Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-31993 | |
Entity Registrant Name | STERLING INFRASTRUCTURE, 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 | 214-0777 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | STRL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,329,659 | |
Entity Central Index Key | 0000874238 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 556,942 | $ 463,449 | $ 1,477,830 | $ 1,180,431 |
Cost of revenues | (474,919) | (405,645) | (1,271,284) | (1,021,348) |
Gross profit | 82,023 | 57,804 | 206,546 | 159,083 |
General and administrative expense | (26,466) | (19,637) | (72,962) | (52,565) |
Intangible asset amortization | (3,509) | (2,866) | (10,591) | (8,598) |
Acquisition related costs | (277) | 0 | (762) | 0 |
Other operating expense, net | (4,085) | (3,270) | (5,186) | (10,414) |
Operating income | 47,686 | 32,031 | 117,045 | 87,506 |
Interest income | 167 | 13 | 207 | 39 |
Interest expense | (5,134) | (3,919) | (14,201) | (15,660) |
Gain on extinguishment of debt, net | 0 | 968 | 2,428 | 2,032 |
Income before income taxes | 42,719 | 29,093 | 105,479 | 73,917 |
Income tax expense | (12,562) | (7,336) | (29,427) | (20,275) |
Net income | 30,157 | 21,757 | 76,052 | 53,642 |
Less: Net income attributable to noncontrolling interests | (634) | (631) | (1,316) | (1,905) |
Net income attributable to Sterling common stockholders | $ 29,523 | $ 21,126 | $ 74,736 | $ 51,737 |
Net income per share attributable to Sterling common stockholders: | ||||
Basic (in dollars per share) | $ 0.98 | $ 0.74 | $ 2.48 | $ 1.81 |
Diluted (in dollars per share) | $ 0.97 | $ 0.72 | $ 2.46 | $ 1.79 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 30,278 | 28,710 | 30,156 | 28,527 |
Diluted (in shares) | 30,540 | 29,213 | 30,364 | 28,927 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 30,157 | $ 21,757 | $ 76,052 | $ 53,642 |
Other comprehensive income, net of tax | ||||
Change in interest rate swap, net of tax (Note 10) | (101) | 718 | 2,301 | 2,341 |
Total comprehensive income | 30,056 | 22,475 | 78,353 | 55,983 |
Less: Comprehensive income attributable to noncontrolling interests | (634) | (631) | (1,316) | (1,905) |
Comprehensive income attributable to Sterling common stockholders | $ 29,422 | $ 21,844 | $ 77,037 | $ 54,078 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents ($28,994 and $35,378 related to variable interest entities (“VIEs”)) | $ 146,479 | $ 81,840 |
Accounts receivable ($38,617 and $26,176 related to VIEs) | 329,548 | 232,153 |
Contract assets ($19,458 and $10,249 related to VIEs) | 153,666 | 83,310 |
Receivables from and equity in construction joint ventures ($5,530 and $7,058 related to VIEs) | 16,316 | 16,896 |
Other current assets ($4,317 and $4,451 related to VIEs) | 23,549 | 20,492 |
Total current assets | 669,558 | 434,691 |
Property and equipment, net ($9,880 and $10,420 related to VIEs) | 222,647 | 204,316 |
Operating lease right-of-use assets, net ($5,033 and $5,097 related to VIEs) | 60,384 | 24,520 |
Goodwill ($1,501 and $1,501 related to VIEs) | 252,887 | 259,791 |
Other intangibles, net | 293,532 | 303,223 |
Other non-current assets, net | 4,325 | 4,455 |
Total assets | 1,503,333 | 1,230,996 |
Current liabilities: | ||
Accounts payable ($45,728 and $23,611 related to VIEs) | 192,902 | 144,982 |
Contract liabilities ($16,137 and $22,583 related to VIEs) | 224,739 | 127,932 |
Current maturities of long-term debt ($0 and $4,857 related to VIEs) | 29,705 | 28,230 |
Current portion of long-term lease obligations ($2,407 and $2,334 related to VIEs) | 17,418 | 8,841 |
Accrued compensation ($3,383 and $2,388 related to VIEs) | 37,448 | 22,803 |
Other current liabilities ($496 and $889 related to VIEs) | 10,096 | 18,972 |
Total current liabilities | 512,308 | 351,760 |
Long-term debt ($0 and $81 related to VIEs) | 407,090 | 428,588 |
Long-term lease obligations ($2,626 and $2,763 related to VIEs) | 43,121 | 15,831 |
Members’ interest subject to mandatory redemption and undistributed earnings | 55,862 | 55,115 |
Deferred tax liability, net | 40,311 | 14,656 |
Other long-term liabilities | 4,754 | 4,819 |
Total liabilities | 1,063,446 | 870,769 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common stock, par value $0.01 per share; 38,000 shares authorized, 30,318 and 29,838 shares issued and outstanding | 303 | 298 |
Additional paid in capital | 281,576 | 280,274 |
Retained earnings | 154,654 | 79,918 |
Accumulated other comprehensive gain (loss) | 578 | (1,723) |
Total Sterling stockholders’ equity | 437,111 | 358,767 |
Noncontrolling interests | 2,776 | 1,460 |
Total stockholders’ equity | 439,887 | 360,227 |
Total liabilities and stockholders’ equity | $ 1,503,333 | $ 1,230,996 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Cash and cash equivalents | $ 146,479 | $ 81,840 |
Accounts receivable | 329,548 | 232,153 |
Contract assets | 153,666 | 83,310 |
Sterling’s receivables from and equity in construction joint ventures | 16,316 | 16,896 |
Other current assets | 23,549 | 20,492 |
Property and equipment, net | 222,647 | 204,316 |
Operating lease right-of-use assets | 60,384 | 24,520 |
Goodwill | 252,887 | 259,791 |
Accounts payable | 192,902 | 144,982 |
Contract liabilities | 224,739 | 127,932 |
Current maturities of long-term debt | 29,705 | 28,230 |
Current portion of long-term lease obligations | 17,418 | 8,841 |
Accrued compensation | 37,448 | 22,803 |
Other current liabilities | 10,096 | 18,972 |
Total long-term debt | 407,090 | 428,588 |
Long-term lease obligations | $ 43,121 | $ 15,831 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 38,000 | 38,000 |
Ending balance (in shares) | 30,318 | 30,318 |
Common stock outstanding (in shares) | 29,838 | 29,838 |
Variable Interest Entity, Primary Beneficiary | ||
Cash and cash equivalents | $ 28,994 | $ 35,378 |
Accounts receivable | 38,617 | 26,176 |
Contract assets | 19,458 | 10,249 |
Sterling’s receivables from and equity in construction joint ventures | 5,530 | 7,058 |
Other current assets | 4,317 | 4,451 |
Property and equipment, net | 9,880 | 10,420 |
Operating lease right-of-use assets | 5,033 | 5,097 |
Goodwill | 1,501 | 1,501 |
Accounts payable | 45,728 | 23,611 |
Contract liabilities | 16,137 | 22,583 |
Current maturities of long-term debt | 0 | 4,857 |
Current portion of long-term lease obligations | 2,407 | 2,334 |
Accrued compensation | 3,383 | 2,388 |
Other current liabilities | 496 | 889 |
Total long-term debt | 0 | 81 |
Long-term lease obligations | $ 2,626 | $ 2,763 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||||
Net income | $ 30,157 | $ 21,757 | $ 76,052 | $ 53,642 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 38,550 | 25,336 | ||
Amortization of debt issuance costs and non-cash interest | 1,636 | 1,756 | ||
Gain on disposal of property and equipment | (1,926) | (1,176) | ||
Gain on debt extinguishment, net | 0 | (968) | (2,428) | (2,032) |
Deferred taxes | 10,470 | 6,120 | 24,975 | 17,413 |
Stock-based compensation | 9,195 | 5,690 | ||
Change in fair value of interest rate swap | (320) | (41) | ||
Changes in operating assets and liabilities (Note 16) | (15,087) | 35,154 | ||
Net cash provided by operating activities | 130,647 | 135,742 | ||
Cash flows from investing activities: | ||||
Acquisitions, net of cash acquired | (3,033) | 0 | ||
Capital expenditures | (47,832) | (39,315) | ||
Proceeds from sale of property and equipment | 3,043 | 2,093 | ||
Net cash used in investing activities | (47,822) | (37,222) | ||
Cash flows from financing activities: | ||||
Repayments of debt | (17,612) | (44,184) | ||
Distributions to noncontrolling interest owners | 0 | (1,959) | ||
Other | 0 | (603) | ||
Net cash used in financing activities | (17,612) | (46,746) | ||
Net change in cash, cash equivalents, and restricted cash | 65,213 | 51,774 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 88,693 | 72,642 | ||
Cash, cash equivalents, and restricted cash at end of period | 153,906 | 124,416 | 153,906 | 124,416 |
Less: restricted cash (other current assets) | (7,427) | (6,714) | (7,427) | (6,714) |
Cash and cash equivalents at end of period | $ 146,479 | $ 117,702 | 146,479 | 117,702 |
Non-cash items: | ||||
Capital expenditures | $ 562 | $ 116 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Total Sterling Stockholders’ Equity | Common Stock | Additional Paid in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Gain | Non-controlling Interests |
Beginning balance (in shares) at Dec. 31, 2020 | 28,184 | |||||||
Beginning balance (in shares) at Dec. 31, 2020 | 95 | |||||||
Beginning balance at Dec. 31, 2020 | $ 268,729 | $ 267,270 | $ 283 | $ 256,423 | $ (1,445) | $ 17,273 | $ (5,264) | $ 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) | (1,959) | ||||||
Issuance of stock (in shares) | 668 | (111) | ||||||
Issuance of stock | 144 | 144 | $ 5 | (1,602) | $ 1,741 | |||
Shares withheld for taxes (in shares) | (246) | (16) | ||||||
Shares withheld for taxes | (5,619) | (5,619) | $ (2) | (5,321) | $ (296) | |||
Ending balance (in shares) at Mar. 31, 2021 | 28,606 | |||||||
Ending balance (in shares) at Mar. 31, 2021 | 0 | |||||||
Ending balance at Mar. 31, 2021 | 275,693 | 275,080 | $ 286 | 251,335 | $ 0 | 27,828 | (4,369) | 613 |
Beginning balance (in shares) at Dec. 31, 2020 | 28,184 | |||||||
Beginning balance (in shares) at Dec. 31, 2020 | 95 | |||||||
Beginning balance at Dec. 31, 2020 | 268,729 | 267,270 | $ 283 | 256,423 | $ (1,445) | 17,273 | (5,264) | 1,459 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 53,642 | |||||||
Change in interest rate swap | 2,341 | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 28,782 | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | |||||||
Ending balance at Sep. 30, 2021 | 323,093 | 321,688 | $ 288 | 255,313 | $ 0 | 69,010 | (2,923) | 1,405 |
Beginning balance (in shares) at Mar. 31, 2021 | 28,606 | |||||||
Beginning balance (in shares) at Mar. 31, 2021 | 0 | |||||||
Beginning balance at Mar. 31, 2021 | 275,693 | 275,080 | $ 286 | 251,335 | $ 0 | 27,828 | (4,369) | 613 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 20,217 | 20,056 | 20,056 | 161 | ||||
Change in interest rate swap | 728 | 728 | 728 | |||||
Stock-based compensation | 2,015 | 2,015 | 2,015 | |||||
Issuance of stock (in shares) | 32 | |||||||
