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What changed in STERLING INFRASTRUCTURE, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of STERLING INFRASTRUCTURE, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+148 added−139 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in STERLING INFRASTRUCTURE, INC.'s 2024 10-K

148 paragraphs added · 139 removed · 120 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

43 edited+2 added−0 removed243 unchanged
Biggest changeAny of these factors, including additional factors that apply to all companies generally which are not specifically mentioned below, in whole or in part, could materially and adversely affect our business, prospects, financial condition, results of operations, stock price and cash flows.
Biggest changeAny of these factors, including additional factors that apply to all companies generally which are not specifically mentioned below, in whole or in part, could materially and adversely affect our business, prospects, financial condition, results of operations, stock price and cash flows. 8 Because of the following factors, as well as other factors affecting our financial condition and operating results, our past financial performance should not be considered to be a reliable indicator of our future performance, and investors should not use historical trends to anticipate results or trends in future periods.
See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 21 - Segment Information for further discussion of our business segments. E-Infrastructure Solutions —Our E-Infrastructure Solutions segment serves large, blue-chip end users in the e-commerce distribution center, data center, manufacturing, warehousing, and power generation sectors and more.
See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 21 - Segment Information for further discussion of our business segments. E-Infrastructure Solutions —Our E-Infrastructure Solutions segment serves large, blue-chip end users in the data center, manufacturing, e-commerce distribution center, warehousing, power generation sectors and more.
In the past, we have been able to attract a sufficient number of personnel to support the growth of our operations; however, we continue to face competition for experienced workers in all of our markets, and we cannot guarantee we will continue to attract a sufficient number of personnel. 7 Our employees are important to the success of our business.
In the past, we have been able to attract a sufficient number of 7 personnel to support the growth of our operations; however, we continue to face competition for experienced workers in all of our markets, and we cannot guarantee we will continue to attract a sufficient number of personnel. Our employees are important to the success of our business.
Across our three operating segments, the revenue and profit generated are from infrastructure projects and services, but we do not directly control the process by which such infrastructure projects and services are awarded.
Across our three operating segments, revenue and profit are generated from infrastructure projects and services, but we do not directly control the process by which such infrastructure projects and services are awarded.
The costs incurred and gross profit realized on our contracts can vary, sometimes substantially, from our original estimates due to a variety of factors, that may include, but are not limited to the following: • onsite conditions that differ from those assumed in the original bid or contract; • failure to include required materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a lump sum contract; • delays caused by weather conditions; • contract or project modifications creating unanticipated costs not covered by change orders or contract price adjustments; • changes in availability, proximity and costs of materials, including steel, concrete, aggregates and other construction materials (such as stone, gravel, sand and oil for asphalt paving), as well as fuel and lubricants for our equipment; and 9 • claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is a part.
The costs incurred and gross profit realized on our contracts can vary, sometimes substantially, from our original estimates due to a variety of factors, that may include, but are not limited to the following: • onsite conditions that differ from those assumed in the original bid or contract; • failure to include required materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a lump sum contract; • delays caused by weather conditions; • contract or project modifications creating unanticipated costs not covered by change orders or contract price adjustments; 9 • changes in availability, proximity and costs of materials, including steel, concrete, aggregates and other construction materials (such as stone, gravel, sand and oil for asphalt paving), as well as fuel and lubricants for our equipment; and • claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is a part.
If our market capitalization drops significantly 19 below the amount of net equity recorded on our balance sheet, it might indicate a decline in our fair value and would require us to further evaluate whether our goodwill or intangible assets have been impaired.
If our market capitalization drops 19 significantly below the amount of net equity recorded on our balance sheet, it might indicate a decline in our fair value and would require us to further evaluate whether our goodwill or intangible assets have been impaired.
In addition, our work is subject to extreme and unpredictable weather conditions, which could become more frequent or severe if general climatic changes occur. For example, in 2021 there was a Texas-wide freezing weather event that caused delays for some of our Transportation Solutions and Building Solutions operations.
In addition, our work is subject to extreme and unpredictable weather conditions, which could become more frequent or severe if general climatic changes occur. For example, in 2021 there 10 was a Texas-wide freezing weather event that caused delays for some of our Transportation Solutions and Building Solutions operations.
Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, and plumbing services for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life.
Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life.
Seasonality Operations for our segments are often affected by weather conditions, especially during the first and fourth quarters of our fiscal year. These conditions may disrupt construction schedules and lead to variability in our revenues, profitability and the number of employees we require.
Seasonality Operations of our segments are often affected by weather conditions, especially during the first and fourth quarters of our fiscal year. These conditions may disrupt construction schedules and lead to variability in our revenues, profitability and the number of employees we require.
While revenues can be recovered following a period of 10 bad weather, it is generally impossible to recover the cost of inefficiencies, and significant periods of bad weather typically reduce profitability of affected contracts both in the current period and during the future life of affected contracts.
While revenues can be recovered following a period of bad weather, it is generally impossible to recover the cost of inefficiencies, and significant periods of bad weather typically reduce profitability of affected contracts both in the current period and during the future life of affected contracts.
E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems.
E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, large scale distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems.
The price and availability of the materials required to execute our projects are subject to volatility and disruptions caused by global economic factors that are beyond our control, including, but not limited to, supply chain disruptions, labor shortages, wage pressures, rising inflation and potential economic slowdown or recession, as well as fuel and energy costs, the impact of natural disasters, public health crises (such as COVID-19), geopolitical conflicts (such as the conflicts in Eastern Europe and the Middle East), and other matters that have impacted or could impact the global economy.
The price and availability of the materials required to execute our projects are subject to volatility and disruptions caused by global economic factors that are beyond our control, including, but not limited to, supply chain disruptions, labor shortages, wage pressures, rising inflation and potential economic slowdown or recession, as well as fuel and energy costs, the impact of natural disasters, public health crises, geopolitical conflicts (such as the conflicts in Eastern Europe and the Middle East), and other matters that have impacted or could impact the global economy.
Foreign governments, including China and Canada, and trading blocs, such as the European Union, have responded by imposing or increasing tariffs, duties and/or trade restrictions on U.S. goods, and are reportedly considering other measures.
Foreign governments, including China, Canada and Mexico, and trading blocs, such as the European Union, have responded by imposing or increasing tariffs, duties and/or trade restrictions on U.S. goods, and are reportedly considering other measures.
In 2016, we implemented a strategy to shift our project mix from low-bid heavy highway projects to alternative delivery heavy highway projects and other higher margin work (e.g., airports, commercial, piling and shoring). In 2016, our low-bid heavy highway revenue was approximately 79% of our total revenue, but we have progressively lowered this to 15% as of December 31, 2023.
In 2016, we implemented a strategy to shift our project mix from low-bid heavy highway projects to alternative delivery heavy highway projects and other higher margin work (e.g., airports, commercial, piling and shoring). In 2016, our low-bid heavy highway revenue was approximately 79% of our total revenue, but we have progressively lowered this to 15% as of December 31, 2024.
In 2023, no individual customer accounted for more than 10% of our consolidated revenues; however we routinely construct projects for our largest customers mentioned above. The loss of any of these customers could have a material adverse effect on our business and financial results.
In 2024, no individual customer accounted for more than 10% of our consolidated revenues; however we routinely construct projects for our largest customers mentioned above. The loss of any of these customers could have a material adverse effect on our business and financial results.
At December 31, 2023, substantially all of our Backlog was contracted on a fixed-unit price or lump sum basis. We occasionally present claims or change orders to our clients for additional costs exceeding or not included in the initial contract price.
At December 31, 2024, substantially all of our Backlog was contracted on a fixed-unit price or lump sum basis. We occasionally present claims or change orders to our clients for additional costs exceeding or not included in the initial contract price.
The percentage of our employees represented by unions at December 31, 2023 was approximately 20%. We maintain agreements with various unions representing groups of our employees at project sites, and we typically renew these agreements periodically. We consider our relationships with our employees and the applicable labor unions to be satisfactory.
The percentage of our employees represented by unions at December 31, 2024 was approximately 20%. We maintain agreements with various unions representing groups of our employees at project sites, and we typically renew these agreements periodically. We consider our relationships with our employees and the applicable labor unions to be satisfactory.
Our stock price may continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in “Risks Factors,” variations in our quarterly operating results from our expectations or those of securities analysts or investors, downward revisions in securities analysts’ estimates, and announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments.
Our stock price may continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in “Risks Factors,” variations in our quarterly operating results from our expectations or those of securities analysts or investors, downward revisions in securities analysts’ estimates, and announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments. 20 Item 1B.
Refer to Item 1A “Risk Factors” and Note 19 - Concentration of Risk and Enterprise Wide Disclosures for information on the Company’s major customers that represent a concentration of risk due to their significant revenue contributions. Competition Competition for our segments varies widely, from small local contractors to large international construction companies.
Refer to Item 1A “Risk Factors” and Note 19 - Concentration of Risk and Enterprise Wide Disclosures for information on the Company’s major customers that represent a concentration of risk due to their significant revenue contributions. Competition The competitors of our segments vary widely, from small local contractors to large international construction companies.
