Sterling Infrastructure, Inc. · NASDAQ:STRL
Sterling Infrastructure — Jefferies Industrials Conference 2022
24 slides from Sterling Infrastructure's conference presentation, Aug 10, 2022
Slide 1: Jefferies Industrials Conference
Jefferies Industrials Conference August 10, 2022 We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow.
Slide 2: Disclosure: Forward-Looking Statements
DISCLOSURE: Forward-Looking Statements This presentation contains, and the officers and directors of the Company may from time to time make, statements that are considered forward- looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forw
Slide 3: Sterling Infrastructure, Inc.
In June 2022, we aligned our name to better reflect our position as a market-leading infrastructure solutions provider driven by our entrepreneurial spirit and customer-centric culture along with a focused, disciplined and bold determination. We are… Sterling Infrastructure, Inc. Delivering value-ad
Slide 4: Delivering Value: Sterling's Proven Performance & Strong Operational Execution
Delivering Value: Sterling's Proven Performance & Strong Operational Execution Diversified Business Mix CAGR (2016 - 2022E) Results in Margin Growth from 6.1% to 14% Revenue Gross Profit EBITDA* 2000 300 300 Commercial 5% 18% 37% 62% Building 20% 250 250 1500 200 200 E-Infrastructure 40% 1000 150 15
Slide 5: Successful Strategic Business Transformation Created Sterling Infrastructure
Successful Strategic Business Transformation Created Sterling Infrastructure, Inc. E-Infrastructure, EBITDA* (2016 - 2022E) Building & $200 Transportation $150 $100 Heavy Civil, Residential & Heavy Civil & Specialty $50 Residential $— 2016 2017 2018 2019 2020 2021 2022E *See EBITDA Reconciliations i
Slide 6: WHO is Sterling?
WHO is Sterling? A story of successful execution of multi-year strategic business transformation since 2016; born of a strategy and vision that levers our entrepreneurial spirit and our customer-centric culture. Sterling, a market-leading infrastructure service provider of e- + E-Infrastructure Solu
Slide 7: Sterling's Expanded Geographic Footprint in Strong Markets with Top Customers
Sterling's Expanded Geographic Footprint in Strong Markets with Top Customers E-Infrastructure Solutions + Expanded geographic footprint providing value-added solutions to blue-chip customers in all major East Coast markets Building Solutions + Expanded geographic footprint serving the Nation's Top
Slide 8: WHY Sterling?
WHY Sterling? Five Year Stock Price Performance Sterling vs S&P 500* + We build value for investors seeking high margins, healthy cash flow, proven performance and strong Sterling operational execution exceeded S&P 500 by 32.3% + Committed to our strategic vision, our blueprint for bottom-line growt
Slide 9: Strategic Execution | Proven Results | Strong Growth
Strategic Execution | Proven Results | Strong Growth Strategic Elements: Solidify the Base | Grow High-Margin Products | Expansion into Adjacent Markets Key Objectives: Bottom-line Growth | Risk Reduction | Exceed Peer Performance Sterling: Second Quarter 2022 9
Slide 10: The Sterling Way
The Sterling Way Taking care of our employees, customers, the environment and our communities is what we do every day Protecting Habitats Protecting the Community Reducing our Carbon Footprint Onsite project management controls for avoidance, Measures regularly practiced at project sites are safety
Slide 11: Second Quarter 2022 Results
+ Second Quarter 2022 Results Sterling: Second Quarter 2022 11
Slide 12: Second Quarter 2022 Results
Second Quarter 2022 Results Sterling Reports Record Second Quarter 2022 Results Earnings Continue to Outpace Expectations Increases 2022 Full Year Guidance Segment revenue as compared to second quarter 2021 Revenues: $510.6 million + Up 27.3%, excluding our recently acquired Net Income: $26.0 millio
Slide 13: Quarterly Consolidated and Segment Results
Quarterly Consolidated and Segment Results ($ in millions) Q2 2022 Q2 2021 ($ in millions) Q2 2022 Q2 2021 Revenues $ 510.6 $ 401.7 E-Infrastructure Solutions Gross Profit 68.4 56.2 Revenue $ 233.5 $ 123.7 G&A Expense (23.4) (15.8) Operating Income $ 32.8 $ 24.7 Intangible Amortization (3.5) (2.9) O
Slide 14: Increased EBITDA and Cash Flow Drives Liquidity Strategy
Increased EBITDA and Cash Flow Drives Liquidity Strategy Sterling is comfortable with a forward looking debt/ Foward Looking EBITDA Debt EBITDA coverage ratio of +/-2.5X. Coverage Ratio 2.5 2 2.4 5-Year Credit Facility 2.2 $435M Term Loan Borrowings 1.5 $75M Revolving Credit Facility (Undrawn) 1 0.5
Slide 15: Contact Us
Contact Us Sterling Ron Ballschmiede, Chief Financial Officer Mary Morley, Investor Relations Sterling Infrastructure, Inc. Tel: (281) 214-0777 The Equity Group Inc. Jeremy Hellman Tel: (212) 836-9626 [email protected] Sterling: Second Quarter 2022 15
Slide 16: Appendix
+ Appendix Sterling: Second Quarter 2022 16
Slide 17: Strategy Driving Profitable Growth
Strategy Driving Profitable Growth *See EBITDA Reconciliations in the Appendix pages 21 - 22 Sterling: Second Quarter 2022 17
Slide 18: 2022 Modeling Considerations
(1) 2022 Modeling Considerations Revenue $1,865 to $1,885 Gross Margin ~14.0% Three Year Revenue Growth G&A Expense as % of Revenue ~5.0% Expectations: Other Operating Expense Net $7 to $9 E-Infrastructure Solutions(2) 7% to 9% JV Non-Controlling Interest Expense $2 to $3 Effective Income Tax Rate ~
Slide 19: 2022 Modeling Considerations Continued
2022 Modeling Considerations Continued* Non-Cash Items FY 2022 Expectations FY 2021 Depreciation $35 to $36 $22.7 Intangible Amortization $15 $11.5 Debt Issuance Cost Amortization $2 to $3 $2.2 Stock-based Compensation $9 to $10 $11.8 Income Tax Expense (Federal) 24% of Pretax Income $19.4 Other Cas
Slide 20: EBITDA Reconciliation
STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA RECONCILIATION (In thousands) (Unaudited) Three Months Six Months Ended Ended June 30, June 30, 2022 2021 2022 2021 Net income attributable to Sterling common stockholders $ 25,961 $ 20,056 $ 45,213 $ 30,611 Depreciation and amortization 13,645 8,4
Slide 21: EBITDA Guidance Reconciliation
STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA GUIDANCE RECONCILIATION (In millions) (Unaudited) Full Year 2022 Guidance Low High Net income attributable to Sterling common stockholders $ 90 $ 96 Depreciation and amortization 50 51 Interest expense, net of interest income 19 20 Income tax expen
Slide 22: Historical EBITDA Reconciliation
STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES HISTORICAL EBITDA RECONCILIATION (In thousands) (Unaudited) 2016 2017 2018 2019 2020 2021 Net (loss) income attributable to Sterling common $ (9,238) $ 11,617 $ 25,187 $ 39,901 $ 42,306 $ 62,645 stockholders Depreciation and amortization 15,699 16,994 16,
Slide 23: ESG at Sterling: The Sterling Way
ESG at Sterling: The Sterling Way Our Core Values: Safety, Respect and Trust, Excellence, Integrity At Sterling, we understand that what we do has an immediate and significant positive impact on improving human conditions + We build our businesses around meeting the needs of the people we serve prov
Slide 24: Thank You
THANK YOU We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow.
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