<SEC-DOCUMENT>0001171843-16-011422.txt : 20160802
<SEC-HEADER>0001171843-16-011422.hdr.sgml : 20160802
<ACCEPTANCE-DATETIME>20160802150750
ACCESSION NUMBER:		0001171843-16-011422
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20160801
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20160802
DATE AS OF CHANGE:		20160802

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			STERLING CONSTRUCTION CO INC
		CENTRAL INDEX KEY:			0000874238
		STANDARD INDUSTRIAL CLASSIFICATION:	HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600]
		IRS NUMBER:				251655321
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31993
		FILM NUMBER:		161800222

	BUSINESS ADDRESS:	
		STREET 1:		2751 CENTERVILLE RD.
		STREET 2:		SUITE 3131
		CITY:			WILMINGTON
		STATE:			DE
		ZIP:			19803
		BUSINESS PHONE:		3024789170

	MAIL ADDRESS:	
		STREET 1:		20810 FERNBUSH LANE
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77073

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OAKHURST CO INC
		DATE OF NAME CHANGE:	19950831

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OAKHURST CAPITAL INC
		DATE OF NAME CHANGE:	19931130
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f8k_080216.htm
<DESCRIPTION>FORM 8-K
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<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 0.75pt; border-top: Black 0.75pt solid; border-bottom: Black 0.75pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Date of Report (Date of earliest event reported):
<B>August 1, 2016</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 12pt"><B>STERLING CONSTRUCTION COMPANY, INC.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
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    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD COLSPAN="5" STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>1-31993</B></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>25-1655321</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(State or other jurisdiction of incorporation or organization)</FONT></TD>
    <TD COLSPAN="5" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Commission File Number)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(I.R.S. Employer Identification No.)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 4.35pt 0pt 0; text-align: center"><B>1800 Hughes Landing Blvd.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 4.35pt 0pt 0; text-align: center"><B>The Woodlands, Texas</B></P></TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><BR>
<FONT STYLE="font-size: 10pt"><B>77380</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Address of principal executive offices)</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Zip Code)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Registrant&rsquo;s telephone number, including area code:&nbsp;&nbsp;<B>(281) 214-0800</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 35%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 38%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD>&nbsp;</TD><TD>&#9633;</TD><TD STYLE="text-align: justify">Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&#9633;</TD><TD STYLE="text-align: justify">Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">&#9633;</TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17&nbsp;CFR 240.14d-2(b))</TD></TR>                                                                                                                                                                                                                     <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&#9633;</TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17&nbsp;CFR 240.13e-4(c))</TD></TR>
</TABLE>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -1in"><B>Item 2.02&#9;Results
of Operations and Financial Condition.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left; text-indent: -1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">On August 1, 2016,
Sterling Construction Company, Inc. (the &ldquo;Company&rdquo;) issued a press release and hosted a conference call announcing
financial results for the three and six months ended June 30, 2016. The press release and the transcript of the conference call
are being furnished with this Current Report on Form 8-K as Exhibit 99.1 and 99.2, respectively, and are hereby incorporated herein
by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The information provided
in Item 2.02 shall not be deemed to be &quot;filed&quot; for the purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933,
as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference
thereto.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Item 9.01&#9;Financial Statements and Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">d) Exhibits</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

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    <TD STYLE="width: 20%; text-align: left"><FONT STYLE="font-size: 10pt"><B>Exhibit Number</B></FONT></TD>
    <TD STYLE="width: 80%; text-align: center"><FONT STYLE="font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">99.1</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Press release, dated August 1, 2016. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">99.2</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">August 1, 2016 conference call transcript. </FONT></TD></TR>
</TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SIGNATURES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>STERLING CONSTRUCTION COMPANY, INC.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 50%"><FONT STYLE="font-size: 10pt">Date:&nbsp;&nbsp;August 2, 2016</FONT></TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 45%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ Ronald A. Ballschmiede</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.25pt"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.25pt; text-align: left; text-indent: -37.25pt"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.25pt; text-align: left; text-indent: -37.25pt"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Ronald A. Ballschmiede</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Executive
        Vice President &amp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Chief
        Financial Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit Index</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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    <TD STYLE="width: 20%; text-align: left"><FONT STYLE="font-size: 10pt"><B>Exhibit Number</B></FONT></TD>
    <TD STYLE="width: 80%; text-align: left"><FONT STYLE="font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">99.1</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Press release, dated August 1, 2016. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">99.2</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">August 1, 2016 conference call transcript.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exh_991.htm
<DESCRIPTION>EXHIBIT 99.1
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<P STYLE="margin: 0; text-align: right"><B>Exhibit 99.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; color: Red"><img src="logo.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>FOR IMMEDIATE RELEASE</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>STERLING CONSTRUCTION COMPANY, INC.