Our commercial business focuses on concrete construction of multi-family foundations, parking structures, elevated slabs and other concrete work for leading developers and general contractors in commercial markets. Four customers, including their respective affiliates, accounted for 42% of the segment’s revenue in 2023, 60% in 2022 and 57% in 2021.
Our commercial business focuses on concrete construction of multi-family foundations, parking structures, elevated slabs and other concrete work for leading developers and general contractors in commercial markets. Four customers, including their respective affiliates, accounted for 36% of the segment’s revenue in 2024, 42% in 2023 and 60% in 2022.
Intangible assets are recognized as an asset apart from goodwill if it arises from contractual or other legal rights or if it is separable; that is, it is capable of being separated or divided from the acquired business and sold, transferred, licensed, rented or exchanged (whether there is intent to do so).
Intangible assets are recognized as an asset apart from goodwill if they arise from contractual or other legal rights or if they are separable; that is, they are capable of being separated or divided from the acquired business and sold, transferred, licensed, rented or exchanged (whether there is intent to do so).
We incurred indebtedness in connection with recent acquisitions, and the agreement governing such indebtedness contains various covenants and other provisions that impose restrictions on our ability to operate and manage our business. As of December 31, 2023, our aggregate principal amount outstanding under our credit facility (“Credit Facility”) was $343.4 million. The Credit Facility will mature on April 2, 2026.
We incurred indebtedness in connection with recent acquisitions, and the agreement governing such indebtedness contains various covenants and other provisions that impose restrictions on our ability to operate and manage our business. As of December 31, 2024, our aggregate principal amount outstanding under our credit facility (“Credit Facility”) was $317.2 million. The Credit Facility will mature on April 2, 2026.
In addition, tighter regulation for the protection of the environment and other factors may make it more difficult to obtain new permits and renewal of existing permits may be subject to more restrictive conditions than currently exist. Human Capital At December 31, 2023, the Company had approximately 3,000 employees, comprised of approximately 700 salaried employees and approximately 2,300 hourly employees.
In addition, tighter regulation for the protection of the environment and other factors may make it more difficult to obtain new permits and renewal of existing permits may be subject to more restrictive conditions than currently exist. Human Capital At December 31, 2024, the Company had approximately 3,000 employees, comprised of approximately 800 salaried employees and approximately 2,200 hourly employees.
A significant disruption or failure could have a material adverse effect on our business operations, financial performance and financial condition. Major public health crises, including the COVID-19 pandemic, could disrupt the Company’s operations and adversely affect its business, results of operations and financial condition.
A significant disruption or failure could have a material adverse effect on our business operations, financial performance and financial condition. Major public health crises could disrupt the Company’s operations and adversely affect its business, results of operations and financial condition.
To the extent that these adjustments result in an increase, a reduction or an elimination of previously reported contract profit, we recognize a credit or a charge against current earnings, which could be material. We may not be able to fully realize the revenue value reported in our Backlog. Backlog as of December 31, 2023 totaled $2.07 billion.
To the extent that these adjustments result in an increase, a reduction or an elimination of previously reported contract profit, we recognize a credit or a charge against current earnings, which could be material. We may not be able to fully realize the revenue value reported in our Backlog. Backlog as of December 31, 2024 totaled $1.69 billion.
The key objective in this strategic area is our focus on bottom-line growth, and the higher margin projects we target have gross margins in the range of 12%-15%.
The key objective in this strategic area is our focus on bottom-line growth, and the higher margin projects we target have gross margins in the range of 15% to 18% or higher.
Building Solutions —Our Building Solutions segment is comprised of our residential and commercial businesses. The principal geographic market for our residential business is Texas, specifically Dallas-Fort Worth, Houston and the surrounding communities. In 2021, we expanded our residential business into the greater Phoenix area and continued this expansion in 2022 with the acquisition of the CCS business.
The principal geographic market for our residential business is Texas, specifically Dallas-Fort Worth, Houston and the surrounding communities. In 2021, we expanded our residential business into the greater Phoenix area and continued this expansion in 2022 with the acquisition of the CCS business.
As of December 31, 2023, our workforce was comprised of the following race and ethnicity demographics: Employees as of December 31, 2023 Hispanic 47.4% White 47.2% Black 2.9% Pacific Islander 1.4% Other 1.1% We focus on our safety processes, which have allowed us to maintain a high level of safety at our work sites.
As of December 31, 2024, our workforce was comprised of the following race and ethnicity demographics: Employees as of December 31, 2024 White 46.8% Hispanic 46.6% Black 2.7% Pacific Islander 1.5% Other 2.4% We focus on our safety processes, which have allowed us to maintain a high level of safety at our work sites.
Since the implementation of the strategy and application of the key objective, we have improved the heavy highway backlog gross margin to 11.3% at December 31, 2023, and we expect gross margins to increase further as we continue to execute our strategy.
Since the implementation of the strategy and application of the key objective, we have improved the heavy highway backlog gross margin and we expect gross margins to increase further as we continue to execute our strategy.
We may be required to write down all or part of our goodwill and intangibles. We had approximately $281 million of goodwill and $328 million of intangibles recorded on our Consolidated Balance Sheet at December 31, 2023.
We may be required to write down all or part of our goodwill and intangibles. We had approximately $265 million of goodwill and $316 million of intangibles recorded on our Consolidated Balance Sheet at December 31, 2024.
The continuation or worsening of these conditions generally, or in the markets where we operate, could decrease demand and pricing for new homes in these areas or result in customer cancellations of pending contracts, which could adversely affect the number of Building Solutions concrete projects we have or reduce the prices we can charge for these projects, either of which could result in a decrease in our revenues and earnings that could materially adversely affect our results of operations. 11 We cannot predict with certainty whether the decline in the U.S. housing market beginning in 2022 will continue or worsen due to changes in conditions that are beyond our control, which may include the following: • continued increases in interest rates; • continued or worsening inflationary pressures; • economic downturn or recession; • shortage of lots available for development; • changes in demographics and population migration that impair the demand for new housing; • labor shortages, especially craft labor, and rising costs of labor; and • changes in the tax laws that reduce the benefits of home ownership.
This impact could adversely affect the number of Building Solutions concrete projects we have or reduce the prices we can charge for these projects, either of which could result in a decrease in our revenues and earnings that could materially adversely affect our results of operations. 11 We cannot predict with certainty whether the decline in the U.S. housing market will continue or worsen due to changes in conditions that are beyond our control, which may include the following: • interest rate uncertainty; • continued or worsening inflationary pressures; • economic downturn or recession; • shortage of lots available for development; • changes in demographics and population migration that impair the demand for new housing; • labor shortages, especially craft labor, and rising costs of labor; and • changes in the tax laws that reduce the benefits of home ownership.
Any termination of a construction joint venture arrangement could cause us to reduce our backlog and could materially and adversely affect our business, results of operations and financial condition. At December 31, 2023, there was approximately $230.0 million of construction work to be completed on unconsolidated construction joint venture contracts, of which $112.4 million represented our proportionate share.
Any termination of a construction joint venture arrangement could cause us to reduce our backlog and could materially and adversely affect our business, results of operations and financial condition. At December 31, 2024, there was approximately $150.3 million of construction work to be completed on unconsolidated construction joint venture contracts, of which $73.6 million represented our proportionate share.
This strategic focus allows us to broaden our portfolio of products and services, and broaden our end customer base to remain competitive in the markets where we operate. Since 2016, we have completed six acquisitions and plan to consider other strategic acquisitions in the future.
This strategic focus allows us to broaden our portfolio of products and services, and broaden our end customer base to remain competitive in the markets where we operate. Since 2016, we have completed eight acquisitions and regularly assess other strategic opportunities.
Pandemics, epidemics, widespread illness or other health crises, such as the COVID-19 pandemic (including any new variants), that interfere with the ability of our employees, suppliers, customers, financing sources or others to conduct business have and could adversely affect the global economy and our results of operations and financial condition.
Pandemics, epidemics, widespread illness, or other public health crises that interfere with the ability of our employees, suppliers, customers, financing sources or others to conduct business have and could adversely affect the global economy and our results of operations and financial condition.
The contracts in Backlog are typically completed in 6 to 36 months. The value of our Backlog was $2.07 billion at December 31, 2023, as compared to $1.41 billion at December 31, 2022.
The contracts in Backlog are typically completed in 6 to 36 months. The value of our Backlog was $1.69 billion at December 31, 2024, as compared to $2.07 billion at December 31, 2023. The decrease in backlog in 2024 is due to the deconsolidation of our 50% owned subsidiary RHB.
Additionally, our project foremen are required to conduct daily safety briefings with our employees. Regular safety walkthroughs are conducted by our managers, supervisors and safety staff to evaluate project conditions and observe employee safety behavior. To address the safety and health of our workforce due to the COVID-19 pandemic, we implemented additional employee health and safety protocols.
Additionally, our project foremen are required to conduct daily safety briefings with our employees. Regular safety walkthroughs are conducted by our managers, supervisors and safety staff to evaluate project conditions and observe employee safety behavior.
The principal geographic markets of this segment are Arizona, Colorado, Nevada, Texas, Utah and the Pacific Islands. Within these principal markets, our core customers are state Departments of Transportation (“DOT(s)”) and regional transit, airport, port, water and railroad authorities. Four state DOTs accounted for 50% of the segment’s revenue in 2023, 44% in 2022 and 42% in 2021.
