|
FORM 10-Q
|
þ
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|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the transition period from ___ to ___
|
||
Commission File Number 1-31993
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
Common Stock, $0.01 par value per share
|
STRL
|
The NASDAQ Stock Market LLC
|
(Title of each class)
|
(Trading Symbol)
|
(Name of each exchange on which registered)
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
þ
Yes
¨
No
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
þ
Yes
¨
No
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨
Yes
þ
No
|
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Page
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenues
|
$
|
223,949
|
|
|
$
|
222,492
|
|
Cost of revenues
|
(204,446
|
)
|
|
(202,658
|
)
|
||
Gross profit
|
19,503
|
|
|
19,834
|
|
||
General and administrative expenses
|
(12,489
|
)
|
|
(12,340
|
)
|
||
Other operating expense, net
|
(2,294
|
)
|
|
(815
|
)
|
||
Operating income
|
4,720
|
|
|
6,679
|
|
||
Interest income
|
364
|
|
|
129
|
|
||
Interest expense
|
(3,060
|
)
|
|
(3,087
|
)
|
||
Income before income taxes
|
2,024
|
|
|
3,721
|
|
||
Income tax expense
|
(163
|
)
|
|
(41
|
)
|
||
Net income
|
1,861
|
|
|
3,680
|
|
||
|
|
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(46
|
)
|
|
(1,191
|
)
|
||
Net income attributable to Sterling common stockholders
|
$
|
1,815
|
|
|
$
|
2,489
|
|
|
|
|
|
|
|||
Net income per share attributable to Sterling common stockholders:
|
|
|
|
|
|||
Basic
|
$
|
0.07
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.09
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding used in computing per share amounts:
|
|
|
|
|
|||
Basic
|
26,377
|
|
|
26,854
|
|
||
Diluted
|
26,723
|
|
|
27,078
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
(Unaudited)
|
|
|
|
|||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
56,764
|
|
|
$
|
94,095
|
|
Receivables, including retainage
|
147,001
|
|
|
145,026
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
44,133
|
|
|
41,542
|
|
||
Inventories
|
2,699
|
|
|
3,159
|
|
||
Receivables from and equity in construction joint ventures
|
11,625
|
|
|
10,720
|
|
||
Other current assets
|
6,696
|
|
|
8,074
|
|
||
Total current assets
|
268,918
|
|
|
302,616
|
|
||
Property and equipment, net
|
52,011
|
|
|
51,999
|
|
||
Operating lease right-of-use assets
|
15,290
|
|
|
—
|
|
||
Goodwill
|
85,231
|
|
|
85,231
|
|
||
Intangibles, net
|
41,818
|
|
|
42,418
|
|
||
Other assets, net
|
246
|
|
|
309
|
|
||
Total assets
|
$
|
463,514
|
|
|
$
|
482,573
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
81,870
|
|
|
$
|
99,426
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
55,598
|
|
|
62,407
|
|
||
Current maturities of long-term debt
|
393
|
|
|
2,899
|
|
||
Current portion of long-term lease obligations
|
7,009
|
|
|
—
|
|
||
Income taxes payable
|
340
|
|
|
318
|
|
||
Accrued compensation
|
10,500
|
|
|
9,448
|
|
||
Other current liabilities
|
6,300
|
|
|
4,676
|
|
||
Total current liabilities
|
162,010
|
|
|
179,174
|
|
||
Long-term debt, net of current maturities
|
76,923
|
|
|
79,117
|
|
||
Long-term lease obligations
|
8,466
|
|
|
—
|
|
||
Members’ interest subject to mandatory redemption and undistributed earnings
|
47,132
|
|
|
49,343
|
|
||
Deferred taxes
|
1,591
|
|
|
1,450
|
|
||
Other long-term liabilities
|
1,115
|
|
|
1,229
|
|
||
Total liabilities
|
297,237
|
|
|
310,313
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|||
Preferred stock, par value $0.01 per share; 1,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share; 38,000 shares authorized, 27,056 and 27,064 shares issued, 26,424 and 26,597 shares outstanding
|
271
|
|
|
271
|
|
||
Additional paid in capital
|
233,502
|
|
|
233,795
|
|
||
Treasury Stock, at cost: 632 and 467 shares
|
(7,182
|
)
|
|
(4,731
|
)
|
||
Retained deficit
|
(63,119
|
)
|
|
(64,934
|
