Sterling Construction Company Inc (STRL, Financial) filed Quarterly Report for the period ended 2010-06-30.
Sterling Construction Company Inc has a market cap of $197.2 million; its shares were traded at around $12.25 with a P/E ratio of 7.9 and P/S ratio of 0.5. Sterling Construction Company Inc had an annual average earning growth of 33.9% over the past 10 years.STRL is in the portfolios of Chuck Royce of Royce& Associates, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC.
As discussed above, revenues in Texas and Nevada for the three months and six months ended June 30, 2010 have declined from the comparable 2009 periods as we completed projects without totally replacing them with new awards. This has resulted in not only a reduction in our workforce, but in the idling of a portion of our equipment fleet, which caused an under absorption of the depreciation, repairs and maintenance, insurance and property taxes related to such equipment. The under absorption is included in cost of revenues and amounted to a reduction of gross profit of approximately $1.0 and $2.3 million for the three and six months ended June 30, 2010, respectively. Management has reviewed the individual pieces of such equipment and determined that it is the same or similar type and age of other equipment not idled and will be used when the market returns to a more normalized level of activity and, consequently, there is no impairment in value of such idle equipment.
For the three and six months ended June 30, 2010, the Company realized gains of $547,000 and $964,000, respectively, on sale of securities, versus realized of gains of $143,000 and $141,000 for the comparable periods in 2009. The increase in realized gains for both the three and six month periods in 2010 was primarily due to a larger amount of invested funds throughout the 2010 periods and also the result of better returns on our municipal bond mutual fund investments than last year.
· depreciation and amortization, totaled $8.1 million in 2010, which increased $1.1 million from 2009 primarily as a result of depreciation in 2010 on equipment purchased in the RLW acquisition in December, 2009;
· deferred tax expense was $0.9 million in 2010, mainly attributable to amortization for tax return purposes of goodwill arising in the acquisition of RHB and RLW versus deferred tax expense of $4.3 million in 2009. The decline in deferred tax expense between the two years is due to the decline in the difference between accelerated tax depreciation in 2010 over book depreciation.
Financing activities in the first six months of 2010 primarily reflect a reduction of $15.0 million in borrowings under our $75.0 million Credit Facility as compared to a reduction of $5.0 million of borrowings in the comparable period in 2009. The amount of borrowings under the Credit Facility is based on the Company's expectations of working capital requirements.
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Sterling Construction Company Inc has a market cap of $197.2 million; its shares were traded at around $12.25 with a P/E ratio of 7.9 and P/S ratio of 0.5. Sterling Construction Company Inc had an annual average earning growth of 33.9% over the past 10 years.STRL is in the portfolios of Chuck Royce of Royce& Associates, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Backlog is our estimate of the revenues that we expect to earn in future periods on our construction projects which are typically completed in 12 to 36 months. At June 30, 2010, our backlog was $557 million as compared to $648 million as of December 31, 2009 and $344 million at June 30, 2009. Our backlog at June 30, 2010 included approximately $61 million of expected revenues for which the contracts had not yet been officially awarded or finalized as to price. Historically, subsequent non-awards of contracts or finalization of contract price have not materially affected our backlog, results of operations or financial condition. Backlog at June 30, 2010, includes $56 million applicable to consolidated joint ventures where we have a controlling interest and $119 million (our portion) where we have a non-controlling interest. Subsequent to June 30, 2010, we have been the apparent low bidder on approximately $65 million of construction contracts.As discussed above, revenues in Texas and Nevada for the three months and six months ended June 30, 2010 have declined from the comparable 2009 periods as we completed projects without totally replacing them with new awards. This has resulted in not only a reduction in our workforce, but in the idling of a portion of our equipment fleet, which caused an under absorption of the depreciation, repairs and maintenance, insurance and property taxes related to such equipment. The under absorption is included in cost of revenues and amounted to a reduction of gross profit of approximately $1.0 and $2.3 million for the three and six months ended June 30, 2010, respectively. Management has reviewed the individual pieces of such equipment and determined that it is the same or similar type and age of other equipment not idled and will be used when the market returns to a more normalized level of activity and, consequently, there is no impairment in value of such idle equipment.
For the three and six months ended June 30, 2010, the Company realized gains of $547,000 and $964,000, respectively, on sale of securities, versus realized of gains of $143,000 and $141,000 for the comparable periods in 2009. The increase in realized gains for both the three and six month periods in 2010 was primarily due to a larger amount of invested funds throughout the 2010 periods and also the result of better returns on our municipal bond mutual fund investments than last year.
· depreciation and amortization, totaled $8.1 million in 2010, which increased $1.1 million from 2009 primarily as a result of depreciation in 2010 on equipment purchased in the RLW acquisition in December, 2009;
· deferred tax expense was $0.9 million in 2010, mainly attributable to amortization for tax return purposes of goodwill arising in the acquisition of RHB and RLW versus deferred tax expense of $4.3 million in 2009. The decline in deferred tax expense between the two years is due to the decline in the difference between accelerated tax depreciation in 2010 over book depreciation.
Financing activities in the first six months of 2010 primarily reflect a reduction of $15.0 million in borrowings under our $75.0 million Credit Facility as compared to a reduction of $5.0 million of borrowings in the comparable period in 2009. The amount of borrowings under the Credit Facility is based on the Company's expectations of working capital requirements.
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