Within these principal markets, our core customers are state Departments of Transportation (“DOT(s)”) and regional transit, airport, port, water and railroad authorities. Four state DOTs accounted for 47% of the segment’s revenue in 2024, 50% in 2023 and 44% in 2022. Building Solutions —Our Building Solutions segment is comprised of our residential and commercial businesses.
See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Backlog” for a discussion and quantification of our Backlog. Also see Item 1A “Risk Factors” for further discussion of risks related to Backlog.
Certain Building Solutions revenue is recognized upon completion at a point in time and therefore is never reflected in our Backlog. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Backlog” for a discussion and quantification of our Backlog. Also see Item 1A “Risk Factors” for further discussion of risks related to Backlog.
Our ability to obtain bonds depends upon our capitalization, working capital, aggregate contract size, past performance, management expertise and external factors, including the capacity of the overall surety market. 6 Bonding companies consider such factors in light of the amount of our Backlog that we have currently bonded and their current underwriting standards, which may change from time to time.
Bonding companies consider such factors in light of the amount of our Backlog that we have currently bonded and their current underwriting standards, which may change from time to time.
We exclude from our Backlog any contract where we are the apparent low bidder for projects (“Unsigned Awards”) until such contract is formally executed by the customer (approximately $303.2 million at December 31, 2023). Certain Building Solutions revenue is recognized upon completion at a point in time and therefore is never reflected in our Backlog.
RHB’s backlog at December 31, 2024 was $491.3 million, which is no longer included in the Company’s consolidated backlog at December 31, 2024. We exclude from our Backlog any contract where we are the apparent low bidder for projects (“Unsigned Awards”) until such contract is formally executed by the customer (approximately $137.9 million at December 31, 2024).
Usually, upon posting of the performance bond, a contractor must also post a maintenance bond for generally 1% of the contract amount for one to two years.
Usually, upon posting of the performance bond, a contractor must also post a maintenance bond for generally 1% of the contract amount for one to two years. Our ability to obtain bonds depends upon our capitalization, working capital, aggregate 6 contract size, past performance, management expertise and external factors, including the capacity of the overall surety market.
We are a leading provider of large-scale site development services in the Southeastern, Northeastern and Mid-Atlantic U.S. Four customers accounted for 40% of the segment’s revenue in 2023, 35% in 2022 and 58% in 2021. Transportation Solutions —Our Transportation Solutions segment is comprised of heavy highway, aviation and rail projects, and it relies heavily on federal and state infrastructure spending.
We are a leading provider of large-scale site development services in the Southeast, Northeast, Mid-Atlantic and Rocky Mountain regions of the U.S. Four customers accounted for 31% of the segment’s revenue in 2024, 40% in 2023 and 35% in 2022.
Because of the following factors, as well as other factors affecting our financial condition and operating results, our past financial performance should not be considered to be a reliable indicator of our future performance, and investors should not use historical trends to anticipate results or trends in future periods. 8 Risks Related to Our Business and Industry Demand for our services may decrease during economic recessions or volatile economic cycles, and a reduction in demand in end markets may adversely affect our business.
Risks Related to Our Business and Industry Demand for our services may decrease during economic recessions or volatile economic cycles, and a reduction in demand in end markets may adversely affect our business.
Added
Transportation Solutions —Our Transportation Solutions segment is comprised of heavy highway, aviation and rail projects, and it relies heavily on federal and state infrastructure spending. The principal geographic markets of this segment are Utah, Arizona, Colorado, Nevada, Texas and the Pacific Islands.
Added
Should these conditions, especially in the markets where we operate, continue or worsen, new home demand and prices could suffer and customers might cancel pending contracts.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeLooking ahead, we remain committed to continuously improving our cybersecurity strategy and initiatives. We recognize the ever-evolving nature of cybersecurity threats and the need to adapt our measures accordingly. In the future, we plan to focus on enhancing employee training and awareness programs to foster a culture of cybersecurity awareness within the Company.
Biggest changeWe are committed to continuously improving our cybersecurity program as we recognize the ever-evolving nature of cybersecurity threats and the need to adapt our measures accordingly.
Item 1C. Cybersecurity In today’s digital age, the security and integrity of our information systems are of paramount importance. As a company, we understand the need to protect the confidentiality, availability and integrity of our data. This disclosure aims to provide an overview of our approach to cybersecurity and the potential risks and threats we face.
Item 1C. Cybersecurity In today’s digital age, the security and integrity of our information systems are of paramount importance. As a company, we understand the need to protect the confidentiality, availability and integrity of our systems and data. This disclosure aims to provide an overview of our approach to cybersecurity and the potential risks and threats we face.
This structure includes key individuals on the Company’s disclosure committee responsible for detecting and reporting cybersecurity incidents and events, and our Board of Directors which is responsible for risk oversight, with review of IT governance and data security being the responsibility of the audit committee.
This structure includes key individuals on the Company’s disclosure committee responsible for detecting and reporting cybersecurity incidents and events, and our Board of Directors which is responsible for cybersecurity risk oversight, with review of IT governance and data security being the responsibility of the audit committee.
Additionally, we recognize the potential for internal risks, such as employee negligence or malicious activities, which can also pose significant cybersecurity threats. We continuously monitor and assess these risks to ensure the effectiveness of our cybersecurity measures. We regularly monitor our IT services to safeguard data and to help improve and stabilize our network and systems.
Additionally, internal risks, such as employee negligence or malicious activities, can also pose significant cybersecurity threats. We continuously monitor and assess these risks to ensure the effectiveness of our cybersecurity measures. We regularly monitor our IT services to safeguard data and to help improve and stabilize our network and systems.
Our SAPA scores are higher than the construction industry average, and we believe this demonstrates our commitment to cybersecurity awareness. In the event of a cybersecurity incident, the Company has a well-defined incident response plan. This plan outlines the steps we take to detect, respond to and recover from such incidents.
Our SAPA scores are higher than the construction industry average, which we believe demonstrates our commitment to cybersecurity awareness. In the event of a cybersecurity incident, the Company has an incident response plan. This plan outlines the steps we take to detect, respond to and recover from such incidents.
Compliance with these requirements is of utmost importance to management, is a top priority for the Company and is a shared responsibility among all stakeholders. Throughout the reporting period, we have diligently worked to ensure our compliance efforts align with these obligations, and we are committed to ongoing efforts to enhance our cybersecurity measures and stay vigilant against evolving threats.
Compliance with these requirements is of utmost importance to management, is a top priority for the Company and is a shared responsibility among all stakeholders. We continue to diligently work to ensure our compliance efforts align with these obligations, and we are committed to ongoing efforts to enhance our cybersecurity measures and stay vigilant against evolving threats.
We have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. 21
We plan to focus on expanding our cybersecurity leadership, resources and expertise, and enhancing our governance and processes. 21 We have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
We are aware of the various risks and threats that the Company faces in relation to cybersecurity. These risks include external threats such as hacking, malware and phishing attacks, which can compromise the security of our systems and data.
We have a cybersecurity program to safeguard our information systems and data, which includes policies, processes and controls designed to protect against cybersecurity threats. The risks and threats that the Company faces in relation to cybersecurity include external threats such as hacking, malware and phishing attacks, which can compromise the security of our systems and data.
Removed
We have implemented a cybersecurity program to safeguard our information systems, which includes policies, procedures and controls designed to protect against cybersecurity threats. Throughout the reporting period, we have made significant changes and enhancements to our cybersecurity program and the adoption of industry best practices.
Added
Our security operations include monitoring conducted by a third-party provider in collaboration with internal teams. The Company has also invested in modern cybersecurity tools to protect and detect the systems and data from attacks and compromises. Within our organization, we have established a cybersecurity governance structure.
Removed
Throughout the reporting period, we have successfully implemented our incident response plan. Within our organization, we have established a dedicated cybersecurity governance structure.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following list summarizes our principal properties by segment for which they are primarily utilized and our “Corporate” headquarters: Location Type of Facility Interest Segment(s) The Woodlands, TX Administrative Leased Corporate Austell, GA Administrative, operations and equipment yard Owned/Leased E-Infrastructure Solutions Flanders, NJ (1) Administrative, operations and equipment yard Leased E-Infrastructure Solutions Denton, TX Administrative and operations Owned Building Solutions Draper, UT (1) Administrative and operations Leased Building Solutions and Transportation Solutions Phoenix, AZ Administrative and operations Leased Transportation Solutions Houston, TX Administrative, operations and equipment yard Owned Transportation Solutions Sparks, NV (1) Administrative and operations Owned/Leased Transportation Solutions Wylie, TX (1) Administrative and operations Leased Building Solutions (1) The leased space is owned by and leased from related parties.