REPORTS </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>2016 SECOND QUARTER RESULTS </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">THE WOODLANDS, TX &ndash; August 1, 2016
&ndash; Sterling Construction Company, Inc. (NasdaqGS: STRL) (&ldquo;Sterling&rdquo; or &ldquo;the Company&rdquo;) today announced
financial results for the second quarter ended June 30, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Second Quarter 2016 Financial Results
Compared to Second Quarter 2015:</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Revenues were $189.6 million compared to $177.4 million;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Gross margin was 8.5% of revenues compared to gross margin of 5.1%;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Operating income was $3.4 million compared with an operating loss
of $0.2 million;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Net income attributable to Sterling common stockholders was $2.0
million compared with a net loss of $2.5 million; and,</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Net income per share attributable to common stockholders was $0.09
compared to a loss of $0.13.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Second Quarter 2016 Backlog Highlights:</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total backlog at June 30, 2016 of $810
million was up 6.4% from December 31, 2015 and was up 9.0% from the second quarter of 2015;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total backlog at June 30, 2016 excluded
$109 million of projects where the Company was the apparent low bidder but the contract had not yet been signed; and,</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gross margin of projects in backlog as
of June 30, 2016 averaged 7.8% as compared with 6.3% the end of the second quarter of 2015, while gross margin of the projects
awarded in the first six months of 2016 averaged more than 9.4%.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Business Overview:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Second quarter 2016 revenues increased
6.9% compared to the second quarter of 2015 driven by increased project activity in Nevada, Hawaii and the Rocky Mountains. This
favorable performance was partly offset by the impact of extensive rainfall in Texas, along with the completion of a large project
in California that was ongoing in the second quarter of 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gross profit was $16.1 million in the second
quarter of 2016 compared to $9.1 million in the prior year second quarter. Gross margin increased by approximately 340 basis points
in the second quarter of 2016 compared to the prior year quarter due to an improvement in project margin mix reflecting a lower
level of zero or near zero margin projects and a greater portion of the Company&rsquo;s overall work being devoted to more profitable
backlog.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">General and administrative expenses were
$9.1 million in the second quarter of 2016, or 4.8% of revenues compared to $9.6 million or 5.4% in the second quarter of 2015.
The decrease in G&amp;A expense as a percentage of revenues reflects the operating leverage inherent in the Company&rsquo;s business
model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other operating expense, net totaled $3.6
million in the second quarter of 2016 compared to income of $0.3 million in the second quarter of the prior year. The increase
to expense was primarily due to increased noncontrolling interest expense, driven by the combined increased income from the Company&rsquo;s
two partially owned subsidiaries. Additionally, one of the subsidiary&rsquo;s 2015 noncontrolling interest was classified as Noncontrolling
owners&rsquo; interest in earnings of subsidiaries and joint ventures. As a result of amendments to that subsidiary agreement,
both subsidiaries 2016 noncontrolling interest are included in Other operating expense, net.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Financial Position at June 30, 2016:</U></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash and cash equivalents was $42.6 million.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Working capital totaled $43.8 million.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total debt was reduced to $17.9 million.
</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Tangible net worth was $55.7 million.
</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>CEO Remarks:</U> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Paul J. Varello, Sterling&rsquo;s CEO,
commented, &ldquo;Our second quarter results, despite challenging weather conditions in our Texas market, showed meaningful improvement
over the prior year quarter. This was the result of continued progress with our ongoing efforts to tighten our estimating and bidding
processes, more stringent management review protocol when bidding new opportunities, our enhanced project management systems, and
overall better execution. As a result, the margins in our backlog point to continued profitability improvement through the balance
of 2016 and into 2017.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Varello continued, &ldquo;All of our
business units continue to win new awards at improved margins. We are particularly pleased with the sizeable projects that our
Texas operation has been awarded thus far this year. We do not anticipate any slowdown in project lettings for the balance of 2016
and 2017 given the funding outlook at the federal level and throughout the states where we operate. We remain comfortable that
we can continue to be selective in bidding projects that give us the greatest opportunity to improve profitability.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;This past May, we announced that
we had successfully completed an equity offering which raised $19 million. We used the proceeds from that offering to fund our
growing working capital needs and to reduce our expensive debt, thus providing Sterling with improved financial flexibility. Ultimately,
we intend to refinance our current asset-based credit facility with a lower cost, higher capacity, revolving credit line which,
when combined with expected free cash flow generation and optimization of various assets, will further strengthen our financial
position to support future growth. We are currently targeting the first half of 2017 to have this refinancing accomplished.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Varello concluded, &ldquo;With respect
to our outlook for the full year 2016, the torrential rains and flooding in Texas and the slower construction ramp-up of the significant
new awards booked in late 2015 and early 2016 resulted in lower revenues and net income for the second quarter and our expectations
for the year as some of this work pushes out into 2017. As a result, we now expect revenues to be in the range of $670 million
to $690 million and net income to be $2 million to $5 million for the full year 2016. We expect continued gross margin improvement
and tight G&amp;A cost controls to further enable us to achieve these targets. In summary, we believe that Sterling&rsquo;s turnaround
is well underway and we expect to deliver continued improvement in profitability and shareholder value in the second half of 2016
and beyond.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Conference Call:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sterling&rsquo;s management will hold a
conference call to discuss these results and recent corporate developments at 9:00 am EST August 1, 2016. Interested parties may
participate in the call by dialing (201) 493-6744 or (877) 445-9755 ten minutes before the conference call is scheduled to begin,
and asking for the Sterling Construction call.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To listen to a simultaneous webcast of
the call, please go to the Company&rsquo;s website at www.strlco.com at least 15 minutes early to download and install any necessary
audio software. If you are unable to listen live, the conference call webcast will be archived on the Company&rsquo;s website for
30 days.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Sterling is a
leading heavy civil construction company that specializes in the building and reconstruction of transportation and water infrastructure
projects in Texas, Utah, Nevada, Colorado, Arizona, California, Hawaii, and other states in which there are construction opportunities.
