Changes in the revaluation of the liability to noncontrolling interest owners are reflected in retained earnings rather than net income; however, such changes impact basic and diluted net income (loss) per share attributable to Sterling common stockholders. The revaluations for the three and nine months ended September 30, 2012 resulted in reductions of $0.05 and $0.07, respectively, in basic and diluted net income (loss) per share attributable to Sterling common stockholders.
Strong Financial Position
We are in very sound financial condition. At September 30, 2012:
- Working capital totaled $82.6 million, including $54.5 million of cash, cash equivalents and short-term investments;
- Up to $38.2 million in borrowings was available under the credit facility with an optional increase amount of $50 million; and,
- Tangible net worth of $157.9 million was more than adequate to support our bonding requirements.
Peter MacKenna, Sterling’s recently appointed Chief Executive Officer commented, “Since joining just over two months ago, I have been evaluating and analyzing all aspects of our business and have been very pleased with much of what I’ve learned. We have a dedicated team of hard working people with considerable experience enabling us to bid and successfully execute larger more complex jobs; we are in attractive geographic markets; and as noted, we are financially very strong. While the economy and general market conditions have impacted our recent performance, I am confident that with the ongoing improvements to our bidding and execution processes, Sterling’s near-term profitability should strengthen, which will position us to capitalize on a more active project environment as economic conditions and government funding improve.”
The enactment of the Moving Ahead for Progress in the 21st Century (“MAP-21”) legislation, a two-year, $105 billion reauthorization of the federal surface transportation program, provides annual federal highway funding close to the level of $41 billion under the SAFETEA-LU bill which has been extended numerous times but expired in June 2012. While maintaining current funding levels, perhaps the greatest impact of the legislation is to give clarity and funding certainty to state and local transportation agencies. Of note, the estimated apportionment of the funds by state indicates that California and Texas have the largest amounts available, approximately $3.5 billion and $3.1 billion, respectively, for fiscal year 2013. In addition, the Transportation Infrastructure Finance and Innovation Act (“TIFIA”) provides for Federal credit assistance to nationally or regionally significant surface transportation projects, including highway, transit and rail. This program will offer up to $750 million of funds in 2013 and $1.0 billion in 2014. This translates into approximately $7.5 billion and $10.0 billion of lending capacity in each of these fiscal years, compared with approximately $1.2 billion of annual lending capacity under prior law. We are hopeful that state and local contracting agencies where we operate will take advantage of TIFIA and MAP-21 funding and once again be awarding larger and more ambitious highway and bridge construction contracts.