Biggest changeThe following list summarizes our principal properties by segment for which they are primarily utilized and our “Corporate” headquarters: Location Type of Facility Interest Segment(s) The Woodlands, TX Administrative Leased Corporate Kennesaw, GA Administrative and operations Leased E-Infrastructure Solutions Austell, GA Operations and equipment yard Owned/Leased E-Infrastructure Solutions Flanders, NJ (1) Administrative, operations and equipment yard Leased E-Infrastructure Solutions Denton, TX Administrative and operations Owned Building Solutions Draper, UT (1) Administrative and operations Leased All Operating Segments Phoenix, AZ Administrative and operations Leased Transportation Solutions Houston, TX Administrative, operations and equipment yard Owned Transportation Solutions Sparks, NV (1) Administrative and operations Owned/Leased Transportation Solutions Wylie, TX (1) Administrative and operations Leased Building Solutions (1) The leased space is owned by and leased from related parties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The Company, including its construction joint ventures and its consolidated 50% owned subsidiary, is now and may in the future be involved in legal proceedings that are incidental to the ordinary course of business.
Biggest changeItem 3. Legal Proceedings The Company, including its construction joint ventures and its unconsolidated 50% owned subsidiary, is now and may in the future be involved in legal proceedings that are incidental to the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plan Information Certain information about the Company’s equity compensation plans will be contained in our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A relating to our 2024 annual meeting of shareholders and is incorporated herein by reference. 22 Issuer Purchases of Equity Securities The following table sets forth certain information with respect to repurchases of our common stock during the quarter ended December 31, 2023: Period Total number of shares (or units) purchased (1) Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs (1) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (1) October 1 – October 31, 2023 0 $ 0.00 0 $ 200,000,000 November 1 – November 30, 2023 0 0.00 0 $ 200,000,000 December 1 – December 31, 2023 0 0.00 0 $ 200,000,000 Total 0 $ 0.00 0 (1) On December 5, 2023, the Board of Directors approved a program that authorized repurchases of up to $200 million of the Company’s common stock.
Biggest changeWhether or not we declare any dividends will be at the discretion of our Board of Directors considering then-existing conditions, including our financial condition and results of operations, capital requirements, bonding prospects, contractual restrictions (including those under our Credit Agreement), business prospects and other factors that our Board of Directors considers relevant. 22 Issuer Purchases of Equity Securities The following table sets forth certain information with respect to repurchases of our common stock during the quarter ended December 31, 2024 (in thousands, except per share values): Period Total number of shares (or units) purchased (1) Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs (1) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (1) October 1 – October 31, 2024 0 $ 0.00 0 $ 149,404 November 1 – November 30, 2024 0 0.00 0 $ 149,404 December 1 – December 31, 2024 117 170.66 117 $ 129,404 Total 117 $ 170.66 117 (1) On December 5, 2023, the Board of Directors approved a program that authorized repurchases of up to $200,000 of the Company’s common stock.
The following graph compares the percentage change in the Company’s cumulative total stockholder return on its common stock for the last five years with the Dow Jones US Total Return Index , a broad market index, and a peer group index selected by our management that includes public companies within our industry (the “Peer Group”).
The following graph compares the percentage change in the Company’s cumulative total stockholder return on its common stock for the last five years with the Dow Jones US Total Return Index , a broad market index, and a peer group index selected by our management that includes public companies within our industry (the “2024 Peer Group”).
The returns are calculated assuming that an investment with a value of $100 was made in the Company’s common stock and in each index on December 31, 2018 and that all dividends were reinvested in additional shares of common stock; however, the Company has paid no dividends during the periods shown.
The returns are calculated assuming that an investment with a value of $100 was made in the Company’s common stock and in each index on December 31, 2019 and that all dividends were reinvested in additional shares of common stock; however, the Company has paid no dividends during the periods shown.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the NASDAQ Global Select Market under the trading symbol “STRL”. On February 23, 2024, there were 636 holders of record of our common stock. Dividend Policy We have never paid any cash dividends on our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the NASDAQ Global Select Market under the trading symbol “STRL”. On February 24, 2025, there were 615 holders of record of our common stock. Dividend Policy We have never paid any cash dividends on our common stock.
GTLS Columbus McKinnon Corporation CMCO Comfort Systems USA, Inc. FIX Construction Partners, Inc. ROAD Dycom Industries, Inc. DY Eagle Materials Inc. EXP Granite Construction Incorporated GVA Great Lakes Dredge & Dock Corporation GLDD IES Holdings, Inc. IESC INNOVATE Corp. VATE MYR Group Inc. MYRG Primoris Services Corporation PRIM Summit Materials, Inc. SUM Infrastructure and Energy Alternatives, Inc.
AMRC Arcosa, Inc. ACA Astec Industries, Inc. ASTE Chart Industries, Inc. GTLS Columbus McKinnon Corporation CMCO Comfort Systems USA, Inc. FIX Construction Partners, Inc. ROAD Dycom Industries, Inc. DY Eagle Materials Inc. EXP Granite Construction Incorporated GVA IES Holdings, Inc. IESC MYR Group Inc. MYRG Primoris Services Corporation PRIM Summit Materials, Inc. SUM Item 6. [Reserved] 24
The companies in the Peer Group were selected because they comprise a broad group of publicly held corporations, each of which has some operations similar to ours. When taken as a whole, management believes the Peer Group more closely resembles our total business than any individual company in the group.
The 2024 Peer Group index replaced the 2023 Peer Group index that was reported in the previous year. The companies in the 2024 Peer Group were selected because they comprise a broad group of publicly held corporations, each of which has some operations similar to ours.
The graph lines merely connect the measuring dates and do not reflect fluctuations between those dates. Additionally, the stock performance shown on the graph is not intended to be indicative of future stock performance. 23 The table below depicts the five-year performance of $100 invested on December 31, 2018 in stock or index, including reinvestment of dividends.
The graph lines merely connect the measuring dates and do not reflect fluctuations between those dates. Additionally, the stock performance shown on the graph is not intended to be indicative of future stock performance. 23 Copyright© 2025 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.
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Whether or not we declare any dividends will be at the discretion of our Board of Directors considering then-existing conditions, including our financial condition and results of operations, capital requirements, bonding prospects, contractual restrictions (including those under our Credit Agreement), business prospects and other factors that our Board of Directors considers relevant.
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When taken as a whole, management believes the 2024 Peer Group more closely resembles our total business than any individual company in the 2024 Peer Group and more than the 2023 Peer Group as a whole.
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December 2018 December 2019 December 2020 December 2021 December 2022 December 2023 Sterling Infrastructure, Inc. $ 100.00 $ 129.29 $ 170.89 $ 241.51 $ 301.19 $ 807.44 Dow Jones US Total Return Index $ 100.00 $ 131.15 $ 157.90 $ 199.74 $ 160.99 $ 203.70 Peer Group $ 100.00 $ 124.38 $ 156.81 $ 228.59 $ 189.22 $ 277.86 The Peer Group in the graph above is comprised of the following member companies: Company Ticker Chart Industries, Inc.
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The table below depicts the five-year performance of $100 invested on December 31, 2019 in stock or index, including reinvestment of dividends.
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(1) IEA (1) Excluded from the computation as it is no longer publicly traded. Item 6. [Reserved] 24
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December 2019 December 2020 December 2021 December 2022 December 2023 December 2024 Sterling Infrastructure, Inc. $ 100.00 $ 132.17 $ 186.79 $ 232.95 $ 624.50 $ 1,196.38 Dow Jones US Total Return Index $ 100.00 $ 120.40 $ 152.31 $ 122.76 $ 155.32 $ 193.29 2024 Peer Group $ 100.00 $ 133.30 $ 189.26 $ 157.52 $ 217.66 $ 330.54 2023 Peer Group (Replaced by 2024 Peer Group) $ 100.00 $ 126.07 $ 183.78 $ 152.13 $ 223.39 $ 356.17 The 2024 Peer Group in the graph above is comprised of the following member companies: Company Ticker Ameresco, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDiscussions of year-over-year comparisons for 2022 and 2021 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2022. 26 RESULTS OF OPERATIONS Consolidated Results The financial highlights for 2023 as compared to 2022 are as follows: Years Ended December 31, (In thousands) 2023 2022 Revenues $ 1,972,229 $ 1,769,436 Gross profit 337,638 274,567 General and administrative expenses (98,703) (86,480) Intangible asset amortization (15,226) (14,100) Acquisition related costs (873) (827) Other operating expense, net (17,041) (13,290) Operating income 205,795 159,870 Interest, net (15,180) (19,706) Income before income taxes and noncontrolling interests 190,615 140,164 Income tax expense (47,770) (41,707) Less: Net income attributable to noncontrolling interests (4,190) (1,740) Net income from Continuing Operations $ 138,655 $ 96,717 Gross margin 17.1 % 15.5 % Revenues— Revenues were $1.97 billion for 2023, an increase of $202.8 million, or 11.5%, compared to the prior year, with 9.1% generated from organic growth.
Biggest changeRESULTS OF OPERATIONS Consolidated Results The financial highlights for 2024 as compared to 2023 are as follows: Years Ended December 31, (In thousands) 2024 2023 Revenues $ 2,115,756 $ 1,972,229 Gross profit 426,123 337,638 General and administrative expenses (118,424) (98,703) Intangible asset amortization (17,037) (15,226) Acquisition related costs (421) (873) Other operating expense, net (25,619) (17,041) Operating income 264,622 205,795 Interest, net 2,367 (15,180) Gain on deconsolidation of subsidiary, net 91,289 — Income before income taxes and noncontrolling interests 358,278 190,615 Income tax expense (87,360) (47,770) Less: Net income attributable to noncontrolling interests (13,457) (4,190) Net income from Continuing Operations $ 257,461 $ 138,655 Gross margin 20.1% 17.1% Revenues— Revenues were $2.12 billion for 2024, an increase of $143.5 million, or 7.3%, compared to the prior year.