Its transportation infrastructure projects include highways, roads, bridges, airfields, ports and light rail. Its water infrastructure
projects include water, wastewater and storm drainage systems.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This press release includes certain statements
that fall within the definition of &ldquo;forward-looking statements&rdquo; under the Private Securities Litigation Reform Act
of 1995. Any such statements are subject to risks and uncertainties, including overall economic and market conditions, federal,
state and local government funding, competitors&rsquo; and customers&rsquo; actions, and weather conditions, which could cause
actual results to differ materially from those anticipated, including those risks identified in the Company&rsquo;s filings with
the Securities and Exchange Commission. Accordingly, such statements should be considered in light of these risks. Any prediction
by the Company is only a statement of management&rsquo;s belief at the time the prediction is made. There can be no assurance that
any prediction once made will continue thereafter to reflect management&rsquo;s belief, and the Company does not undertake to update
publicly its predictions or to make voluntary additional disclosures of nonpublic information, whether as a result of new information,
future events or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: red">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 50%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Contact:</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sterling Construction Company, Inc.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jennifer Maxwell, Director of Investor Relations</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">281-951-3560</P></td>
    <td style="width: 50%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Investor Relations Counsel:</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Equity Group Inc.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Fred Buonocore&nbsp;&nbsp;212-836-9607</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Kevin Towle&nbsp;&nbsp;212-836-9620</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></td></tr>
</table>
<P STYLE="font: 10pt Courier; margin: 0pt 0; text-align: justify; text-indent: 45.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(See Accompanying Tables)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STERLING CONSTRUCTION COMPANY, INC. &amp;
SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>(Amounts in thousands,
except share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: small-caps 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Three Months Ended </b></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>June 30,</b></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Six Months Ended</b></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>June 30,</b></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; padding-left: 10pt; text-indent: -10pt">Revenues&#9;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">189,582</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">177,425</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">316,149</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">295,107</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Cost of revenues&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(173,493</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(168,314</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(296,230</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(292,832</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 10pt; padding-left: 10pt">Gross profit &#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,089</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,111</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,919</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,275</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">General and administrative expenses&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,104</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,598</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,646</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21,201</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Other operating income (expense), net&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,604</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">325</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,358</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,086</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 10pt; padding-left: 10pt">Operating income (loss)&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,381</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(162</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,085</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,840</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Interest income&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">432</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Interest expense&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(812</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(634</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,685</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,016</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Loss on extinguishment of debt&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(240</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(240</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Income (loss) before income taxes and earnings attributable to noncontrolling interests &#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(967</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,766</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,664</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Income tax expense&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(28</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(27</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(31</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Net income (loss)&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,543</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,793</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,695</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Noncontrolling owners&rsquo; interests in earnings of subsidiaries and joint ventures&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(520</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,547</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(512</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,839</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.25pt; padding-left: 10pt; text-indent: -10pt">Net income (loss) attributable to Sterling common stockholders&#9;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">2,023</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">(2,542</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">)</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">(5,305</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">)</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">(19,534</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Net income (loss) per share attributable to Sterling common stockholders:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 10pt; padding-left: 10pt">Basic and diluted&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.09</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.25</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1.03</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Weighted average number of common shares outstanding used in computing per share amounts:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 10pt; padding-left: 10pt">Basic &#9;&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,761,671</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,269,977</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,260,946</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,040,870</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 10pt; padding-left: 10pt">Diluted&#9;&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,958,551</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,269,977</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,260,946</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,040,870</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STERLING CONSTRUCTION COMPANY, INC. &amp;
SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONDENSED CONSOLIDATED BALANCE SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Amounts in thousands, except share and
per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, <BR>
2016</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, <BR>
2015</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center">(Unaudited)</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 10pt; text-indent: -10pt">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; padding-left: 10pt; text-indent: -10pt">Cash and cash equivalents &#9;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">42,635</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">4,426</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Contracts receivable, including retainage&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">106,595</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,112</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 20pt; text-indent: -10pt">Costs and estimated earnings in excess of billings on uncompleted contracts&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,391</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,905</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Inventories&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,725</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,535</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Receivables from and equity in construction joint ventures&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,930</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Other current assets&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,428</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,013</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 30pt; text-indent: -10pt">Total current assets&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">201,139</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,921</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Property and equipment, net&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72,035</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,475</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Goodwill&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,820</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,820</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Other assets, net&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,968</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,949</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.25pt; padding-left: 30pt; text-indent: -10pt">Total assets&#9;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">330,962</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">266,165</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 