Sterling Construction Company, Inc. Reports 2012 First Quarter Results

Sterling Construction Company, Inc. (NasdaqGS: STRL) (“Sterling” or “the Company”) today announced results for the first quarter ended March 31, 2012.
 
$ in thousands

(except per share data)
  3 Months Ended   % Change*
  3/31/12   3/31/11  
Revenues   $ 98,425     $ 99,242     (0.8 )%
Gross profit   $ 1,873     $ 7,599     (75.4 )%
Gross margin     1.9 %     7.7 %   (75.3 )%
Operating income (loss)   $ (4,562 )   $ 1,688     NM  
Net income (loss) attributable to

common stockholders
  $ (7,500 )   $ 44     NM  
Diluted net income (loss) per share attributable to

common stockholders**
  $ (0.44 )   $ 0.00     NM  
 

* The percentages and amounts shown for changes between periods in the table above and in the discussions below are based on the amounts reported in the Form 10-Q and may differ from the amounts which would have been calculated from the table above as a result of rounding.

**Based on 16.3 million and 16.6 million weighted-average diluted shares outstanding for the three months ended March 31, 2012 and 2011, respectively.

NM – Not meaningful

2012 First Quarter Compared to 2011

The slight decline in 2012 first quarter revenues was primarily due to lower revenues from contracts in Texas, and, to a lesser extent, in Nevada and Utah. This decline was largely offset by $11.9 million in revenues attributable to J. Banicki Construction, Inc. (operating in Arizona) and Myers & Sons Construction, L.P. (operating in California), both of which were acquired in August 2011. Gross profit and gross margin declined due to net downward revisions of estimated revenues and gross profit on a number of construction projects, primarily in Texas. During the quarter ended March 31, 2012, our projects continued to be impacted by a number of the issues identified in the fourth quarter of 2011, and changes in estimated revenues and gross margin on certain construction projects resulted in a net charge of $3.9 million included in the operating results and a $2.4 million after-tax charge or $0.15 per diluted share attributable to Sterling common stockholders. As previously reported, we have made a number of changes to our management team, systems and controls, and while we expect the implementation of these changes will help to improve profitability in the future, we do not expect to see a substantial improvement on our 2012 results.

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