The Company expects to pursue strategic uses of its cash, such as, investing in projects or businesses that meet its gross margin targets and overall profitability, managing its debt balances and repurchasing shares of its common stock.
The Company expects to pursue strategic uses of its cash, such as investing in projects or businesses that meet its gross margin and overall profitability targets, managing its debt balances and repurchasing shares of its common stock.
We remain focused on our strategic objectives, as described in Item 1 “Business — Business Strategy.” These objectives include: 1) growth in our E-Infrastructure Solutions segment, with particular focus on large, high-value projects; 2) risk reduction through a continued shift in our Transportation Solutions business away from low-bid heavy highway work, toward alternative delivery and design-build projects; 3) continuing to grow market share and geographic presence in Building Solutions; and 4) improving our margins in each of our segments.
We remain focused on our strategic objectives, as described in Item 1 “Business — Business Strategy.” These objectives include: 1) growth in our E-Infrastructure Solutions segment, with particular focus on large, high-value projects; 2) risk reduction through a continued shift 25 in our Transportation Solutions business away from low-bid heavy highway work, toward alternative delivery and design-build projects; 3) continuing to grow market share and geographic presence in Building Solutions; and 4) improving our margins in each of our segments.
Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting estimates involve more significant judgment used in the preparation of the Consolidated Financial Statements. Revenue Recognition Performance Obligations Satisfied Over Time —Revenue for contracts that satisfy the criteria for over time recognition is recognized as the work progresses.
Actual results may differ from these estimates under different 31 assumptions or conditions. The Company believes the following critical accounting estimates involve more significant judgment used in the preparation of the Consolidated Financial Statements. Revenue Recognition Performance Obligations Satisfied Over Time —Revenue for contracts that satisfy the criteria for over time recognition is recognized as the work progresses.
Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, and plumbing services for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life.
Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life.
The following discussion reflects continuing operations only, unless otherwise indicated. See Note 4 - Dispositions for further discussion. Professional Plumbers Group - On November 16, 2023, we completed the acquisition of Professional Plumbers Group, Incorporated (“PPG”), a corporation headquartered in Wylie, Texas for a purchase price of approximately $57 million.
The following discussion reflects continuing operations only, unless otherwise indicated. See Note 4 - Dispositions for further discussion. PPG Acquisition— On November 16, 2023, we completed the acquisition of Professional Plumbers Group, Incorporated (“PPG”), a corporation headquartered in Wylie, Texas for a purchase price of approximately $57 million.
The cumulative impact of revisions in total cost estimates during the progress of work is reflected 31 in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on performance obligations in progress.
The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on performance obligations in progress.
Surety companies consider such factors in relationship to the amount of our backlog and their underwriting standards, 30 which may change from time to time. We have pledged all proceeds and other rights under our construction contracts to our bond surety company.
Surety companies consider such factors in relationship to the amount of our backlog and their underwriting standards, which may change from time to time. We have pledged all proceeds and other rights under our construction contracts to our bond surety company.
E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems.
E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, large scale distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems.
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.
Compliance and Other —The Credit Agreement contains various affirmative and negative covenants that may, subject to certain exceptions, restrict our ability and the ability of 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 30 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 accordance with the Agreement’s payment terms, the Company received two payments totaling $14 million in the first quarter of 2023, and two additional payments of $2 million each are due by the end of 2025 and 2027, respectively.
In accordance with the payment terms, the Company received two payments totaling $14 million in the first quarter of 2023, and two additional payments of $2 million each are due by the end of 2025 and 2027, respectively.
The nearer a contract progresses toward completion, the more visibility the Company has in refining its estimate of total revenues (including incentives, delay penalties and change orders), costs and gross profit.
The nearer a contract progresses toward completion, the more visibility the Company has in refining its estimate of 27 total revenues (including incentives, delay penalties and change orders), costs and gross profit.
In addition, the Company is required to maintain certain financial covenants. See Note 10 - Debt for further discussion of these financial covenants. As of December 31, 2023, we were in compliance with all of our restrictive and financial covenants. The Company’s debt is recorded at its carrying amount in the Consolidated Balance Sheets.
In addition, the Company is required to maintain certain financial covenants. See Note 10 - Debt for further discussion of these financial covenants. As of December 31, 2024, we were in compliance with all of our restrictive and financial covenants. The Company’s debt is recorded at its carrying amount in the Consolidated Balance Sheets.
Borrowings —Based on our average borrowings for 2023 and our 2024 forecasted cash needs, we continue to believe that the Company has sufficient liquid financial resources to fund our requirements for the next year of operations. Furthermore, the Company is continually assessing ways to increase revenues and reduce costs to improve liquidity.
Borrowings —Based on our average borrowings for 2024 and our 2025 forecasted cash needs, we continue to believe that the Company has sufficient liquid financial resources to fund our requirements for the next year of operations. Furthermore, the Company is continually assessing ways to increase revenues and reduce costs to improve liquidity.
Based upon the current market rates for debt with similar credit risk and maturities, at December 31, 2023 the fair value of our debt outstanding approximated the carrying value, as interest is based on Term SOFR plus an applicable margin.
Based upon the current market rates for debt with similar credit risk and maturities, at December 31, 2024 the fair value of our debt outstanding approximated the carrying value, as interest is based on Term SOFR plus an applicable margin.
These are discussed in a number of places including Item 1A “Risk Factors.” Our annual assessments indicated there was no impairment of goodwill during the years ended December 31, 2023, 2022 and 2021.
These are discussed in a number of places including Item 1A “Risk Factors.” Our annual assessments indicated there was no impairment of goodwill during the years ended December 31, 2024, 2023 and 2022.
The unallocated remainder is reported in the “Corporate G&A Expense” line, which is primarily comprised of corporate headquarters facility expense, the cost of the executive management team, and other expenses pertaining to certain centralized functions that benefit the entire Company but are not directly attributable to any specific business segment, such as corporate human resources, legal, governance, compliance and finance functions.
The balance of the corporate level expenses are reported in the “Corporate G&A Expense” line, which is primarily comprised of corporate headquarters facility expense, the cost of the executive management team and other expenses pertaining to certain centralized functions that benefit the entire Company, but are not directly attributable to any specific business segment, such as corporate human resources, legal, governance, compliance and finance functions.
During the fourth quarter of 2023, 2022 and 2021, the Company performed a qualitative assessment of goodwill, and based on this assessment, no indicators of impairment were present. Factors considered include macroeconomic, industry and competitive conditions, financial performance and reporting unit specific events.
During the fourth quarter of 2024, 2023 and 2022, the Company performed a qualitative assessment of goodwill, and based on this 32 assessment, no indicators of impairment were present. Factors considered include macroeconomic, industry and competitive conditions, financial performance and reporting unit specific events.
For the years ended December 31, 2023, 2022 and 2021, there were no events or changes in circumstances that would indicate a material impairment of our long-lived assets. 32
For the years ended December 31, 2024, 2023 and 2022, there were no events or changes in circumstances that would indicate a material impairment of our long-lived assets.
The Company’s use of these fair value measurements include: • determining the purchase price allocation for an acquired business; • goodwill impairment testing when a quantitative analysis is deemed necessary; and • long-lived asset (such as property, equipment and intangible assets) impairment testing when impairment indicators are present.
The Company’s use of these fair value measurements include: • determining the purchase price allocation for an acquired business; • determining the value of retained interest after the deconsolidation of a subsidiary; • goodwill impairment testing when a quantitative analysis is deemed necessary; and • long-lived asset (such as property, equipment and intangible assets) impairment testing when impairment indicators are present.
At December 31, 2023, we had $343.4 million of outstanding borrowings under the Term Loan Facility and no outstanding borrowings under the Revolving Credit Facility. 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.
At December 31, 2024, we had $317.2 million of outstanding borrowings under the Term Loan Facility and no outstanding borrowings under the Revolving Credit Facility. 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.
Building Solutions —Our Building Solutions segment is comprised of our residential and commercial businesses. The segment is driven by new home starts in Dallas-Fort Worth, the segments largest market, and continued expansion in the Houston and Phoenix markets. Building Solutions' core customer base includes top national, regional and custom home builders in our areas.
The segment is driven by new home starts in Dallas-Fort Worth, the segments largest market, and continued expansion in the Houston and Phoenix markets. Building Solutions' core customer base includes top national, regional and custom home builders in our areas.
Thus, gross profit as a percent of revenues can increase or decrease from comparable and subsequent quarters due to variations among contracts and depending upon the stage of completion of contracts. General and administrative expenses— General and administrative expenses were $98.7 million, or 5.0% of revenue, for 2023, compared to $86.5 million, or 4.9% of revenue, in the prior year.
