Exhibit 99.1
Sterling Construction Company, Inc. Announces Results of Operations
for Its First Quarter
HOUSTON--(BUSINESS WIRE)--May 13, 2004--Sterling Construction
Company, Inc. (Amex:STV), ("Sterling" or the "Company"), today
announced results of operations for the first quarter ended March 31,
2004. Sterling operates through two subsidiaries, 80.1%-owned Sterling
Houston Holdings, Inc. (the "Construction Segment"), a heavy civil
construction company that specializes in municipal and state highway
contracts for paving, bridge, water and sewer and light rail projects,
and Steel City Products, Inc. (the "Distribution Segment"), a
distributor of automotive accessories, pet supplies and lawn and
garden products based in Pittsburgh.
The Company reported total revenues of $32.3 million and net
income of $0.3 million for the first quarter of 2004, representing net
income of 5 cents per share (4 cents per share on a diluted basis).
Consolidated Earnings before Interest, Taxes, Depreciation and
Amortization ("EBITDA"), net of minority interest, was $2.2 million.
In the comparable period last year, total revenues were $41.7 million
resulting in net income of $1.2 million or 24 cents per share (20
cents per share on a diluted basis). EBITDA, net of minority interest,
was $3.6 million in the prior year period.
Commenting on the results, Joseph Harper, the Company's President,
said that the first quarter, historically the Construction Segment's
weakest, was especially hard hit in 2004 by exceptionally poor weather
which slowed work schedules. He noted, however, that both the
Construction and Distribution Segments had exceeded their budgeted
operating income in the quarter.
Maarten Hemsley, the Company's Chief Financial Officer, said,
"While our statement of operations includes a full income tax
provision, we have substantial tax loss carryforwards sheltering most
of our $630,000 of first quarter pre-tax operating income. Our P&L
also reflects a non-cash charge of $200,000 resulting from variable
accounting treatment for certain stock options, which treatment was
not material in the prior year period. Following changes to the
Company's stock option plans, under current rules, the effect of
variable accounting treatment in future periods will not be material."
To protect the Company's tax loss carryforwards, which represent a
significant corporate asset, shareholders and prospective shareholders
are reminded that the Company has in place charter restrictions on the
accumulation of shareholdings exceeding 4.5%, as such an accumulation
under current tax laws could adversely affect the use of the tax
losses.
This press release includes certain statements that fall within
the definition of "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. Any such statements are
subject to risks and uncertainties, including overall economic and
market conditions, competitors' and customers' actions, and weather
conditions, which could cause actual results to differ materially from
those anticipated, including those risks identified in the Company's
filings with the Securities and Exchange Commission. Accordingly, such
statements should be considered in light of these risks.
STERLING CONSTRUCTION COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED RESULTS OF OPERATIONS
(unaudited)
Three months Three months
Ended Ended
March 31, March 31,
2004 2003
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Contract revenues $25,586 $35,679
Sales 6,723 6,019
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32,309 41,698
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Cost of contract revenues earned 22,908 31,822
Cost of goods sold, including occupancy
and buying expenses 5,776 5,160
Selling and administrative expenses 2,476 1,995
Interest expense, net of interest income 519 600
------------ -------------
31,679 39,577
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Income before minority interest and
income taxes 630 2,121
Minority interest in net earnings of
subsidiary 167 324
------------ -------------
Income before taxes 463 1,797
Income tax expense 195 601
------------ -------------
Net income $268 $1,196
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Basic and diluted net income per share:
Basic $0.05 $0.24
Diluted $0.04 $0.20
Weighted average number of shares
outstanding used in
computing basic and diluted per
share amounts:
Basic 5,172,458 5,069,016
Diluted 7,266,573 5,993,090
CONTACT: Sterling Construction Company, Inc.
Maarten Hemsley, 781-934 2219
or
Joseph Harper, 281-821 9091