Issuance of stock | 120 | 120 | 120 | |||||
Other | (3) | (3) | (3) | |||||
Ending balance (in shares) at Jun. 30, 2021 | 28,638 | |||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | |||||||
Ending balance at Jun. 30, 2021 | 298,770 | 297,996 | $ 286 | 253,467 | $ 0 | 47,884 | (3,641) | 774 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 21,757 | 21,126 | 21,126 | 631 | ||||
Change in interest rate swap | 718 | 718 | 718 | |||||
Stock-based compensation | 1,840 | 1,840 | 1,840 | |||||
Issuance of stock (in shares) | 148 | |||||||
Issuance of stock | 107 | 107 | $ 2 | 105 | ||||
Shares withheld for taxes (in shares) | (4) | |||||||
Shares withheld for taxes | (99) | (99) | (99) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 28,782 | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | |||||||
Ending balance at Sep. 30, 2021 | $ 323,093 | 321,688 | $ 288 | 255,313 | $ 0 | 69,010 | (2,923) | 1,405 |
Beginning balance (in shares) at Dec. 31, 2021 | 29,838 | 29,838 | ||||||
Beginning balance at Dec. 31, 2021 | $ 360,227 | 358,767 | $ 298 | 280,274 | 79,918 | (1,723) | 1,460 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 19,523 | 19,252 | 19,252 | 271 | ||||
Change in interest rate swap | 1,563 | 1,563 | 1,563 | |||||
Stock-based compensation | 3,521 | 3,521 | 3,521 | |||||
Issuance of stock (in shares) | 688 | |||||||
Issuance of stock | 192 | 192 | $ 7 | 185 | ||||
Shares withheld for taxes (in shares) | (263) | |||||||
Shares withheld for taxes | (7,386) | (7,386) | $ (3) | (7,383) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 30,263 | |||||||
Ending balance at Mar. 31, 2022 | $ 377,640 | 375,909 | $ 302 | 276,597 | 99,170 | (160) | 1,731 | |
Beginning balance (in shares) at Dec. 31, 2021 | 29,838 | 29,838 | ||||||
Beginning balance at Dec. 31, 2021 | $ 360,227 | 358,767 | $ 298 | 280,274 | 79,918 | (1,723) | 1,460 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 76,052 | |||||||
Change in interest rate swap | $ 2,301 | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 29,838 | 30,318 | ||||||
Ending balance at Sep. 30, 2022 | $ 439,887 | 437,111 | $ 303 | 281,576 | 154,654 | 578 | 2,776 | |
Beginning balance (in shares) at Mar. 31, 2022 | 30,263 | |||||||
Beginning balance at Mar. 31, 2022 | 377,640 | 375,909 | $ 302 | 276,597 | 99,170 | (160) | 1,731 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 26,372 | 25,961 | 25,961 | 411 | ||||
Change in interest rate swap | 839 | 839 | 839 | |||||
Stock-based compensation | 2,333 | 2,333 | 2,333 | |||||
Issuance of stock (in shares) | 36 | |||||||
Issuance of stock | 191 | 191 | $ 1 | 190 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 30,299 | |||||||
Ending balance at Jun. 30, 2022 | 407,375 | 405,233 | $ 303 | 279,120 | 125,131 | 679 | 2,142 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 30,157 | 29,523 | 29,523 | 634 | ||||
Change in interest rate swap | (101) | (101) | (101) | |||||
Stock-based compensation | 2,436 | 2,436 | 2,436 | |||||
Issuance of stock (in shares) | 24 | |||||||
Issuance of stock | 155 | 155 | 155 | |||||
Shares withheld for taxes (in shares) | (5) | |||||||
Shares withheld for taxes | $ (135) | (135) | (135) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 29,838 | 30,318 | ||||||
Ending balance at Sep. 30, 2022 | $ 439,887 | $ 437,111 | $ 303 | $ 281,576 | $ 154,654 | $ 578 | $ 2,776 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. NATURE OF OPERATIONS Business Summary Sterling Infrastructure, Inc. (“Sterling,” “the Company,” “we,” “our” or “us”), a Delaware corporation, operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States (the “U.S.”), primarily across the Southern, Northeastern, Mid-Atlantic and the Rocky Mountain States, California and Hawaii, as well as other areas with strategic construction opportunities. E-Infrastructure Solutions projects develop advanced, large-scale site development systems and services for data centers, e-commerce distribution centers, warehousing, transportation, energy and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail, water, wastewater and storm drainage systems. Building Solutions projects include residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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 5 - Consolidated 50% Owned Subsidiaries and Note 6 - 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 to conform to the current period 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, 2021 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 September 30, 2022 and December 31, 2021, our allowance for our estimate of expected credit losses was zero. 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 September 30, 2022 and December 31, 2021, contract assets included $85,900 and $47,308 of retainage, respectively, and contract liabilities included $44,987 and $46,882 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 64% of our September 30, 2022 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 and nine months ended September 30, 2022 that was included in the contract liability balance on December 31, 2021 was $45,315 and $517,579, respectively. Revenue recognized for the three and nine months ended September 30, 2021 that was included in the contract liability balance on December 31, 2020 was $111,887 and $409,257, respectively. Cash and Restricted Cash— Our cash is comprised of highly liquid investments with maturities of three months or less. Restricted cash of $7,427 and $6,853 is included in “Other current assets” on the Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, 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. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 3. ACQUISITIONS General— On December 30, 2021 (the “Closing Date”), Sterling completed the acquisition (the “Acquisition”) of Petillo LLC and its related entities (collectively, “Petillo”). The Acquisition is accounted for using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . Purchase Consideration— Sterling completed the Acquisition for a purchase price of $196,763, net of cash acquired, detailed as follows: Cash consideration transferred, net of cash acquired $ 175,000 Equity consideration transferred (759 shares at $26.87 per share (1) ) 20,406 Target working capital adjustment 1,357 Total consideration $ 196,763 (1) Sterling’s closing stock price on December 29, 2021. Preliminary Purchase Price Allocation— The aggregate purchase price noted above was allocated to the assets and liabilities acquired based upon their estimated fair values at the acquisition closing date, which were based, in part, upon a preliminary external appraisal and valuation of certain assets, including specifically identified intangible assets. The excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired totaling $60,873 was recorded as goodwill. This goodwill represents the value of expected future earnings and cash flows, as well as the synergies created by the integration of the new business within our organization, including cross-selling opportunities to help strengthen our existing service offerings and expand our market position. Goodwill and intangibles of approximately $132,000 related to the Acquisition, are deductible and amortizable for tax purposes over the next 15 years. The following table summarizes our purchase price allocation at the Acquisition Closing Date, net of cash acquired: Net tangible assets: Accounts receivable $ 45,016 Contract assets 5,953 Other current assets 193 Property and equipment, net 47,141 Other non-current assets, net 5,498 Accounts payable (21,810) Contract liabilities (8,585) Other current liabilities (8,216) Total net tangible assets 65,190 Identifiable intangible assets 70,700 Goodwill 60,873 Total consideration transferred $ 196,763 During the nine months ended September 30, 2022, the total consideration and purchase price allocation (goodwill) changed by $7,800, primarily due to an updated estimate of the tax basis step-up payment. The purchase price allocation above is subject to further change when additional information is obtained. We have not finalized our assessment of the fair values primarily for intangible assets and property and equipment. We intend to finalize the purchase price allocation as soon as practicable within the measurement period, but in no event later than one year following the Closing Date of the Acquisition. Our final purchase price allocation may result in additional adjustments to various other assets and liabilities, including the residual amount allocated to goodwill during the measurement period. Identifiable Intangible Assets — Intangible assets identified as part of the Acquisition are reflected in the table below and are recorded at their estimated fair value, as determined by the Company’s management, based on available information which includes a preliminary valuation from external experts. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. Weighted Average Life (Years) December 30, 2021 Customer relationships 25 $ 43,200 Trade names 25 27,500 Total $ 70,700 Supplemental Pro Forma Information (Unaudited) — The following unaudited pro forma combined financial information (“the pro forma financial information”) gives effect to the Acquisition, accounted for as a business combination using the purchase method of accounting. The pro forma financial information reflects the Acquisition and related events as if they occurred at the beginning of the period and includes adjustments to (1) include compensation expense associated with the employment agreement the Company entered into with Mr. Petillo, (2) include additional intangible asset amortization associated with the Acquisition, (3) include additional interest expense associated with the Acquisition and (4) include the pro forma results of Petillo for the three and nine months ended September 30, 2021. This pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the pro forma events taken place on the dates indicated. Further, the pro forma financial information does not purport to project the future operating results of the combined company following the Acquisition. Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Pro forma revenue $ 524,405 $ 1,323,771 Pro forma net income attributable to Sterling $ 27,985 $ 62,330 |