Thus, gross profit as a percentage of revenues can increase or decrease from comparable and subsequent quarters due to variations among contracts and depending upon the stage of completion of contracts. General and administrative expenses— General and administrative expenses were $118.4 million, or 5.6% of revenue, for 2024, compared to $98.7 million, or 5.0% of revenue, in the prior year.
Years Ended December 31, (In thousands) 2022 2021 Net cash provided by (used in): Operating activities of Discontinued Operations $ (7,334) $ 11,384 Investing activities of Discontinued Operations (723) (5,964) Financing activities of Discontinued Operations (81) (1,908) Net change in cash, cash equivalents, and restricted cash of Discontinued Operations $ (8,138) $ 3,512 Credit Facilities, Debt and Other Capital General —In addition to our available cash, cash equivalents and cash provided by operations, from time to time we use borrowings to finance acquisitions, our capital expenditures and working capital needs.
(In thousands) Year Ended December 31, 2022 Net cash used in: Operating activities of Discontinued Operations $ (7,334) Investing activities of Discontinued Operations (723) Financing activities of Discontinued Operations (81) Net change in cash, cash equivalents and restricted cash of Discontinued Operations $ (8,138) Credit Facilities, Debt and Other Capital General —In addition to our available cash, cash equivalents and cash provided by operations, from time to time we use borrowings to finance acquisitions, our capital expenditures and working capital needs.
Investing Activities— During 2023, net cash used in investing activities was $87.8 million, compared to net cash used of $89.8 million in the prior year.
Investing Activities— During 2024, net cash used in investing activities was $185.8 million, compared to net cash used of $87.8 million in the prior year.
At the Federal level, the November 2021 Infrastructure Investments and Jobs Act (“IIJA”) includes approximately $643 billion in funding for transportation programs ($432 billion for highways, $109 billion for transportation and $102 billion for rail), of which $284 billion is an increase over historic investment levels that will fund new transportation infrastructure.
The IIJA includes approximately $643 billion in funding for transportation programs ($432 billion for highways, $109 billion for transportation and $102 billion for rail), of which $284 billion is an increase over historic investment levels that will fund new transportation infrastructure.
Management expects net capital expenditures in 2024 to be in the range of $55 to $60 million; however, the award of a project requiring significant purchases of equipment or other factors could result in increased expenditures.
Capital expenditures, net of disposals, incurred in 2024 were $70.8 million. Management expects net capital expenditures in 2025 to be in the range of $70 to $80 million; however, the award of a project requiring significant purchases of equipment or other factors could result in increased expenditures.
Financing Activities— During 2023, net cash used in financing activities was $104.5 million compared to net cash used of $32.8 million in the prior year.
Financing Activities— During 2024, net cash used in financing activities was $118.6 million compared to net cash used of $104.5 million in the prior year.
The IIJA also includes $25 billion of funding for airport modernization. As a result of the IIJA, we had an increase in bid activity and project awards which started in the third quarter of 2022 and continued through 2023. We expect this positive trend to continue for the foreseeable future.
The IIJA also includes $25 billion of funding for airport modernization As a result of the IIJA, we saw an increase in bid activity and project awards which started in the third quarter of 2022 and continued through 2023 and 2024.
See Note 13 - Income Taxes for more information. 27 Segment Results The Company’s operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. We incur certain expenses at the corporate level that relate to our business as a whole.
In 2024 and 2023, the Company’s non-deductible compensation was offset by increased tax deductions related to stock compensation. See Note 13 - Income Taxes for more information. Segment Results The Company’s operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions and Building Solutions. We incur certain expenses at the corporate level that relate to our business as a whole.
E-Infrastructure Solutions —Our E-Infrastructure Solutions business is driven by our customers’ investments in the development of advanced manufacturing centers, data centers, e-commerce distribution centers and warehouses. We foresee significant growth opportunities tied to the implementation of multi-year capital deployment plans by customers in the electric vehicle (EV), battery, solar, food, and semiconductor manufacturing markets.
E-Infrastructure Solutions —Our E-Infrastructure Solutions business is driven by our customers’ investments in the development of data centers, advanced manufacturing centers, e-commerce distribution centers and warehouses. We foresee significant growth opportunities tied to the implementation of multi-year capital deployment plans by data center customers, including hyperscalers, colocation providers and others.
The significant improvement in cash flows provided by operating activities was primarily driven by higher net income and improvements in our accounts receivable, net contracts in progress and accounts payable balances (collectively, “Contract Capital”), as discussed below. Changes in Contract Capital— The change in operating assets and liabilities varies due to fluctuations in operating activities and investments in Contract Capital.
The improvement in cash flows provided by operating 29 activities was primarily driven by higher net income and net improvements in our accounts receivable, net contracts in progress and accounts payable balances (collectively, “Contract Capital”), as discussed below.
The changes in components of Contract Capital during the years ended December 31, 2023 and 2022 were as follows: Years Ended December 31, (In thousands) 2023 2022 Contracts in progress, net $ 226,066 $ 77,692 Accounts receivable 12,805 (63,285) Receivables from and equity in construction joint ventures (3,384) (5,034) Accounts payable 10,307 11,888 Change in Contract Capital, net $ 245,794 $ 21,261 During 2023, the change in Contract Capital was $245.8 million.
The changes in components of Contract Capital during the years ended December 31, 2024 and 2023 were as follows: Years Ended December 31, (In thousands) 2024 2023 Contracts in progress, net $ 194,306 $ 226,066 Accounts receivable (6,888) 12,805 Receivables from and equity in construction joint ventures 7,428 (3,384) Accounts payable (9,336) 10,307 Change in Contract Capital, net $ 185,510 $ 245,794 During 2024, the change in Contract Capital was $185.5 million.
The increase was primarily driven by higher volume from advanced manufacturing and data centers, partly offset by lower volume from large e-commerce distribution centers and small warehouses. Operating income— Operating income was $141.0 million, or 15.0% of revenue, for 2023, an increase of $19.5 million compared to $121.5 million, or 13.4% of revenue, in the prior year.
The decrease was primarily driven by the timing of advanced manufacturing projects, lower volume from warehouses and other small projects, partly offset by higher volume from data centers. Operating income— Operating income was $203.4 million, or 22.0% of revenue, for 2024, an increase of $62.4 million compared to $141.0 million, or 15.0% of revenue, in the prior year.
This metric allows management to monitor the Company’s business development efforts to ensure we grow our Backlog and our business over time, and management believes that this measure is useful to investors for the same reason.
This metric allows management to monitor the Company’s business development efforts to ensure we grow our Backlog and our business over time, and management believes that this measure is useful to investors for the same reason. As noted above, due to the deconsolidation of RHB, Sterling’s consolidated backlog figures as of December 31, 2024 do not include RHB’s backlog.
The increase was driven by higher heavy highway and other non-highway services revenue, partly offset by lower aviation revenues due to the timing of new awards. Operating income— Operating income was $41.9 million, or 6.6% of revenue, for 2023, an increase of $15.3 million compared to $26.6 million, or 4.9% of revenue, in the prior year.
The increase was driven by higher heavy highway, aviation and other non-highway services revenue. Operating income— Operating income was $50.9 million, or 6.5% of revenue, for 2024, an increase of $9.0 million compared to $41.9 million, or 6.6% of revenue, in the prior year. The increase in operating income was driven by the aforementioned higher revenue.
Income taxes— The effective income tax rate was 25.1% in 2023 and 29.8% in the prior year. The rate varied from the statutory rate primarily as a result of state income taxes, non-deductible compensation and other permanent differences. In 2023, the Company’s non-deductible compensation was offset by increased tax deductions related to stock compensation.
Income taxes— The effective income tax rate was 24.4% in 2024 and 25.1% in the prior year. The rate varied from the statutory rate primarily as a result of state income taxes, non-deductible compensation , gain on the deconsolidation of subsidiary and other permanent differences.
Backlog includes $112.4 million and $18.5 million attributable to our share of estimated revenues related to joint ventures where we are a noncontrolling joint venture partner at December 31, 2023 and 2022, respectively. We anticipate that approximately 65% of our Backlog will be recognized as revenues during 2024, with substantially all remaining recognized in the twelve months following.
Backlog includes $73.6 million and $112.4 million attributable to our share of estimated revenues related to joint ventures where we are a noncontrolling joint venture partner at December 31, 2024 and 2023, respectively.
The increase was driven by an $88.4 million increase in Transportation Solutions, an $82.3 million increase in Building Solutions and a $32.1 million increase in E-Infrastructure Solutions. Gross profit— Gross profit was $337.6 million for 2023, an increase of $63.1 million, or 23.0%, compared to the prior year.
The increase was driven by a $152.8 million increase in Transportation Solutions and a $4.5 million increase in Building Solutions partly offset by a $13.7 million decrease in E-Infrastructure Solutions. Gross profit and margin— Gross profit was $426.1 million for 2024, an increase of $88.5 million, or 26.2%, compared to the prior year.
The increase was driven by higher volume, an improved project margin mix in Transportation Solutions and an improving supply chain. Gross margin— The Company’s gross margin as a percent of revenue increased to 17.1% in 2023, as compared to 15.5% in the prior year.