)
|
||
Total Sterling stockholders’ equity
|
163,472
|
|
|
164,401
|
|
||
Noncontrolling interests
|
2,805
|
|
|
7,859
|
|
||
Total stockholders’ equity
|
166,277
|
|
|
172,260
|
|
||
Total liabilities and stockholders’ equity
|
$
|
463,514
|
|
|
$
|
482,573
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
1,861
|
|
|
$
|
3,680
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,389
|
|
|
4,124
|
|
||
Amortization of deferred loan costs
|
833
|
|
|
801
|
|
||
Gain on disposal of property and equipment
|
(38
|
)
|
|
(250
|
)
|
||
Deferred tax expense
|
141
|
|
|
—
|
|
||
Stock-based compensation expense
|
1,021
|
|
|
617
|
|
||
Changes in operating assets and liabilities (Note 15)
|
(27,449
|
)
|
|
(31,464
|
)
|
||
Net cash used in operating activities
|
(19,242
|
)
|
|
(22,492
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property and equipment
|
(3,814
|
)
|
|
(1,897
|
)
|
||
Proceeds from sale of property and equipment
|
137
|
|
|
886
|
|
||
Net cash used in investing activities
|
(3,677
|
)
|
|
(1,011
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayments on long-term debt
|
(5,610
|
)
|
|
(4,679
|
)
|
||
Distributions to noncontrolling interest owners
|
(5,100
|
)
|
|
—
|
|
||
Purchase of treasury stock
|
(3,201
|
)
|
|
—
|
|
||
Other
|
(501
|
)
|
|
(309
|
)
|
||
Net cash used in financing activities
|
(14,412
|
)
|
|
(4,988
|
)
|
||
Net decrease in cash and cash equivalents
|
(37,331
|
)
|
|
(28,491
|
)
|
||
Cash and cash equivalents at beginning of period
|
94,095
|
|
|
83,953
|
|
||
Cash and cash equivalents at end of period
|
$
|
56,764
|
|
|
$
|
55,462
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid in
Capital
|
|
Retained
Deficit
|
|
Treasury Stock
|
|
Total Sterling
Stockholders’ Equity
|
|
Non-controlling
Interests
|
|
Total
Stockholders’ Equity
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2018
|
26,597
|
|
|
$
|
271
|
|
|
$
|
233,795
|
|
|
$
|
(64,934
|
)
|
|
467
|
|
|
$
|
(4,731
|
)
|
|
$
|
164,401
|
|
|
$
|
7,859
|
|
|
$
|
172,260
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,815
|
|
|
—
|
|
|
—
|
|
|
1,815
|
|
|
46
|
|
|
1,861
|
|
|||||||
Stock-based compensation
|
(1
|
)
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
1,021
|
|
|||||||
Distributions to owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,100
|
)
|
|
(5,100
|
)
|
|||||||
Purchase of treasury stock
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
(3,201
|
)
|
|
(3,201
|
)
|
|
—
|
|
|
(3,201
|
)
|
|||||||
Issuance of stock
|
130
|
|
|
—
|
|
|
(1,314
|
)
|
|
—
|
|
|
(130
|
)
|
|
1,314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for taxes
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
(564
|
)
|
|
(564
|
)
|
|
—
|
|
|
(564
|
)
|
|||||||
Balance at March 31, 2019
|
26,424
|
|
|
$
|
271
|
|
|
$
|
233,502
|
|
|
$
|
(63,119
|
)
|
|
632
|
|
|
$
|
(7,182
|
)
|
|
$
|
163,472
|
|
|
$
|
2,805
|
|
|
$
|
166,277
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid in Capital |
|
Retained
Deficit |
|
Treasury Stock
|
|
Total Sterling
Stockholders’ Equity |
|
Non-controlling
Interests |
|
Total
Stockholders’ Equity |
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2017
|
27,051
|
|
|
$
|
271
|
|
|
$
|
231,183
|
|
|
$
|
(90,121
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
141,333
|
|
|
$
|
4,856
|
|
|
$
|
146,189
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,489
|
|
|
—
|
|
|
—
|
|
|
2,489
|
|
|
1,191
|
|
|
3,680
|
|
|||||||
Stock-based compensation
|
(3
|
)
|
|
—
|
|
|
617
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
617
|
|
|
—
|
|
|
617
|
|
|||||||
Shares withheld for taxes
|
(13
|
)
|
|
(1
|
)
|
|
(193
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
|
—
|
|
|
(194
|
)
|
|||||||
Balance at March 31, 2018
|
27,035
|
|
|
$
|
270
|
|
|
$
|
231,607
|
|
|
$
|
(87,632
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
144,245
|
|
|
$
|
6,047
|
|
|
$
|
150,292
|
|
1.