Revenue From Customers
Revenue From Customers | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Customers | 4. REVENUE FROM CUSTOMERS Backlog — The following table presents the Company’s backlog, by segment: September 30, December 31, E-Infrastructure Solutions Backlog $ 584,279 $ 432,613 Transportation Solutions Backlog 965,546 963,267 Building Solutions Backlog - Commercial 115,518 97,235 Total Backlog $ 1,665,343 $ 1,493,115 The Company expects to recognize approximately 70% 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 September 30, Nine Months Ended September 30, Revenues by major end market 2022 2021 2022 2021 E-Infrastructure Solutions Revenues $ 255,530 $ 121,286 $ 658,005 $ 341,601 Heavy Highway 155,847 188,746 408,216 427,451 Aviation 25,463 35,840 61,980 99,816 Water Containment and Treatment 23,373 11,463 60,377 41,890 Other 16,443 13,849 42,433 30,948 Transportation Solutions Revenues 221,126 249,898 573,006 600,105 Residential 51,304 65,295 166,045 156,078 Commercial 28,982 26,970 80,774 82,647 Building Solutions Revenues 80,286 92,265 246,819 238,725 Total Revenues $ 556,942 $ 463,449 $ 1,477,830 $ 1,180,431 Revenues by contract type Fixed-Unit Price $ 217,296 $ 267,092 $ 554,014 $ 670,526 Lump-Sum 287,472 129,742 752,614 348,313 Residential and Other 52,174 66,615 171,202 161,592 Total Revenues $ 556,942 $ 463,449 $ 1,477,830 $ 1,180,431 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 $14,680 and $13,905, at September 30, 2022 and December 31, 2021, respectively, 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 contract estimates and variations in project scope of work resulted in net increases of approximately $13,400 and $39,400 for the three and nine months ended September 30, 2022, respectively, and in a net decrease of approximately $360 and a net increase of $11,700 for the three and nine months ended September 30, 2021, respectively, included in “Operating income” on the Condensed Consolidated Statements of Operations. |
Consolidated 50% Owned Subsidia
Consolidated 50% Owned Subsidiaries | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Consolidated 50% Owned Subsidiaries | 5. 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 $4,100 and $5,200 for the three and nine months ended September 30, 2022, respectively, and were approximately $3,300 and $9,900 for the three and nine months ended September 30, 2021, 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: September 30, December 31, Members’ interest subject to mandatory redemption $ 40,000 $ 40,000 Net accumulated earnings 15,862 15,115 Total liability $ 55,862 $ 55,115 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 on an unconsolidated basis for Myers is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 63,902 $ 50,338 $ 157,001 $ 121,432 Operating (loss) income $ (128) $ 808 $ (6,184) $ 2,273 Net (loss) income $ (126) $ 2,757 $ (1,261) $ 4,192 |
Construction Joint Ventures
Construction Joint Ventures | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Construction Joint Ventures | 6. 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 16,544 $ 19,846 $ 37,006 $ 37,412 Operating income $ 1,285 $ 1,290 $ 2,673 $ 4,430 Net income $ 1,294 $ 1,292 $ 2,688 $ 4,435 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: September 30, December 31, Current assets $ 111,871 $ 130,898 Current liabilities $ (67,924) $ (91,121) Sterling’s receivables from and equity in construction joint ventures $ 16,316 $ 16,896 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 48,543 $ 69,116 $ 165,020 $ 181,022 Income before tax $ 4,292 $ 9,311 $ 18,636 $ 22,726 Sterling’s noncontrolling interest: Revenues $ 20,778 $ 30,326 $ 71,356 $ 79,264 Income before tax $ 1,760 $ 4,149 $ 7,775 $ 9,959 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 | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 7. PROPERTY AND EQUIPMENT Property and equipment are summarized as follows: September 30, December 31, Construction and transportation equipment $ 356,276 $ 316,381 Buildings and improvements 25,581 24,042 Land 3,891 3,891 Office equipment 3,498 3,270 Total property and equipment 389,246 347,584 Less accumulated depreciation (166,599) (143,268) Total property and equipment, net $ 222,647 $ 204,316 Depreciation Expense— Depreciation expense is primarily included within cost of revenues and was $9,629 and $27,959 for the three and nine months ended September 30, 2022, respectively, and $5,763 and $16,738 for the three and nine months ended September 30, 2021, respectively. |
Other Intangible Assets
Other Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | 8. 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: September 30, 2022 December 31, 2021 Weighted Gross Accumulated Gross Accumulated Customer relationships 25 $ 275,823 $ (34,242) $ 274,923 $ (25,838) Trade names 24 57,607 (6,560) 57,607 (4,726) Non-compete agreements 5 2,487 (1,583) 2,487 (1,230) Total 24 $ 335,917 $ (42,385) $ 335,017 $ (31,794) The Company’s intangible amortization expense was $3,509 and $10,591 for the three and nine months ended September 30, 2022, respectively, and $2,866 and $8,598 for the three and nine months ended September 30, 2021, respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT The Company’s outstanding debt was as follows: September 30, December 31, Term Loan Facility $ 429,469 $ 446,888 Revolving Credit Facility — — Credit Facility 429,469 446,888 Other debt 11,069 15,309 Total debt 440,538 462,197 Less - Current maturities of long-term debt (29,705) (28,230) Less - Unamortized debt issuance costs (3,743) (5,379) Total long-term debt $ 407,090 $ 428,588 Credit Facility —Our amended credit agreement (as amended, the “Credit Agreement”) provides the Company with senior secured debt financing (collectively, the “Credit Facility”) consisting of (i) a senior secured first lien term loan facility (the “Term Loan Facility”) in the aggregate principal amount of $540,000 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 to twelve-month LIBOR rate plus a margin, at the Company’s election. At September 30, 2022, the Company calculated interest using a one-month LIBOR rate and an applicable margin of 2.52% and 2.00% per annum, respectively. We continue to utilize an interest rate swap to hedge against $200,000 of the outstanding Term Loan Facility, which resulted in a weighted average interest rate of approximately 3.57% per annum during the nine months ended September 30, 2022. Scheduled principal payments on the Term Loan Facility are made quarterly and total approximately $23,200, $31,900, and $26,100 for each of the years ending 2022, 2023 and 2024, respectively. A final payment of all principal and interest then outstanding on the Term Loan Facility is due on October 2, 2024. 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, and is also required to prepay the Credit Facility with a certain percentage of its excess cash flow within 5 days after receipt of its annual audited financial statements. For the nine months ended September 30, 2022, the Company made scheduled term loan payments of $17,419. 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 September 30, 2022, we had no outstanding borrowings under the $75,000 Revolving Credit Facility. Debt Issuance Costs —The costs associated with the Credit Facility are reflected on the Condensed Consolidated Balance Sheets as a direct reduction from the related debt liability and amortized over the term of the facility. Amortization of debt issuance costs was $534 and $1,636 for the three and nine months ended September 30, 2022, respectively, and $492 and $1,756 for the three and nine months ended September 30, 2021, respectively, and was recorded as interest expense. Other Debt —At December 31, 2021, other debt primarily consisted of a $10,000 subordinated promissory note (the “Subordinated Promissory Note”) to one of the Plateau sellers and a short-term Paycheck Protection Program loan (the “PPP Loan”) received by one of the Company’s 50% owned subsidiaries. The Subordinated Promissory Note bears interest at 8% and the final principal payment is due on April 2, 2025. During the first quarter of 2022, the Small Business Administration forgave the outstanding PPP Loan of approximately $4,800, of which the Company recorded a gain on debt extinguishment of $2,428 for its 50% portion of the gain. 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 September 30, 2022, 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 September 30, 2022 and December 31, 2021, the fair value of our debt outstanding approximated the carrying value. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 10. FINANCIAL INSTRUMENTS Interest Rate Derivative —We continue to utilize a swap arrangement to hedge against interest rate variability associated with $200,000 of the $429,469 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 September 30, 2022, the fair value of the swap recorded in accumulated other comprehensive income (loss) (“AOCI”) was a net gain of $746. 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 September 30, 2022 or December 31, 2021. The following table presents the fair value of the interest rate derivative by valuation hierarchy and balance sheet classification: September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Assets Other current assets $ — $ 864 $ — $ 864 $ — $ — $ — $ — Other non-current assets — — — — — — — — Total assets at fair value $ — $ 864 $ — $ 864 $ — $ — $ — $ — Derivative Liabilities Other current liabilities $ — $ — $ — $ — $ — $ (2,438) $ — $ (2,438) Other non-current liabilities — — — — — — — — Total liabilities at fair value $ — $ — $ — $ — $ — $ (2,438) $ — $ (2,438) OCI —The following table presents the total value recognized in OCI and reclassified from AOCI into earnings during the three and nine months ended September 30, 2022 and 2021 for derivatives designated as cash flow hedges: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Before Tax Tax Net of Tax Before Tax Tax Net of Tax Net gain (loss) recognized in OCI $ 165 $ (38) $ 127 $ 2,122 $ (484) $ 1,638 Net amount reclassified from AOCI into earnings (1) (296) 68 (228) 860 (197) 663 Change in other comprehensive income $ (131) $ 30 $ (101) $ 2,982 $ (681) $ 2,301 Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Before Tax Tax Net of Tax Before Tax Tax Net of Tax Net gain (loss) recognized in OCI $ (111) $ 25 $ (86) $ (67) $ 15 $ (52) Net amount reclassified from AOCI into earnings (1) 1,041 (237) 804 3,099 (706) 2,393 Change in other comprehensive income $ 930 $ (212) $ 718 $ 3,032 $ (691) $ 2,341 (1) Net unrealized gains totaling $746 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 | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease Obligations | 11. 