The Company’s gross margin as a percentage of revenue increased to 20.1% in 2024, as compared to 17.1% in the prior year. The increases were driven by the aforementioned higher volume, an improved project margin mix in the E-Infrastructure Solutions and Transportation Solutions segments and the inclusion of the Texas plumbing business acquired in late 2023.
The increases in operating income and margin were driven by higher volume from advanced manufacturing projects, partly offset by lower volume from large e-commerce distribution centers and small warehouses. Transportation Solutions Revenues— Revenues were $630.9 million for 2023, an increase of $88.4 million, or 16.3%, compared to the prior year.
The increases in operating income and margin were driven by a mix shift toward large mission-critical projects, partly offset by lower volume from warehouses and other small commercial projects and by the timing of advanced manufacturing projects. Transportation Solutions Revenues— Revenues were $783.7 million for 2024, an increase of $152.8 million, or 24.2%, compared to the prior year.
Other operating expense, net— Other operating expense, net, includes 50% of earnings and losses related to members’ interest of our consolidated 50% owned subsidiary, earn-out and other miscellaneous operating income or expense. Members’ interest earnings are treated as an expense and increase the liability account.
The increase reflects incremental G&A from the Texas plumbing business acquired in late 2023, growth and inflation. Other operating expense, net— Other operating expense, net, includes 50% of earnings and losses related to members’ interest of our formerly consolidated 50% owned RHB subsidiary, earn-out and other miscellaneous operating income or expense.
Years Ended December 31, (In thousands) 2023 % of Revenues 2022 % of Revenues Revenues E-Infrastructure Solutions $ 937,408 48% $ 905,277 51% Transportation Solutions 630,908 32% 542,550 31% Building Solutions 403,913 20% 321,609 18% Total Revenues $ 1,972,229 $ 1,769,436 Operating Income E-Infrastructure Solutions $ 140,997 15.0% $ 121,453 13.4% Transportation Solutions 41,911 6.6% 26,623 4.9% Building Solutions 46,193 11.4% 36,693 11.4% Segment Operating Income 229,101 11.6% 184,769 10.4% Corporate G&A Expense (22,433) (24,072) Acquisition Related Costs (873) (827) Total Operating Income $ 205,795 10.4% $ 159,870 9.0% E-Infrastructure Solutions Revenues— Revenues were $937.4 million for 2023, an increase of $32.1 million, or 3.5%, compared to the prior year.
Years Ended December 31, (In thousands) 2024 % of Revenues 2023 % of Revenues Revenues E-Infrastructure Solutions $ 923,728 44% $ 937,408 48% Transportation Solutions 783,659 37% 630,908 32% Building Solutions 408,369 19% 403,913 20% Total Revenues $ 2,115,756 $ 1,972,229 Operating Income E-Infrastructure Solutions $ 203,359 22.0% $ 140,997 15.0% Transportation Solutions 50,869 6.5% 41,911 6.6% Building Solutions 49,083 12.0% 46,193 11.4% Segment Operating Income 303,311 14.3% 229,101 11.6% Corporate General and Administrative Expense (38,268) (22,433) Acquisition Related Costs (421) (873) Total Operating Income $ 264,622 12.5% $ 205,795 10.4% 28 E-Infrastructure Solutions Revenues— Revenues were $923.7 million for 2024, a decrease of $13.7 million, or 1.5%, compared to the prior year.
The increase in gross margin as a percent of revenue was due to an easing of supply chain challenges starting in the second quarter of 2023. Contracts in progress that were not substantially complete totaled approximately 230 at both December 31, 2023 and 2022. These contracts are of various sizes, of different expected profitability and in various stages of completion.
The number of contracts in progress that were not substantially complete totaled approximately 180 and 230 December 31, 2024 and 2023, respectively. These contracts are of various sizes, of different expected profitability and in various stages of completion.
In 2023, the cash used in investing activities was driven by $51.2 million for the acquisition of the PPG business and $50.6 million for the net purchases of capital equipment, partly offset by the $14 million received for the disposition of Myers. Capital equipment is acquired as needed to support changing levels of production activities and to replace retiring equipment.
In 2024, the amount of net cash used in investing activities was primarily driven by $103.8 million of cash removed from the Company’s Consolidated Balance Sheet due to the deconsolidation of RHB and $81.0 million for purchases of capital equipment. Capital equipment is acquired as needed to support changing levels of production activities and to replace retiring equipment.
At December 31, 2023, our Backlog was $2.07 billion, as compared to $1.41 billion at December 31, 2022, with a book-to-burn ratio of 1.38 for the year ended December 31, 2023.
At December 31, 2024, our Backlog was $1.69 billion, as compared to $2.07 billion at December 31, 2023. Excluding RHB, the book-to-burn ratio was 1.02 for the year ended December 31, 2024. The Company’s margin in Backlog has increased to 16.7% at December 31, 2024 from 15.2% at December 31, 2023, driven by a greater mix of E-Infrastructure Solutions backlog.
The change in other operating expense, net, was an increase of $3.8 million during 2023 compared to the prior year. Members’ interest earnings increased by $4.4 million during 2023 to $17.7 million from $13.3 million in the prior year, as a result of higher revenue and improved margin mix from our 50% owned subsidiary.
Members’ interest earnings are treated as an expense and increase the liability account. The change in other operating expense, net, was an increase of $8.6 million during 2024 compared to the prior year.
The increase in operating income was driven by the aforementioned higher volume. 28 LIQUIDITY AND SOURCES OF CAPITAL Cash and Cash Equivalents— Total cash and cash equivalents at December 31, 2023 and 2022 were $471.6 million and $181.5 million, respectively, and included the following components: As of December 31, (In thousands) 2023 2022 Generally available $ 362,884 $ 100,825 Consolidated 50% owned subsidiary 72,007 55,700 Construction joint ventures 36,672 25,019 Cash and cash equivalents $ 471,563 $ 181,544 The following table presents consolidated information about our cash flows: Years Ended December 31, (In thousands) 2023 2022 Net cash provided by (used in): Operating activities $ 478,584 $ 219,116 Investing activities (87,752) (89,755) Financing activities (104,534) (32,789) Net change in cash and cash equivalents $ 286,298 $ 96,572 Operating Activities— During 2023, net cash provided by operating activities was $478.6 million compared to net cash provided by operating activities of $219.1 million in the prior year.
The following table presents consolidated information about our cash flows: Years Ended December 31, (In thousands) 2024 2023 Net cash provided by (used in): Operating activities $ 497,104 $ 478,584 Investing activities (185,849) (87,752) Financing activities (118,623) (104,534) Net change in cash and cash equivalents $ 192,632 $ 286,298 Operating Activities— During 2024, net cash provided by operating activities was $497.1 million compared to net cash provided by operating activities of $478.6 million in the prior year.
The year ended December 31, 2022 represents the period ending November 30, 2022, the date of disposition.
Discontinued Operations— Cash flows from discontinued operations are disclosed below and in Note 4 - Dispositions , rather than separately presented in the statement of cash flows. The year ended December 31, 2022 represents the period ending November 30, 2022, the date of disposition.
Material Cash Requirements The following table sets forth our material cash requirements from contractual obligations at December 31, 2023: Payments due by period (In thousands) Total 1 - 3 Years 4 – 5 Years >5 Years Credit Facility $ 343,438 $ 26,250 $ 317,188 $ — $ — Credit Facility interest 57,923 26,089 31,834 — — Other notes payable (inclusive of outstanding interest) 843 275 333 235 — Members’ interest subject to mandatory redemption and undistributed earnings (1) 29,108 29,108 — — — Total $ 431,312 $ 81,722 $ 349,355 $ 235 $ — (1) Mandatory redemption is based on the death or disability of the interest holder.
Material Cash Requirements The following table sets forth our material cash requirements from contractual obligations at December 31, 2024: Payments due by period (In thousands) Total 1 - 3 Years 4 – 5 Years >5 Years Credit Facility $ 317,188 $ 26,250 $ 290,938 $ — $ — Credit Facility interest 25,638 19,507 6,131 — — Other notes payable (inclusive of outstanding interest) 554 174 290 90 — Total $ 343,380 $ 45,931 $ 297,359 $ 90 $ — Capital Expenditures — Capital equipment is acquired as needed by increased levels of production and to replace retiring equipment.
The increase was primarily driven by a $66.0 million increase in residential revenues due to a record number of slabs poured in 2023, and an increase in commercial volume compared to 2022. The increase in residential revenues includes $34.4 million from the Arizona concrete foundation business acquired in late 2022.
The increase was primarily driven by the inclusion of $61.1 million of revenue from the Texas plumbing business acquired in late 2023 and an increase in residential slabs completed in the Arizona market compared to 2023, partly offset by fewer residential slabs completed in the Texas markets compared to 2023.
The decrease is driven by higher interest income due to increased interest rates in 2023 on our growing cash balance, partly offset by continued interest rate increases in 2023 on our Credit Facility and the expiration of our interest rate swap in the fourth quarter of 2022.
Interest, net— Combined interest expense and income was net income of $2.4 million in 2024, compared to net expense of $15.2 million in the prior year. The decrease in net expense was driven by higher interest income due to increased interest rates in 2024 on our growing cash balance.