|
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS
|
Revenue by major end market
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Heavy Highway
|
$
|
93,610
|
|
|
$
|
107,408
|
|
Commercial
|
30,850
|
|
|
28,519
|
|
||
Aviation
|
29,937
|
|
|
23,252
|
|
||
Water Containment and Treatment
|
15,234
|
|
|
14,995
|
|
||
Other
|
11,553
|
|
|
13,067
|
|
||
Total Heavy Civil Construction Revenue
|
$
|
181,184
|
|
|
$
|
187,241
|
|
Revenue by contract type
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Fixed Unit Price
|
$
|
141,219
|
|
|
$
|
160,236
|
|
Lump Sum and Other
|
39,965
|
|
|
27,005
|
|
||
Total Heavy Civil Construction Revenue
|
$
|
181,184
|
|
|
$
|
187,241
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
44,133
|
|
|
$
|
41,542
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(55,598
|
)
|
|
(62,407
|
)
|
||
Net amount of billings in excess of costs and estimated earnings on uncompleted contracts
|
$
|
(11,465
|
)
|
|
$
|
(20,865
|
)
|
3.
|
CASH AND CASH EQUIVALENTS
|
4.
|
CONSOLIDATED 50% OWNED SUBSIDIARIES
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Members’ interest subject to mandatory redemption
|
$
|
40,000
|
|
|
$
|
40,000
|
|
Net accumulated earnings
|
7,132
|
|
|
9,343
|
|
||
Total liability
|
$
|
47,132
|
|
|
$
|
49,343
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
3,603
|
|
|
$
|
8,745
|
|
Receivables, including retainage
|
24,900
|
|
|
24,109
|
|
||
Other current assets
|
13,679
|
|
|
14,533
|
|
||
Total current assets
|
42,182
|
|
|
47,387
|
|
||
Property and equipment, net
|
6,818
|
|
|
7,219
|
|
||
Operating lease right-of-use assets
|
3,297
|
|
|
—
|
|
||
Goodwill
|
1,501
|
|
|
1,501
|
|
||
Total assets
|
$
|
53,798
|
|
|
$
|
56,107
|
|
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
19,588
|
|
|
$
|
22,211
|
|
Other current liabilities
|
11,032
|
|
|
9,811
|
|
||
Total current liabilities
|
30,620
|
|
|
32,022
|
|
||
Other long-term liabilities
|
1,854
|
|
|
1,976
|
|
||
Total liabilities
|
$
|
32,474
|
|
|
$
|
33,998
|
|
5.
|
CONSTRUCTION JOINT VENTURES
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
$
|
7,859
|
|
|
$
|
4,856
|
|
Net income attributable to noncontrolling interest included in equity
|
46
|
|
|
1,191
|
|
||
Distributions to noncontrolling interest owners
|
(5,100
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
2,805
|
|
|
$
|
6,047
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Total combined:
|
|
|
|
|
|||
Current assets
|
$
|
70,482
|
|
|
$
|
64,815
|
|
Less current liabilities
|
(81,857
|
)
|
|
(74,543
|
)
|
||
Net liabilities
|
$
|
(11,375
|
)
|
|
$
|
(9,728
|
)
|
|
|
|
|
||||
Sterling’s receivables from and equity in noncontrolling construction joint ventures
|
$
|
11,625
|
|
|
$
|
10,720
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Total combined:
|
|
|
|
|
|
||
Revenues
|
$
|
31,384
|
|
|
$
|
31,357
|
|
Income before tax
|
1,969
|
|
|
3,404
|
|
||
Sterling’s noncontrolling interest:
|
|
|
|
||||
Revenues
|
$
|
15,684
|
|
|
$
|
15,065
|
|
Income before tax
|
984
|
|
|
1,691
|
|
6.
|
PROPERTY AND EQUIPMENT
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Construction and transportation equipment
|
|
$
|
148,138
|
|
|
$
|
144,630
|
|
Buildings and improvements
|
|
11,139
|
|
|
11,072
|
|
||
Land
|
|
2,720
|
|
|
2,720
|
|
||
Office equipment
|
|
2,627
|
|
|
2,711
|
|
||
Total property and equipment
|
|
164,624
|
|
|
161,133
|
|
||
Less accumulated depreciation
|
|
(112,613
|
)
|
|
(109,134
|
)
|
||
Total property and equipment, net
|
|
$
|
52,011
|
|
|
$
|
51,999
|
|
7.
|
INTANGIBLES
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Weighted
Average Life |
|
Gross
Carrying Amount |
|
Accumulated Amortization |
|
Gross
Carrying Amount |
|
Accumulated Amortization |
||||||||
Customer relationships
|
23 years
|
|
$
|
40,823
|
|
|
$
|
(3,610
|
)
|
|
$
|
40,823
|
|
|
$
|
(3,159
|
)
|
Trade name
|
13 years
|
|
5,307
|
|
|
(1,050
|
)
|
|
5,307
|
|
|
(919
|
)
|
||||
Non-competition agreements
|
7 years
|
|
487
|
|
|
(139
|
)
|
|
487
|
|
|
(121
|
)
|
||||
Total
|
22 years
|
|
$
|
46,617
|
|
|
$
|
(4,799
|
)
|
|
$
|
46,617
|
|
|
$
|
(4,199
|
)
|
8.
