mandatory redemption | $ 20,000 |
Consolidated 50% Owned Subsid_4
Consolidated 50% Owned Subsidiaries - Components of Noncontrolling Interest Subject to Mandatory Redemption (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Noncontrolling Interest [Abstract] | ||
Members’ interest subject to mandatory redemption | $ 40,000 | $ 40,000 |
Net accumulated earnings | 7,132 | 9,343 |
Total liability | $ 47,132 | $ 49,343 |
Consolidated 50% Owned Subsid_5
Consolidated 50% Owned Subsidiaries Consolidated 50% Owned Subsidiaries - Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | |||||
Cash and cash equivalents | $ 56,764 | $ 94,095 | $ 55,462 | $ 83,953 | |
Receivables, including retainage | 147,001 | 145,026 | |||
Other current assets | 6,696 | 8,074 | |||
Total current assets | 268,918 | 302,616 | |||
Property and equipment, net | 52,011 | 51,999 | |||
Operating lease right-of-use assets | 15,290 | $ 13,600 | |||
Goodwill | 85,231 | 85,231 | |||
Total assets | 463,514 | 482,573 | |||
Accounts payable | 81,870 | 99,426 | |||
Other current liabilities | 6,300 | 4,676 | |||
Total current liabilities | 162,010 | 179,174 | |||
Other long-term liabilities | 1,115 | 1,229 | |||
Total liabilities | 297,237 | 310,313 | |||
Variable Interest Entity, Primary Beneficiary | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash and cash equivalents | 3,603 | 8,745 | |||
Receivables, including retainage | 24,900 | 24,109 | |||
Other current assets | 13,679 | 14,533 | |||
Total current assets | 42,182 | 47,387 | |||
Property and equipment, net | 6,818 | 7,219 | |||
Operating lease right-of-use assets | 3,297 | ||||
Goodwill | 1,501 | 1,501 | |||
Total assets | 53,798 | 56,107 | |||
Accounts payable | 19,588 | 22,211 | |||
Other current liabilities | 11,032 | 9,811 | |||
Total current liabilities | 30,620 | 32,022 | |||
Other long-term liabilities | 1,854 | 1,976 | |||
Total liabilities | $ 32,474 | $ 33,998 |
Construction Joint Ventures - R
Construction Joint Ventures - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, beginning of period | $ 7,859 | $ 4,856 |
Net income attributable to noncontrolling interest included in equity | 46 | 1,191 |
Distributions to noncontrolling interest owners | (5,100) | 0 |
Balance, end of period | $ 2,805 | $ 6,047 |
Construction Joint Ventures - B
Construction Joint Ventures - Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 268,918 | $ 302,616 |
Less current liabilities | (162,010) | (179,174) |
Sterling’s receivables from and equity in noncontrolling construction joint ventures | 11,625 | 10,720 |
Joint Ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 70,482 | 64,815 |
Less current liabilities | (81,857) | (74,543) |
Net liabilities | (11,375) | (9,728) |
Sterling’s receivables from and equity in noncontrolling construction joint ventures | $ 11,625 | $ 10,720 |
Construction Joint Ventures - I
Construction Joint Ventures - Income Statement Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Sterling’s noncontrolling interest: | ||
Revenues | $ 46 | $ 1,191 |
Joint Ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 31,384 | 31,357 |
Income before tax | 1,969 | 3,404 |
Sterling’s noncontrolling interest: | ||
Revenues | 15,684 | 15,065 |
Income before tax | $ 984 | $ 1,691 |
Property and Equipment - Summar
Property and Equipment - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 164,624 | $ 161,133 |
Less accumulated depreciation | (112,613) | (109,134) |
Total property and equipment, net | 52,011 | 51,999 |
Construction and transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 148,138 | 144,630 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,139 | 11,072 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,720 | 2,720 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,627 | $ 2,711 |
Intangibles (Details)
Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life | 22 years | ||
Gross Carrying Amount | $ 46,617 | $ 46,617 | |
Accumulated Amortization | (4,799) | (4,199) | |
Amortization of intangible assets | $ 600 | $ 600 | |
Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life | 23 years | ||
Gross Carrying Amount | $ 40,823 | 40,823 | |
Accumulated Amortization | $ (3,610) | (3,159) | |
Trade Names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life | 13 years | ||
Gross Carrying Amount | $ 5,307 | 5,307 | |
Accumulated Amortization | $ (1,050) | (919) | |
Noncompete Agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life | 7 years | ||
Gross Carrying Amount | $ 487 | 487 | |