While the majority of our end customers are demonstrating strong performance, in 2023 we experienced a decline in large e-commerce distribution center and small warehouse activity. We expect these markets will remain subdued through 2024. 25 Transportation Solutions —Our Transportation Solutions business is primarily driven by federal, state and municipal funding.
Following a decline in activity that began in 2023, awards in the e-commerce distribution sector began to strengthen in late 2024. Similarly, small warehouse activity, which began to decline in 2023 and remained soft in 2024, is beginning to exhibit signs of recovery. Transportation Solutions —Our Transportation Solutions business is primarily driven by federal, state and municipal funding.
See Note 3 - Acquisitions for further discussion. MARKET OUTLOOK AND TRENDS We see favorable opportunities for long-term growth across each of our business segments.
RHB’s revenue will no longer be included in Sterling’s consolidated revenue in 2025 and Sterling’s consolidated backlog figures as of December 31, 2024 do not include RHB’s backlog. MARKET OUTLOOK AND TRENDS We see favorable opportunities for long-term growth across each of our business segments.
Operating income— Operating income was $46.2 million, or 11.4% of revenue, for 2023, an increase of $9.5 million compared to $36.7 million, or 11.4% of revenue, in the prior year.
Operating income— Operating income was $49.1 million, or 12.0% of revenue, for 2024, an increase of $2.9 million compared to $46.2 million, or 11.4% of revenue, in the prior year. The increases in operating income and margin were driven by the inclusion of the Texas plumbing business and a mix shift towards residential, which has higher margins than commercial.
Backlog and gross margin: (In thousands) Backlog Gross Margin in Backlog Fourth quarter of 2023 $2,067,016 15.2% Third quarter of 2023 $2,010,407 15.2% Second quarter of 2023 $1,735,669 15.5% First quarter of 2023 $1,624,233 14.8% Fourth quarter of 2022 $1,414,342 14.3% A detailed discussion of our financial and operating results for the years ended December 31, 2023 and 2022 is presented in the following sections.
RHB’s 2024 year end backlog of $491.3 million is not included in the Company’s consolidated backlog at December 31, 2024. A detailed discussion of our financial and operating results for the years ended December 31, 2024 and 2023 is presented in the following sections.
We saw strong, consistent recovery in residential activity through 2023 and experienced volume growth across each geography. We believe the dynamics in our markets, including population growth and structural hosing shortages, support continued growth in residential in 2024.
We saw strong, consistent recovery in residential activity through 2023 and experienced volume growth across each geography. While this strength continued into early 2024, in the second quarter of 2024 the combined impact of interest rate uncertainty, affordability challenges, and developed land availability drove a decline in the market which continued through the remainder of the year.
Removed
We have been awarded several large projects related to investments in EV and solar products. We anticipate continued strong demand from these and other technology sectors, supported by Federal government investment initiatives and incentives. Additionally, we continue to benefit from activity related to multiphase hyperscale data center development.
Added
See Note 3 - Acquisitions for further discussion. RHB Deconsolidation— Since 2012, the Company has held a 50% ownership interest in Road and Highway Builders, LLC (“RHB”), with Rich Buenting holding the remaining 50% ownership interest. Historically, the Company fully consolidated the entity as a result of its exercise of control of the entity.
Removed
For our commercial business, demand in the multi-family home market increased in the first three quarters of 2023 but slowed late in the year. We expect continued declines in this market in 2024.
Added
On December 31, 2024, the parties executed an amendment to the RHB operating agreement to ensure the continuation of this mutually beneficial relationship while addressing the evolving needs and interest of both parties. This amendment modified the way RHB would be dispositioned in the event of the death or disability of Mr.
Removed
Unsigned Awards were $303.2 million at December 31, 2023 and $275.0 million at December 31, 2022. Combined Backlog totaled $2.37 billion at December 31, 2023 and $1.69 billion at December 31, 2022, with a book-to-burn ratio of 1.40 for the year ended December 31, 2023.
Added
Buenting and provides that in such event, Sterling and Mr. Buenting’s estate must agree on one of four alternatives: (1) continuation of the existing ownership structure, (2) acquisition of Sterling’s 50% interest by Mr. Buenting’s estate at fair market value, (3) acquisition of Mr.
Removed
The Company’s margin in Backlog has increased to 15.2% at December 31, 2023 from 14.3% at December 31, 2022 and the Combined Backlog margin increased to 15.4% at December 31, 2023 from 14.2% at December 31, 2022, driven by a greater mix of E-Infrastructure Solutions backlog and an improved backlog margin mix within Transportation Solutions.
Added
Buenting’s 50% interest by Sterling at fair market value or (4) the joint sale of RHB to a third party at fair market value. Under GAAP, this contractual change requires that Sterling no longer consolidate RHB’s results with its own and use equity method accounting with respect to Sterling’s interest in the entity.
Removed
Interest, net— Interest, net was $15.2 million in 2023 compared to $19.7 million in the prior year.
Added
Beginning January 1, 2025, the Company will report RHB’s operating income as a single line item (“Other operating income (expense), net”) in the Consolidated Statements of Operations and will report its interest in RHB at December 31, 2024, and thereafter, as a single line item (“Investment in unconsolidated subsidiary”) in the Consolidated Balance Sheets.
Removed
The segment information for the prior period has been recast to conform to the current presentation.
Added
These investments are driven by the need to support the increasing use of cloud computing applications, increasing adoption and complexity of artificial intelligence applications and digital transformation across industries. Additionally, we continue to see significant opportunity related to the construction of manufacturing capacity in the U.S., including semiconductor fabrication.
Removed
The increases in operating income and margin were driven by an improved project margin mix and the aforementioned higher revenue. Building Solutions Revenues— Revenues were $403.9 million for 2023, an increase of $82.3 million, or 25.6%, compared to the prior year, with 12.8% generated from organic growth.
Added
At the Federal level, the Infrastructure Investments and Jobs Act (“IIJA”), which establishes funding for the 2022 through 2026 time period, drove significant increases in transportation funding relative to the previous five-year law.
Removed
In 2023, the cash used in financing activities was primarily driven by $93.5 million in repayments of debt, including scheduled payments of $29.8 million and voluntary early payments of $53 million on the Term Loan Facility (as defined below) and $10 million for the repayment of the Plateau Excavation, Inc.
Added
We expect that the combination of strong state and federal funding will allow the transportation market to remain elevated relative to historical levels in 2025 and 2026. Building Solutions —Our Building Solutions segment is comprised of our residential and commercial businesses.
Removed
(“Plateau”) seller note, and $9.6 million for withholding taxes paid on the net share settlement of vested equity awards. 29 Discontinued Operations— Cash flows from discontinued operations are disclosed below and in Note 4 - Dispositions , rather than separately presented in the statement of cash flows.
Added
We believe the dynamics in our markets, including population growth and structural housing shortages, support a return to growth over a multi-year time period.
Removed
On December 27, 2023, the Credit Agreement was amended to, among other things: (i) provide for the extension of the Term Loan Facility by the lenders to the Company in the aggregate principal amount of $350 million, (ii) extend the maturity date to April 2, 2026 for the Credit Facility, and (iii) adjust the quarterly payment schedule of the Term Loan Facility to account for the extension of the maturity date.
Added
We anticipate that approximately 74% of our Backlog will be recognized as revenues during 2025, with substantially all remaining recognized in the twelve months following. 26 Unsigned Awards were $137.9 million at December 31, 2024 and $303.2 million at December 31, 2023. Combined Backlog totaled $1.83 billion at December 31, 2024 and $2.37 billion at December 31, 2023.
Removed
The other material terms of the Credit Agreement remained unchanged, including the availability under the Credit Facility, interest rate, and affirmative and negative covenants.
Added
Excluding RHB, the book-to-burn ratio was 1.01 for the year ended December 31, 2024.
Removed
On June 5, 2023, the Credit Agreement was amended pursuant to an opt-in election to address the cessation of LIBOR and provide an alternative, replacement method of calculating the interest rates payable under the Credit Agreement with adjusted forward-looking term rates based on the Secured Overnight Financing Rate (“Term SOFR”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur indebtedness as of December 31, 2023 included $343.4 million of variable rate debt under our Credit Facility. At December 31, 2023 a 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest expense by approximately $3.4 million per year. As of December 31, 2023, we held cash and cash equivalents of $471.6 million.
Biggest changeOur indebtedness as of December 31, 2024 included $317.2 million of variable rate debt under our Credit Facility. At December 31, 2024 a 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest expense by approximately $3.2 million per year. As of December 31, 2024, we held cash and cash equivalents of $664.2 million.
Based upon the current market rates for debt with similar credit risk and maturities, at December 31, 2023, the fair value of our debt outstanding approximated the carrying value, as interest is based on Term SOFR plus an applicable margin.
Based upon the current market rates for debt with similar credit risk and maturities, at December 31, 2024, the fair value of our debt outstanding approximated the carrying value, as interest is based on Term SOFR plus an applicable margin.
At December 31, 2023 a 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest income by approximately $4.7 million per year. Other Fair Value — The carrying values of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair values because of the short-term nature of these instruments.
At December 31, 2024 a 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest income by approximately $6.6 million per year. Other Fair Value — The carrying values of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair values because of the short-term nature of these instruments.

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