EXHIBIT 99.1
STERLING CONSTRUCTION COMPANY, INC. ANNOUNCES THIRD QUARTER RESULTS
Contact: Joseph Harper, President (281) 821 9091
Maarten Hemsley, Chief Financial Officer (781) 934 2219
Wilmington, DE... November 13, 2003. Sterling Construction Company, Inc. (OTC
Bulletin Board "STCS"), ("Sterling" or the "Company"), today announced results
of operations for its third quarter and nine months ended September 30, 2003.
Sterling operates through two subsidiaries, 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 Pittsburgh-based 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 for the third quarter of $41.4 million and
pre-tax income (before minority interest) of $2.4 million. Net income was $2.3
million, or 34 cents per share on a diluted basis. In the prior year third
quarter revenues were $32.5 million and pre-tax income (before minority
interest) was $1.1 million, with net income of $1.2 million, or 21 cents per
share on a diluted basis. The Company's Earnings Before Interest, Taxes and
Depreciation ("EBITDA") was $4.1 million in the third quarter, compared with
$2.5 million in the prior year period.
For the first nine months, the Company reported total revenues of $132.4 million
and pre-tax income (before minority interest) of $7.8 million. Net income was
$5.1 million, or 80 cents per share on a diluted basis. In the first nine months
of last year, revenues were $96.2 million and pre-tax income (before minority
interest) was $3.3 million, with net income of $2.3 million, or 39 cents per
share on a diluted basis. Total EBITDA for the first nine months was $12.0
million, an increase of $4.8 million over the prior year.
Commenting on the operating results, Joseph Harper, the Company's President,
said that the improvement in revenues and profits in this year's third quarter
and first nine months resulted from the excellent performance of the
Construction segment, which enjoyed higher revenues on municipal contracts and
benefited from the addition of the Kinsel business acquired in September 2002,
further enhanced by generally favorable weather throughout the period. At
September 30, 2003 Construction had a contract revenue backlog of approximately
$126 million. Mr. Harper noted that, despite the strong contract backlog, the
Company's principal municipal customers are experiencing budgetary constraints,
so that the current high revenue levels and profit margins may not be indicative
of future results.
Maarten Hemsley, the Company's Chief Financial Officer, noted that the Company
reevaluated its deferred tax asset in the third quarter and due to the improved
operating performance reduced the valuation allowance by approximately $702,000.
Almost all federal taxes are sheltered by the Company's substantial tax loss
carryforwards. In this regard, he noted that consolidated profits in the first
nine months of fiscal 2003, net of minority interest, but before the tax charge,
were equal to $1.05 cents per share on a diluted basis.
STERLING CONSTRUCTION COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED RESULTS OF OPERATIONS (unaudited)
<Table>
<Caption>
THREE THREE NINE NINE
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
30, 2003 30, 2002 30, 2003 30, 2002
------------ ------------- -------------- -------------
Contract revenues ................................... $ 36,630 $ 27,458 $ 116,167 $ 77,724
Sales ............................................... 4,746 5,062 16,218 18,468
------------ ------------ ------------ ------------
$ 41,376 $ 32,520 $ 132,385 $ 96,192
------------ ------------ ------------ ------------
Cost of contract revenues earned .................... 31,501 24,193 102,730 69,082
Cost of goods sold, including occupancy, buying and
warehouse expenses ............................ 4,072 4,296 13,836 15,497
Selling and administrative expenses ................. 2,470 2,287 6,238 6,482
Interest expense, net of interest income ............ 444 619 1,736 1,792
------------ ------------ ------------ ------------
38,487 31,395 124,540 92,853
------------ ------------ ------------ ------------
Income before minority interest and income taxes .... 2,889 1,125 7,845 3,339
Minority interest in net earnings of subsidiary ..... 454 260 1,224 655
------------ ------------ ------------ ------------
Income before taxes ................................. 2,435 865 6,621 2,684
Income tax expense, net of deferred tax benefit ..... 143 (376) 1,561 376
------------ ------------ ------------ ------------
Net income .......................................... $ 2,292 $ 1,241 $ 5,060 $ 2,308
============ ============ ============ ============
Basic and diluted net income per share:
Basic ............................................... $ 0.45 $ 0.25 $ 1.00 $ 0.46
Diluted ............................................. $ 0.34 $ 0.21 $ 0.80 $ 0.39
Weighted average number of shares outstanding used in
computing basic and diluted per share amounts:
Basic ............................................... 5,073,349 5,055,516 5,070,084 5,055,516
Diluted ............................................. 6,712,633 5,901,231 6,308,516 5,860,258
</Table>
This press release includes certain statements that fall within the definition
of "forward-looking statements" under the Private Securities Litigation Reform
Act of 1995 such as the statement with respect to future results. Any such
statements are subject to risks and uncertainties, including overall economic
and market conditions, competitors' and customers' actions, which could cause
actual results to differ materially from those anticipated, including those
risks identified in the Company's filings with the Securities and Exchange
Commission. Accordingly, such statements should be considered in light of these
risks.
* * * * *