Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-31993 | |
Entity Registrant Name | STERLING CONSTRUCTION COMPANY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 25-1655321 | |
Entity Address, Address Line One | 1800 Hughes Landing Blvd. | |
Entity Address, City or Town | The Woodlands | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77380 | |
City Area Code | 281 | |
Local Phone Number | 214-0800 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | STRL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,606,443 | |
Entity Central Index Key | 0000874238 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 315,316 | $ 296,688 |
Cost of revenues | (270,284) | (261,443) |
Gross profit | 45,032 | 35,245 |
General and administrative expense | (17,099) | (17,604) |
Intangible asset amortization | (2,866) | (2,837) |
Acquisition related costs | 0 | (473) |
Other operating expense, net | (2,312) | (2,228) |
Operating income | 22,755 | 12,103 |
Interest income | 14 | 99 |
Interest expense | (6,004) | (7,803) |
Loss on extinguishment of debt | (337) | 0 |
Income before income taxes | 16,428 | 4,399 |
Income tax expense | (4,760) | (1,184) |
Net income | 11,668 | 3,215 |
Less: Net income attributable to noncontrolling interests | (1,113) | (100) |
Net income attributable to Sterling common stockholders | $ 10,555 | $ 3,115 |
Net income per share attributable to Sterling common stockholders: | ||
Basic (in dollars per share) | $ 0.37 | $ 0.11 |
Diluted (in dollars per share) | $ 0.37 | $ 0.11 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 28,279 | 27,736 |
Diluted (in shares) | 28,763 | 27,992 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 11,668 | $ 3,215 |
Change in interest rate swap, net of tax | 895 | (7,061) |
Total comprehensive income (loss) | 12,563 | (3,846) |
Less: Comprehensive income attributable to noncontrolling interests | (1,113) | (100) |
Comprehensive income (loss) attributable to Sterling common stockholders | $ 11,450 | $ (3,946) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents ($20,270 and $26,122 related to variable interest entities (“VIEs”)) | $ 61,402 | $ 66,185 |
Accounts receivable ($19,567 and $25,789 related to VIEs) | 170,186 | 177,424 |
Contract assets ($10,404 and $8,370 related to VIEs) | 90,109 | 84,975 |
Receivables from and equity in construction joint ventures ($9,312 and $9,708 related to VIEs) | 18,166 | 16,653 |
Other current assets ($2,829 and $1,493 related to VIEs) | 15,366 | 16,306 |
Total current assets | 355,229 | 361,543 |
Property and equipment, net ($8,999 and $6,010 related to VIEs) | 135,428 | 126,668 |
Operating lease right-of-use assets, net ($4,060 and $4,213 related to VIEs) | 15,804 | 16,515 |
Goodwill ($1,501 and $1,501 related to VIEs) | 192,014 | 192,014 |
Other intangibles, net | 242,021 | 244,887 |
Deferred tax asset, net | 3,410 | 7,817 |
Other non-current assets, net | 3,310 | 3,250 |
Total assets | 947,216 | 952,694 |
Current liabilities: | ||
Accounts payable ($17,608 and $19,505 related to VIEs) | 111,131 | 95,201 |
Contract liabilities ($13,287 and $17,678 related to VIEs) | 111,232 | 114,019 |
Current maturities of long-term debt ($6,793 and $6,793 related to VIEs) | 59,962 | 77,434 |
Current portion of long-term lease obligations ($1,929 and $1,801 related to VIEs) | 7,627 | 7,588 |
Income taxes payable | 260 | 0 |
Accrued compensation ($2,817 and $2,141 related to VIEs) | 22,124 | 18,013 |
Other current liabilities ($1,295 and $1,374 related to VIEs) | 9,910 | 9,629 |
Total current liabilities | 322,246 | 321,884 |
Long-term debt ($62 and $53 related to VIEs) | 279,175 | 291,249 |
Long-term lease obligations ($2,131 and $2,412 related to VIEs) | 8,202 | 8,958 |
Members’ interest subject to mandatory redemption and undistributed earnings | 51,615 | 51,290 |
Other long-term liabilities ($1,063 and $722 related to VIEs) | 10,285 | 10,584 |
Total liabilities | 671,523 | 683,965 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Common stock, par value $0.01 per share; 38,000 shares authorized, 28,606 and 28,279 shares issued, 28,606 and 28,184 shares outstanding | 286 | 283 |
Additional paid in capital | 251,335 | 256,423 |
Treasury stock, at cost: 0 and 95 shares | 0 | (1,445) |
Retained earnings | 27,828 | 17,273 |
Accumulated other comprehensive loss | (4,369) | (5,264) |
Total Sterling stockholders’ equity | 275,080 | 267,270 |
Noncontrolling interests | 613 | 1,459 |
Total stockholders’ equity | 275,693 | 268,729 |
Total liabilities and stockholders’ equity | $ 947,216 | $ 952,694 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cash and cash equivalents | $ 61,402 | $ 66,185 |
Accounts receivable | 170,186 | 177,424 |
Contract assets | 90,109 | 84,975 |
Receivables from and equity in construction joint ventures | 18,166 | 16,653 |
Other current assets | 15,366 | 16,306 |
Property and equipment, net | 135,428 | 126,668 |
Operating lease right-of-use assets | 15,804 | 16,515 |
Goodwill | 192,014 | 192,014 |
Accounts payable | 111,131 | 95,201 |
Contract liabilities | 111,232 | 114,019 |
Current maturities of long-term debt | 59,962 | 77,434 |
Current portion of long-term lease obligations | 7,627 | 7,588 |
Accrued compensation | 22,124 | 18,013 |
Other current liabilities | 9,910 | 9,629 |
Long term debt | 279,175 | 291,249 |
Long-term lease obligations | 8,202 | 8,958 |
Other long-term liabilities | $ 10,285 | $ 10,584 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 38,000,000 | 38,000,000 |
Common stock issued (in shares) | 28,606,000 | 28,279,000 |
Common stock outstanding (in shares) | 28,606,000 | 28,184,000 |
Treasury stock (in shares) | 0 | 95,000 |
Variable Interest Entity, Primary Beneficiary | ||
Cash and cash equivalents | $ 20,270 | $ 26,122 |
Accounts receivable | 19,567 | 25,789 |
Contract assets | 10,404 | 8,370 |
Receivables from and equity in construction joint ventures | 9,312 | 9,708 |
Other current assets | 2,829 | 1,493 |
Property and equipment, net | 8,999 | 6,010 |
Operating lease right-of-use assets | 4,060 | 4,213 |
Goodwill | 1,501 | 1,501 |
Accounts payable | 17,608 | 19,505 |
Contract liabilities | 13,287 | 17,678 |
Current maturities of long-term debt | 6,793 | 6,793 |
Current portion of long-term lease obligations | 1,929 | 1,801 |
Accrued compensation | 2,817 | 2,141 |
Other current liabilities | 1,295 | 1,374 |
Long term debt | 62 | 53 |
Long-term lease obligations | 2,131 | 2,412 |
Other long-term liabilities | $ 1,063 | $ 722 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 11,668 | $ 3,215 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,305 | 8,285 |
Amortization of debt issuance costs and non-cash interest | 660 | 1,022 |
Gain on disposal of property and equipment | (68) | (393) |
Loss on debt extinguishment | 337 | 0 |
Deferred taxes | 4,142 | 913 |
Stock-based compensation expense | 1,835 | 2,234 |
Change in interest rate swap | (22) | 171 |
Changes in operating assets and liabilities (Note 15) | 11,863 | (4,676) |
Net cash provided by operating activities | 38,720 | 10,771 |
Cash flows from investing activities: | ||
Capital expenditures | (11,209) | (7,354) |
Proceeds from sale of property and equipment | 208 | 512 |
Net cash used in investing activities | (11,001) | (6,842) |
Cash flows from financing activities: | ||
Cash received from credit facility | 0 | 30,000 |
Repayments of debt | (30,543) | (5,082) |
Distributions to noncontrolling interest owners | (1,959) | 0 |
Other | 0 | (675) |
Net cash (used in) provided by financing activities | (32,502) | 24,243 |
Net change in cash and cash equivalents | (4,783) | 28,172 |
Cash and cash equivalents at beginning of period | 66,185 | 45,733 |
Cash and cash equivalents at end of period | 61,402 | 73,905 |
Non-cash items: | ||
Capital expenditures | $ 3,131 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid in Capital | Treasury Stock | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss | Total Sterling Stockholders’ Equity | Non-controlling Interests |
Beginning balance (in shares) at Dec. 31, 2019 | 27,772 | 518 | ||||||
Beginning balance at Dec. 31, 2019 | $ 221,211 | $ 283 | $ 251,019 | $ (6,142) | $ (25,033) | $ (209) | $ 219,918 | $ 1,293 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 3,215 | 3,115 | 3,115 | 100 | ||||
Change in interest rate swap | (7,061) | (7,061) | (7,061) | |||||
Stock-based compensation | 2,234 | 2,234 | 2,234 | |||||
Issuance of stock (in shares) | 248 | 248 | ||||||
Issuance of stock | 103 | (2,460) | $ 2,563 | 103 | ||||
Shares withheld for taxes (in shares) | 54 | 46 | ||||||
Shares withheld for taxes | (772) | (104) | $ (668) | (772) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 27,966 | 316 | ||||||
Ending balance at Mar. 31, 2020 | 218,930 | $ 283 | 250,689 | $ (4,247) | (21,918) | (7,270) | 217,537 | 1,393 |
Beginning balance (in shares) at Dec. 31, 2020 | 28,184 | 95 | ||||||
Beginning balance at Dec. 31, 2020 | 268,729 | $ 283 | 256,423 | $ (1,445) | 17,273 | (5,264) | 267,270 | 1,459 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 11,668 | 10,555 | 10,555 | 1,113 | ||||
Change in interest rate swap | 895 | 895 | 895 | |||||
Stock-based compensation | 1,835 | 1,835 | 1,835 | |||||
Distributions to owners | (1,959) | 0 | (1,959) | |||||
Issuance of stock (in shares) | 668 | 111 | ||||||
Issuance of stock | 144 | $ 5 | (1,602) | $ 1,741 | 144 | |||
Shares withheld for taxes (in shares) | (246) | (16) | ||||||
Shares withheld for taxes | (5,619) | $ (2) | (5,321) | $ (296) | (5,619) | |||
Ending balance (in shares) at Mar. 31, 2021 | 28,606 | 0 | ||||||