10pt; text-indent: -10pt">LIABILITIES AND EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Current liabilities:&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Accounts payable&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">79,853</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">58,959</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Billings in excess of costs and estimated earnings on uncompleted contracts&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,914</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,556</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Current maturities of long-term debt&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,854</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,856</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Income taxes payable&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Accrued compensation&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,855</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,977</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Other current liabilities&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,869</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,896</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 30pt; text-indent: -10pt">Total current liabilities&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">157,372</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">104,311</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Long-term liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Long-term debt, net of current maturities&#9;&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,044</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,324</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Member&rsquo;s interest subject to mandatory redemption and undistributed earnings&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">49,260</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,438</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Other long-term liabilities&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">389</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">338</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 30pt; text-indent: -10pt">Total long-term liabilities&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">62,693</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">66,100</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Commitments and contingencies</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Sterling stockholders&rsquo; equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Preferred stock, par value $0.01 per share; 1,000,000 shares authorized, none issued&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">--</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Common stock, par value $0.01 per share; 28,000,000 shares authorized, 25,002,964 and 19,753,170 shares issued&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Additional paid in capital&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">208,031</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">188,147</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Retained deficit&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(97,805</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(92,500</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 30pt; text-indent: -10pt">Total Sterling common stockholders&rsquo; equity&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,476</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">95,845</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 20pt; text-indent: -10pt">Noncontrolling interests&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">421</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(91</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 30pt; text-indent: -10pt">Total equity&#9;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">110,897</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">95,754</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 30pt; text-indent: -10pt">Total liabilities and equity&#9;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">330,962</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">266,165</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD></TR>
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<TYPE>EX-99.2
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<DESCRIPTION>EXHIBIT 99.2
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<P STYLE="margin: 0; text-align: right"><B>Exhibit 99.2</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 47%; border-right: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sterling Construction Co., Inc.</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-right: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; color: #5D596A">STRL</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 27%; border-right: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; color: #5D596A">Q2 2016 Earnings Call</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; color: #5D596A">Aug. 1, 2016</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; color: #5D596A"><I>Company&#9650;</I></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; color: #5D596A"><I>Ticker&#9650;</I></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="color: #5D596A"><I>Event Type&#9650;</I></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; color: #5D596A"><I>Date&#9650;</I></FONT></TD></TR>
</TABLE>


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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">PARTICIPANTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Corporate Participants</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Jennifer Maxwell</B> &ndash; Director-Investor Relations,
Sterling Construction Co., Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Paul J. Varello</B> &ndash; Chief Executive Officer &amp;
Director, Sterling Construction Co., Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Ronald A. Ballschmiede</B> &ndash; Chief Financial Officer
&amp; Executive Vice President, Sterling Construction Co., Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Other Participants</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>John Bergstrom Rogers</B> &ndash; Analyst, D. A. Davidson
&amp; Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Tahira Afzal</B> &ndash; Analyst, KeyBanc Capital Markets,
Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>William Bremer</B> &ndash; Analyst, Maxim Group LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Vahid Khorsand</B> &ndash; Analyst, BWS Financial, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">MANAGEMENT DISCUSSION SECTION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Greetings and welcome to the Sterling Construction&rsquo;s
Second Quarter 2016 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session
will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">It is now my pleasure to introduce your host, Jennifer Maxwell,
Director of Investor Relations. Thank you, you may begin. Ladies and gentlemen, please standby, your conference will resume momentarily.
Okay. You may begin the conference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Jennifer Maxwell, Director-Investor
Relations</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thanks Christine and good morning everyone. Participating with
me today on our call is our Chief Executive Officer, Paul Varello; our Chief Financial Officer, Ron Ballschmiede; and [ph] Joe
Cardello (1:23), our Chief Business Development Officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Just as a reminder, today&rsquo;s conference call includes certain
statements that fall within the definition of forward-looking statements under the Private Securities Litigation Reform Act. Any
such statements are subject to risks and uncertainties, including overall economic and market conditions; federal, state and local
government funding, competitor and customer actions and weather conditions, which could cause actual results to differ materially
from those anticipated, including those risks identified in the company&rsquo;s filings with the Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accordingly, such statements should be considered in light of
these risks. Any predictions by the company is only a statement of management&rsquo;s beliefs at the time the prediction is made.
There can be no assurance that any prediction once made will continue thereafter to reflect management&rsquo;s beliefs; and the
company does not undertake to publicly update those predictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">And now, I would like to turn this call over to our CEO, Paul
Varello. Paul?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Paul J. Varello, Chief
Executive Officer &amp; Director</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thanks Jennifer and good morning everybody. I am happy to report
that our turnaround efforts continue to produce positive results. Our net income for this quarter was finally crossed over into
the black and is the highest quarterly income in more than 13 quarters. We believe that our turnaround is on track and we expect
our bottom line to continue to improve.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although we experienced torrential rains and flooding during
the quarter in Texas, we made very good progress in our other geographic markets and that helped to offset a majority of the shortfall.
For the quarter, Texas represented only 25% of our revenue, where normally it is closer to 33%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From a broader perspective, we continue to see sequentially
greater investment in infrastructure projects at the federal, state and local levels. Many of the projects that will be out for
bid include roads, bridges, airports and water projects in the $20 million to $80 million range which fits very well with our capabilities
and allows us to be selective in choosing the best jobs to bid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We also have been very pleased with the way backlog and project
margins have continued to increase during the first half of this year. Our total backlog at the end of the quarter, including projects
where we were the apparent low bidder but the contracts had not yet been signed, totaled more than $919 million. In addition, the
bid margin in projects awarded during the first half of this year was 9.4%. We see that trend continuing throughout the balance
of this year and beyond.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We also completed an equity offering during the quarter which
raised $19 million. We used the proceeds to pay down a large portion of our very expensive debt and to fund working capital needs
as we ramped up a record number of projects during the quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">With our stronger balance sheet and improved financial flexibility
we are well positioned to take full advantage of the growth opportunities we see before us. We expect that the rains and flooding
experienced in Texas may result in lower revenue and net income for the year as some of this delayed work pushes out into 2017.