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 ten 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost $ 5,955 $ 1,672 $ 14,100 $ 4,694 Short-term lease cost $ 4,457 $ 3,813 $ 10,805 $ 8,848 Finance lease cost: Amortization of right-of-use assets $ 35 $ 46 $ 112 $ 151 Interest on lease liabilities 3 5 10 16 Total finance lease cost $ 38 $ 51 $ 122 $ 167 Supplemental cash flow information related to leases is as follows: Nine Months Ended September 30, Cash paid for amounts included in the measurement of lease liabilities: 2022 2021 Operating cash flows from operating leases $ 14,059 $ 4,627 Operating cash flows from finance leases $ 10 $ 16 Financing cash flows from finance leases $ 112 $ 151 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 56,083 $ 6,221 Finance leases $ — $ — Supplemental balance sheet information related to leases is as follows: Operating Leases September 30, December 31, Operating lease right-of-use assets $ 60,384 $ 24,520 Current portion of long-term lease obligations $ 17,418 $ 8,841 Long-term lease obligations 43,121 15,831 Total operating lease liabilities $ 60,539 $ 24,672 Finance Leases Property and equipment, at cost $ 1,479 $ 1,479 Accumulated depreciation (1,022) (907) Property and equipment, net $ 457 $ 572 Current maturities of long-term debt $ 146 $ 148 Long-term debt 114 224 Total finance lease liabilities $ 260 $ 372 Weighted Average Remaining Lease Term Operating leases 4.6 5.4 Finance leases 1.8 2.5 Weighted Average Discount Rate Operating leases 5.4 % 5.0 % Finance leases 4.3 % 4.3 % Maturities of lease liabilities are as follows: Year Ending December 31, Operating Finance 2022 (excluding the nine months ended September 30, 2022) $ 4,409 $ 39 2023 18,327 154 2024 16,174 77 2025 12,979 — 2026 7,838 — 2027 6,190 — Thereafter 2,599 — Total lease payments $ 68,516 $ 270 Less imputed interest (7,977) (10) Total $ 60,539 $ 260 |
Lease Obligations | 11. 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 ten 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost $ 5,955 $ 1,672 $ 14,100 $ 4,694 Short-term lease cost $ 4,457 $ 3,813 $ 10,805 $ 8,848 Finance lease cost: Amortization of right-of-use assets $ 35 $ 46 $ 112 $ 151 Interest on lease liabilities 3 5 10 16 Total finance lease cost $ 38 $ 51 $ 122 $ 167 Supplemental cash flow information related to leases is as follows: Nine Months Ended September 30, Cash paid for amounts included in the measurement of lease liabilities: 2022 2021 Operating cash flows from operating leases $ 14,059 $ 4,627 Operating cash flows from finance leases $ 10 $ 16 Financing cash flows from finance leases $ 112 $ 151 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 56,083 $ 6,221 Finance leases $ — $ — Supplemental balance sheet information related to leases is as follows: Operating Leases September 30, December 31, Operating lease right-of-use assets $ 60,384 $ 24,520 Current portion of long-term lease obligations $ 17,418 $ 8,841 Long-term lease obligations 43,121 15,831 Total operating lease liabilities $ 60,539 $ 24,672 Finance Leases Property and equipment, at cost $ 1,479 $ 1,479 Accumulated depreciation (1,022) (907) Property and equipment, net $ 457 $ 572 Current maturities of long-term debt $ 146 $ 148 Long-term debt 114 224 Total finance lease liabilities $ 260 $ 372 Weighted Average Remaining Lease Term Operating leases 4.6 5.4 Finance leases 1.8 2.5 Weighted Average Discount Rate Operating leases 5.4 % 5.0 % Finance leases 4.3 % 4.3 % Maturities of lease liabilities are as follows: Year Ending December 31, Operating Finance 2022 (excluding the nine months ended September 30, 2022) $ 4,409 $ 39 2023 18,327 154 2024 16,174 77 2025 12,979 — 2026 7,838 — 2027 6,190 — Thereafter 2,599 — Total lease payments $ 68,516 $ 270 Less imputed interest (7,977) (10) Total $ 60,539 $ 260 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. 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 | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Current tax expense $ 2,092 $ 1,216 $ 4,452 $ 2,862 Deferred tax expense 10,470 6,120 24,975 17,413 Income tax expense $ 12,562 $ 7,336 $ 29,427 $ 20,275 Cash paid for income taxes $ 1,345 $ 485 $ 4,143 $ 2,167 The effective income tax rate for the three and nine months ended September 30, 2022 was 29.4% and 27.9%, respectively. The rates varied from the statutory rate primarily as a result of state income taxes, nondeductible compensation and other permanent differences. The rate for nine months ended September 30, 2022 was additionally benefited by non-taxed PPP loan forgiveness in the first quarter of 2022. Due to net operating loss carryforwards, the Company expects no cash payments for federal income taxes for 2022. 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, 2021 the Company had federal and state net operating loss (“NOL”) carryforwards of $33,780 and $32,064, respectively, which expire at various dates in the next 17 years for U.S. federal income tax and in the next 6 to 16 years for the various state jurisdictions where we operate. Such NOL carryforwards expire beginning in 2028 through 2039. The Company expects to utilize the balance of its federal NOL carryforwards in 2022. 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
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stock Incentive Plan | 14. STOCK INCENTIVE PLAN 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 nine months ended September 30, 2022 primarily relate to activity associated with the Stock Incentive Plan, the ESPP and shares withheld for taxes. Share Grants —During the nine months ended September 30, 2022, the Company granted the following awards under the Stock Incentive Plan: Shares Weighted Average Grant-Date Fair Value per Share RSAs 26 $ 23.43 RSUs 138 $ 26.01 PSUs (at target) 166 $ 26.52 Total shares granted 330 Share Issuances —During the nine months ended September 30, 2022, the Company issued the following shares under the Stock Incentive Plan and the ESPP: Shares RSAs (issued upon grant) 26 RSUs (issued upon vesting) 20 PSUs (issued upon vesting) 675 ESPP (issued upon sale) 27 Total shares issued 748 Stock-Based Compensation —During the three and nine months ended September 30, 2022, the Company recognized $2,436 and $7,065 , respectively, of stock-based compensation expense, and during the three and nine months ended September 30, 2021, the Company recognized $1,840 and $5,690 of stock-based compensation expense, respectively, primarily within general and administrative expenses. Included within total stock-based compensation expense for the three and nine months ended September 30, 2022 is $27 and $94 , respectively, of expense related to the ESPP, and during the three and nine months ended September 30, 2021, the Company recognized $19 and $66, respectively, of expense related to the ESPP. Additionally, the Company has liability-based awards for which the number of units awarded is not determined until the vesting date . During the three and nine months ended September 30, 2022, the Company recognized $0 and $1,225, respectively, within additional paid in capital for the vesting of liability-based awards. The Company did not have any liability-based awards vest during 2021. The Company recognizes forfeitures as they occur, rather than estimating expected forfeitures. Shares Withheld for Taxes —The Company withheld 5 and 268 shares for taxes on RSU/PSU stock-based compensation vestings for $135 and $7,521 during the three and nine months ended September 30, 2022, respectively. AOCI —During the three and nine months ended September 30, 2022, 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 10 - Financial Instruments for further discussion. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 15. EARNINGS PER SHARE The following table reconciles the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, Numerator: 2022 2021 2022 2021 Net income attributable to Sterling common stockholders $ 29,523 $ 21,126 $ 74,736 $ 51,737 Denominator: Weighted average common shares outstanding — basic 30,278 28,710 30,156 28,527 Shares for dilutive unvested stock and warrants 262 503 208 400 Weighted average common shares outstanding — diluted 30,540 29,213 30,364 28,927 Basic net income per share attributable to Sterling common stockholders $ 0.98 $ 0.74 $ 2.48 $ 1.81 Diluted net income per share attributable to Sterling common stockholders $ 0.97 $ 0.72 $ 2.46 $ 1.79 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 16. SUPPLEMENTAL CASH FLOW INFORMATION Operating Assets and Liabilities— The following table summarizes the changes in the components of operating assets and liabilities: Nine Months Ended September 30, 2022 2021 Accounts receivable $ (97,447) $ (41,259) Contracts in progress, net 26,451 26,694 Receivables from and equity in construction joint ventures 580 (5,003) Other current and non-current assets (1,488) (6,630) Accounts payable 47,411 47,423 Accrued compensation and other liabilities 11,087 12,916 Members' interest subject to mandatory redemption and undistributed earnings (1,681) 1,013 Changes in operating assets and liabilities $ (15,087) $ 35,154 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 17. SEGMENT INFORMATION The Company’s internal and public segment reporting are aligned based upon the services offered by its operating segments. With the December 30, 2021 acquisition of Petillo, the Company realigned its operating groups to reflect management’s present oversight of operations. After realignment, the Company’s operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions, with the commercial business reclassified from the previously reported Specialty Services operating group into the newly formed Building Solutions operating group. The segment information