Ending balance at Mar. 31, 2021 | $ 275,693 | $ 286 | $ 251,335 | $ 0 | $ 27,828 | $ (4,369) | $ 275,080 | $ 613 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. NATURE OF OPERATIONS Business Summary Sterling Construction Company, Inc., (“Sterling,” “the Company,” “we,” “our” or “us”), a Delaware corporation, operates through a variety of subsidiaries within three segments 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 land development activities (including 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. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Presentation Basis— The accompanying Condensed Consolidated Financial Statements are presented in accordance with accounting policies generally accepted in the United States (“GAAP”) and reflect all wholly owned subsidiaries and those entities the Company is required to consolidate. See Note 4 - Consolidated 50% Owned Subsidiaries and Note 5 - Construction Joint Ventures for further discussion of the Company’s consolidation policy for those entities that are not wholly owned. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Values presented within tables (excluding per share data) are in thousands. Reclassifications have been made to historical financial data in the Condensed Consolidated Financial Statements to conform to the current year presentation. Estimates and Judgments— The preparation of the accompanying Condensed Consolidated Financial Statements in conformance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting estimates of the Company require a higher degree of judgment than others in their application. These include the recognition of revenue and earnings from construction contracts over time, the valuation of long-lived assets, goodwill and purchase accounting estimates. Management continually evaluates all of its estimates and judgments based on available information and experience; however, actual results could differ from these estimates. Significant Accounting Policies Consistent with Regulation S-X Rule 10-1(a), the Company has omitted significant accounting policies in this quarterly report that would duplicate the disclosures contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020 under “Part II, Item 8. - Notes to Consolidated Financial Statements.” This quarterly report should be read in conjunction with the Company’s most recent annual report on Form 10-K. Accounts Receivable— Receivables are generally based on amounts billed to the customer in accordance with contractual provisions. Receivables are written off based on the individual credit evaluation and specific circumstances of the customer, when such treatment is warranted. The Company performs a review of outstanding receivables, historical collection information and existing economic conditions to determine if there are potential uncollectible receivables. At March 31, 2021 and December 31, 2020, our allowance for our estimate of expected credit losses was zero. As is customary, we have agreed to indemnify our bonding company for all losses incurred by it in connection with bonds that are issued, and we have granted our bonding company a security interest in certain assets, including accounts receivable, as collateral for such obligation. Contracts in Progress— For performance obligations satisfied over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Typically, Sterling bills for advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. However, the Company occasionally bills subsequent to revenue recognition, resulting in contract assets. Many of the contracts under which the Company performs work also contain retainage provisions. Retainage refers to that portion of our billings held for payment by the customer pending satisfactory completion of the project. Unless reserved, the Company assumes that all amounts retained by customers under such provisions are fully collectible. At March 31, 2021 and December 31, 2020, contract assets included $43,824 and $44,412 of retainage, respectively, and contract liabilities included $35,832 and $33,856 of retainage, respectively. Retainage on active contracts is classified as current regardless of the term of the contract and is generally collected within one year of the completion of a contract. We anticipate collecting approximately 69% of our March 31, 2021 retainage during the next twelve months. These assets and liabilities are reported on the Condensed Consolidated Balance Sheet within “Contract assets” and “Contract liabilities” on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the three months ended March 31, 2021 that was included in the contract liability balance on December 31, 2020 was $155,558. Revenue recognized for the three months ended March 31, 2020 that was included in the contract liability balance on December 31, 2019 was $146,266. Cash and Restricted Cash— Our cash is comprised of highly liquid investments with maturities of three months or less. Restricted cash of approximately $5,800 and $6,500 is included in “Other current assets” on the Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively. This primarily represents cash deposited by the Company into separate accounts and designated as collateral for standby letters of credit in the same amount in accordance with contractual agreements. |
Revenue From Customers
Revenue From Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Customers | 3. REVENUE FROM CUSTOMERS Backlog — The following table presents the Company’s backlog, by segment: March 31, December 31, Heavy Civil Backlog $ 1,261,461 $ 898,183 Specialty Services Backlog 377,761 277,205 Total Heavy Civil and Specialty Services Backlog $ 1,639,222 $ 1,175,388 The Company expects to recognize approximately 52% of its backlog as revenue during the next twelve months, and the balance thereafter. Revenue Disaggregation — The following tables present the Company’s revenue disaggregated by major end market and contract type: Three Months Ended March 31, Revenues by major end market 2021 2020 Heavy Highway $ 99,516 $ 96,374 Aviation 27,222 28,457 Water Containment and Treatment 14,219 21,809 Other 6,097 8,975 Heavy Civil Revenues 147,054 155,615 Land Development 96,572 76,245 Commercial 27,516 28,478 Specialty Services Revenues 124,088 104,723 Residential Revenues 44,174 36,350 Total Revenues $ 315,316 $ 296,688 Revenues by contract type Fixed-Unit Price $ 177,547 $ 141,739 Lump Sum 91,155 114,252 Residential and Other 46,614 40,697 Total Revenues $ 315,316 $ 296,688 Each of these contract types presents advantages and disadvantages. Typically, the Company assumes more risk with lump-sum contracts. However, these types of contracts offer additional profits if the work is completed for less than originally estimated. Under fixed-unit price contracts, the Company’s profit may vary if actual labor-hour costs vary significantly from the negotiated rates. Also, because some contracts can provide little or no fee for managing material costs, the components of contract cost can impact profitability. Variable Consideration The Company has projects that it is in the process of negotiating, or awaiting final approval of, unapproved change orders and claims with its customers. The Company is proceeding with its contractual rights to recoup additional costs incurred from its customers based on completing work associated with change orders, including change orders with pending change order pricing, or claims related to significant changes in scope which resulted in substantial delays and additional costs in completing the work. Unapproved change order and claim information has been provided to the Company’s customers and negotiations with the customers are ongoing. If additional progress with an acceptable resolution is not reached, legal action will be taken. Based upon the Company’s review of the provisions of its contracts, specific costs incurred and other related evidence supporting the unapproved change orders and claims, together in some cases as necessary with the views of the Company’s outside claim consultants, the Company concluded it was appropriate to include in project price amounts of $7,142, at March 31, 2021 and December 31, 2020, relating to unapproved change orders and claims. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Contract Estimates Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, the Company estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes such profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that often span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials and the performance of subcontractors. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated revenues and gross margin resulted in a net increase of approximately $8,305 for the three months ended March 31, 2021, and net increase of approximately $95 for the three months ended March 31, 2020, included in “Operating income” on the Condensed Consolidated Statements of Operations. |
Consolidated 50% Owned Subsidia
Consolidated 50% Owned Subsidiaries | 3 Months Ended |