We now expect full year revenue to be in the range of $670 million to $690 million and net income to be in the range of $2 million
to $5 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In conclusion, we believe that our turnaround efforts, though
not complete, continue to drive significant improvement in earnings and create a firm foundation for sustained growth in the years
ahead.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Now, I&rsquo;d like to ask our CFO, Ron Ballschmiede to offer
his report. Ron?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Ronald A. Ballschmiede,
Chief Financial Officer &amp; Executive Vice President</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thanks Paul and good morning everybody. Let me start with building
on Paul&rsquo;s backlog comments by providing a few additional details around our recent backlog trends. At June 30, 2016, our
backlog stood at $810 million compared to the end of our second quarter of 2015 a backlog of $243 million. As Paul mentioned, our
total backlog at the end of 2016 second quarter, including projects where we were the apparent low bidder but the contracts had
not yet been signed, totaled $919 million, consistent with the end of the first quarter of 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Even more important than the level of our backlog is the steady
improvement of our embedded gross margin in that backlog. At June 30, 2015, the backlog margin was 6.3%. The backlog margin has
increased each subsequent quarter and at June 30, 2016, the margin backlog increased 150 basis points to 7.8%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We believe that this trend reflects progress made in the diligence
around selecting the right projects to bid on, improvements in project execution, continued progress to complete legacy projects
with little or no margin and the significant increases in transportation and infrastructure bid opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Revenue for the second quarter of 2016 was $190 million, a bit
short of our expectation, yet more than $13 million higher than Q2 of last year, which was $177 million. The second quarter of
the year was not helped by the poor weather in some of our markets, particularly the very wet weather in Texas, which is normally
our largest market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On the positive side, our geographic dispersion mitigated a
portion of that negative revenue pressure in Texas with increasing revenues in each of Nevada, Hawaii and the Rocky Mountain States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Gross profits for the second quarter totaled $16.1 million or
8.5% of revenues compared to $9.1 million or 5.1% for the comparable period of 2015. The second quarter 2016 8.5% gross margin
is the highest quarterly margins since 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our actual gross margin performance against estimated margins
continues to be solid. For the six months of 2016 with $316 million of revenue driven by over $800 million of backlog, our changes
in estimated revenue and gross margin resulted in a net charge of only $500,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Importantly and as we discussed in our first quarter call, that
small charge for the full half year of the year included a first quarter charge of approximately $1 million related to a subcontractor
dispute on a previously completed legacy project in California. While never able to declare project execution victory, our progress
over the past year and a half has been significant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our general and administrative expenses for the second quarter
were at $9.1 million, down from $9.6 million in the comparable quarter of 2015. The year-over-year decline was largely the result
of lower employee-related and benefit-related costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other operating expense was $3.6 million compared to other operating
income of $300,000 in the first quarter of 2015. The increase was primarily due to increased non-controlling interest expense driven
by the combined increased income from the company&rsquo;s two partially-owned subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Additionally, one of the subsidiaries&rsquo; 2015 non-controlling
interest was classified below net income and included in non-controlling owners&rsquo; interest in earnings and subsidiaries and
joint ventures. As a result of amendments to that subsidiary&rsquo;s agreement, both subsidiaries&rsquo; 2016 non-controlling interests
are now included and will be moving forward in other operating expense, net.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You&rsquo;ll note that during the quarter we also reported a
$520,000 expense of non-controlling owners&rsquo; interest in earnings of subsidiaries and joint ventures, the line just below
net income on our income statement. In 2016, this line item represents only our partner&rsquo;s share of our construction joint
venture income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Interest expense for 2016 second quarter was $812,000 compared
to the second quarter of 2015 of $634,000. The increase reflects the higher interest rate of our asset-based lending facility and
changes in our average debt balance. The summation of all these items results in a second quarter net income attributable to Sterling
common share stockholders of $2 million and net income per share of $0.09 per share compared with a second quarter 2015 loss of
$2.5 million or a loss of $0.13 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Turning to our balance sheet, we ended the quarter with a cash
balance of $42.6 million compared to a cash balance of $14.9 million at the end of 2016 first quarter. Our June 30, 2016, balance
sheet includes approximately $23.6 million of cash held by our California variable interest entity and our consolidated construction
joint venture, which is reserved for use in both entities. The comparable cash reserve balance at the beginning of the second quarter
of 2016 was $5.9 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our debt totaled $17.9 million at June 30, 2016, compared to
$32.1 million at March 31, 2016. Taken together, our cash net of debt position at June 30, 2016, was $24.7 million, improved by
almost $42 million from the beginning of the second quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Significant cash generation activities during the quarter primarily
included the net proceeds of $19.1 million from our common stock secondary offering, which I will discuss further in a moment,
and an improvement in our investment in contract capital of $15.4 million and our cash flow from operating earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We believe that the level and changes in our contract capital
are good measures to manage our investment in project activities. Our contract; capital reflecting the combined balances of our
contracts in process, receivables, inventories and accounts payables; improved during the second quarter of 2016 by $16.3 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As we had discussed in our year-end 2015 and our first quarter
2016 earnings calls, we were exploring different capital raising alternatives to further strengthen our financial position and
provide us with the additional financial flexibilities to take advantage of the improving market. Our capital raising alternatives
included the potential sale of real estate, equipment, businesses and equity, the favorable resolution of outstanding contract
claims, refinancing our equipment-based facilities or a combination thereof. Many of these alternatives remain available to us
to strategically transform and improve the profitability of our company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">However, to provide the much needed incremental working capital
necessary to ramp up our recent significant new awards and restart our seasonal projects, we initiated and completed a secondary
common stock offering in early May. We issued 5,175,000 shares of common stock and received net proceeds of $19.1 million on May
9.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Approximately, a third of those proceeds were immediately necessary
to bring our payables back to normal terms. The balance of the proceeds went to improving our financial condition and financial
flexibility allowing us to continue the turnaround and position us to return to a more traditional credit facility towards the
end of 2016 or early 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As expected and as evidenced by our significant improvement
in liquidity at the end of the second quarter, these early spring working capital demands are now behind us and we are beginning