|
DEBT
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Oaktree Facility
|
$
|
71,602
|
|
|
$
|
74,571
|
|
Notes and deferred payments to sellers, Tealstone acquisition
|
11,460
|
|
|
13,572
|
|
||
Notes payable for construction and transportation equipment
|
474
|
|
|
612
|
|
||
Total debt
|
83,536
|
|
|
88,755
|
|
||
|
|
|
|
||||
Less - Current maturities of long-term debt
|
(393
|
)
|
|
(2,899
|
)
|
||
Less - Unamortized deferred loan costs
|
(6,220
|
)
|
|
(6,739
|
)
|
||
Total long-term debt
|
$
|
76,923
|
|
|
$
|
79,117
|
|
•
|
a ratio of secured indebtedness to EBITDA of not more than
2.00
to 1.00 for the trailing four consecutive fiscal quarters ending March 31, 2019, reducing to
1.80
to 1.00 for the four consecutive quarters ending September 30, 2019 through maturity in 2022;
|
•
|
daily cash collateral of not less than
$15,000
;
|
•
|
gross margin in contract backlog of not less than
$70,000
for the average of the trailing four consecutive fiscal quarters;
|
•
|
net capital expenditures during the trailing four consecutive fiscal quarters shall not exceed
$15,000
;
|
•
|
bonding capacity shall be maintained at all times in an amount not less than
$1,000,000
; and
|
•
|
the EBITDA of Tealstone Residential Concrete, Inc. shall not be less than
$12,000
for each of the trailing four consecutive fiscal quarters.
|
9.
|
LEASE OBLIGATIONS
|
|
Three Months Ended March 31, 2019
|
||
Operating lease cost
|
$
|
2,211
|
|
Short-term lease cost
|
$
|
4,743
|
|
|
|
||
Finance lease cost:
|
|
||
Amortization of right-of-use assets
|
$
|
32
|
|
Interest on lease liabilities
|
2
|
|
|
Total finance lease cost
|
$
|
34
|
|
|
Three Months Ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
2,383
|
|
Operating cash flows from finance leases
|
$
|
2
|
|
Financing cash flows from finance leases
|
$
|
32
|
|
|
|
||
Right-of-use assets obtained in exchange for lease obligations (noncash):
|
|
||
Operating leases
|
$
|
3,101
|
|
Finance leases
|
$
|
76
|
|
|
March 31,
2019 |
||
Operating Leases
|
|
||
Operating lease right-of-use assets
|
$
|
15,290
|
|
|
|
||
Current portion of long-term lease obligations
|
$
|
7,009
|
|
Long-term lease obligations
|
8,466
|
|
|
Total operating lease liabilities
|
$
|
15,475
|
|
|
|
||
Finance Leases
|
|
||
Property and equipment, at cost
|
$
|
740
|
|
Accumulated depreciation
|
(323
|
)
|
|
Property and equipment, net
|
$
|
417
|
|
|
|
||
Current maturities of long-term debt
|
$
|
134
|
|
Long-term debt, net of current maturities
|
72
|
|
|
Total finance lease liabilities
|
$
|
206
|
|
|
|
||
Weighted Average Remaining Lease Term
|
|
||
Operating leases
|
2.9
|
|
|
Finance leases
|
1.9
|
|
|
|
|
||
Weighted Average Discount Rate
|
|
||
Operating leases
|
6.0
|
%
|
|
Finance leases
|
3.8
|
%
|
|
Operating
Leases
|
|
Finance
Leases
|
||||
Year Ending December 31,
|
|
|
|
||||
2019 (excluding the three months ended March 31, 2019)
|
$
|
5,179
|
|
|
$
|
121
|
|
2020
|
5,903
|
|
|
54
|
|
||
2021
|
4,163
|
|
|
31
|
|
||
2022
|
2,025
|
|
|
8
|
|
||
2023
|
289
|
|
|
—
|
|
||
Thereafter
|
10
|
|
|
—
|
|
||
Total lease payments
|
$
|
17,569
|
|
|
$
|
214
|
|
Less imputed interest
|
(2,094
|
)
|
|
(8
|
)
|
||
Total
|
$
|
15,475
|
|
|
$
|
206
|
|
10.
|
COMMITMENT AND CONTINGENCIES
|
11.
|
INCOME TAXES AND DEFERRED TAX ASSET/LIABILITY
|
12.
|
STOCK INCENTIVE PLAN AND OTHER EQUITY ACTIVITY
|
|
|
Shares
|
|
Weighted Average Grant-Date Fair Value per Share
|
|||
RSAs
|
|
3
|
|
|
$
|
10.89
|
|
RSUs
|
|
138
|
|
|
$
|
10.96
|
|
PSUs
|
|
185
|
|
|
$
|
10.89
|
|
Total shares granted
|
|
326
|
|
|
|
|
|
Shares
|
|
RSA (issued upon grant)
|
|
3
|
|
RSUs (issued upon vesting)
|
|
73
|
|
PSUs (issued upon vesting)
|
|
54
|
|
Total shares issued
|
|
130
|
|
13.
