Sterling Infrastructure, Inc.

Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure first quarter webcast and conference call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Tuesday, May 6, 2025. I would now like to turn the conference over to Noelle Diltz. Please go ahead.

Good morning to everyone joining us, and welcome to Sterling Infrastructure's 2025 First Quarter Earnings Conference Call and Webcast. I'm pleased to be here today to discuss our 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 then discuss our financial results and guidance, after which Joe will provide a market and full year outlook. We will then open the call up for questions. As a reminder, there are accompanying slides on the investor relations section of our website. These slides include details on our full year 2025 financial guidance. Before turning the call over to Joe, I will read the safe harbor statement. The discussion 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 a 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 management may reference EBITDA, adjusted EBITDA, adjusted debt 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 release issued yesterday afternoon. Our discussion of results today will refer to pro forma figures that adjust prior period results to conform to the current accounting of our RHB-JV. As a reminder, at year-end 2024, there was a change in the accounting treatment for this JV such that we no longer consolidate revenue and backlog but it does not change our share of EBITDA that we recognize from the JV. Additionally, we may refer to adjusted operating income, EBITDA, and EPS figures that adjust for certain non-cash and non-recurring items. Please see our press release for a description and reconciliation of these adjustments. All comparisons are to the prior year quarter unless otherwise noted. I'll now turn the call over to our CEO, Joe Cotillo.

Good morning, everyone, and thank you for joining today's call. Sterling is off to a great start for the year. In the first quarter, we grew adjusted earnings per share by 29% to $1.63 and delivered adjusted EBITDA of $80 million, a 31% increase. Revenue grew 7% in the quarter on a pro forma basis, fueled by growth of over 18% in our e-infrastructure solution segment and 9% in our transportation solutions. Our gross profit margins expanded more than 400 basis points from the prior year to reach 22%. We remain focused on pursuing the most attractive and highest return opportunities. Additionally, operating cash flow generation in the quarter was strong at $85 million. We are pleased to announce that during the quarter, we closed on the acquisition of Drake Concrete, a provider of residential concrete slabs in the Dallas-Fort Worth area for $25 million. This acquisition strengthens our geographic footprint within DFW and expands our customer depth as Drake has limited customer overlap with Teelstone. We anticipate Drake will contribute $55 million of revenue and $6.5 million of EBITDA in 2025. Looking to the future, we remain extremely positive on our outlook. While we are certainly cognizant of the high levels of uncertainty surrounding trade policies and the economy, we believe we are in markets and geographies that have strong, sustainable growth. Additionally, we have limited exposure to foreign sourced materials. We will continue to build upon the strong base we have established, drive margins, and pursue opportunities that enhance our long-term value. We will stay focused on the things that we can control and adapt and react to changing conditions as necessary. Our backlog position and visibility anchor our confidence in the future. Backlog at the end of the quarter totaled $2.1 billion, a 17% year-over-year increase on a pro forma basis. And our book-to-burn ratio was above two times. E-infrastructure solutions backlog of $1.2 billion was up 27% in the first quarter. Our customers are not showing any signs of slowing down. Our multi-year visibility is further supported by continued growth in our pipeline of future phase opportunities tied to our current projects. At the end of last year, we raised our expectations for future phase work at the end of the first quarter from half a billion dollars to three quarters of a billion dollars. and we hit the high end of that goal. When you take both our signed backlog and future phase work, we have visibility into a pool of e-infrastructure work approaching $2 billion, which for us is unprecedented. We are extremely excited about the future and believe we will continue to drive strong earnings growth over the next few years. The Sterling Way, which is our commitment to take care of our people, our environment, our investors, and our communities, while we work to build America's infrastructure remains our guiding principle as we execute our strategy. Now, I'd like to discuss our segment results in a little more detail. In e-infrastructure, first quarter revenue grew 18% over prior year. The data center market was again the primary growth driver in the quarter. increasing approximately 60% over the prior year period. Adjusted segment operating income grew 61%, and adjusted operating margins reached 23%, a 618 basis point increase. This was driven by our shift towards large mission-critical projects, including data centers, where our superior project management and ability to finish jobs on or ahead of schedule are extremely valuable to our customers. Mission critical work continues to represent the vast majority of our e-infrastructure backlog, including data center work at over 65%. Moving to transportation solutions, first quarter revenue grew 9% on a pro forma basis, and adjusted operating profit grew 60%, driven by strong market demand and the benefits of mixed shift towards higher margin services. We ended the quarter with transportation solutions backlog of $861 million, an 11% year-over-year increase on a pro forma basis. Shifting to building solutions, in the first quarter, segment revenue declined 14%, and adjusted operating income declined 18%. Overall demand for homes has been impacted as potential home buyers struggle with affordability challenges. Revenue from our legacy residential business declined 19%, driven by softness in the overall housing market, unusually severe weather, and a challenging comparison to the first quarter of 2024. With that, I'd like to turn it over to Ron to give you more details on some of our financial metrics and full year guidance. Rob?