Mar. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Consolidated 50% Owned Subsidiaries | 4. CONSOLIDATED 50% OWNED SUBSIDIARIES The Company has 50% ownership interests in two subsidiaries (“Myers” and “RHB”) that it fully consolidates as a result of its exercise of control over the entities. The earnings attributable to the 50% portions the Company does not own were approximately $1,800 and $1,700 for the three months ended March 31, 2021 and 2020, respectively, and are eliminated within “Other operating expense, net” in the Condensed Consolidated Statements of Operations. Any undistributed earnings for partners are included in “Members’ interest subject to mandatory redemption and undistributed earnings” within the Condensed Consolidated Balance Sheets and are mandatorily payable at the time of the noncontrolling owners’ death or permanent disability. These two subsidiaries have individual mandatory redemption provisions which, under circumstances outlined in the partner agreements, are certain to occur and obligate the Company to purchase each partner’s remaining 50% interests for $20,000 ($40,000 in the aggregate). The Company has purchased two separate $20,000 death and permanent total disability insurance policies to mitigate the Company’s cash draw if such events were to occur. These purchase obligations are also recorded in “Members’ interest subject to mandatory redemption and undistributed earnings” on the Condensed Consolidated Balance Sheets. The liability consists of the following: March 31, December 31, Members’ interest subject to mandatory redemption $ 40,000 $ 40,000 Net accumulated earnings 11,615 11,290 Total liability $ 51,615 $ 51,290 The Company must determine whether any of its entities, including these two 50% owned subsidiaries, in which it participates, is a VIE. The Company determined that Myers is a VIE and that the Company is the primary beneficiary because pursuant to the terms of the Myers Operating Agreement, the Company is exposed to the majority of potential losses of the partnership. Summary financial information for Myers is as follows: Three Months Ended March 31, 2021 2020 Revenues $ 27,957 $ 44,362 Operating income $ 718 $ 155 Net income $ 352 $ 79 |
Construction Joint Ventures
Construction Joint Ventures | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Construction Joint Ventures | 5. CONSTRUCTION JOINT VENTURES Joint Ventures with a Controlling Interest —We consolidate any venture that is determined to be a VIE for which we are the primary beneficiary, or which we otherwise effectively control. The equity held by the remaining owners and their portions of net income (loss) are reflected in stockholders’ equity on the Condensed Consolidated Balance Sheets line item “Noncontrolling interests” and in the Condensed Consolidated Statements of Operations line item “Net income attributable to noncontrolling interests,” respectively. The Company determined that a joint venture in which the Company’s Ralph L. Wadsworth Construction subsidiary is a 51% owner is a VIE and the Company is the primary beneficiary. Summary financial information for this construction joint venture is as follows: Three Months Ended March 31, 2021 2020 Revenues $ 8,242 $ 4,064 Operating income $ 2,527 $ 296 Net income $ 2,528 $ 299 Joint Ventures with a Noncontrolling Interest —The Company accounts for unconsolidated joint ventures using a pro-rata basis in the Condensed Consolidated Statements of Operations and as a single line item (“Receivables from and equity in construction joint ventures”) in the Condensed Consolidated Balance Sheets. This method is a permissible modification of the equity method of accounting which is a common practice in the construction industry. Combined financial amounts of joint ventures in which the Company has a noncontrolling interest and the Company’s share of such amounts which are included in the Company’s Condensed Consolidated Financial Statements are shown below: March 31, December 31, Current assets $ 141,199 $ 143,608 Current liabilities $ (100,730) $ (141,295) Sterling’s receivables from and equity in construction joint ventures $ 18,166 $ 16,653 Three Months Ended March 31, 2021 2020 Revenues $ 49,417 $ 26,846 Income before tax $ 4,635 $ 2,157 Sterling’s noncontrolling interest: Revenues $ 21,944 $ 13,082 Income before tax $ 2,135 $ 1,049 The caption “Receivables from and equity in construction joint ventures” includes undistributed earnings and receivables owed to the Company. Undistributed earnings are typically released to the joint venture partners after the customer accepts the project as completed and the warranty period, if any, has passed. Other —The use of joint ventures exposes us to a number of risks, including the risk that our partners may be unable or unwilling to provide their share of capital investment to fund the operations of the venture or complete their obligations to us, the venture, or ultimately, the customer. Differences in opinions or views among joint venture partners could also result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and operations of the joint venture. In addition, agreement terms may subject us to joint and several liability for our venture partners, and the failure of our venture partners to perform their obligations could impose additional performance and financial obligations on us. The aforementioned factors could result in unanticipated costs to complete the projects, liquidated damages or contract disputes, including claims against our partners. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: March 31, December 31, Construction and transportation equipment $ 244,416 $ 231,799 Buildings and improvements 21,895 21,025 Land 3,891 3,891 Office equipment 3,033 3,012 Total property and equipment 273,235 259,727 Less accumulated depreciation (137,807) (133,059) Total property and equipment, net $ 135,428 $ 126,668 Depreciation Expense— Depreciation expense is primarily included within cost of revenues and was $5,439 and $5,448 for the three months ended March 31, 2021 and 2020, respectively. |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | 7. OTHER INTANGIBLE ASSETS The following table presents our acquired finite-lived intangible assets, including the weighted-average useful lives for each major intangible asset category and in total: March 31, 2021 December 31, 2020 Weighted Gross Accumulated Gross Accumulated Customer relationships 25 $ 232,623 $ (18,730) $ 232,623 $ (16,360) Trade name 23 30,107 (3,588) 30,107 (3,209) Non-compete agreements 5 2,487 (878) 2,487 (761) Total 24 $ 265,217 $ (23,196) $ 265,217 $ (20,330) The Company's intangible amortization expense was $2,866 and $2,837 for the three months ended March 31, 2021 and 2020, respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT The Company’s outstanding debt was as follows: March 31, December 31, Term Loan Facility $ 324,500 $ 355,000 Revolving Credit Facility — — Credit Facility 324,500 355,000 Note payable to seller, Plateau Acquisition 10,000 10,000 Other debt 10,354 10,397 Total debt $ 344,854 $ 375,397 Less - Current maturities of long-term debt (59,962) (77,434) Less - Unamortized debt issuance costs (5,717) (6,714) Total long-term debt $ 279,175 $ 291,249 Credit Facility —Our amended credit agreement (“Credit Agreement”) provides the Company with senior secured debt financing in an amount up to $475,000 in the aggregate, consisting of (i) a senior secured first lien term loan facility (the “Term Loan Facility”) in the amount of $400,000 (collectively, the “Credit Facility”) and (ii) a senior secured first lien revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $75,000 (with a $75,000 limit for the issuance of letters of credit and a $15,000 sublimit for swing line loans). The obligations under the Credit Facility are secured by substantially all assets of the Company and the subsidiary guarantors, subject to certain permitted liens and interests of other parties. The Credit Facility will mature on October 2, 2024. The Term Loan Facility bears interest at either the base rate plus a margin, or at a one-, two-, three-, six- or, if available, twelve-month LIBOR rate plus a margin, at the Company’s election. At March 31, 2021, the Company calculated interest using a one-month LIBOR rate and an applicable margin of 0.15% and 4.50% per annum, respectively. We continue to utilize an interest rate swap to hedge against $275,000 of the outstanding Term Loan Facility, which resulted in a weighted average interest rate of approximately 5.62% per annum during the three months ended March 31, 2021. Scheduled principal payments on the Term Loan Facility total $50,000, $50,000, $50,000 and $15,000 for each of the years ending 2021, 2022, 2023, and 2024, respectively, and the Company is required to make payments quarterly. The Company is required to make mandatory prepayments on the Credit Facility with proceeds received from issuances of debt, events of loss and certain dispositions. The Company also is required to prepay the Credit Facility with its excess cash flow within 5 days after receipt of its annual audited financial statements. For the three months ended March 31, 2021, the company made a scheduled term loan payment of $12,500 and an excess cash flow payment of $18,000. A final payment of all principal and interest then outstanding on the Term Loan Facility is due on October 2, 2024. The Revolving Credit Facility bears interest at the same rate options as the Term Loan Facility. In addition to interest on debt borrowings, we are assessed quarterly commitment fees on the unutilized portion of the facility as well as letter of credit fees on outstanding instruments. At March 31, 2021, we had no outstanding borrowings under the Revolving Credit Facility, providing $75,000 of available capacity. Debt Issuance Costs —The costs associated with the Term Loan Facility and Revolving Credit Facility are reflected on the Condensed Consolidated Balance Sheets as a direct reduction from the related debt liability and amortized over the terms of the respective facilities. Amortization of debt issuance costs was $660 and $752 for the three months ended March 31, 2021 and 2020, respectively, and was recorded as interest expense. Additionally, due to an early payment of $18,000 on the Term Loan Facility in the first quarter of 2021, we recorded a loss on debt extinguishment of $337 related to debt issuance costs. Compliance and Other —The Credit Agreement contains various affirmative and negative covenants that may, subject to certain exceptions, restrict the ability of us and our subsidiaries to, among other things, grant liens, incur additional indebtedness, make loans, advances or other investments, make non-ordinary course asset sales, declare or pay dividends or make other distributions with respect to equity interests, purchase, redeem or otherwise acquire or retire capital stock or other equity interests, or merge or consolidate with any other person, among various other things. In addition, the Company is required to maintain certain financial covenants. As of March 31, 2021, we were in compliance with all of our restrictive and financial covenants. The Company’s debt is recorded at its carrying amount in the Condensed Consolidated Balance Sheets. At March 31, 2021 and December 31, 2020, the carrying values of our debt outstanding approximated the fair values. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 9. FINANCIAL INSTRUMENTS Interest Rate Derivative —We continue to utilize a swap arrangement to hedge against interest rate variability associated with $275,000 of the $324,500 outstanding under the Term Loan Facility. The Company has designated its interest rate swap agreement as a cash flow hedging derivative. To the extent the derivative instrument is effective and the documentation requirements have been met, changes in fair value are recognized in other comprehensive income (loss) (“OCI”) until the underlying hedged item is recognized in earnings. At March 31, 2021 the fair value of the swap recorded in accumulated other comprehensive income (loss) (“AOCI”) was a net loss of $5,662. Derivatives Disclosures Fair Value —Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: • Level 1—Fair value is based on quoted prices in active markets. • Level 2—Fair value is based on internally developed models that use, as their basis, readily observable market parameters. Our derivative positions are classified within level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. These level 2 derivatives are valued utilizing an income approach, which discounts future cash flow based on current market expectations and adjusts for credit risk. • Level 3—Fair value is based on internally developed models that use, as their basis, significant unobservable market parameters. The Company did not have any level 3 classifications at March 31, 2021 or December 31, 2020. The following table presents the fair value of the interest rate derivative by valuation hierarchy and balance sheet classification: March 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities Other current liabilities $ — $ (4,076) $ — $ (4,076) $ — $ (4,427) $ — $ (4,427) Other non-current liabilities — (1,799) — (1,799) — (2,629) — (2629) Total liabilities at fair value $ — $ (5,875) $ — $ (5,875) $ — $ (7,056) $ — $ (7,056) OCI —The following table presents the total value recognized in OCI and reclassified from AOCI into earnings during the three months ended March 31, 2021 and 2020 for derivatives designated as cash flow hedges: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Before Tax Amount Tax Net of Tax Before Tax Amount Tax Net of Tax Net gain (loss) recognized in OCI $ 126 $ (29) $ 97 $ (9,174) $ 2,064 $ (7,110) Net amount reclassified from AOCI into earnings (1) 1,034 (236) 798 63 (14) 49 Change in other comprehensive income $ 1,160 $ (265) $ 895 $ (9,111) $ 2,050 $ (7,061) (1) Net unrealized losses totaling $3,863 are anticipated to be reclassified from AOCI into earnings during the next 12 months due to settlement of the associated underlying obligations. |
Lease Obligations
Lease Obligations | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease Obligations | 10. LEASE OBLIGATIONS The Company has operating and finance leases primarily for construction and transportation equipment, as well as office space. The Company’s leases have remaining lease terms of one month to seven years, some of which include options to extend the leases for up to ten years. The components of lease expense are as follows: Three Months Ended March 31, 2021 2020 Operating lease cost $ 1,512 $ 2,159 Short-term lease cost $ 2,124 $ 3,281 Finance lease cost: Amortization of right-of-use assets $ 50 $ 56 Interest on lease liabilities 6 8 Total finance lease cost $ 56 $ 64 Supplemental cash flow information related to leases is as follows: Three Months Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,518 $ 2,105 Operating cash flows from finance leases $ 6 $ 8 Financing cash flows from finance leases $ 50 $ 56 Right-of-use assets obtained in exchange for lease obligations (noncash): Operating leases $ 896 $ 3,540 Finance leases $ — $ — Supplemental balance sheet information related to leases is as follows: March 31, December 31, Operating Leases Operating lease right-of-use assets $ 15,804 $ 16,515 Current portion of long-term lease obligations $ 7,627 $ 7,588 Long-term lease obligations 8,202 8,958 Total operating lease liabilities $ 15,829 $ 16,546 Finance Leases Property and equipment, at cost $ 1,479 $ 1,479 Accumulated depreciation (754) (702) Property and equipment, net $ 725 $ 777 Current maturities of long-term debt $ 179 $ 188 Long-term debt 330 372 Total finance lease liabilities $ 509 $ 560 Weighted Average Remaining Lease Term Operating leases 3.2 3.2 Finance leases 3.0 3.2 Weighted Average Discount Rate Operating leases 5.6 % 5.7 % Finance leases 4.2 % 4.2 % Maturities of lease liabilities are as follows: Operating Finance Year Ending December 31, 2021 (excluding the three months ended March 31, 2021) $ 5,087 $ 158 2022 5,954 154 2023 3,242 154 2024 1,418 77 2025 656 — 2026 528 — Thereafter 628 — Total lease payments $ 17,513 $ 543 Less imputed interest (1,684) (34) Total $ 15,829 $ 509 |
Lease Obligations | 10. LEASE OBLIGATIONS The Company has operating and finance leases primarily for construction and transportation equipment, as well as office space. The Company’s leases have remaining lease terms of one month to seven years, some of which include options to extend the leases for up to ten years. The components of lease expense are as follows: Three Months Ended March 31, 2021 2020 Operating lease cost $ 1,512 $ 2,159 Short-term lease cost $ 2,124 $ 3,281 Finance lease cost: Amortization of right-of-use assets $ 50 $ 56 Interest on lease liabilities 6 8 Total finance lease cost $ 56 $ 64 Supplemental cash flow information related to leases is as follows: Three Months Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,518 $ 2,105 Operating cash flows from finance leases $ 6 $ 8 Financing cash flows from finance leases $ 50 $ 56 Right-of-use assets obtained in exchange for lease obligations (noncash): Operating leases $ 896 $ 3,540 Finance leases $ — $ — Supplemental balance sheet information related to leases is as follows: March 31, December 31, Operating Leases Operating lease right-of-use assets $ 15,804 $ 16,515 Current portion of long-term lease obligations $ 7,627 $ 7,588 Long-term lease obligations 8,202 8,958 Total operating lease liabilities $ 15,829 $ 16,546 Finance Leases Property and equipment, at cost $ 1,479 $ 1,479 Accumulated depreciation (754) (702) Property and equipment, net $ 725 $ 777 Current maturities of long-term debt $ 179 $ 188 Long-term debt 330 372 Total finance lease liabilities $ 509 $ 560 Weighted Average Remaining Lease Term Operating leases 3.2 3.2 Finance leases 3.0 3.2 Weighted Average Discount Rate Operating leases 5.6 % 5.7 % Finance leases 4.2 % 4.2 % Maturities of lease liabilities are as follows: Operating Finance Year Ending December 31, 2021 (excluding the three months ended March 31, 2021) $ 5,087 $ 158 2022 5,954 154 2023 3,242 154 2024 1,418 77 2025 656 — 2026 528 — Thereafter 628 — Total lease payments $ 17,513 $ 543 Less imputed interest (1,684) (34) Total $ 15,829 $ 509 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES The Company is required by its insurance providers to obtain and hold standby letters of credit. These letters of credit serve as a guarantee by the banking institution to pay the Company’s insurance providers the incurred claim costs attributable to its general liability, workers compensation and automobile liability claims, up to the amount stated in the standby letters of credit, in the event that these claims were not paid by the Company. These letters of credit are cash collateralized, resulting in the cash being designated as restricted. The Company, including its construction joint ventures and its consolidated 50% owned subsidiaries, is now and may in the future be involved as a party to various legal proceedings that are incidental to the ordinary course of business. Management, after consultation with legal counsel, does not believe that the outcome of these actions will have a material impact on the Condensed Consolidated Financial Statements of the Company. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. INCOME TAXES The Company and its subsidiaries are based in the U.S. and file federal and various state income tax returns. The components of the provision for income taxes were as follows: Three Months Ended March 31, 2021 2020 Current tax expense $ 618 $ 271 Deferred tax expense 4,142 913 Income tax expense $ 4,760 $ 1,184 Cash paid for income taxes $ — $ 44 The 2021 effective income tax rate varied from the statutory rate primarily as a result of state income taxes, nondeductible compensation and other permanent differences. Due to net operating loss carryforwards, the Company expects no cash payments for federal income taxes for 2021 or 2020. The Company makes cash payments for state income taxes in states in which the Company does not have net operating loss carry forwards. At December 31, 2020 the Company had federal and state net operating loss (“NOL”) carryforwards of $58,719 and $36,381, respectively, which expire at various dates in the next 18 years for U.S. federal income tax and in the next 7 to 18 years for the various state jurisdictions where we operate. Such NOL carryforwards expire beginning in 2028 through 2039. As a result of the Company’s analysis, management has determined that the Company does not have any material uncertain tax positions. |
Stock Incentive Plan and Other