|
NET INCOME PER SHARE ATTRIBUTABLE TO STERLING COMMON STOCKHOLDERS
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
|
||
Net income attributable to Sterling common stockholders
|
$
|
1,815
|
|
|
$
|
2,489
|
|
Denominator:
|
|
|
|
||||
Weighted average common shares outstanding — basic
|
26,377
|
|
|
26,854
|
|
||
Shares for dilutive unvested stock and warrants
|
346
|
|
|
224
|
|
||
Weighted average common shares outstanding and incremental shares assumed repurchased — diluted
|
26,723
|
|
|
27,078
|
|
||
Basic income per share attributable to Sterling common stockholders
|
$
|
0.07
|
|
|
$
|
0.09
|
|
Diluted income per share attributable to Sterling common stockholders
|
$
|
0.07
|
|
|
$
|
0.09
|
|
14.
|
SEGMENT INFORMATION
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenue
|
|
|
|
|
|
||
Heavy Civil Construction
|
$
|
181,184
|
|
|
$
|
187,241
|
|
Residential Construction
|
42,765
|
|
|
35,251
|
|
||
Total Revenue
|
$
|
223,949
|
|
|
$
|
222,492
|
|
|
|
|
|
||||
Operating Income
|
|
|
|
|
|
||
Heavy Civil Construction
|
$
|
(847
|
)
|
|
$
|
1,945
|
|
Residential Construction
|
5,567
|
|
|
4,734
|
|
||
Total Operating Income
|
$
|
4,720
|
|
|
$
|
6,679
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Heavy Civil Construction
|
$
|
326,841
|
|
|
$
|
355,011
|
|
Residential Construction
|
136,673
|
|
|
127,562
|
|
||
Total Assets
|
$
|
463,514
|
|
|
$
|
482,573
|
|
15.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Receivables, including retainage
|
$
|
(1,976
|
)
|
|
$
|
(6,946
|
)
|
Net amount of billings in excess of costs and estimated earnings on uncompleted contracts
|
(9,400
|
)
|
|
(10,586
|
)
|
||
Receivables from and equity in construction joint ventures
|
(905
|
)
|
|
(1,105
|
)
|
||
Other assets
|
1,902
|
|
|
3,861
|
|
||
Accounts payable
|
(17,556
|
)
|
|
(12,334
|
)
|
||
Accrued compensation and other liabilities
|
2,697
|
|
|
(891
|
)
|
||
Member’s interest subject to mandatory redemption and undistributed earnings
|
(2,211
|
)
|
|
(3,463
|
)
|
||
Changes in operating assets and liabilities
|
$
|
(27,449
|
)
|
|
$
|
(31,464
|
)
|
•
|
changes in general economic conditions, including recessions, reductions in federal, state and local government funding for infrastructure services and changes in those governments’ budgets, practices, laws and regulations;
|
•
|
delays or difficulties related to the completion of projects, including additional costs, reductions in revenues or the payment of liquidated damages, or delays or difficulties related to obtaining required governmental permits and approvals;
|
•
|
actions of suppliers, subcontractors, design engineers, joint venture partners, customers, competitors, banks, surety companies and others which are beyond the control of the Company, including suppliers’, subcontractors’ and joint venture partners’ failure to perform;
|
•
|
factors that affect the accuracy of estimates inherent in the bidding for contracts, estimates of backlog, over time recognition accounting policies, including onsite conditions that differ materially from those assumed in the original bid, contract modifications, mechanical problems with machinery or equipment and effects of other risks discussed in this document;
|
•
|
design/build contracts which subject the Company to the risk of design errors and omissions;
|
•
|
cost escalations associated with contracts, including changes in availability, proximity and cost of materials such as steel, cement, concrete, aggregates, oil, fuel and other construction materials and cost escalations associated with subcontractors and labor;
|
•
|
dependence on a limited number of significant customers;
|
•
|
adverse weather conditions;
|
•
|
the presence of competitors with greater financial resources or lower margin requirements than the Company and the impact of competitive bidders on the Companies ability to obtain new backlog at reasonable margins acceptable to the Company;
|
•
|
ability to successfully identify, finance, complete and integrate acquisitions;
|
•
|
citations issued by any governmental authority, including the Occupational Safety and Health Administration;
|
•
|
federal, state and local environmental laws and regulations where non-compliance can result in penalties and/or termination of contracts as well as civil and criminal liability;
|
•
|
adverse economic conditions in the Company’s markets; and
|
•
|
the other factors discussed in more detail in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2018
(“
2018
Form 10-K”) under “Part I, Item 1A. Risk Factors.”