our generally strongest seasonal cash flow quarters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">With that, I&rsquo;ll turn it back to Paul.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Paul J. Varello, Chief
Executive Officer &amp; Director</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thanks, Ron. Now I&rsquo;d like to open it up to questions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">QUESTION AND ANSWER SECTION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Thank you. We will now be conducting a question-and-answer
session. [Operator Instructions] Our first question comes from the line of John Rogers with D.A. Davidson. Please proceed with
your question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Hi good morning.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Good morning, John.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Hey. Paul or Ron, I guess the first thing &ndash; and congratulations on the return to solid profitability. In terms of the
outlook for the rest of the year, the impact on net income from the deferred revenue seems a little more extreme where it&rsquo;s
lingering into the second half of the year, whereas I would have expected weather-related delays, some of that would be made up
in the second half of the year. But it sounds like you&rsquo;re seeing some or expecting some continuing margin pressure. Am I
reading this wrong?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>No, I don&rsquo;t think it was so much margin pressure as really three factors. The rain in Texas was one of
the big contributors. It&rsquo;s our biggest market in terms of revenue. Ron, when I get done, please go over the math of how that
impacted net income. But if we just think about the revenue shortfall issue or the recast revenue, John, it is the delay due to
the flooding in Texas. We had really what they call around here biblical flooding in really all of March and three quarters of
April. We lost almost all that time in Texas. After that, it dried out and it seemed to be fine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">That was contributor one. Contributor two was we didn&rsquo;t
have enough &ndash; you remember the equity raised really generated the additional money on around May 9. We were really spoon-feeding
the projects that had to ramp up as early as March. We had won a bunch of jobs in December and January, frankly more than we thought
we would. And those jobs would sometimes take a while to ramp up. All were relatively quick starters which we realized then was
going to drain our working capital coffers pretty quickly. So we had to slow-play that until we could get that capital raise in
hand. We did that. I feel very good about how we were able to hit as many jobs as we could. And that was the larger &ndash; at
least 50% of the impact was from that. The second one being the weather. I guess they&rsquo;re just two really big drivers. Ron,
could you explain how the revenue shortfall impacted the net earnings?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Sure. I think a couple of just add-ons to what Paul just said would be we will make up some of that revenue
shortfall. But most of it just rolls out in subsequent quarters. And in addition to that, we&rsquo;ve seen somewhat of a slowdown
in bringing the new awards to or the progress on the new awards to fruition just timing of being released to do more work. So the
combination of those things essentially just slid almost $40 million of revenue if you go midpoint to midpoint from 2016 to 2017.
Top down, easy math &ndash; well, now, easy in quotes math, so at 8% to 9% margin, that moves, that number works. It&rsquo;s &ndash;
take $38 million delta times 8% or 9% margin and that&rsquo;s about what we&rsquo;re seeing from an income standpoint being shoved
into 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>And as I think we all know, there is hardly any upside to being terribly optimistic on these forecasts. And
so we believe that had the second quarter not been as difficult weather-wise, we had a chance of certainly staying within our guidance.
But when the second quarter turned out to have these kind of challenges, we decided everything else was going so well we would
just be wiser to set a target we felt more comfortable with.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Okay. And then my other question was just in terms of the margins that you saw in the quarter and you touched on this a little
bit in your comments. But they&rsquo;re above or they were above the margins that are estimated within your backlog. Were there
some notable project closeouts there and is that a repeatable scenario?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>[ph] Joe Catello (20:43), our Chief Business Development Officer, has joined us. [ph] Joe (20:47), can you handle
that one?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah. What&rsquo;s really driving that margin
is mix. So if you take a look at &ndash; one of the comments that Paul brought up is Texas represented a lower percentage of our
total revenue than it normally does. We had a much higher revenue out in the West and in the Rocky Mountain states and Hawaii.
In addition, some of the 0% margin jobs then got pushed into Q3 and Q4. So they didn&rsquo;t hit the quarter as much as we anticipated
out of Texas.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>And the Western jobs had better margins than the Texas job did plus the 0%s. So the net impact of all of that
was something I think will continue but to a lesser degree as Texas snaps back.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah. And John, that&rsquo;s one of the reasons I thought it necessary to tell you the story [indiscernible]
(21:41) involved, which is the [indiscernible] (21:43) on our income statement related to our 50%-owned ventures. Our charge in
the quarter for that was $3.8 million, give or take. So it&rsquo;s pretty easy math. It&rsquo;s all in the Q. You double that.
So those two ventures made almost $8 million and of course that&rsquo;s some great work in their geographies. So that certainly
was the biggest factor in the mix that [ph] Joe (22:07) described. That&rsquo;s a very significant impact. I&rsquo;ll take more
expense in the non-controlling interests [ph] and less (22:15) every time because what that means is those entities made more money,
which is a good thing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Sure, okay. Sorry and lastly if I could. Bidding prospects in the second, anything of note there? How does the pipeline look
in terms of opportunities?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>[ph] Joe (22:35), can you handle that?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah. We&rsquo;re in the busy season of bidding.
We&rsquo;re not seeing any slowdowns in any of our general markets. We&rsquo;re still waiting for the pickup in Nevada. Nevada
is probably the lowest or the slowest state that we have going right now. But we see some great job opportunities coming out in
Utah, Colorado. And as we get towards the back half of the year, there&rsquo;s a big job in Hawaii that could be coming out late
this year or early next year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Okay, great. I&rsquo;ll get back in queue. Thank you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Thanks, John.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Our next question comes from the line of Tahira Afzal
with KeyBanc. Please proceed with your question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Hey, Paul and team. Congratulations on the fantastic quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Good morning, Tahira. Thank you very much.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>So I don&rsquo;t know if this is a question for, Paul, yourself or Ron. But does the fact we have some pushed out
revenues into the third and fourth quarter cause some of the typical seasonality to change? So typically, your third quarter is
very pronounced and then the fourth quarter is lighter. Is there a chance we see more of a rollout and a gradual build-out into
the fourth quarter this time?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Tahira, first of all, the third quarter will again be a substantially &ndash; will be our best quarter. It always
is. And we&rsquo;re already essentially a third of the way through it. And it&rsquo;s certainly a little early, but it&rsquo;s
certainly on track to do that again. In terms of margins, we think margins will be slightly less. But I&rsquo;ll remind you that
with fixed G&amp;A and a very high revenue, more of it flows to the bottom line. So we are still believing at the net income line,
we&rsquo;ll have a strong third quarter. Ron, what would you add to that?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah, I think that&rsquo;s right. And certainly the gross profit will be helped also by some of that fixed cost.