Stock Incentive Plan and Other Equity Activity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stock Incentive Plan And Other Equity Activity | 13. STOCK INCENTIVE PLAN AND OTHER EQUITY ACTIVITY General —The Company has a stock incentive plan (the “Stock Incentive Plan”) and an employee stock purchase plan (the “ESPP”) that are administered by the Compensation and Talent Development Committee of the Board of Directors. Under the Stock Incentive Plan, the Company can issue shares to employees and directors in the form of restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance share units (“PSUs”). Changes in common stock, additional paid in capital and treasury stock during the three months ended March 31, 2021 primarily relate to activity associated with the Stock Incentive Plan, the ESPP and shares withheld for taxes. Share Grants —During the three months ended March 31, 2021, the Company had the following share grants associated with the Stock Incentive Plan: Shares Weighted Average Grant-Date Fair Value per Share RSUs 108 $ 18.95 PSUs (at target) 139 $ 18.84 Total shares granted 247 Share Issuances —During the three months ended March 31, 2021, the Company had the following share issuances associated with the Stock Incentive Plan and the ESPP: Shares RSUs (issued upon vesting) 40 PSUs (issued upon vesting) 621 ESPP (issued upon sale) 7 Total shares issued 668 Stock-Based Compensation Expense —During the three months ended March 31, 2021 and 2020, the Company recognized $1,835 and $2,234, respectively, of stock-based compensation expense, primarily within general and administrative expenses. The Company recognizes forfeitures as they occur, rather than estimating expected forfeitures. Included within total stock-based compensation expense for the three months ended March 31, 2021 and 2020 is $25 and $18, respectively, of expense related to the ESPP. Shares Withheld for Taxes —The Company withheld 246 shares for taxes on RSU/PSU stock-based compensation vestings for $5,619 during the three months ended March 31, 2021. AOCI —During the three months ended March 31, 2021, changes in AOCI were a result of net gains (losses) recognized in OCI and amounts reclassified from AOCI into earnings related to our interest rate derivative. See Note 9 - Financial Instruments for further discussion. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. EARNINGS PER SHARE The following table reconciles the numerators and denominators of the basic and diluted earnings per share computations for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Numerator: Net income attributable to Sterling common stockholders $ 10,555 $ 3,115 Denominator: Weighted average common shares outstanding — basic 28,279 27,736 Shares for dilutive unvested stock and warrants 484 256 Weighted average common shares outstanding — diluted 28,763 27,992 Basic net income per share attributable to Sterling common stockholders $ 0.37 $ 0.11 Diluted net income per share attributable to Sterling common stockholders $ 0.37 $ 0.11 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 15. SUPPLEMENTAL CASH FLOW INFORMATION Operating Assets and Liabilities— The following table summarizes the changes in the components of operating assets and liabilities: Three Months Ended March 31, 2021 2020 Accounts receivable $ 7,238 $ 21,026 Contracts in progress, net (7,921) (12,001) Receivables from and equity in construction joint ventures (1,513) (1,593) Other current and non-current assets 876 1,242 Accounts payable 12,799 (14,421) Accrued compensation and other liabilities 59 888 Members' interest subject to mandatory redemption and undistributed earnings 325 183 Changes in operating assets and liabilities $ 11,863 $ (4,676) |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 16. SEGMENT INFORMATION The Company’s internal and public segment reporting are aligned based upon the services offered by its operating segments. The Company’s operations consist of three reportable segments: Heavy Civil, Specialty Services and Residential. The Company’s Chief Operating Decision Maker evaluates the performance of the operating segment based upon revenue and income from operations. Each segment’s income from operations reflects corporate costs, allocated based primarily upon revenue. The following table presents total revenue and income from operations by reportable segment for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Revenues Heavy Civil $ 147,054 $ 155,615 Specialty Services 124,088 104,723 Residential 44,174 36,350 Total Revenues $ 315,316 $ 296,688 Operating Income Heavy Civil $ 1,090 $ (3,622) Specialty Services 16,177 11,114 Residential 5,488 5,084 Subtotal 22,755 12,576 Acquisition related costs — (473) Total Operating Income $ 22,755 $ 12,103 |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Presentation Basis | Presentation Basis— The accompanying Condensed Consolidated Financial Statements are presented in accordance with accounting policies generally accepted in the United States (“GAAP”) and reflect all wholly owned subsidiaries and those entities the Company is required to consolidate. See Note 4 - Consolidated 50% Owned Subsidiaries and Note 5 - Construction Joint Ventures for further discussion of the Company’s consolidation policy for those entities that are not wholly owned. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Values presented within tables (excluding per share data) are in thousands. Reclassifications have been made to historical financial data in the Condensed Consolidated Financial Statements to conform to the current year presentation. |
Estimates and Judgments | Estimates and Judgments— The preparation of the accompanying Condensed Consolidated Financial Statements in conformance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting estimates of the Company require a higher degree of judgment than others in their application. These include the recognition of revenue and earnings from construction contracts over time, the valuation of long-lived assets, goodwill and purchase accounting estimates. Management continually evaluates all of its estimates and judgments based on available information and experience; however, actual results could differ from these estimates. |
Accounts Receivable | Accounts Receivable— Receivables are generally based on amounts billed to the customer in accordance with contractual provisions. Receivables are written off based on the individual credit evaluation and specific circumstances of the customer, when such treatment is warranted. The Company performs a review of outstanding receivables, historical collection information and existing economic conditions to determine if there are potential uncollectible receivables. At March 31, 2021 and December 31, 2020, our allowance for our estimate of expected credit losses was zero. As is customary, we have agreed to indemnify our bonding company for all losses incurred by it in connection with bonds that are issued, and we have granted our bonding company a security interest in certain assets, including accounts receivable, as collateral for such obligation. |
Contracts in Progress | Contracts in Progress— For performance obligations satisfied over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Typically, Sterling bills for advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. However, the Company occasionally bills subsequent to revenue recognition, resulting in contract assets. Many of the contracts under which the Company performs work also contain retainage provisions. Retainage refers to that portion of our billings held for payment by the customer pending satisfactory completion of the project. Unless reserved, the Company assumes that all amounts retained by customers under such provisions are fully collectible. At March 31, 2021 and December 31, 2020, contract assets included $43,824 and $44,412 of retainage, respectively, and contract liabilities included $35,832 and $33,856 of retainage, respectively. Retainage on active contracts is classified as current regardless of the term of the contract and is generally collected within one year of the completion of a contract. We anticipate collecting approximately 69% of our March 31, 2021 retainage during the next twelve months. These assets and liabilities are reported on the Condensed Consolidated Balance Sheet within “Contract assets” and “Contract liabilities” on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the three months ended March 31, 2021 that was included in the contract liability balance on December 31, 2020 was $155,558. Revenue recognized for the three months ended March 31, 2020 that was included in the contract liability balance on December 31, 2019 was $146,266. |
Cash and Restricted cash | Cash and Restricted Cash— Our cash is comprised of highly liquid investments with maturities of three months or less. Restricted cash of approximately $5,800 and $6,500 is included in “Other current assets” on the Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively. This primarily represents cash deposited by the Company into separate accounts and designated as collateral for standby letters of credit in the same amount in accordance with contractual agreements. |
Revenue From Customers (Tables)
Revenue From Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Backlog By Segment | The following table presents the Company’s backlog, by segment: March 31, December 31, Heavy Civil Backlog $ 1,261,461 $ 898,183 Specialty Services Backlog 377,761 277,205 Total Heavy Civil and Specialty Services Backlog $ 1,639,222 $ 1,175,388 |