|
|
Three Months Ended March 31,
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
Variance
|
|||||
Revenues
|
$
|
223,949
|
|
|
$
|
222,492
|
|
|
0.7
|
%
|
Gross profit
|
19,503
|
|
|
19,834
|
|
|
(1.7
|
)%
|
||
General and administrative expenses
|
(12,489
|
)
|
|
(12,340
|
)
|
|
(1.2
|
)%
|
||
Other operating expense, net
|
(2,294
|
)
|
|
(815
|
)
|
|
(181.5
|
)%
|
||
Operating income
|
4,720
|
|
|
6,679
|
|
|
(29.3
|
)%
|
||
Interest, net
|
(2,696
|
)
|
|
(2,958
|
)
|
|
8.9
|
%
|
||
Income tax expense
|
(163
|
)
|
|
(41
|
)
|
|
NM
|
|
||
Less: Net income attributable to noncontrolling interests
|
(46
|
)
|
|
(1,191
|
)
|
|
(96.1
|
)%
|
||
Net income attributable to Sterling common stockholders
|
$
|
1,815
|
|
|
$
|
2,489
|
|
|
(27.1
|
)%
|
Gross margin
|
8.7
|
%
|
|
8.9
|
%
|
|
(2.2
|
)%
|
||
Operating margin
|
2.1
|
%
|
|
3.0
|
%
|
|
(30.0
|
)%
|
||
NM - Not meaningful
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||
(In thousands)
|
2019
|
|
% of
Total
|
|
2018
|
|
% of
Total
|
||||
Revenue
|
|
|
|
|
|
|
|
|
|
||
Heavy Civil Construction
|
$
|
181,184
|
|
|
81%
|
|
$
|
187,241
|
|
|
84%
|
Residential Construction
|
42,765
|
|
|
19%
|
|
35,251
|
|
|
16%
|
||
Total Revenue
|
$
|
223,949
|
|
|
|
|
$
|
222,492
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
||
Heavy Civil Construction
|
$
|
(847
|
)
|
|
(18)%
|
|
$
|
1,945
|
|
|
29%
|
Residential Construction
|
5,567
|
|
|
118%
|
|
4,734
|
|
|
71%
|
||
Total Operating Income
|
$
|
4,720
|
|
|
|
|
$
|
6,679
|
|
|
|
|
Three Months Ended March 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Net cash used in:
|
|
|
|
|
|
||
Operating activities
|
$
|
(19,242
|
)
|
|
$
|
(22,492
|
)
|
Investing activities
|
(3,677
|
)
|
|
(1,011
|
)
|
||
Financing activities
|
(14,412
|
)
|
|
(4,988
|
)
|
||
Total decrease in cash and cash equivalents
|
$
|
(37,331
|
)
|
|
$
|
(28,491
|
)
|
(In thousands)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Cash and cash equivalents
|
$
|
56,764
|
|
|
$
|
94,095
|
|
Working capital
|
$
|
106,908
|
|
|
$
|
123,442
|
|
(In thousands)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Generally available
|
$
|
40,314
|
|
|
42,605
|
|
|
Consolidated 50% owned subsidiaries
|
13,308
|
|
|
31,026
|
|
||
Construction joint ventures
|
3,142
|
|
|
20,464
|
|
||
Total cash
|
$
|
56,764
|
|
|
$
|
94,095
|
|
(In thousands)
|
March 31, 2019
|
|
March 31, 2018
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
(2,591
|
)
|
|
$
|
(2,901
|
)
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(6,809
|
)
|
|
(7,685
|
)
|
||
Contracts in progress, net
|
(9,400
|
)
|
|
(10,586
|
)
|
||
Contracts receivable, including retainage
|
(1,976
|
)
|
|
(6,946
|
)
|
||
Receivables from and equity in construction joint ventures
|
(905
|
)
|
|
(1,105
|
)
|
||
Inventories
|
460
|
|
|
2,759
|
|
||
Accounts payable
|
(17,556
|
)
|
|
(12,334
|
)
|
||
Contract Capital, net
|
$
|
(29,377
|
)
|
|
$
|
(28,212
|
)
|
Period
|
|
Total Number of
Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|||
January 1 - January 31, 2019
|
|
—
|
|
|
$
|
—
|
|
February 1 - February 28, 2019
|
|
6,980
|
|
|
$
|
13.09
|
|
March 1 - March 31, 2019
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
6,980
|
|
|
$
|
13.09
|
|
Period
|
|
Total Number of
Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number of Shares Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number (or
Approximate Dollar
Value) of Shares
That May Yet Be
Purchased Under the
Plans or Programs
|
|||||
January 1 - January 31, 2019
|
|
105,348
|
|
|
$
|
11.57
|
|
|
571,867
|
|
|
1,428,133
|
|
February 1 - February 28, 2019
|
|
—
|
|
|
$
|
—
|
|
|
571,867
|
|
|
1,428,133
|
|
March 1 - March 31, 2019
|
|
144,822
|
|
|
$
|
13.69
|
|
|
716,689
|
|
|
1,283,311
|
|
Total
|
|
250,170
|
|
|
$
|
12.80
|
|
|
716,689
|
|
|
1,283,311
|
|
Exhibit No.