for the prior period has been recast to conform to the current presentation. The Company’s Chief Operating Decision Maker evaluates the performance of the operating segment based upon revenue and income from operations. We incur expenses at the corporate level that relate to our business as a whole. Certain of these amounts have been charged to our business segments by various methods, largely on the basis of usage, with the unallocated remainder reported in the “Corporate” line. Corporate overhead is primarily comprised of corporate headquarters facility expense, the cost of the executive management team, and expenses pertaining to certain centralized functions that benefit the entire Company but are not directly attributable to the businesses, such as corporate human resources, legal, governance and finance functions. The following table presents total revenue and income from operations by reportable segment for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, Revenues 2022 2021 2022 2021 E-Infrastructure Solutions $ 255,530 $ 121,286 $ 658,005 $ 341,601 Transportation Solutions 221,126 249,898 573,006 600,105 Building Solutions 80,286 92,265 246,819 238,725 Total Revenues $ 556,942 $ 463,449 $ 1,477,830 $ 1,180,431 Operating Income E-Infrastructure Solutions $ 37,533 $ 19,218 $ 91,642 $ 61,744 Transportation Solutions 9,635 9,334 18,428 16,796 Building Solutions 9,324 9,238 28,433 23,389 Segment Operating Income 56,492 37,790 138,503 101,929 Corporate (8,529) (5,759) (20,696) (14,423) Acquisition Related Costs (277) — (762) — Total Operating Income $ 47,686 $ 32,031 $ 117,045 $ 87,506 |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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 5 - Consolidated 50% Owned Subsidiaries and Note 6 - 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 to conform to the current period 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 September 30, 2022 and December 31, 2021, our allowance for our estimate of expected credit losses was zero. |
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 September 30, 2022 and December 31, 2021, contract assets included $85,900 and $47,308 of retainage, respectively, and contract liabilities included $44,987 and $46,882 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 64% of our September 30, 2022 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 and nine months ended September 30, 2022 that was included in the contract liability balance on December 31, 2021 was $45,315 and $517,579, respectively. Revenue recognized for the three and nine months ended September 30, 2021 that was included in the contract liability balance on December 31, 2020 was $111,887 and $409,257, respectively. |
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 $7,427 and $6,853 is included in “Other current assets” on the Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, 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. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Fair Value Consideration Transferred | Purchase Consideration— Sterling completed the Acquisition for a purchase price of $196,763, net of cash acquired, detailed as follows: Cash consideration transferred, net of cash acquired $ 175,000 Equity consideration transferred (759 shares at $26.87 per share (1) ) 20,406 Target working capital adjustment 1,357 Total consideration $ 196,763 (1) Sterling’s closing stock price on December 29, 2021. |
Summary of Preliminary Purchase Price Allocation | The following table summarizes our purchase price allocation at the Acquisition Closing Date, net of cash acquired: Net tangible assets: Accounts receivable $ 45,016 Contract assets 5,953 Other current assets 193 Property and equipment, net 47,141 Other non-current assets, net 5,498 Accounts payable (21,810) Contract liabilities (8,585) Other current liabilities (8,216) Total net tangible assets 65,190 Identifiable intangible assets 70,700 Goodwill 60,873 Total consideration transferred $ 196,763 |
Schedule of Identifiable Intangible Assets Acquired | Weighted Average Life (Years) December 30, 2021 Customer relationships 25 $ 43,200 Trade names 25 27,500 Total $ 70,700 |
Summary of Proforma Information | Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Pro forma revenue $ 524,405 $ 1,323,771 Pro forma net income attributable to Sterling $ 27,985 $ 62,330 |
Revenue From Customers (Tables)
Revenue From Customers (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Backlog By Segment | The following table presents the Company’s backlog, by segment: September 30, December 31, E-Infrastructure Solutions Backlog $ 584,279 $ 432,613 Transportation Solutions Backlog 965,546 963,267 Building Solutions Backlog - Commercial 115,518 97,235 Total Backlog $ 1,665,343 $ 1,493,115 |
Disaggregation of Revenue | The following tables present the Company’s revenue disaggregated by major end market and contract type: Three Months Ended September 30, Nine Months Ended September 30, Revenues by major end market 2022 2021 2022 2021 E-Infrastructure Solutions Revenues $ 255,530 $ 121,286 $ 658,005 $ 341,601 Heavy Highway 155,847 188,746 408,216 427,451 Aviation 25,463 35,840 61,980 99,816 Water Containment and Treatment 23,373 11,463 60,377 41,890 Other 16,443 13,849 42,433 30,948 Transportation Solutions Revenues 221,126 249,898 573,006 600,105 Residential 51,304 65,295 166,045 156,078 Commercial 28,982 26,970 80,774 82,647 Building Solutions Revenues 80,286 92,265 246,819 238,725 Total Revenues $ 556,942 $ 463,449 $ 1,477,830 $ 1,180,431 Revenues by contract type Fixed-Unit Price $ 217,296 $ 267,092 $ 554,014 $ 670,526 Lump-Sum 287,472 129,742 752,614 348,313 Residential and Other 52,174 66,615 171,202 161,592 Total Revenues $ 556,942 $ 463,449 $ 1,477,830 $ 1,180,431 |
Consolidated 50% Owned Subsid_2
Consolidated 50% Owned Subsidiaries (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Summary of Liability Breakdown | The liability consists of the following: September 30, December 31, Members’ interest subject to mandatory redemption $ 40,000 $ 40,000 Net accumulated earnings 15,862 15,115 Total liability $ 55,862 $ 55,115 |
Summary of Financial Information | Summary financial information on an unconsolidated basis for Myers is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 63,902 $ 50,338 $ 157,001 $ 121,432 Operating (loss) income $ (128) $ 808 $ (6,184) $ 2,273 Net (loss) income $ (126) $ 2,757 $ (1,261) $ 4,192 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 16,544 $ 19,846 $ 37,006 $ 37,412 Operating income $ 1,285 $ 1,290 $ 2,673 $ 4,430 Net income $ 1,294 $ 1,292 $ 2,688 $ 4,435 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 48,543 $ 69,116 $ 165,020 $ 181,022 Income before tax $ 4,292 $ 9,311 $ 18,636 $ 22,726 Sterling’s noncontrolling interest: Revenues $ 20,778 $ 30,326 $ 71,356 $ 79,264 Income before tax $ 1,760 $ 4,149 $ 7,775 $ 9,959 |
Construction Joint Ventures (Ta
Construction Joint Ventures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Condensed Income Statement | Summary financial information on an unconsolidated basis for Myers is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 63,902 $ 50,338 $ 157,001 $ 121,432 Operating (loss) income $ (128) $ 808 $ (6,184) $ 2,273 Net (loss) income $ (126) $ 2,757 $ (1,261) $ 4,192 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 16,544 $ 19,846 $ 37,006 $ 37,412 Operating income $ 1,285 $ 1,290 $ 2,673 $ 4,430 Net income $ 1,294 $ 1,292 $ 2,688 $ 4,435 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 48,543 $ 69,116 $ 165,020 $ 181,022 Income before tax $ 4,292 $ 9,311 $ 18,636 $ 22,726 Sterling’s noncontrolling interest: Revenues $ 20,778 $ 30,326 $ 71,356 $ 79,264 Income before tax $ 1,760 $ 4,149 $ 7,775 $ 9,959 |
Condensed Balance Sheet | September 30, December 31, Current assets $ 111,871 $ 130,898 Current liabilities $ (67,924) $ (91,121) Sterling’s receivables from and equity in construction joint ventures $ 16,316 $ 16,896 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment are summarized as follows: September 30, December 31, Construction and transportation equipment $ 356,276 $ 316,381 Buildings and improvements 25,581 24,042 Land 3,891 3,891 Office equipment 3,498 3,270 Total property and equipment 389,246 347,584 Less accumulated depreciation (166,599) (143,268) Total property and equipment, net $ 222,647 $ 204,316 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 December 31, 2021 Weighted Gross Accumulated Gross Accumulated Customer relationships 25 $ 275,823 $ (34,242) $ 274,923 $ (25,838) Trade names 24 57,607 (6,560) 57,607 (4,726) Non-compete agreements 5 2,487 (1,583) 2,487 (1,230) Total 24 $ 335,917 $ (42,385) $ 335,017 $ (31,794) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s outstanding debt was as follows: September 30, December 31, Term Loan Facility $ 429,469 $ 446,888 Revolving Credit Facility — — Credit Facility 429,469 446,888 Other debt 11,069 15,309 Total debt 440,538 462,197 Less - Current maturities of long-term debt (29,705) (28,230) Less - Unamortized debt issuance costs (3,743) (5,379) Total long-term debt $ 407,090 $ 428,588 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Assets Other current assets $ — $ 864 $ — $ 864 $ — $ — $ — $ — Other non-current assets — — — — — — — — Total assets at fair value $ — $ 864 $ — $ 864 $ — $ — $ — $ — Derivative Liabilities Other current liabilities $ — $ — $ — $ — $ — $ (2,438) $ — $ (2,438) Other non-current liabilities — — — — — — — — Total liabilities at fair value $ — $ — $ — $ — $ — $ (2,438) $ — $ (2,438) |
