Exhibit 99.1
STERLING CONSTRUCTION COMPANY, INC. ANNOUNCES RESULTS OF OPERATIONS FOR
ITS FIRST QUARTER
Contact: Joseph Harper, President (281) 821 9091
Maarten Hemsley, Chief Financial Officer (781) 934 2219
Wilmington, DE... May 15, 2003. Sterling Construction Company, Inc. (OTC
Bulletin Board "STCS"), ("Sterling" or the "Company"), today announced results
of operations for the first quarter ended March 31, 2003. Sterling operates
through two majority-owned subsidiaries, 80.1%-owned Sterling Houston Holdings,
Inc. ("Construction"), a heavy civil construction company that specializes in
municipal and state highway contracts for paving, bridge, water and sewer and
light rail projects, and 90%-owned Steel City Products, Inc. ("Distribution"),
one of the largest distributors of automotive accessories, pet supplies and lawn
and garden products in the Northeastern United States.
The Company reported total revenues of $41.7 million and pre-tax income (before
minority interest) of $2.1 million for the first quarter of fiscal 2003,
representing 20 cents per share on a diluted basis. The results reflected a
significant improvement over the prior year, when revenues were $29.7 million,
with pre-tax income of $0.8 million (6 cents per share on a diluted basis).
Consolidated Earnings before Interest, Taxes, Depreciation and Amortization
("EBITDA") for the current year period was $4.0 million compared with $2.4
million in the prior year period.
Commenting on the results, Joseph Harper, the Company's President, said that
both Construction and Distribution exceeded their budgets in the first quarter.
Construction benefited from the addition of the Kinsel business acquired in
September 2002, a strong backlog and favorable weather conditions throughout the
period. At the end of the quarter, Construction had a contract revenue backlog
of $132 million.
Mr. Hemsley, the Company's Chief Financial Officer, noted that although the
results reflect a full income tax charge, almost all federal taxes are sheltered
by the Company's substantial tax loss carryforwards. He also noted that this
year's first quarter pre-tax earnings per share were 30 cents on a diluted
basis.
The Company also reported that in April 2003 it had prepaid to KTI, Inc. ("KTI")
the full amount outstanding under its $1.0 million zero coupon note, together
with accrued interest of approximately $0.2 million, in exchange for the
cancellation of warrants held by KTI for 394,000 shares of Sterling common
stock, which would have been exercisable by KTI after January 2006 at a price of
$1.50 per share.
STERLING CONSTRUCTION COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED RESULTS OF OPERATIONS
(unaudited)
<Table>
<Caption>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
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2003 2002
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Contract revenues ................................................ $ 35,679 $ 23,134
Sales ............................................................ 6,019 6,548
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41,698 29,682
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Cost of contract revenues earned ................................. 31,822 20,874
Cost of goods sold, including occupancy and buying expenses ...... 5,160 5,501
Operating, selling and administrative expenses ................... 1,995 1,920
Interest expense, net of interest income ......................... 600 591
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39,577 28,886
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Income before minority interest and income taxes ................. 2,121 796
Minority interest in net earnings of subsidiary .................. 324 156
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Income before taxes .............................................. 1,797 640
Income tax expense ............................................... 601 270
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Net income ....................................................... $ 1,196 $ 370
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Basic and diluted net income per share:
Basic ............................................................ $ 0.24 $ 0.07
Diluted .......................................................... $ 0.20 $ 0.06
Weighted average number of shares outstanding used
in computing basic and diluted per share amounts:
Basic ............................................................ 5,069,016 5,055,516
Diluted .......................................................... 5,993,090 5,801,816
</Table>