|
Exhibit Title
|
||
3.1
(1)
|
|||
3.2
(1)
|
|||
10.1
(2)
|
|||
31.1
(2)
|
|||
31.2
(2)
|
|||
32.1
(3)
|
|||
32.2
(3)
|
|||
101.INS
|
XBRL Instance Document
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
STERLING CONSTRUCTION COMPANY, INC.
|
|
|
|
|
Date: May 7, 2019
|
By:
|
/s/ Ronald A. Ballschmiede
|
|
|
Ronald A. Ballschmiede
|
|
|
Chief Financial Officer and Duly Authorized Officer
|
•
|
By his or her annual base salary in effect; then
|
•
|
By the percentage allocated to the particular goal (if there is more than one goal for the year); and then
|
•
|
By the performance level of the goal.
|
•
|
An award to the participant of Time-Based Restricted Stock Units (“
RSUs
”) that vest ratably over the Program Cycle provided the participant is an employee of the Company on the vesting date; and
|
•
|
An award to the participant of Performance Share Units (“
PSUs
”) that vest ratably over the Program Cycle based on the Company achieving a pre-determined performance goal for each year in the Program Cycle and provided the participant is an employee of the Company on the vesting date, or as otherwise provided below (
see Termination of Employment
).
|
Reason for Termination
|
Effect on Participation
|
Death or Permanent Disability
(as defined in the award agreement)
|
STI:
A prorated payout under the STI for the Program Year in which termination occurs will be made on the assumption that the Target performance for that year was met.
RSUs:
All unvested RSUs will vest in full.
PSUs:
PSUs for years in which the participant was an employee will vest based on actual performance. PSUs for the remaining years will vest on the assumption that the Target performance level was met.
|
Change of Control (COC)
(as defined in the Sterling Construction Company, Inc. Stock Incentive Plan)
|
STI:
A prorated payout under the STI for the Program Year in which the COC occurs will be made on the assumption that the Target performance level was met.
RSUs:
All unvested RSUs will vest in full.
PSUs:
PSUs for years in which the participant was an employee will vest based on actual performance. PSUs for the remaining years will vest on the assumption that the Target performance level was met.
|
Retirement
(age 60 with a minimum of 10 years of service; or age 65 with a minimum of 5 years of service, both requiring 6 months written notice.)
|
STI:
A prorated payout under the STI for the Program Year in which termination occurs will be made based on the actual level of performance for that year.
RSUs:
If the participant has been an employee for at least six months since the start of a Program Cycle and executes a one-year non-compete and non-solicitation agreement with the Company, all unvested RSUs will vest in full.
PSUs:
Provided that the participant executes a one-year non-compete and non-solicitation agreement with the Company, all his or her PSUs will vest in full based on actual performance achieved.
|
Without Cause or “Good Reason”
(as said term is defined in a participant’s employment agreement.)
|
STI:
A payout under the STI for the Program Year in which termination occurred will be made based on the actual level of performance for that year, but pro-rated for the number of days during the Program Year that the participant was an employee.
RSUs:
All unvested RSUs will vest in full.
PSUs:
PSUs for years in which the participant was an employee will vest based on actual performance. PSUs for the remaining years will vest on the assumption that the Target performance level was achieved.
|
For Cause
(as defined in the award agreement)
|
STI:
No payout will be made under the STI.
RSUs:
All unvested RSUs will be forfeited.
PSUs
. All PSUs will be forfeited.
|
Resignation by the Participant
|
STI:
No payout will be made under the STI.
RSUs:
All unvested RSUs will be forfeited.