Schedule of Changes in AOCI | Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Before Tax Tax Net of Tax Before Tax Tax Net of Tax Net gain (loss) recognized in OCI $ 165 $ (38) $ 127 $ 2,122 $ (484) $ 1,638 Net amount reclassified from AOCI into earnings (1) (296) 68 (228) 860 (197) 663 Change in other comprehensive income $ (131) $ 30 $ (101) $ 2,982 $ (681) $ 2,301 Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Before Tax Tax Net of Tax Before Tax Tax Net of Tax Net gain (loss) recognized in OCI $ (111) $ 25 $ (86) $ (67) $ 15 $ (52) Net amount reclassified from AOCI into earnings (1) 1,041 (237) 804 3,099 (706) 2,393 Change in other comprehensive income $ 930 $ (212) $ 718 $ 3,032 $ (691) $ 2,341 (1) Net unrealized gains totaling $746 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) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Expenses | The components of lease expense are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost $ 5,955 $ 1,672 $ 14,100 $ 4,694 Short-term lease cost $ 4,457 $ 3,813 $ 10,805 $ 8,848 Finance lease cost: Amortization of right-of-use assets $ 35 $ 46 $ 112 $ 151 Interest on lease liabilities 3 5 10 16 Total finance lease cost $ 38 $ 51 $ 122 $ 167 Supplemental cash flow information related to leases is as follows: Nine Months Ended September 30, Cash paid for amounts included in the measurement of lease liabilities: 2022 2021 Operating cash flows from operating leases $ 14,059 $ 4,627 Operating cash flows from finance leases $ 10 $ 16 Financing cash flows from finance leases $ 112 $ 151 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases $ 56,083 $ 6,221 Finance leases $ — $ — Supplemental balance sheet information related to leases is as follows: Operating Leases September 30, December 31, Operating lease right-of-use assets $ 60,384 $ 24,520 Current portion of long-term lease obligations $ 17,418 $ 8,841 Long-term lease obligations 43,121 15,831 Total operating lease liabilities $ 60,539 $ 24,672 Finance Leases Property and equipment, at cost $ 1,479 $ 1,479 Accumulated depreciation (1,022) (907) Property and equipment, net $ 457 $ 572 Current maturities of long-term debt $ 146 $ 148 Long-term debt 114 224 Total finance lease liabilities $ 260 $ 372 Weighted Average Remaining Lease Term Operating leases 4.6 5.4 Finance leases 1.8 2.5 Weighted Average Discount Rate Operating leases 5.4 % 5.0 % Finance leases 4.3 % 4.3 % |
Maturities of Lease Liabilities, Operating Leases | Maturities of lease liabilities are as follows: Year Ending December 31, Operating Finance 2022 (excluding the nine months ended September 30, 2022) $ 4,409 $ 39 2023 18,327 154 2024 16,174 77 2025 12,979 — 2026 7,838 — 2027 6,190 — Thereafter 2,599 — Total lease payments $ 68,516 $ 270 Less imputed interest (7,977) (10) Total $ 60,539 $ 260 |
Maturities of Lease Liabilities, Finance Leases | Maturities of lease liabilities are as follows: Year Ending December 31, Operating Finance 2022 (excluding the nine months ended September 30, 2022) $ 4,409 $ 39 2023 18,327 154 2024 16,174 77 2025 12,979 — 2026 7,838 — 2027 6,190 — Thereafter 2,599 — Total lease payments $ 68,516 $ 270 Less imputed interest (7,977) (10) Total $ 60,539 $ 260 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Taxes | The components of the provision for income taxes were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Current tax expense $ 2,092 $ 1,216 $ 4,452 $ 2,862 Deferred tax expense 10,470 6,120 24,975 17,413 Income tax expense $ 12,562 $ 7,336 $ 29,427 $ 20,275 Cash paid for income taxes $ 1,345 $ 485 $ 4,143 $ 2,167 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Grants and Issuances | During the nine months ended September 30, 2022, the Company granted the following awards under the Stock Incentive Plan: Shares Weighted Average Grant-Date Fair Value per Share RSAs 26 $ 23.43 RSUs 138 $ 26.01 PSUs (at target) 166 $ 26.52 Total shares granted 330 Shares RSAs (issued upon grant) 26 RSUs (issued upon vesting) 20 PSUs (issued upon vesting) 675 ESPP (issued upon sale) 27 Total shares issued 748 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, Numerator: 2022 2021 2022 2021 Net income attributable to Sterling common stockholders $ 29,523 $ 21,126 $ 74,736 $ 51,737 Denominator: Weighted average common shares outstanding — basic 30,278 28,710 30,156 28,527 Shares for dilutive unvested stock and warrants 262 503 208 400 Weighted average common shares outstanding — diluted 30,540 29,213 30,364 28,927 Basic net income per share attributable to Sterling common stockholders $ 0.98 $ 0.74 $ 2.48 $ 1.81 Diluted net income per share attributable to Sterling common stockholders $ 0.97 $ 0.72 $ 2.46 $ 1.79 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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: Nine Months Ended September 30, 2022 2021 Accounts receivable $ (97,447) $ (41,259) Contracts in progress, net 26,451 26,694 Receivables from and equity in construction joint ventures 580 (5,003) Other current and non-current assets (1,488) (6,630) Accounts payable 47,411 47,423 Accrued compensation and other liabilities 11,087 12,916 Members' interest subject to mandatory redemption and undistributed earnings (1,681) 1,013 Changes in operating assets and liabilities $ (15,087) $ 35,154 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, Revenues 2022 2021 2022 2021 E-Infrastructure Solutions $ 255,530 $ 121,286 $ 658,005 $ 341,601 Transportation Solutions 221,126 249,898 573,006 600,105 Building Solutions 80,286 92,265 246,819 238,725 Total Revenues $ 556,942 $ 463,449 $ 1,477,830 $ 1,180,431 Operating Income E-Infrastructure Solutions $ 37,533 $ 19,218 $ 91,642 $ 61,744 Transportation Solutions 9,635 9,334 18,428 16,796 Building Solutions 9,324 9,238 28,433 23,389 Segment Operating Income 56,492 37,790 138,503 101,929 Corporate (8,529) (5,759) (20,696) (14,423) Acquisition Related Costs (277) — (762) — Total Operating Income $ 47,686 $ 32,031 $ 117,045 $ 87,506 |
Nature of Operations (Details)
Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
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 | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts against contracts receivable | $ 0 | $ 0 | $ 0 | ||
Contract receivables | 85,900,000 | 85,900,000 | 47,308,000 | ||
Contract liabilities, retainage | $ 44,987,000 | $ 44,987,000 | 46,882,000 | ||
Percentage of receivables estimated to be collected in next fiscal year | 64% | 64% | |||
Contract liability recognized during period | $ 45,315,000 | $ 517,579,000 | |||
Contract liability revenue recognized | $ 111,887,000 | $ 409,257,000 | |||
Restricted cash | $ 7,427,000 | $ 6,714,000 | $ 7,427,000 | $ 6,714,000 | $ 6,853,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Dec. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 252,887 | $ 259,791 | |
Expected tax deductible, period | 15 years | ||
Petillo | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 60,873 | ||
Expected tax deductible amount | $ 132,000 | ||
Consideration transferred | $ 7,800 |
Acquisitions - Consideration Tr
Acquisitions - Consideration Transferred and Purchase Price Allocation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Dec. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Goodwill | $ 252,887 | $ 259,791 | |
Petillo | |||
Business Combination, Consideration Transferred [Abstract] | |||
Cash consideration transferred, net of cash acquired | $ 175,000 | ||
Equity consideration transferred (in shares) | 759 | ||
Business acquisition, price per share | $ 26.87 | ||
Share consideration given for acquisitions | $ 20,406 | ||
Target working capital adjustment | 1,357 | ||
Aggregate consideration | 196,763 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Accounts receivable | 45,016 | ||
Contract assets | 5,953 | ||
Other current assets | 193 | ||
Property and equipment, net | 47,141 | ||
Other non-current assets, net | 5,498 | ||
Accounts payable | (21,810) | ||
Contract liabilities | (8,585) | ||
Other current liabilities | (8,216) | ||
Total net tangible assets | 65,190 | ||
Identifiable intangible assets | 70,700 | ||
Goodwill | 60,873 | ||
Total consideration transferred | $ 196,763 |
Acquisitions - Schedule of Iden
Acquisitions - Schedule of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 30, 2021 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Weighted Average Life (Years) | 24 years | |
Petillo | ||
Business Acquisition [Line Items] | ||
Fair value | $ 70,700 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Weighted Average Life (Years) | 25 years | |
Customer relationships | Petillo | ||
Business Acquisition [Line Items] | ||
Weighted Average Life (Years) | 25 years | |
Fair value | $ 43,200 | |
Trade names | ||
Business Acquisition [Line Items] | ||
Weighted Average Life (Years) | 24 years | |
Trade names | Petillo | ||
Business Acquisition [Line Items] | ||
Weighted Average Life (Years) | 25 years | |
Fair value | $ 27,500 |
Acquisitions - Supplemental Pro
Acquisitions - Supplemental Pro Forma Information (Details) - Petillo - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Pro forma revenue | $ 524,405 | $ 1,323,771 |
Pro forma net income attributable to Sterling | $ 27,985 | $ 62,330 |
Revenue From Customers - Backlo
Revenue From Customers - Backlog By Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Disaggregation of Revenue [Line Items] | ||
Backlog | $ 1,665,343 | $ 1,493,115 |
E-Infrastructure Solutions Backlog | ||
Disaggregation of Revenue [Line Items] | ||
Backlog | 584,279 | 432,613 |
Transportation Solutions Revenues | ||
Disaggregation of Revenue [Line Items] | ||
Backlog | 965,546 | 963,267 |
Building Solutions Backlog - Commercial | ||
Disaggregation of Revenue [Line Items] | ||
Backlog | $ 115,518 | $ 97,235 |
Revenue from Customers - Revenu
Revenue from Customers - Revenue Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 556,942 | $ 463,449 | $ 1,477,830 | $ 1,180,431 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 556,942 | 463,449 | 1,477,830 | 1,180,431 |
E-Infrastructure Solutions Backlog | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 255,530 | 121,286 | 658,005 | 341,601 |
Transportation Solutions Revenues | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 221,126 | 249,898 | 573,006 | 600,105 |
Transportation Solutions Revenues | Heavy Highway | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 155,847 | 188,746 | 408,216 | 427,451 |
Transportation Solutions Revenues | Aviation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 25,463 | 35,840 | 61,980 | 99,816 |
Transportation Solutions Revenues | Water Containment and Treatment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,373 | 11,463 | 60,377 | 41,890 |
Transportation Solutions Revenues | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,443 | 13,849 | 42,433 | 30,948 |
Building Solutions Backlog - Commercial | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 80,286 | 92,265 | 246,819 | 238,725 |
