Sterling Infrastructure, Inc.

Greetings and welcome to Sterling Infrastructure's 2023 First Quarter Earnings Conference column webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Noel Biltz, Vice President of Investor Relations and Corporate Strategy. Thank you. You may begin.

Thank you, Paul. Good morning to everyone joining us. I'm pleased to be here today to discuss our first quarter results with Joe Cotillo, Sterling's Chief Executive Officer, and Ron Volschmitty, Sterling's Chief Financial Officer. Joe will open the call with an overview of the company and its performance in the quarter. Ron will follow that up with a detailed discussion of the financial results, after which Joe will provide a market and full year outlook. Then we'll open the call up for questions. Unless otherwise stated, all numbers discussed today will be for continued operations which exclude our late 2022 divestiture of Myers. As a reminder, there are accompanying slides on the investor relations section of our website. Before turning the call over to Joe, I'll read the Safe Harbor Statement. Some discussions made today may include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Sterling's most recent 10-K and 10-Q filings for more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligations to update forward-looking statements as a result of new information, future events, or otherwise. Please note that we may discuss EBITDA, adjusted EBITDA, adjusted net income, or adjusted earnings per share on this call, which are all financial measures not recognized under U.S. GAAP. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our earnings relief issued yesterday afternoon. I'll now turn the call over to our CEO, Joe Cotillo.

Thanks, Noelle. Good morning, everyone. Thank you for joining Sterling's first quarter 2023 earnings call. It's always great to be able to discuss strong results, but what I'm really proud of is what our Sterling team is doing to achieve these results. Our people are out in the field every day using their entrepreneurial spirit to win projects, execute flawlessly, and push Sterling to the next level. This is even more impressive when you consider the unprecedented supply chain and macroeconomic challenges we are facing. This team is delivered quarter after quarter and is doing a great job. In these dynamic times, it is important we stay committed to our guiding principles, the Sterling Way, which remind us of our duty to continuously improve how we protect our people, our environment, and give back to our communities while working to build America's infrastructure. These values have again helped us to deliver another record quarter. Safety is a cornerstone of how we operate. This week kicks off National Safety Week, which we believe is a great time to reflect on both our success in achieving one of the best safety records in the industry and on what we can do to further these efforts. This is of particular importance as we head into the busy construction season. Moving to our financials. Our first quarter results capture the resilience of our business model. In e-infrastructure, which is now over half of our revenues and is our fastest growing highest margin segment, we delivered 22% organic top line growth. This reflects a rapid increase in activity related to high value advanced manufacturing projects. We have announced some of the largest projects in the company's history over the past few months, and we see more of these opportunities on the horizon. Data center activity also remains strong as our customers push to manage continuously increasing data demands. E-infrastructure's operating margins declined 80 basis points from the prior year, driven by seasonal weather impacts, supply chain disruptions, and mix. We expect to see improvements in the segment margins as we move through the year. Results in transportation solutions reflect our strategic progress in shifting the business away from low bid, heavy highway work to alternative delivery highway, aviation, rail, and other projects. While our revenue declined 4% year over year, operating income improved 19% and operating margins expanded 95 basis points. Our focus for this segment remains on growing higher margin, lower risk work. Our building solution segment grew revenues by 7%, driven by higher levels of commercial work. It is notable that our residential revenue was essentially flat relative to last year as a mid-single-digit decline in slab volume was offset by price. This compares to a 29% decline in single-family home starts nationally in the first quarter. Looking at our residential slab volume trends in more detail, Houston was extremely strong in the quarter as we nearly doubled our slab count and saw sequential increases each month. Our strategy to capture share is working. Dallas and Phoenix started the quarter off slow but picked up in March, with Dallas picking up early in the month and Phoenix later. Solid volume trends have continued across each of our geographies into April. First quarter building solutions operating margin declined 150 basis points from prior year, driven by a mixed shift towards inherently lower margin commercial work and continued escalation of concrete prices. As residential picks up and supply chains ease, our margin should improve through the year. Shifting over to consolidated results, revenue was up 10% relative to last year, and our adjusted EBITDA grew 13%. We grew our combined backlog to 1.75 billion, up 4% versus year-end 2022, and delivered 64 cents per share to our shareholders. As we look to the remainder of the year, we expect a continuation of strong demand in e-infrastructure and transportation solutions and a gradual recovery in building solutions. Our strong backlog position gives us confidence in our previously issued guidance ranges, which we are reiterating today. Based on our first quarter results, we believe we are tracking towards the high end of our 2023 guidance, which suggests a 13% increase in revenue and a 14% growth in net income. With that, I'd like to turn it over to Ron to give you more details on the quarter. Ron?