Sterling Reports Record First Quarter 2024 Results
The financial comparisons herein are to the prior year quarter, unless otherwise noted.
First Quarter 2024 Results
- Revenues of
$440.4 million , an increase of 9% - Gross margin of 17.5%, an increase from 15.3%
- Net Income of
$31.0 million , or$1.00 per diluted share, an increase of 58% and 56%, respectively - EBITDA(1) of
$55.7 million , an increase of 21% - Cash flows from operations totaled
$49.6 million for the first quarter - Cash and Cash Equivalents totaled
$480.4 million atMarch 31, 2024 - Backlog at
March 31, 2024 was$2.35 billion - Combined backlog(2) at
March 31, 2024 was$2.42 billion
CEO Remarks and Outlook
"We had a great start to the year, growing revenue 9%, driving gross margins to a new first quarter high of 17.5%, and delivering EPS of
"The trends across each of our business segments remain strong. In E-Infrastructure Solutions, we expanded operating margins by 294 basis points and grew operating profit by 12% as we continue to shift toward large, mission critical projects. E-Infrastructure revenue declined 10%, driven predominantly by weather impacts across the east coast and the timing of scheduled project starts. We continue to expect high single to low double-digit revenue growth in the E-Infrastructure segment in 2024. E-Infrastructure awards of $332 million reflect continued strength in the data center market. Transportation Solutions had another excellent quarter, with revenue growth of 34% and operating profit growth of 53%. We are seeing broad-based demand across our Transportation Solutions footprint and end markets. Building Solutions revenue grew 23% and operating profit grew 70%, reflecting strength in our residential slab business and excellent performance at the recently acquired
"We believe 2024 will be another excellent year for Sterling. With the strong first quarter results along with our backlog position, we are trending toward the high end of our guidance for the year. We are maintaining our full year revenue and EBITDA guidance and are raising our net income and diluted EPS guidance to reflect lowered net interest expense and tax rate expectations for the year. Based on the high end of our 2024 guidance, our revenue would grow 12%, our net income would increase 23% and our EBITDA would improve 16%,"
Full Year 2024 Guidance
- Revenue of
$2.125 billion to$2.215 billion - Net Income of
$160 million to$170 million - Diluted EPS of
$5.00 to$5.30 - EBITDA(1) of
$285 million to$300 million
(1) See the "Non-GAAP Measures" and "EBITDA Reconciliation" sections below for more information. |
(2)
Combined Backlog includes Unsigned Awards of |
Conference Call
Sterling's management will hold a conference call to discuss these results and recent corporate developments on
To listen to a simultaneous webcast of the call, please go to the Company's website at www.strlco.com at least 15 minutes early to download and install any necessary audio software. If you are unable to listen live, the conference call webcast will be archived on the Company's website for 30 days.
About Sterling
Sterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and
our people to move and our country to grow."
Important Information for Investors and Stockholders
Non-GAAP Measures
This press release contains "Non-GAAP" financial measures as defined under Regulation G of the amended
Non-GAAP measures may include adjusted net income, adjusted EPS, EBITDA and adjusted EBITDA, in each case excluding the impacts of certain identified items. The excluded items represent items that the Company does not consider to be representative of its normal operations. The Company believes that these measures are useful for investors to review, because they provide a consistent measure of the underlying financial results of the Company's ongoing business and, in the Company's view, allow for a supplemental comparison against historical results and expectations for future performance. Furthermore, the Company uses each of these to measure the performance of the Company's operations for budgeting and forecasting, as well as for determining employee incentive compensation. However, Non-GAAP measures should not be considered as substitutes for net income, EPS, or other data prepared and reported in accordance with GAAP and should be viewed in addition to the Company's reported results prepared in accordance with GAAP.