Building Solutions Backlog - Commercial | Residential | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 51,304 | 65,295 | 166,045 | 156,078 |
Building Solutions Backlog - Commercial | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 28,982 | 26,970 | 80,774 | 82,647 |
Fixed-Unit Price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 217,296 | 267,092 | 554,014 | 670,526 |
Lump-Sum | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 287,472 | 129,742 | 752,614 | 348,313 |
Residential and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 52,174 | $ 66,615 | $ 171,202 | $ 161,592 |
Revenue from Customers - Narrat
Revenue from Customers - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Remaining performance obligation expected to be recognized over next twelve months | 70% | 70% | |||
Remaining performance obligation period | 12 months | 12 months | |||
Operating income (Loss) | |||||
Disaggregation of Revenue [Line Items] | |||||
Estimated construction gain (loss) before tax | $ 13,400 | $ (360) | $ 39,400 | $ 11,700 | |
Costs and Estimated Earnings in Excess of Billings | |||||
Disaggregation of Revenue [Line Items] | |||||
Contracts receivable unpaid project contract price | $ 14,680 | $ 14,680 | $ 13,905 |
Consolidated 50% Owned Subsid_3
Consolidated 50% Owned Subsidiaries - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) insurancePolicy entity | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) entity | Sep. 30, 2021 USD ($) | Mar. 31, 2022 | Dec. 31, 2021 USD ($) entity | |
Noncontrolling Interest [Line Items] | ||||||
Ownership interest in subsidiaries | 50% | 50% | 50% | 50% | ||
Number of entities | entity | 2 | 2 | 1 | |||
Members’ interest subject to mandatory redemption | $ 40,000 | $ 40,000 | $ 40,000 | |||
Number of death and disability insurance policies | insurancePolicy | 2 | |||||
Total disability insurance policies, per policy amount | $ 20,000 | 20,000 | ||||
Myers | ||||||
Noncontrolling Interest [Line Items] | ||||||
Net accumulated earnings | 4,100 | $ 3,300 | 5,200 | $ 9,900 | ||
Variable Interest Entity, Primary Beneficiary | Myers | ||||||
Noncontrolling Interest [Line Items] | ||||||
Members’ interest subject to mandatory redemption | $ 20,000 | $ 20,000 |
Consolidated 50% Owned Subsid_4
Consolidated 50% Owned Subsidiaries - Components of Noncontrolling Interest (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Noncontrolling Interest [Abstract] | ||
Members’ interest subject to mandatory redemption | $ 40,000 | $ 40,000 |
Net accumulated earnings | 15,862 | 15,115 |
Total liability | $ 55,862 | $ 55,115 |
Consolidated 50% Owned Subsid_5
Consolidated 50% Owned Subsidiaries - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Variable Interest Entity [Line Items] | ||||
Operating income | $ 47,686 | $ 32,031 | $ 117,045 | $ 87,506 |
Net (loss) income | 29,523 | 21,126 | 74,736 | 51,737 |
Variable Interest Entity, Primary Beneficiary | Myers | ||||
Variable Interest Entity [Line Items] | ||||
Revenues | 63,902 | 50,338 | 157,001 | 121,432 |
Operating income | (128) | 808 | (6,184) | 2,273 |
Net (loss) income | $ (126) | $ 2,757 | $ (1,261) | $ 4,192 |
Construction Joint Ventures - S
Construction Joint Ventures - SEMA Financials (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
Operating income | $ 47,686 | $ 32,031 | $ 117,045 | $ 87,506 |
Net (loss) income | 29,523 | 21,126 | $ 74,736 | 51,737 |
RLW | Joint Ventures | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 51% | |||
SEMA Construction Inc | Variable Interest Entity, Primary Beneficiary | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | 16,544 | 19,846 | $ 37,006 | 37,412 |
Operating income | 1,285 | 1,290 | 2,673 | 4,430 |
Net (loss) income | $ 1,294 | $ 1,292 | $ 2,688 | $ 4,435 |
Construction Joint Ventures - C
Construction Joint Ventures - Construction Joint Ventures, Partner Share (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 669,558 | $ 434,691 |
Current liabilities | (512,308) | (351,760) |
Sterling’s receivables from and equity in construction joint ventures | 16,316 | 16,896 |
Joint Ventures | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 111,871 | 130,898 |
Current liabilities | (67,924) | (91,121) |
Sterling’s receivables from and equity in construction joint ventures | $ 16,316 | $ 16,896 |
Construction Joint Ventures - I
Construction Joint Ventures - Income Statement Information (Details) - Joint Ventures - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | $ 48,543 | $ 69,116 | $ 165,020 | $ 181,022 |
Income before tax | 4,292 | 9,311 | 18,636 | 22,726 |
Sterling’s noncontrolling interest: | ||||
Revenues | 20,778 | 30,326 | 71,356 | 79,264 |
Income before tax | $ 1,760 | $ 4,149 | $ 7,775 | $ 9,959 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 389,246 | $ 389,246 | $ 347,584 | ||
Less accumulated depreciation | (166,599) | (166,599) | (143,268) | ||
Total property and equipment, net | 222,647 | 222,647 | 204,316 | ||
Depreciation | 9,629 | $ 5,763 | 27,959 | $ 16,738 | |
Construction and transportation equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 356,276 | 356,276 | 316,381 | ||
Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 25,581 | 25,581 | 24,042 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 3,891 | 3,891 | 3,891 | ||
Office equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 3,498 | $ 3,498 | $ 3,270 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life (Years) | 24 years | ||||
Gross Carrying Amount | $ 335,917 | $ 335,917 | $ 335,017 | ||
Accumulated Amortization | (42,385) | (42,385) | (31,794) | ||
Amortization of intangible assets | 3,509 | $ 2,866 | $ 10,591 | $ 8,598 | |
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life (Years) | 25 years | ||||
Gross Carrying Amount | 275,823 | $ 275,823 | 274,923 | ||
Accumulated Amortization | (34,242) | $ (34,242) | (25,838) | ||
Trade names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life (Years) | 24 years | ||||
Gross Carrying Amount | 57,607 | $ 57,607 | 57,607 | ||
Accumulated Amortization | (6,560) | $ (6,560) | (4,726) | ||
Non-compete agreements | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Life (Years) | 5 years | ||||
Gross Carrying Amount | 2,487 | $ 2,487 | 2,487 | ||
Accumulated Amortization | $ (1,583) | $ (1,583) | $ (1,230) |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 440,538,000 | $ 462,197,000 |
Less - Current maturities of long-term debt | (29,705,000) | (28,230,000) |
Less - Unamortized debt issuance costs | (3,743,000) | (5,379,000) |
Total long-term debt | 407,090,000 | 428,588,000 |
Other debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 11,069,000 | 15,309,000 |
Secured Debt | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 429,469,000 | 446,888,000 |
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 | $ 429,469,000 | $ 446,888,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2022 | Sep. 30, 2022 USD ($) entity | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) entity | Sep. 30, 2021 USD ($) | Dec. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) entity | |
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 440,538,000 | $ 440,538,000 | $ 462,197,000 | |||||||
Amortization of debt issuance costs | $ 534,000 | $ 492,000 | $ 1,636,000 | $ 1,756,000 | ||||||
Number of entities | entity | 2 | 2 | 1 | |||||||
Ownership interest in subsidiaries | 50% | 50% | 50% | 50% | ||||||
Gain (loss) on extinguishment of debt | $ 0 | $ 968,000 | $ 2,428,000 | $ 2,032,000 | ||||||
Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Cash flow prepayment term | 5 days | |||||||||
Subordinated Promissory Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated interest rate | 8% | |||||||||
Paycheck Protection Program | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | $ 10,000,000 | |||||||||
Loan amount forgiven | $ 4,800,000 | |||||||||
Gain (loss) on extinguishment of debt | $ 2,428,000 | |||||||||
Secured Debt | Interest Rate Swap | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Derivative, notional amount | $ 200,000,000 | $ 200,000,000 | ||||||||
Secured Debt | Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Weighted average interest rate | 3.57% | 3.57% | ||||||||
Repayments of debt | $ 17,419,000 | |||||||||
Long-term debt | $ 429,469,000 | 429,469,000 | $ 446,888,000 | |||||||
Secured Debt | Term Loan Facility | Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Periodic payments | $ 26,100,000 | $ 31,900,000 | $ 23,200,000 | |||||||
Secured Debt | Term Loan Facility | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument face amount | 540,000,000 | 540,000,000 | ||||||||
Line of Credit | Revolving Credit Facility | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | 75,000,000 | 75,000,000 | ||||||||
Debt instrument, LIBOR interest rate | 2.52% | |||||||||
Line of Credit | Revolving Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2% | |||||||||
Line of Credit | Revolving Credit Facility | Swing Line Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, maximum borrowing capacity | $ 15,000,000 | $ 15,000,000 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Derivative [Line Items] | |||||
Long-term debt | $ 440,538 | $ 440,538 | $ 462,197 | ||
Fair value of contracts | (131) | $ 930 | 2,982 | $ 3,032 | |
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Fair value of contracts | 746 | ||||
Secured Debt | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 200,000 | 200,000 | |||
Secured Debt | Term Loan Facility | |||||
Derivative [Line Items] | |||||
Long-term debt | $ 429,469 | $ 429,469 | $ 446,888 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of the Interest Rate Derivative (Details) - Fair Value, Recurring - Interest Rate Swap - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Assets | ||
Other current assets | $ 864 | $ 0 |
Other non-current assets | 0 | 0 |
Total assets at fair value | 864 | 0 |
Derivative Liabilities | ||
Other current liabilities | 0 | (2,438) |
Other non-current liabilities | 0 | 0 |
Total liabilities at fair value | 0 | (2,438) |
Level 1 | ||
Derivative Assets | ||
Other current assets | 0 | 0 |
Other non-current assets | 0 | 0 |
Total assets at fair value | 0 | 0 |
Derivative Liabilities | ||
Other current liabilities | 0 | 0 |