But I think in the Q and I&rsquo;ll give you the numbers now, we entered the quarter with $70 million of backlog on margins that
had nil profit in it. We burned about $30 million of that number. So $30 million divided by the quarterly revenues to $190 million
caused pretty big significant number offset as [ph] Joe (25:10) mentioned by mix. The $40 million that&rsquo;s remaining will be
burnt in third and fourth quarter and most of it in third. But mathematically, it becomes a much smaller parentage of the total.
So it has less impact in the third quarter and less impact in the fourth quarter on a mathematical basis than it did in the second.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Got it. Ron, that&rsquo;s actually pretty helpful. And Paul, the last time we talked, there was a chance you might
have some sort of margin-making [Technical Difficulty] (25:49) some closeouts or something that could have helped you close the
gap and meet net income or operating income even with the weather changes. Any change that&rsquo;s happened over the last couple
of weeks have you decide to be a little more conservative as you look at how this [ph] work (26:11) ramps up?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah. What we were speaking of is there is a part of the business that I would just say is the normal business.
And those opportunities for additional margin come from change orders primarily as well as continuing to execute against the base
project. Beyond change orders &ndash; and we had several. We always have several in every quarter. But they generally are not big
significant numbers. The larger more significant numbers are claims and claims unfortunately are one-off things. And so in our
forecast, we are not anticipating in any of the forecast guidance we&rsquo;ve given you any claims which we hope do happen. But
because they&rsquo;re one-off, we tend to say that&rsquo;s not our &ndash; we&rsquo;d like to look at our business as a normal
run rate kind of earning stream. So what I would say is there&rsquo;s only upside if we are fortunate enough to execute and collect
on claims &ndash; claims different from change orders &ndash; during the balance of this year. We did execute several change orders
this quarter. But it&rsquo;s pretty much mundane. Several million dollars on the total revenue of $190 million was not moving the
needle a lot. We always get some of those every quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah, and that&rsquo;s a revenue number. So I talked -</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Right.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>I talked little a bit at the opening comments about our changes in estimated gross profit. The way we do that,
that&rsquo;s all changes in our backlog. So in the first quarter, we had that project in California that essentially was $1 million
and that was a change in all of our backlog. And it wasn&rsquo;t the only one, but it netted out and that&rsquo;s really the objective.
In the second quarter, that same [ph] confrontation (28:07) netted out to $500,000 up of GP. Again -</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Got it.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>That&rsquo;s our objective. We want the negatives and the positives, [ph] which you always have, to offset and
a possible with (28:18) small credit. So the second quarter only add about $500,000 benefit, so 200 basis points, 300 basis points
on our margin. But I would call that just normal noise of settling change orders, updating estimates, appreciating the rain effect
and everything else. So I think a normal quarter, there&rsquo;s nothing extraordinary, closeouts or margin coming out of the change
orders that we just talked about.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Got it, okay. And last question for you folks before I hop back into the queue. If I do the math correctly based
on what you all are saying; I sense there&rsquo;s a chance if you put in low bids, et cetera, you could be exiting this year with
backlog up potentially, let&rsquo;s say, in the low mid-teens, maybe a little higher than that. Do you folks feel capacity-wise
&ndash; and maybe this is a question for [ph] Joe (29:18) &ndash; you can actually translate that into a revenue growth of the
same pace? So in other words, do you feel you have the capacity to really generate revenue growth of the mid-teens level?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah, I think we can look at it in two ways.
If you start with kind of the back office [indiscernible] (29:41) that support the growth, we still feel very comfortable we got
enough capacity to get us close to that $1 billion mark in total. Down in the operations, flexing up that capacity as we grow should
not be an issue. And frankly, we have excess capacity now. Hence, we sold off a fair amount of equipment. We still have some assets
that we could either get rid of or maintain to support that capacity, Tahira.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Got it, okay. Well, good quarter, guys. And I&rsquo;ll hop back in the queue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Thank you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Our next question comes from the line of William Bremer
with Maxim. Please proceed with your question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Good
morning, Paul. Good morning, Ron.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Good morning, Bill.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>So
Ron, I want to go to your legacy backlog. You voiced that this quarter you realized approximately $30 million. So year-to-date
&ndash; and I just want to correct if there&rsquo;s any issues here &ndash; approximately $56 million or I should say $46 million
has been worked off. Is that correct?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah, I think we started the year with $86 million and we ended the second half with $40 million left. That&rsquo;s
correct.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Okay.
So are we on target at the conclusion of 2016 to be, say, below $10 million? Is that slated? Do you see those other $40 million
projects sort of ready to go? Is the shovel sort of in there that you guys are finally going to be able to complete this?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yes, I think those will be gone. And in our world, you always have some projects that are 0% or lower margin.