Reconciliations of Non-GAAP financial measures to the most comparable GAAP measures are provided in the tables included within this press release.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains statements that are considered forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: our business strategy; our financial strategy; our industry outlook; our guidance; our expected margin growth; and our plans, objectives, expectations, forecasts, outlook and intentions. All of these types of statements, other than statements of historical fact included in this press release, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "guidance," "continue," the negative of such terms or other comparable terminology. The forward-looking statements contained in this press release are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the "Risk Factors" section in our filings with the
Company Contact:
281-214-0795
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
|||
|
|||
|
Three Months Ended |
||
|
2024 |
|
2023 |
|
|
|
|
Revenues |
$ 440,360 |
|
$ 403,579 |
Cost of revenues |
(363,456) |
|
(341,837) |
Gross profit |
76,904 |
|
61,742 |
General and administrative expense |
(27,298) |
|
(23,321) |
Intangible asset amortization |
(4,297) |
|
(3,736) |
Acquisition related costs |
(36) |
|
(190) |
Other operating expense, net |
(3,148) |
|
(1,868) |
Operating income |
42,125 |
|
32,627 |
Interest income |
5,902 |
|
1,974 |
Interest expense |
(6,664) |
|
(7,528) |
Income before income taxes |
41,363 |
|
27,073 |
Income tax expense |
(7,604) |
|
(7,033) |
Net income, including noncontrolling interests |
33,759 |
|
20,040 |
Less: Net income attributable to noncontrolling interests |
(2,711) |
|
(391) |
Net income attributable to Sterling common stockholders |
$ 31,048 |
|
$ 19,649 |
|
|
|
|
Net income per share attributable to Sterling common stockholders: |
|
|
|
Basic |
$ 1.00 |
|
$ 0.64 |
Diluted |
$ 1.00 |
|
$ 0.64 |
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
Basic |
30,977 |
|
30,618 |
Diluted |
31,186 |
|
30,789 |
SEGMENT INFORMATION (In thousands) (Unaudited) |
|||||||
|
|||||||
|
Three Months Ended |
||||||
Revenues |
2024 |
|
% of Revenue |
|
2023 |
|
% of Revenue |
E-Infrastructure Solutions |
$ 184,476 |
|
42 % |
|
$ 205,840 |
|
51 % |
Transportation Solutions |
148,969 |
|
34 % |
|
111,139 |
|
28 % |
Building Solutions |
106,915 |
|
24 % |
|
86,600 |
|
21 % |
Total Revenues |
$ 440,360 |
|
|
|
$ 403,579 |
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
E-Infrastructure Solutions |
$ 27,169 |
|
14.7 % |
|
$ 24,269 |
|
11.8 % |
Transportation Solutions |
8,132 |
|
5.5 % |
|
5,306 |
|
4.8 % |
Building Solutions |
14,775 |
|
13.8 % |
|
8,701 |
|
10.0 % |
Segment Operating Income |
50,076 |
|
11.4 % |
|
38,276 |
|
9.5 % |
Corporate G&A Expense |
(7,915) |
|
|
|
(5,459) |
|
|
Acquisition Related Costs |
(36) |
|
|
|
(190) |
|
|
Total Operating Income |
$ 42,125 |
|
9.6 % |
|
$ 32,627 |
|
8.1 % |
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) (Unaudited) |
|||
|
|||
|
|
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 480,414 |
|
$ 471,563 |
Accounts receivable |
274,010 |
|
252,435 |
Contract assets |
88,329 |
|
88,600 |
Receivables from and equity in construction joint ventures |
18,222 |
|
17,506 |
Other current assets |
17,883 |
|
17,875 |
Total current assets |
878,858 |
|
847,979 |
Property and equipment, net |
258,802 |
|
243,648 |
Operating lease right-of-use assets, net |
55,169 |
|
57,235 |
|
281,363 |
|
281,117 |
Other intangibles, net |
324,100 |
|
328,397 |
Other non-current assets, net |
19,204 |
|
18,808 |
Total assets |
$ 1,817,496 |
|
$ 1,777,184 |
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ 135,426 |
|
$ 145,968 |
Contract liabilities |
485,049 |
|
444,160 |