PSUs:
All unvested PSUs will be forfeited.
|
In a termination of employment, payouts based on the actual performance level achieved will be made at the same time as payouts are made to participants whose employment did not terminate. Payouts based on the assumption that Target performance was achieved will be made irrespective of whether at the end of the Program Cycle, a greater or lesser performance level was actually achieved.
|
•
|
Any payout under the STI will be made in the first quarter of the year following the end of an STI Program Year, but no later than March 15 of the following year.
|
•
|
Payouts under the STI are treated as supplemental income for federal income tax withholding purposes. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the participant.
|
•
|
Payouts may also be subject to state income tax withholding, and to any garnishment, levy or other wage withholding order affecting the participant.
|
•
|
Payouts are not eligible for deferral into a participant's Company 401(k) account.
|
•
|
Generally, a participant will not recognize taxable income at the time RSUs and PSUs are received, but will recognize taxable income when they vest — that is, when the restrictions on RSUs and PSUs are converted into shares of Common Stock.
|
•
|
The taxable income recognized by a participant is equal to the fair market value of the converted shares on the vesting date. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the
participant.
|
•
|
The Committee permits participants to satisfy the Company's LTI withholding requirements (but not the STI withholding requirements) by transferring to the Company shares of Common Stock that have vested under the LTI and that have a market value on the last trading day of the Program Cycle equal to the taxes that the Company is required to withhold.
|
•
|
More information about the tax consequences of participating in the LTI is contained in the Plan Description of the Sterling Construction Company, Inc. Stock Incentive Plan.
|
STI
|
||
[Name] (2019) Base Salary
|
$100,000
|
|
[Name] STI Target Amount
|
80% — $80,000
|
|
Goal I — 2019 EBITDA Goal:
Goal Weighting: 75%
|
||
Threshold
TBD
|
Target
TBD
|
Maximum
TBD
|
Payout: 50%
|
100%
|
200%
|
Goal II — Strategic
Income from expanding Tealstone Residential into new markets
Goal Weighting: 25%
|
||
Threshold
TBD
|
Target
TBD
|
Maximum
TBD
|
Payout: 50%
|
100%
|
200%
|
|
|
|
LTI
|
||
LTI Target Amount
|
120% — $120,000
|
|
EPS Goal / Weighting:
|
|
|
|
2019 EPS Goal:
|
|
Threshold
|
Target
|
Maximum
|
TBD
|
TBD
|
TBD
|
Payout: 50%
|
100%
|
200%
|
|
2020 EPS Goal:
|
|
Threshold
|
Target
|
Maximum
|
TBD
|
TBD
|
TBD
|
Payout: 50%
|
100%
|
200%
|
|
2021 EPS Goal:
|
|
Threshold
|
Target
|
Maximum
|
TBD
|
TBD
|
TBD
|
Payout: 50%
|
100%
|
200%
|
|
|
|
1.
|
It is the policy of Sterling Construction Company, Inc., including its subsidiaries, (the “Company”) that the amount of any bonus or other incentive compensation (together, "
Incentive Compensation
") that has already been paid to an employee of the Company (either in cash or in common stock of the Company, or both) that was based on financial statements that are subsequently restated (other than the retroactive changes in accounting as required by GAAP), may, at the sole discretion of the Board of Directors through its Compensation Committee be adjusted either by repayment by the employee to the Company or by making an additional payment to the employee so that the employee will have received no more and no less than the amount that he or she would have received had the financial statements been restated before the amount of the Incentive Compensation was determined.
|
2.
|
If an adjustment is made as a result of the restatement and the Incentive Compensation is shown to have been —
|
(a)
|
Overpaid, the employee shall return the amount of the overpayment within sixty (60) days of a written demand therefor by the Company.
|
(b)
|
Underpaid, the Company shall pay the amount of the underpayment to the employee within thirty (30) days of the completion of the restatement.
|
(i)
|
The market value of such shares at the date of such transfer, pledge or encumbrance or at the date the demand for repayment is made, whichever is higher; or
|
(ii)
|
An equivalent number of shares of common stock of the Company having such market value.
|
3.
|
Any payment and/or conveyance of shares to the Company under this policy shall be made whether or not the employee required to make the payment or conveyance was culpable with respect to the error, event, act or omission that caused the restatement to be made, but nothing in this policy shall be construed to prevent the Company from pursuing other remedies against the employee if the Company determines that he or she was in fact culpable in any respect.
|
4.
|
In the event of a restatement of the financial statements of the Company due to the action(s) or inaction(s) of an employee subject to paragraph 1 herein, the Board of Directors, through its Compensation Committee, may in its sole discretion seek to recover from any said current or former employee of the Company who received incentive-based compensation (including cash or common stock awarded as compensation) during the 3-year period prior to the date on which the Company is required to prepare a restatement, the excess of what was paid to said employee, including the cancellation and/or recovery of shares of common stock of the Company that were awarded, due to the accounting restatement.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Sterling Construction Company, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ Joseph A. Cutillo
|
|
|
|
Joseph A. Cutillo
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Sterling Construction Company, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ Ronald A. Ballschmiede
|
|
|
|
Ronald A. Ballschmiede
|
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 7, 2019
|
/s/ Joseph A. Cutillo
|
|
Joseph A. Cutillo
|
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 7, 2019
|
/s/ Ronald A. Ballschmiede
|
|
Ronald A. Ballschmiede
|
|
Chief Financial Officer
|