Accumulated Amortization | $ (139) | $ (121) |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total debt | $ 83,536 | $ 88,755 |
Less - Current maturities of long-term debt | (393) | (2,899) |
Less - Unamortized deferred loan costs | (6,220) | (6,739) |
Total long-term debt | 76,923 | 79,117 |
Notes and deferred payments to sellers, Tealstone acquisition | ||
Debt Instrument [Line Items] | ||
Notes payable | 11,460 | 13,572 |
Notes payable for transportation and construction equipment and other | ||
Debt Instrument [Line Items] | ||
Notes payable | 474 | 612 |
Oaktree facility | Senior secured term loans | Equipment-based facility | ||
Debt Instrument [Line Items] | ||
Oaktree Facility | $ 71,602 | $ 74,571 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Notes and deferred payments to sellers, Tealstone acquisition | |||
Debt Instrument [Line Items] | |||
Promissory notes issued to the sellers | $ 5,000,000 | ||
Cash payments to the seller | 9,900,000 | ||
Deferred payments | 2,400,000 | ||
Deferred cash payments due | 7,500,000 | ||
Notes and deferred payments to sellers | 11,600,000 | ||
Accretion expense | $ 300,000 | $ 300,000 | |
Notes and deferred payments to sellers, Tealstone acquisition | Measurement Input, Discount Rate | |||
Debt Instrument [Line Items] | |||
Fair value inputs, discount rate | 0.12 | ||
Notes payable for transportation and construction equipment and other | |||
Debt Instrument [Line Items] | |||
Notes Payable | $ 474,000 | $ 612,000 | |
Notes payable, noncurrent | 500,000 | 600,000 | |
Senior secured term loans | Oaktree facility | Equipment-based facility | |||
Debt Instrument [Line Items] | |||
Oaktree Facility | 71,602,000 | $ 74,571,000 | |
Senior secured term loans | Term loan | Loan and security agreement | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 85,000,000 | ||
Loan prepayment offer required to make quarterly, percentage | 75.00% | ||
Debt instrument, financial covenants, maximum ratio of secured indebtedness to EBITDA, period one | 2 | ||
Debt Instrument, financial covenants, maximum ratio of secured indebtedness to EBITDA, period two | 1.8 | ||
Debt Instrument, financial covenants, minimum daily cash collateral, period two | $ 15,000,000 | ||
Debt Instrument, financial covenants, minimum rolling four quarter gross margin in contract backlog, period two | 70,000,000 | ||
Debt instrument, financial covenants, maximum incurrence of net capital expenditures during each of four consecutive fiscal quarters | 15,000,000 | ||
Debt instrument, financial covenants, minimum bonding capacity | 1,000,000,000 | ||
Debt instrument, financial covenants, minimum EBITDA during each four consecutive fiscal quarters | $ 12,000,000 | ||
Senior secured term loans | Term loan | Loan and security agreement | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 8.75% | ||
Notes payable for transportation and construction equipment and other | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 3 years | ||
Debt instrument, interest rate, stated percentage | 2.99% | ||
Notes payable for transportation and construction equipment and other | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 5 years | ||
Debt instrument, interest rate, stated percentage | 6.92% |
Lease Obligations (Details)
Lease Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Lease termination period | 10 years | |
Lease, Cost [Abstract] | ||
Operating lease cost | $ 2,211 | |
Short-term lease cost | 4,743 | |
Amortization of right-of-use assets | 32 | |
Interest on lease liabilities | 2 | |
Total finance lease cost | 34 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 2,383 | |
Operating cash flows from finance leases | 2 | |
Financing cash flows from finance leases | 32 | |
Right-of-use assets obtained in exchange for lease obligations (noncash): | ||
Operating leases | 3,101 | |
Finance leases | 76 | |
Assets and Liabilities, Lessee [Abstract] | ||
Operating lease right-of-use assets | 15,290 | $ 13,600 |
Current portion of long-term lease obligations | 7,009 | 6,200 |
Long-term lease obligations | 8,466 | $ 7,400 |
Total operating lease liabilities | 15,475 | |
Property and equipment, at cost | 740 | |
Accumulated depreciation | (323) | |
Property and equipment, net | 417 | |
Current maturities of long-term debt | 134 | |
Long-term debt, net of current maturities | 72 | |
Total finance lease liabilities | $ 206 | |
Weighted Average Remaining Lease Term: Operating leases | 2 years 10 months 13 days | |
Weighted Average Remaining Lease Term: Financing leases | 1 year 10 months 7 days | |
Weighted Average Discount Rate: Operating lease | 6.00% | |