Disaggregation of Revenue | The following tables present the Company’s revenue disaggregated by major end market and contract type: Three Months Ended March 31, Revenues by major end market 2021 2020 Heavy Highway $ 99,516 $ 96,374 Aviation 27,222 28,457 Water Containment and Treatment 14,219 21,809 Other 6,097 8,975 Heavy Civil Revenues 147,054 155,615 Land Development 96,572 76,245 Commercial 27,516 28,478 Specialty Services Revenues 124,088 104,723 Residential Revenues 44,174 36,350 Total Revenues $ 315,316 $ 296,688 Revenues by contract type Fixed-Unit Price $ 177,547 $ 141,739 Lump Sum 91,155 114,252 Residential and Other 46,614 40,697 Total Revenues $ 315,316 $ 296,688 |
Consolidated 50% Owned Subsid_2
Consolidated 50% Owned Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Summary of Liability Breakdown | The liability consists of the following: March 31, December 31, Members’ interest subject to mandatory redemption $ 40,000 $ 40,000 Net accumulated earnings 11,615 11,290 Total liability $ 51,615 $ 51,290 |
Summary of Financial Information | Summary financial information for Myers is as follows: Three Months Ended March 31, 2021 2020 Revenues $ 27,957 $ 44,362 Operating income $ 718 $ 155 Net income $ 352 $ 79 Three Months Ended March 31, 2021 2020 Revenues $ 8,242 $ 4,064 Operating income $ 2,527 $ 296 Net income $ 2,528 $ 299 Three Months Ended March 31, 2021 2020 Revenues $ 49,417 $ 26,846 Income before tax $ 4,635 $ 2,157 Sterling’s noncontrolling interest: Revenues $ 21,944 $ 13,082 Income before tax $ 2,135 $ 1,049 |
Construction Joint Ventures (Ta
Construction Joint Ventures (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Condensed Income Statement | Summary financial information for Myers is as follows: Three Months Ended March 31, 2021 2020 Revenues $ 27,957 $ 44,362 Operating income $ 718 $ 155 Net income $ 352 $ 79 Three Months Ended March 31, 2021 2020 Revenues $ 8,242 $ 4,064 Operating income $ 2,527 $ 296 Net income $ 2,528 $ 299 Three Months Ended March 31, 2021 2020 Revenues $ 49,417 $ 26,846 Income before tax $ 4,635 $ 2,157 Sterling’s noncontrolling interest: Revenues $ 21,944 $ 13,082 Income before tax $ 2,135 $ 1,049 |
Condensed Balance Sheet | March 31, December 31, Current assets $ 141,199 $ 143,608 Current liabilities $ (100,730) $ (141,295) Sterling’s receivables from and equity in construction joint ventures $ 18,166 $ 16,653 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment are summarized as follows: March 31, December 31, Construction and transportation equipment $ 244,416 $ 231,799 Buildings and improvements 21,895 21,025 Land 3,891 3,891 Office equipment 3,033 3,012 Total property and equipment 273,235 259,727 Less accumulated depreciation (137,807) (133,059) Total property and equipment, net $ 135,428 $ 126,668 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table presents our acquired finite-lived intangible assets, including the weighted-average useful lives for each major intangible asset category and in total: March 31, 2021 December 31, 2020 Weighted Gross Accumulated Gross Accumulated Customer relationships 25 $ 232,623 $ (18,730) $ 232,623 $ (16,360) Trade name 23 30,107 (3,588) 30,107 (3,209) Non-compete agreements 5 2,487 (878) 2,487 (761) Total 24 $ 265,217 $ (23,196) $ 265,217 $ (20,330) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s outstanding debt was as follows: March 31, December 31, Term Loan Facility $ 324,500 $ 355,000 Revolving Credit Facility — — Credit Facility 324,500 355,000 Note payable to seller, Plateau Acquisition 10,000 10,000 Other debt 10,354 10,397 Total debt $ 344,854 $ 375,397 Less - Current maturities of long-term debt (59,962) (77,434) Less - Unamortized debt issuance costs (5,717) (6,714) Total long-term debt $ 279,175 $ 291,249 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following table presents the fair value of the interest rate derivative by valuation hierarchy and balance sheet classification: March 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities Other current liabilities $ — $ (4,076) $ — $ (4,076) $ — $ (4,427) $ — $ (4,427) Other non-current liabilities — (1,799) — (1,799) — (2,629) — (2629) Total liabilities at fair value $ — $ (5,875) $ — $ (5,875) $ — $ (7,056) $ — $ (7,056) |
Schedule of Derivative Assets at Fair Value | The following table presents the fair value of the interest rate derivative by valuation hierarchy and balance sheet classification: March 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities Other current liabilities $ — $ (4,076) $ — $ (4,076) $ — $ (4,427) $ — $ (4,427) Other non-current liabilities — (1,799) — (1,799) — (2,629) — (2629) Total liabilities at fair value $ — $ (5,875) $ — $ (5,875) $ — $ (7,056) $ — $ (7,056) |
Schedule of Changes in AOCI | The following table presents the total value recognized in OCI and reclassified from AOCI into earnings during the three months ended March 31, 2021 and 2020 for derivatives designated as cash flow hedges: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Before Tax Amount Tax Net of Tax Before Tax Amount Tax Net of Tax Net gain (loss) recognized in OCI $ 126 $ (29) $ 97 $ (9,174) $ 2,064 $ (7,110) Net amount reclassified from AOCI into earnings (1) 1,034 (236) 798 63 (14) 49 Change in other comprehensive income $ 1,160 $ (265) $ 895 $ (9,111) $ 2,050 $ (7,061) (1) Net unrealized losses totaling $3,863 are anticipated to be reclassified from AOCI into earnings during the next 12 months due to settlement of the associated underlying obligations. |
Lease Obligations (Tables)
Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease Expenses | The components of lease expense are as follows: Three Months Ended March 31, 2021 2020 Operating lease cost $ 1,512 $ 2,159 Short-term lease cost $ 2,124 $ 3,281 Finance lease cost: Amortization of right-of-use assets $ 50 $ 56 Interest on lease liabilities 6 8 Total finance lease cost $ 56 $ 64 Supplemental cash flow information related to leases is as follows: Three Months Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,518 $ 2,105 Operating cash flows from finance leases $ 6 $ 8 Financing cash flows from finance leases $ 50 $ 56 Right-of-use assets obtained in exchange for lease obligations (noncash): Operating leases $ 896 $ 3,540 Finance leases $ — $ — Supplemental balance sheet information related to leases is as follows: March 31, December 31, Operating Leases Operating lease right-of-use assets $ 15,804 $ 16,515 Current portion of long-term lease obligations $ 7,627 $ 7,588 Long-term lease obligations 8,202 8,958 Total operating lease liabilities $ 15,829 $ 16,546 Finance Leases Property and equipment, at cost $ 1,479 $ 1,479 Accumulated depreciation (754) (702) Property and equipment, net $ 725 $ 777 Current maturities of long-term debt $ 179 $ 188 Long-term debt 330 372 Total finance lease liabilities $ 509 $ 560 Weighted Average Remaining Lease Term Operating leases 3.2 3.2 Finance leases 3.0 3.2 Weighted Average Discount Rate Operating leases 5.6 % 5.7 % Finance leases 4.2 % 4.2 % |
Maturities of Lease Liabilities, Operating Leases | Maturities of lease liabilities are as follows: Operating Finance Year Ending December 31, 2021 (excluding the three months ended March 31, 2021) $ 5,087 $ 158 2022 5,954 154 2023 3,242 154 2024 1,418 77 2025 656 — 2026 528 — Thereafter 628 — Total lease payments $ 17,513 $ 543 Less imputed interest (1,684) (34) Total $ 15,829 $ 509 |
Maturities of Lease Liabilities, Finance Leases | Maturities of lease liabilities are as follows: Operating Finance Year Ending December 31, 2021 (excluding the three months ended March 31, 2021) $ 5,087 $ 158 2022 5,954 154 2023 3,242 154 2024 1,418 77 2025 656 — 2026 528 — Thereafter 628 — Total lease payments $ 17,513 $ 543 Less imputed interest (1,684) (34) Total $ 15,829 $ 509 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Taxes | The components of the provision for income taxes were as follows: Three Months Ended March 31, 2021 2020 Current tax expense $ 618 $ 271 Deferred tax expense 4,142 913 Income tax expense $ 4,760 $ 1,184 Cash paid for income taxes $ — $ 44 |
Stock Incentive Plan and Othe_2
Stock Incentive Plan and Other Equity Activity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Grants and Issuances | During the three months ended March 31, 2021, the Company had the following share grants associated with the Stock Incentive Plan: Shares Weighted Average Grant-Date Fair Value per Share RSUs 108 $ 18.95 PSUs (at target) 139 $ 18.84 Total shares granted 247 Shares RSUs (issued upon vesting) 40 PSUs (issued upon vesting) 621 ESPP (issued upon sale) 7 Total shares issued 668 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators of the basic and diluted earnings per share computations for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Numerator: Net income attributable to Sterling common stockholders $ 10,555 $ 3,115 Denominator: Weighted average common shares outstanding — basic 28,279 27,736 Shares for dilutive unvested stock and warrants 484 256 Weighted average common shares outstanding — diluted 28,763 27,992 Basic net income per share attributable to Sterling common stockholders $ 0.37 $ 0.11 Diluted net income per share attributable to Sterling common stockholders $ 0.37 $ 0.11 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table summarizes the changes in the components of operating assets and liabilities: Three Months Ended March 31, 2021 2020 Accounts receivable $ 7,238 $ 21,026 Contracts in progress, net (7,921) (12,001) Receivables from and equity in construction joint ventures (1,513) (1,593) Other current and non-current assets 876 1,242 Accounts payable 12,799 (14,421) Accrued compensation and other liabilities 59 888 Members' interest subject to mandatory redemption and undistributed earnings 325 183 Changes in operating assets and liabilities $ 11,863 $ (4,676) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents total revenue and income from operations by reportable segment for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 2020 Revenues Heavy Civil $ 147,054 $ 155,615 Specialty Services 124,088 104,723 Residential 44,174 36,350 Total Revenues $ 315,316 $ 296,688 Operating Income Heavy Civil $ 1,090 $ (3,622) Specialty Services 16,177 11,114 Residential 5,488 5,084 Subtotal 22,755 12,576 Acquisition related costs — (473) Total Operating Income $ 22,755 $ 12,103 |
