May 4, 2020 – Sterling Construction Company, Inc. (NasdaqGS: STRL) (“Sterling” or “the Company”) today announced financial results for the three months ended March 31, 2020.

CONSOLIDATED FIRST QUARTER 2020 FINANCIAL RESULTS COMPARED TO FIRST QUARTER 2019:

• Revenues were $296.7 million compared to $223.9 million;

• Gross margin was 11.9% of revenues compared to 8.7%;

• Plateau acquisition related costs totaled $0.5 million or $0.02 per diluted share;

• Net income attributable to Sterling common stockholders was $3.1 million or $3.5 million on an adjusted basis⁽¹⁾ compared to $1.8 million or $2.0 million on an adjusted basis⁽¹⁾;

• Net income per diluted share attributable to Sterling common stockholders was $0.11 or $0.12 on an adjusted basis⁽¹⁾ compared to $0.07;

• Cash flows from operations was $10.8 million, an improvement of $30.0 million; and,

• Adjusted EBITDA⁽¹⁾ was $20.8 million compared to $9.0 million.

CONSOLIDATED FINANCIAL POSITION AND LIQUIDITY AT MARCH 31, 2020:

• Cash and Cash Equivalents were $73.9 million;

• Debt, net of cash totaled $385.1 million; and,

• Remaining availability of $25 million under our $75 million Revolving Credit Facility.

HEAVY CIVIL AND SPECIALTY SERVICES BACKLOG HIGHLIGHTS

• Combined Backlog at March 31, 2020 was $1.43 billion, up from $1.34 billion at December 31, 2019. Combined Backlog consists of $1.19 billion of Backlog and $241 million of Unsigned Low-bid Awards as of March 31, 2020 compared to $1.07 billion and $273 million at December 31, 2019, respectively. No residential contracts are included in Backlog.

• Total margin in Backlog has increased approximately 120 basis points, from 11.5% at December 31, 2019 to 12.7% at March 31, 2020. Combined Backlog gross margin improved from 11.0% at December 31, 2019 to 12.1% at March 31, 2020.

Due to the uncertain future COVID-19 financial impacts over the balance of the year, we have withdrawn our previously articulated guidance until we have greater visibility.

Sterling’s Chief Executive Officer, Joe Cutillo, stated, “I’m very proud of our 3,000 employees and their ability to take care of our customers, protect themselves and their families and adapt to a rapidly changing environment associated with the COVID-19 pandemic. Their hard work, ingenuity and quick actions enabled us to deliver record first quarter results that were consistent with our expectations heading into the quarter. Additionally, our first quarter results were aligned with our strategic objectives to continue to grow our bottom line profits faster than top line revenue. Our recently acquired Plateau business, which is the largest component of the Specialty Services segment, exceeded our expectations in financial performance and booked over $100 million of new business in the quarter. Our Residential operating income was slightly lower than the prior year quarter due to heavy March rains, but was up sequentially over the fourth quarter of 2019 as we continue to expand into the Houston market. The Heavy Civil segment saw the largest unfavorable productivity impact in the first quarter related to the pandemic as customers and back offices began to work virtually and new procedures and protocol were developed and implemented into field operations. Despite the COVID-19 pandemic headwinds, the Heavy Civil segment managed to approach achieving our first quarter financial expectations.”

“As we look forward, all our segments have been deemed to be a component of “Essential Critical Infrastructure” per the National Cybersecurity and Infrastructure Agency. We have record backlogs in both the Heavy Civil and Specialty Services segments and remain in an enviable position versus many other businesses. However, we expect to begin to see more significant impacts related to the COVID-19 pandemic in the second and third quarters as our home builder customers expect demand to slow, and new commercial projects related to multifamily and offices may be delayed.”

Mr. Cutillo concluded, “Due to the anticipated slowdown in project activity for our residential, multi-family and commercial markets, along with the high potential of other unforeseen impacts, we have decided to withdraw our previously articulated guidance until we have greater visibility into these markets. Despite the near-term challenges created by the COVID-19 pandemic, the profit and cash flow generated by of each of our businesses in the first quarter exemplify the continued execution of our strategy. Importantly, we generated positive free cash flow in our seasonally weak first quarter, and our liquidity position remains strong, providing us with the financial flexibility to continue to execute on our record combined backlog even if business conditions worsen, and leaving us well prepared to resume the growth trajectory of our bottom line when the economic environment normalizes.”

Sterling’s management will hold a conference call to discuss these results and recent corporate developments on Tuesday, May 5, 2020 at 9:00 a.m. ET/8:00 a.m. CT. Interested parties may participate in the call by dialing (201) 493-6744 or (877) 445-9755. Please call in ten minutes before the conference call is scheduled to begin and ask for the Sterling Construction call. To coincide with the conference call, Sterling will post a slide presentation at www.strlco.com on the Investor Presentations & Webcast section of the Investor Relations tab. Following management’s opening remarks, there will be a question and answer session.

To listen to a simultaneous webcast of the call, please go to the Company’s website at www.strlco.com at least fifteen 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 thirty days.

Sterling Construction Company, Inc., (“Sterling” or “the Company”), a Delaware corporation, is a construction company that has been involved in the construction industry since its founding in 1955. The Company operates through a variety of subsidiaries within three operating groups specializing in heavy civil, specialty services, and residential projects in the United States (the “U.S.”), primarily across the southern U.S., the Rocky Mountain states, California and Hawaii, as well as other areas with strategic construction opportunities. Heavy civil includes infrastructure and rehabilitation projects for highways, roads, bridges, airfields, ports, light rail, water, wastewater and storm drainage systems. Specialty services projects include construction site excavation and drainage, drilling and blasting for excavation, foundations for multi-family homes, parking structures and other commercial concrete projects. Residential projects include concrete foundations for single-family homes.