Weighted Average Discount Rate: Financing lease | 3.80% | |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2019 (excluding the three months ended March 31, 2019) | $ 5,179 | |
2020 | 5,903 | |
2021 | 4,163 | |
2022 | 2,025 | |
2023 | 289 | |
Thereafter | 10 | |
Total lease payments | 17,569 | |
Less imputed interest | (2,094) | |
Total operating lease liabilities | 15,475 | |
Finance Lease Liabilities, Payments, Due [Abstract] | ||
2019 (excluding the three months ended March 31, 2019) | 121 | |
2020 | 54 | |
2021 | 31 | |
2022 | 8 | |
2023 | 0 | |
Thereafter | 0 | |
Total lease payments | 214 | |
Less imputed interest | (8) | |
Total finance lease liabilities | $ 206 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease renewal term | 1 month | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease renewal term | 5 years |
Income Taxes and Deferred Tax_2
Income Taxes and Deferred Tax Asset/Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense (benefit) | $ 22 | $ 41 |
Deferred tax expense | $ (141) | $ 0 |
Stock Incentive Plan and Othe_3
Stock Incentive Plan and Other Equity Activity - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Sale of Stock [Line Items] | ||
Shares granted (in shares) | 326 | |
Shares issued under share-based compensation (in shares) | 130 | |
Stock-based compensation expense | $ 1,021 | $ 617 |
Purchase of treasury stock | $ 3,201 | |
Common Stock | ||
Sale of Stock [Line Items] | ||
Purchase of treasury stock (in shares) | 250 | |
Purchase of treasury stock | $ 3,201 | |
Additional Paid in Capital | ||
Sale of Stock [Line Items] | ||
Stock-based compensation expense | $ 1,021 | $ 617 |
Common Stock | ||
Sale of Stock [Line Items] | ||
Purchase of treasury stock (in shares) | (250) | |
Shares repurchased for tax withholding (in shares) | (52) | |
Treasury Stock | ||
Sale of Stock [Line Items] | ||
Purchase of treasury stock (in shares) | 250 | |
Purchase of treasury stock | $ 3,201 | |
Stock-based compensation vesting, tax withholding amount | $ (564) | |
RSAs | ||
Sale of Stock [Line Items] | ||
Shares granted (in shares) | 3 | |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ 10.89 | |
RSUs | ||
Sale of Stock [Line Items] | ||
Shares granted (in shares) | 138 | |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ 10.96 | |
Shares issued under share-based compensation (in shares) | 73 | |
PSUs | ||
Sale of Stock [Line Items] | ||
Shares granted (in shares) | 185 | |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ 10.89 | |
Shares issued under share-based compensation (in shares) | 54 |
Net Income Per Share Attribut_3
Net Income Per Share Attributable to Sterling Common Stockholders - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income attributable to Sterling common stockholders | $ 1,815 | $ 2,489 |
Weighted average common shares outstanding, basic (in shares) | 26,377 | 26,854 |
Shares for dilutive unvested stock and warrants (in shares) | 346 | 224 |
Weighted average common shares outstanding and incremental shares assumed repurchased, diluted (in shares) | 26,723 | 27,078 |
Basic income per share attributable to Sterling common stockholders (USD per share) | $ 0.07 | $ 0.09 |
Diluted income per share attributable to Sterling common stockholders (USD per share) | $ 0.07 | $ 0.09 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Revenue,
Segment Information - Revenue, Operating Income, and Assets, By Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Total Revenue | $ 223,949 | $ 222,492 | |
Operating income | 4,720 | 6,679 | |
Assets | 463,514 | $ 482,573 | |
Heavy Civil Construction | |||
Segment Reporting Information [Line Items] | |||
Total Revenue | 181,184 | 187,241 | |
Operating income | (847) | 1,945 | |
Assets | 326,841 | 355,011 | |
Residential Construction | |||
Segment Reporting Information [Line Items] | |||
Total Revenue | 42,765 | 35,251 | |
Operating income | 5,567 | $ 4,734 | |
Assets | $ 136,673 | $ 127,562 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Receivables, including retainage | $ (1,976) | $ (6,946) |
Net amount of billings in excess of costs and estimated earnings on uncompleted contracts | (9,400) | (10,586) |
Receivables from and equity in construction joint ventures | (905) | (1,105) |
Other assets | 1,902 | 3,861 |
Accounts payable | (17,556) | (12,334) |
Accrued compensation and other liabilities | 2,697 | (891) |
Member’s interest subject to mandatory redemption and undistributed earnings | (2,211) | (3,463) |
Changes in operating assets and liabilities | $ (27,449) | $ (31,464) |