Nature of Operations (Details)
Nature of Operations (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Allowance for doubtful accounts against contracts receivable | $ 0 | $ 0 | |
Contract receivables | 43,824,000 | $ 44,412,000 | |
Contract liabilities, retainage | $ (35,832,000) | (33,856,000) | |
Percentage of receivables estimated to be collected in next fiscal year | 69.00% | ||
Contract liability recognized during period | $ 155,558,000 | ||
Contract liability revenue recognized | $ 146,266,000 | ||
Other current assets | |||
Property, Plant and Equipment [Line Items] | |||
Restricted cash, current | $ 5,800,000 | $ 6,500,000 |
Revenue From Customers - Backlo
Revenue From Customers - Backlog By Segment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Disaggregation of Revenue [Line Items] | ||
Backlog | $ 1,639,222 | $ 1,175,388 |
Heavy Civil | ||
Disaggregation of Revenue [Line Items] | ||
Backlog | 1,261,461 | 898,183 |
Specialty Services | ||
Disaggregation of Revenue [Line Items] | ||
Backlog | $ 377,761 | $ 277,205 |
Revenue From Customers - Additi
Revenue From Customers - Additional Information (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Mar. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected to be recognized over next twelve months | 52.00% |
Remaining performance obligation period | 12 months |
Revenue From Customers - Disagg
Revenue From Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 315,316 | $ 296,688 |
Fixed-Unit Price | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 177,547 | 141,739 |
Lump Sum | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 91,155 | 114,252 |
Residential and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 46,614 | 40,697 |
Heavy Civil | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 147,054 | 155,615 |
Heavy Civil | Heavy Highway | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 99,516 | 96,374 |
Heavy Civil | Aviation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 27,222 | 28,457 |
Heavy Civil | Water Containment and Treatment | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,219 | 21,809 |
Heavy Civil | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,097 | 8,975 |
Specialty Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 124,088 | 104,723 |
Specialty Services | Land Development | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 96,572 | 76,245 |
Specialty Services | Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 27,516 | 28,478 |
Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 44,174 | $ 36,350 |
Revenue From Customers - Narrat
Revenue From Customers - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Costs and Estimated Earnings in Excess of Billings | |||
Disaggregation of Revenue [Line Items] | |||
Contracts receivable unpaid project contract price | $ 7,142 | $ 7,142 | |
Operating income (Loss) | |||
Disaggregation of Revenue [Line Items] | |||
Estimated construction gain (loss) before tax | $ 8,305 | $ 95 |
Consolidated 50% Owned Subsid_3
Consolidated 50% Owned Subsidiaries - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)entity | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Noncontrolling Interest [Line Items] | |||
Ownership interest in subsidiaries | 50.00% | ||
Number of entities | entity | 2 | ||
Members’ interest subject to mandatory redemption | $ 40,000 | $ 40,000 | |
Total disability insurance policies, per policy amount | 20,000 | ||
Myers | |||
Noncontrolling Interest [Line Items] | |||
Net accumulated earnings | 1,800 | $ 1,700 | |
Variable Interest Entity, Primary Beneficiary | Myers | |||
Noncontrolling Interest [Line Items] | |||
Members’ interest subject to mandatory redemption | $ 20,000 |
Consolidated 50% Owned Subsid_4
Consolidated 50% Owned Subsidiaries - Components of Noncontrolling Interest (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Noncontrolling Interest [Abstract] | ||
Members’ interest subject to mandatory redemption | $ 40,000 | $ 40,000 |
Net accumulated earnings | 11,615 | 11,290 |
Total liability | $ 51,615 | $ 51,290 |
Consolidated 50% Owned Subsid_5
Consolidated 50% Owned Subsidiaries Consolidated 50% Owned Subsidiaries - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Variable Interest Entity [Line Items] | ||
Operating income | $ 22,755 | $ 12,103 |
Net income | 10,555 | 3,115 |
Variable Interest Entity, Primary Beneficiary | Myers | ||
Variable Interest Entity [Line Items] | ||
Revenues | 27,957 | 44,362 |
Operating income | 718 | 155 |
Net income | $ 352 | $ 79 |
Construction Joint Ventures - S
Construction Joint Ventures - SEMA Financials (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||
Operating income | $ 22,755 | $ 12,103 |
Net income | 10,555 | 3,115 |
Revenues | 315,316 | 296,688 |
Joint Ventures | Variable Interest Entity, Primary Beneficiary | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 8,242 | 4,064 |
Operating income | 2,527 | 296 |
Net income | $ 2,528 | 299 |
RLW | Joint Ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 51.00% | |
SEMA Construction Inc | Joint Ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Operating income | $ 2,527 | 296 |
Net income | 2,528 | 299 |
Revenues | $ 8,242 | $ 4,064 |
Construction Joint Ventures - C
Construction Joint Ventures - Construction Joint Ventures, Partner Share (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 355,229 | $ 361,543 |
Current liabilities | (322,246) | (321,884) |
Receivables from and equity in construction joint ventures | 18,166 | 16,653 |
Joint Ventures | Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 141,199 | 143,608 |
Current liabilities | (100,730) | (141,295) |
Receivables from and equity in construction joint ventures | $ 18,166 | $ 16,653 |
Construction Joint Ventures - I
Construction Joint Ventures - Income Statement Information (Details) - Joint Ventures - Equity Method Investment, Nonconsolidated Investee or Group of Investees - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||
Revenues | $ 49,417 | $ 26,846 |
Income before tax | 4,635 | 2,157 |
Sterling’s noncontrolling interest: | ||
Revenues | 21,944 | 13,082 |
Income before tax | $ 2,135 | $ 1,049 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 273,235 | $ 259,727 | |
Less accumulated depreciation | (137,807) | (133,059) | |
Total property and equipment, net | 135,428 | 126,668 | |
Depreciation | 5,439 | $ 5,448 | |
Construction and transportation equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 244,416 | 231,799 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 21,895 | 21,025 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,891 | 3,891 | |
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 3,033 | $ 3,012 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life (Years) | 24 years | ||
Gross Carrying Amount | $ 265,217 | $ 265,217 | |
Accumulated Amortization | (23,196) | (20,330) | |
Amortization of intangible assets | $ 2,866 | $ 2,837 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life (Years) | 25 years | ||
Gross Carrying Amount | $ 232,623 | 232,623 | |
Accumulated Amortization | $ (18,730) | (16,360) | |
Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life (Years) | 23 years | ||
Gross Carrying Amount | $ 30,107 | 30,107 | |
Accumulated Amortization | $ (3,588) | (3,209) | |
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Life (Years) | 5 years | ||
Gross Carrying Amount | $ 2,487 | 2,487 | |
Accumulated Amortization | $ (878) | $ (761) |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 344,854 | $ 375,397 |
Less - Current maturities of long-term debt | (59,962) | (77,434) |
Less - Unamortized debt issuance costs | (5,717) | (6,714) |
Long term debt | 279,175 | 291,249 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 10,354 | 10,397 |
Secured Debt | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 324,500 | 355,000 |
Secured Debt | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 0 |
Secured Debt | Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 324,500 | 355,000 |
Notes Payable, Other Payables | Plateau Excavation | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 10,000 | $ 10,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 02, 2019 |
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 344,854,000 | $ 344,854,000 | $ 375,397,000 | ||||||
Amortization of debt issuance costs | 660,000 | $ 752,000 | |||||||
Loss on extinguishment of debt | $ 337,000 | $ 0 | |||||||
Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Cash flow prepayment term | 5 days | ||||||||
Secured Debt | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument face amount | $ 475,000,000 | ||||||||
Secured Debt | Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Weighted average interest rate | 5.62% | 5.62% | |||||||
Repayments of debt | $ 12,500,000 | ||||||||
Excess cash flow payment | 18,000,000 | ||||||||
Long-term debt | $ 324,500,000 | 324,500,000 | $ 355,000,000 | ||||||
Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 0 | 0 | |||||||
Revolving Credit Facility | Secured Debt | Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument face amount | 400,000,000 | ||||||||
Revolving Credit Facility | Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit, maximum borrowing capacity | 75,000,000 | ||||||||
Debt instrument, LIBOR interest rate | 0.15% | ||||||||
Line of credit, remaining borrowing capacity | $ 75,000,000 | 75,000,000 | |||||||
Revolving Credit Facility | Line of Credit | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 4.50% | ||||||||