Current maturities of long-term debt |
26,469 |
|
26,520 |
Current portion of long-term lease obligations |
19,143 |
|
19,641 |
Accrued compensation |
19,831 |
|
27,758 |
Other current liabilities |
19,799 |
|
14,121 |
Total current liabilities |
705,717 |
|
678,168 |
Long-term debt |
308,721 |
|
314,996 |
Long-term lease obligations |
36,180 |
|
37,722 |
Members' interest subject to mandatory redemption and undistributed earnings |
19,097 |
|
29,108 |
Deferred tax liability, net |
78,303 |
|
76,764 |
Other long-term liabilities |
17,261 |
|
16,573 |
Total liabilities |
1,165,279 |
|
1,153,331 |
Stockholders' equity: |
|
|
|
Common stock |
311 |
|
309 |
Additional paid in capital |
288,173 |
|
293,570 |
Retained earnings |
356,082 |
|
325,034 |
Total Sterling stockholders' equity |
644,566 |
|
618,913 |
Noncontrolling interests |
7,651 |
|
4,940 |
Total stockholders' equity |
652,217 |
|
623,853 |
Total liabilities and stockholders' equity |
$ 1,817,496 |
|
$ 1,777,184 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||
|
|||
|
Three Months Ended |
||
|
2024 |
|
2023 |
Cash flows from operating activities: |
|
|
|
Net income |
$ 33,759 |
|
$ 20,040 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
16,258 |
|
13,692 |
Amortization of debt issuance costs and non-cash interest |
305 |
|
422 |
Gain on disposal of property and equipment |
(585) |
|
(1,672) |
Deferred taxes |
1,517 |
|
2,728 |
Stock-based compensation |
4,586 |
|
3,240 |
Changes in operating assets and liabilities |
(6,249) |
|
10,608 |
Net cash provided by operating activities |
49,591 |
|
49,058 |
Cash flows from investing activities: |
|
|
|
Acquisitions, net of cash acquired |
(1,016) |
|
— |
Disposition proceeds |
— |
|
14,000 |
Capital expenditures |
(22,432) |
|
(14,221) |
Proceeds from sale of property and equipment |
2,401 |
|
6,726 |
Net cash (used in) provided by investing activities |
(21,047) |
|
6,505 |
Cash flows from financing activities: |
|
|
|
Repayments of debt |
(6,678) |
|
(30,843) |
Withholding taxes paid on net share settlement of equity awards |
(13,015) |
|
(4,288) |
Net cash used in financing activities |
(19,693) |
|
(35,131) |
Net change in cash, cash equivalents, and restricted cash |
8,851 |
|
20,432 |
Cash, cash equivalents and restricted cash at beginning of period |
471,563 |
|
185,265 |
Cash, cash equivalents and restricted cash at end of period |
480,414 |
|
205,697 |
Less: restricted cash |
— |
|
(3,121) |
Cash and cash equivalents at end of period |
$ 480,414 |
|
$ 202,576 |
EBITDA RECONCILIATION (In thousands) (Unaudited) |
|||
|
|||
|
Three Months Ended |
||
|
2024 |
|
2023 |
Net income attributable to Sterling common stockholders |
$ 31,048 |
|
$ 19,649 |
Depreciation and amortization |
16,258 |
|
13,692 |
Interest expense, net of interest income |
762 |
|
5,554 |
Income tax expense |
7,604 |
|
7,033 |
EBITDA(1) |
55,672 |
|
45,928 |
Acquisition related costs |
36 |
|
190 |
Adjusted EBITDA(2) |
$ 55,708 |
|
$ 46,118 |
|
|
|
|
(1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders adjusted for depreciation and amortization, net interest expense and taxes. |
|||
|
|
|
|
(2) The Company defines adjusted EBITDA as EBITDA excluding the impact of acquisition related costs. |
EBITDA GUIDANCE RECONCILIATION (In millions) (Unaudited) |
|||
|
|||
|
Full Year 2024 Guidance |
||
|
Low |
|
High |
Net income attributable to Sterling common stockholders |
$ 160 |
|
$ 170 |
Depreciation and amortization |
65 |
|
66 |
Interest expense, net of interest income |
3 |
|
4 |
Income tax expense |
57 |
|
60 |
EBITDA (1) |
$ 285 |
|
$ 300 |
|
|
|
|
(1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense, and taxes. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/sterling-reports-record-first-quarter-2024-results-302137226.html
SOURCE