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Sterling Construction Company, Inc. Reports 2012 Fourth Quarter And Year-End Results

Stocks in this article: STRL

Gross profit for the 2012 fourth quarter was $16.3 million compared with $3.9 million in the same period last year, and gross margin increased to 10.3% from 3.4%. The improvement was related primarily to projects in Utah and Texas. Of note, fourth quarter gross profit and gross margin benefitted from upward revisions of estimated revenues and gross profit on projects in Utah. While projects in Texas continued to reflect the impact of some downward revisions, the impact was substantially less in the 2012 fourth quarter than in the 2011 fourth quarter.

General and administrative expenses increased $3.3 million between the comparable fourth quarters as a result of higher revenues, as well as higher compensation expense related to recent executive appointments and higher professional fees. General and administrative expenses for the 2012 fourth quarter were lower, however, than the $10.3 million reported for the 2012 third quarter. We had operating income of $7.1 million in the fourth quarter of 2012 and an operating margin of 4.5%; this compares to an operating loss of $69.0 million in the fourth quarter of 2011, which included a $67.0 million goodwill impairment charge.

Other Highlights

Backlog at December 31, 2012 was $656 million (excluding approximately $63 million of contracts in which we were the apparent low bidder at December 31, 2012 but which had not been officially awarded). Since year-end, approximately $98 million has been added to backlog. Backlog was $704 million at September 30, 2012 and $616 million at December 31, 2011. During the 2012 fourth quarter, we were awarded contracts approximating $131 million, compared to $119 million in the 2011 fourth quarter bringing total 2012 awards (excluding acquired contracts) to $643 million, an increase of 8% over total 2011 awards.

For 2012, capital expenditures were $37.4 million compared with $24.0 million in 2011 with the increase relating to investments to support our higher level of operations and to replace older equipment. We continue to dispose of underutilized and aging equipment, and over the course of 2012, we generated proceeds of $12.5 million from the sale of property and equipment resulting in a pre-tax gain of $3.2 million.

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