Swing Line Loan | Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit, maximum borrowing capacity | $ 15,000,000 | ||||||||
Interest Rate Swap | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivative, notional amount | $ 275,000,000 | $ 275,000,000 | |||||||
Forecast | Secured Debt | Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Periodic payments | $ 15,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Derivative [Line Items] | |||
Long-term debt | $ 344,854,000 | $ 375,397,000 | |
Fair value of contracts | 1,160,000 | $ (9,111,000) | |
Interest Rate Swap | |||
Derivative [Line Items] | |||
Fair value of contracts | 5,662,000 | ||
Secured Debt | Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative, notional amount | 275,000,000 | ||
Secured Debt | Term Loan Facility | |||
Derivative [Line Items] | |||
Long-term debt | $ 324,500,000 | $ 355,000,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of the Interest Rate Derivative (Details) - Fair Value, Recurring - Interest Rate Swap - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Derivative Liabilities | ||
Other current liabilities | $ (4,076) | $ (4,427) |
Other non-current liabilities | (1,799) | (2,629) |
Total liabilities at fair value | (5,875) | (7,056) |
Level 1 | ||
Derivative Liabilities | ||
Other current liabilities | 0 | 0 |
Other non-current liabilities | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 2 | ||
Derivative Liabilities | ||
Other current liabilities | (4,076) | (4,427) |
Other non-current liabilities | (1,799) | (2,629) |
Total liabilities at fair value | (5,875) | (7,056) |
Level 3 | ||
Derivative Liabilities | ||
Other current liabilities | 0 | 0 |
Other non-current liabilities | 0 | 0 |
Total liabilities at fair value | $ 0 | $ 0 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Total Value Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Net gain (loss) recognized in OCI, before tax amount | $ 126 | $ (9,174) |
Net gain (loss) recognized in OCI, tax amount | (29) | 2,064 |
Net gain (loss) recognized in OCI, net of tax amount | 97 | (7,110) |
Net amount reclassified from AOCI into earnings, before tax amount | 1,034 | 63 |
Net amount reclassified from AOCI into earnings, tax amount | (236) | (14) |
Net amount reclassified from AOCI into earnings, net of tax amount | 798 | 49 |
Change in OCI, before tax amount | 1,160 | (9,111) |
Change in OCI, tax amount | (265) | 2,050 |
Change in OCI, net of tax amount | 895 | $ (7,061) |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Change in OCI, before tax amount | 5,662 | |
Interest Expense | Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Unrealized gains expected to be reclassified from AOCI within next 12 months | $ 3,863 |
Lease Obligations (Details)
Lease Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Lease termination period | 10 years | ||
Lease, Cost [Abstract] | |||
Operating lease cost | $ 1,512 | $ 2,159 | |
Short-term lease cost | 2,124 | 3,281 | |
Finance lease cost: | |||
Amortization of right-of-use assets | 50 | 56 | |
Interest on lease liabilities | 6 | 8 | |
Total finance lease cost | 56 | 64 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | 1,518 | 2,105 | |
Operating cash flows from finance leases | 6 | 8 | |
Financing cash flows from finance leases | 50 | 56 | |
Right-of-use assets obtained in exchange for lease obligations (noncash): | |||
Operating leases | 896 | 3,540 | |
Finance leases | 0 | $ 0 | |
Assets and Liabilities, Lessee [Abstract] | |||
Operating lease right-of-use assets | 15,804 | $ 16,515 | |
Current portion of long-term lease obligations | 7,627 | 7,588 | |
Long-term lease obligations | 8,202 | 8,958 | |
Total operating lease liabilities | 15,829 | 16,546 | |
Property and equipment, at cost | 1,479 | 1,479 | |
Accumulated depreciation | $ (754) | $ (702) | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net ($8,999 and $6,010 related to VIEs) | Property and equipment, net ($8,999 and $6,010 related to VIEs) | |
Property and equipment, net | $ 725 | $ 777 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term debt ($6,793 and $6,793 related to VIEs) | Current maturities of long-term debt ($6,793 and $6,793 related to VIEs) | |
Current maturities of long-term debt | $ 179 | $ 188 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt ($62 and $53 related to VIEs) | ||
Long-term debt | $ 330 | 372 | |
Total finance lease liabilities | $ 509 | $ 560 | |
Weighted average remaining lease term: operating leases | 3 years 2 months 12 days | 3 years 2 months 12 days | |
Weighted average remaining lease term: financing leases | 3 years | 3 years 2 months 12 days | |
Weighted average discount rate: operating lease | 5.60% | 5.70% | |
Weighted average discount rate: financing lease | 4.20% | 4.20% | |
Operating Leases | |||
2021 (excluding the three months ended March 31, 2021) | $ 5,087 | ||
2022 | 5,954 | ||
2023 | 3,242 | ||
2024 | 1,418 | ||
2025 | 656 | ||
2026 | 528 | ||
Thereafter | 628 | ||
Total lease payments | 17,513 | ||
Less imputed interest | (1,684) | ||
Total operating lease liabilities | 15,829 | $ 16,546 | |
Finance Leases | |||
2021 (excluding the three months ended March 31, 2021) | 158 | ||
2022 | 154 | ||
2023 | 154 | ||
2024 | 77 | ||
2025 | 0 | ||
2026 | 0 | ||
Thereafter | 0 | ||
Total lease payments | 543 | ||
Less imputed interest | (34) | ||
Total finance lease liabilities | $ 509 | $ 560 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease renewal term | 1 month | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease renewal term | 7 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Mar. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |
Ownership interest in subsidiaries | 50.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Current tax expense | $ 618 | $ 271 | |
Deferred tax expense | 4,142 | 913 | |
Income tax expense | 4,760 | 1,184 | |
Cash paid for income taxes | $ 0 | $ 44 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 58,719 | ||
Operating loss carryforward expiration period | 18 years | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 36,381 | ||
Minimum | State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforward expiration period | 7 years | ||
Maximum | State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforward expiration period | 18 years |
Stock Incentive Plan and Othe_3
Stock Incentive Plan and Other Equity Activity - Share Grants (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 247 |
RSUs | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 108 |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ / shares | $ 18.95 |
PSUs | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 139 |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ / shares | $ 18.84 |
Stock Incentive Plan and Othe_4
Stock Incentive Plan and Other Equity Activity - Share Issuances (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2021shares | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 668 |
RSUs | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 40 |
PSUs | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 621 |
ESPP | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 7 |
Stock Incentive Plan and Othe_5
Stock Incentive Plan and Other Equity Activity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Sale of Stock [Line Items] | ||
Stock-based compensation expense | $ 1,835 | $ 2,234 |
Shares withheld for taxes | (5,619) | (772) |
Employee Stock Purchase Plan | ESPP | ||
Sale of Stock [Line Items] | ||
Stock-based compensation expense | $ 25 | $ 18 |
Treasury Stock | ||
Sale of Stock [Line Items] | ||
Shares withheld for taxes (in shares) | (16) | 46 |
Shares withheld for taxes | $ (296) | $ (668) |
Treasury Stock | RSU/PSU | ||
Sale of Stock [Line Items] | ||
Shares withheld for taxes (in shares) | 246 | |
Shares withheld for taxes | $ 5,619 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net income | $ 10,555 | $ 3,115 |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 28,279 | 27,736 |
Shares for dilutive unvested stock and warrants (in shares) | 484 | 256 |
Weighted average common shares outstanding - diluted (in shares) | 28,763 | 27,992 |
Basic net income per share attributable to Sterling common stockholders (in dollars per share) | $ 0.37 | $ 0.11 |
Diluted net income per share attributable to Sterling common stockholders (in dollars per share) | $ 0.37 | $ 0.11 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | $ 7,238 | $ 21,026 |
Contracts in progress, net | (7,921) | (12,001) |
Receivables from and equity in construction joint ventures | (1,513) | (1,593) |
Other current and non-current assets | 876 | 1,242 |
Accounts payable | 12,799 | (14,421) |
Accrued compensation and other liabilities | 59 | 888 |
Members' interest subject to mandatory redemption and undistributed earnings | 325 | 183 |
Changes in operating assets and liabilities | $ 11,863 | $ (4,676) |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 3 | |
Revenues | $ 315,316 | $ 296,688 |
Operating Income | 22,755 | 12,103 |
Acquisition related costs | 0 | (473) |
Heavy Civil | ||
Segment Reporting Information [Line Items] | ||
Revenues | 147,054 | 155,615 |
Specialty Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 124,088 | 104,723 |
Residential | ||
Segment Reporting Information [Line Items] | ||
Revenues | 44,174 | 36,350 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 315,316 | 296,688 |
Operating Income | 22,755 | 12,576 |
Operating Segments | Heavy Civil | ||
Segment Reporting Information [Line Items] | ||
Revenues | 147,054 | 155,615 |
Operating Income | 1,090 | (3,622) |
Operating Segments | Specialty Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 124,088 | 104,723 |
Operating Income | 16,177 | 11,114 |
Operating Segments | Residential | ||
Segment Reporting Information [Line Items] | ||
Revenues | 44,174 | 36,350 |
Operating Income | $ 5,488 | $ 5,084 |