Other non-current liabilities | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 2 | ||
Derivative Assets | ||
Other current assets | 864 | 0 |
Other non-current assets | 0 | 0 |
Total assets at fair value | 864 | 0 |
Derivative Liabilities | ||
Other current liabilities | 0 | (2,438) |
Other non-current liabilities | 0 | 0 |
Total liabilities at fair value | 0 | (2,438) |
Level 3 | ||
Derivative Assets | ||
Other current assets | 0 | 0 |
Other non-current assets | 0 | 0 |
Total assets at fair value | 0 | 0 |
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 | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Net gain (loss) recognized in OCI, before tax amount | $ 165 | $ (111) | $ 2,122 | $ (67) | ||||
Net gain (loss) recognized in OCI, tax amount | (38) | 25 | (484) | 15 | ||||
Net gain (loss) recognized in OCI, net of tax amount | 127 | (86) | 1,638 | (52) | ||||
Net amount reclassified from AOCI into earnings, before tax amount | (296) | 1,041 | 860 | 3,099 | ||||
Net amount reclassified from AOCI into earnings, tax amount | 68 | (237) | (197) | (706) | ||||
Net amount reclassified from AOCI into earnings, net of tax amount | (228) | 804 | 663 | 2,393 | ||||
Change in OCI, before tax amount | (131) | 930 | 2,982 | 3,032 | ||||
Change in OCI, tax amount | 30 | (212) | (681) | (691) | ||||
Change in OCI, net of tax amount | $ (101) | $ 839 | $ 1,563 | $ 718 | $ 728 | $ 895 | 2,301 | $ 2,341 |
Interest Rate Swap | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Change in OCI, before tax amount | 746 | |||||||
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 | $ 746 |
Lease Obligations (Details)
Lease Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||||
Lease termination period | 10 years | ||||
Lease, Cost [Abstract] | |||||
Operating lease cost | $ 5,955 | $ 1,672 | $ 14,100 | $ 4,694 | |
Short-term lease cost | 4,457 | 3,813 | 10,805 | 8,848 | |
Finance lease cost: | |||||
Amortization of right-of-use assets | 35 | 46 | 112 | 151 | |
Interest on lease liabilities | 3 | 5 | 10 | 16 | |
Total finance lease cost | 38 | $ 51 | 122 | 167 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows from operating leases | 14,059 | 4,627 | |||
Operating cash flows from finance leases | 10 | 16 | |||
Financing cash flows from finance leases | 112 | 151 | |||
Right-of-use assets obtained in exchange for lease obligations (non-cash): | |||||
Operating leases | 56,083 | 6,221 | |||
Finance leases | 0 | $ 0 | |||
Assets and Liabilities, Lessee [Abstract] | |||||
Operating lease right-of-use assets | 60,384 | 60,384 | $ 24,520 | ||
Current portion of long-term lease obligations | 17,418 | 17,418 | 8,841 | ||
Long-term lease obligations | 43,121 | 43,121 | 15,831 | ||
Total operating lease liabilities | 60,539 | 60,539 | 24,672 | ||
Property and equipment, at cost | 1,479 | 1,479 | 1,479 | ||
Accumulated depreciation | $ (1,022) | $ (1,022) | $ (907) | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net ($9,880 and $10,420 related to VIEs) | Property and equipment, net ($9,880 and $10,420 related to VIEs) | Property and equipment, net ($9,880 and $10,420 related to VIEs) | ||
Property and equipment, net | $ 457 | $ 457 | $ 572 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current maturities of long-term debt ($0 and $4,857 related to VIEs) | Current maturities of long-term debt ($0 and $4,857 related to VIEs) | Current maturities of long-term debt ($0 and $4,857 related to VIEs) | ||
Current maturities of long-term debt | $ 146 | $ 146 | $ 148 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt ($0 and $81 related to VIEs) | Long-term debt ($0 and $81 related to VIEs) | Long-term debt ($0 and $81 related to VIEs) | ||
Long-term debt | $ 114 | $ 114 | $ 224 | ||
Total finance lease liabilities | $ 260 | $ 260 | $ 372 | ||
Weighted average remaining lease term: operating leases | 4 years 7 months 6 days | 4 years 7 months 6 days | 5 years 4 months 24 days | ||
Weighted average remaining lease term: financing leases | 1 year 9 months 18 days | 1 year 9 months 18 days | 2 years 6 months | ||
Weighted average discount rate: operating lease | 5.40% | 5.40% | 5% | ||
Weighted average discount rate: financing lease | 4.30% | 4.30% | 4.30% | ||
Operating Leases | |||||
2022 (excluding the nine months ended September 30, 2022) | $ 4,409 | $ 4,409 | |||
2023 | 18,327 | 18,327 | |||
2024 | 16,174 | 16,174 | |||
2025 | 12,979 | 12,979 | |||
2026 | 7,838 | 7,838 | |||
2027 | 6,190 | 6,190 | |||
Thereafter | 2,599 | 2,599 | |||
Total lease payments | 68,516 | 68,516 | |||
Less imputed interest | (7,977) | (7,977) | |||
Total operating lease liabilities | 60,539 | 60,539 | $ 24,672 | ||
Finance Leases | |||||
2022 (excluding the nine months ended September 30, 2022) | 39 | 39 | |||
2023 | 154 | 154 | |||
2024 | 77 | 77 | |||
2025 | 0 | 0 | |||
2026 | 0 | 0 | |||
2027 | 0 | 0 | |||
Thereafter | 0 | 0 | |||
Total lease payments | 270 | 270 | |||
Less imputed interest | (10) | (10) | |||
Total finance lease liabilities | $ 260 | $ 260 | $ 372 | ||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease renewal term | 1 month | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease renewal term | 10 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Ownership interest in subsidiaries | 50% | 50% | 50% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||||
Current tax expense | $ 2,092 | $ 1,216 | $ 4,452 | $ 2,862 | |
Deferred tax expense | 10,470 | 6,120 | 24,975 | 17,413 | |
Income tax expense | 12,562 | 7,336 | 29,427 | 20,275 | |
Cash paid for income taxes | $ 1,345 | $ 485 | $ 4,143 | $ 2,167 | |
Effective income tax rate reconciliation | 29.40% | 27.90% | |||
Domestic Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | $ 33,780 | ||||
Operating loss carryforward expiration period | 17 years | ||||
State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | $ 32,064 | ||||
Minimum | State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforward expiration period | 6 years | ||||
Maximum | State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforward expiration period | 16 years |
Stock Incentive Plan - Share Gr
Stock Incentive Plan - Share Grants (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 330 |
RSAs | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 26 |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ / shares | $ 23.43 |
RSUs | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 138 |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ / shares | $ 26.01 |
PSUs | |
Class of Stock [Line Items] | |
Shares granted (in shares) | 166 |
Weighted Average Grant-Date Fair Value per Share (in dollars per share) | $ / shares | $ 26.52 |
Stock Incentive Plan - Share Is
Stock Incentive Plan - Share Issuances (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2022 shares | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 748 |
RSAs | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 26 |
RSUs | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 20 |
PSUs | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 675 |
ESPP | |
Class of Stock [Line Items] | |
Shares issued (in shares) | 27 |
Stock Incentive Plan - Narrativ
Stock Incentive Plan - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Sale of Stock [Line Items] | ||||||
Stock-based compensation expense | $ 2,436 | $ 1,840 | $ 7,065 | $ 5,690 | ||
Shares withheld for taxes | 135 | $ 7,386 | 99 | $ 5,619 | ||
Additional Paid in Capital | ||||||
Sale of Stock [Line Items] | ||||||
Shares withheld for taxes | 135 | $ 7,383 | 99 | $ 5,321 | ||
Liability-Based Awards | Additional Paid in Capital | ||||||
Sale of Stock [Line Items] | ||||||
Stock-based compensation expense | $ 0 | $ 1,225 | ||||
RSU/PSU | ||||||
Sale of Stock [Line Items] | ||||||
Shares withheld for taxes (in shares) | 5 | 268 | ||||
Shares withheld for taxes | $ 135 | $ 7,521 | ||||
Employee Stock Purchase Plan | ESPP | ||||||
Sale of Stock [Line Items] | ||||||
Stock-based compensation expense | $ 27 | $ 19 | $ 94 | $ 66 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income attributable to Sterling common stockholders | $ 29,523 | $ 21,126 | $ 74,736 | $ 51,737 |
Denominator: | ||||
Weighted average common shares outstanding - basic (in shares) | 30,278 | 28,710 | 30,156 | 28,527 |
Shares for dilutive unvested stock and warrants (in shares) | 262 | 503 | 208 | 400 |
Weighted average common shares outstanding - diluted (in shares) | 30,540 | 29,213 | 30,364 | 28,927 |
Basic net income per share attributable to Sterling common stockholders (in dollars per share) | $ 0.98 | $ 0.74 | $ 2.48 | $ 1.81 |
Diluted net income per share attributable to Sterling common stockholders (in dollars per share) | $ 0.97 | $ 0.72 | $ 2.46 | $ 1.79 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | $ (97,447) | $ (41,259) |
Contracts in progress, net | 26,451 | 26,694 |
Receivables from and equity in construction joint ventures | 580 | (5,003) |
Other current and non-current assets | (1,488) | (6,630) |
Accounts payable | 47,411 | 47,423 |
Accrued compensation and other liabilities | 11,087 | 12,916 |
Members' interest subject to mandatory redemption and undistributed earnings | (1,681) | 1,013 |
Changes in operating assets and liabilities | $ (15,087) | $ 35,154 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Revenues | $ 556,942 | $ 463,449 | $ 1,477,830 | $ 1,180,431 |
Operating Income | 47,686 | 32,031 | 117,045 | 87,506 |
Acquisition related costs | (277) | 0 | (762) | 0 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 556,942 | 463,449 | 1,477,830 | 1,180,431 |
Operating Income | 56,492 | 37,790 | 138,503 | 101,929 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income | (8,529) | (5,759) | (20,696) | (14,423) |
E-Infrastructure Solutions Backlog | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 255,530 | 121,286 | 658,005 | 341,601 |
Operating Income | 37,533 | 19,218 | 91,642 | 61,744 |
Transportation Solutions Revenues | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 221,126 | 249,898 | 573,006 | 600,105 |
Operating Income | 9,635 | 9,334 | 18,428 | 16,796 |
Building Solutions Backlog - Commercial | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 80,286 | 92,265 | 246,819 | 238,725 |
Operating Income | $ 9,324 | $ 9,238 | $ 28,433 | $ 23,389 |