But that&rsquo;s just noise at this &ndash; yeah, it will be just noise. So I&rsquo;d expect that entire $40 million to be burnt
third quarter, fourth quarter, give or take two-thirds or one-thirds for lack of a very &ndash; I didn&rsquo;t do a scientific
rollout of that. But order of magnitude, that&rsquo;s about right.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Okay.
And then I want to go into your labor, very impressive in this quarter. Your other peers are sort of voicing some inflation. How
were you able to keep your labor in check at this point without potentially losing some of your top catch or top managers?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>It is competitive for supervision, Bill, project managers, project superintendents. It has certainly continued
to ramp up. And we think our profitability and our execution is really attracting very good people. So while I think we still have
to continue to create opportunities for people for growth, it&rsquo;s there. On the craft labor front, we haven&rsquo;t experienced
substantial inflationary effect that we didn&rsquo;t have built into our estimates. Numbers down here in Texas is still running
modestly low and we had that built into our bids. We&rsquo;re also thankful that with the average life for jobs less than two years,
we can recycle the estimate every time. So you reprogram the rate you&rsquo;re going to use based on any inflationary impact. And
we always put an inflationary assumption in our estimates. And so far Bill, we&rsquo;ve been spot on. There hasn&rsquo;t been much
impact from that.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Hey Ron, this last one is for you. Can you give us a sense on annual bookings. What&rsquo;s the breakdown between
say private, commercial as well as the public domain of projects you&rsquo;re bidding on at this time or that&rsquo;s in your backlog
at this time, I should say?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>[indiscernible] (33:26) hand it over to [ph] Joe (33:27). He is the man that studies that very hard.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah, when you look at, what I&rsquo;ll call
the highway side, which would be state or federal, 80% of our total work is in that space. However, when you get into airports
and some of those activities as well, they fall under the same guidelines. So about 92% to 94% of our work today falls under that
piece and the rest would fall under private.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Okay. Thank you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Our next question comes from the line of Vahid Khorsand
with BWS. Please proceed with your questions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Vahid Khorsand &ndash; BWS Financial, Inc.&gt;:
</B>Hi guys. First question, if you could just talk a little bit about how confident you are in the new guidance you&rsquo;re providing?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah, I think we feel considerably more comfortable with this new guidance. And again, I want to remind you,
it excludes the one-off opportunities that are inherent in our business. So the actual number with any amount of luck at all will
be probably higher once claims are settled and other one-off things are in there. So I would tell you my confidence in the number,
Vahid, is north of 80%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Vahid Khorsand &ndash; BWS Financial, Inc.&gt;:
</B>Okay. The reason why I ask is, you were talking about the rains in Texas and that kind of hit the revenue mark for the year
and then you noted that was in April and March. And I&rsquo;m just wondering why you didn&rsquo;t &ndash; why you stuck by your
guidance in May, if that was the case?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah, I think it was still raining. What were the number of work [indiscernible] (35:18)?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>It depends on geographic area of Texas, but we had monstrous rains in May and well after we released the quarter.
So I think the number was somewhere between loss days of 15 days to 20 days. When we divide that by 60 or so workdays, normal workdays,
that&rsquo;s a very big percentage.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>And we unfortunately don&rsquo;t get those numbers right on the spot. And so if you&rsquo;re talking about early
May even then with the torrential rains continuing down there, the impact of the April numbers was not fully known until later.
We knew we lost the days. We didn&rsquo;t understand the impact until later after those announcements were done.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Vahid Khorsand &ndash; BWS Financial, Inc.&gt;:
</B>Okay. And then my next...</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>We do [ph] think it&rsquo;s a challenge here. You have to realize (36:07), we lost somewhere of roughly 10 days
to 12 days in May and you still have the rest of May and June to get those projects kick back off depending on the level of rain
and the level of activities from the customer. So until [indiscernible] (36:24) you just don&rsquo;t know how faster you are go
to ramp back up.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>One last thing is that I hope this habit breaks in Texas, but we are naming floods now after certain holidays.
We have the Tax Day flood, which happened on May &ndash; April 15, and it was torrential terrible flooding situation, followed
by the Memorial Day floods. And so we&rsquo;re naming them based on holidays. Next big holiday is Labor Day and we&rsquo;re hoping
that the rain pattern has changed by then.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>We survived July 4...</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>We did.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Hot and dry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Hot and dry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Vahid Khorsand &ndash; BWS Financial, Inc.&gt;:
</B>My next question was on your backlog. It&rsquo;s down from the end of Q1 and my question is, are you focusing on keeping that
at a lower level than it was at Q1 or are you focusing on trying to get it above that level and if you&rsquo;re trying to get it
above that level, any sense of where you imagined the backlog will be at the end of the year?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Let me make a first cut at that. [ph] Joe (37:26), maybe you could offer a color commentary. What I tried to
do last year was to concentrate on the bottom line, not the top. And this year the opportunity is coming up with the Federal Highway
Bill and other things and the way it&rsquo;s generating better opportunities for better margins means we must participate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">And indeed we now feel good enough of our project execution
where we will willingly participate with a much greater focus on the things we know, we make money on based on history, which taught
us not only where we made money, but where we did not make money and part of the strategy is to avoid those things where we inherently
know there&rsquo;s too much risk or we don&rsquo;t make money.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">I would tell you that our tendency for the balance of this year
and into next year is to continue to carefully grow revenue and &ndash; but more importantly, continue to grow bottom line. I&rsquo;m
less fixated on top line. I remain focused on the bottom line. What would you add [ph] Joe (38:34)?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah, I think two things. It&rsquo;s relatively
flat. We are focused on selecting the right bids. I will tell you, in general, we&rsquo;re winning right at about the same percentage
in total, but we&rsquo;re being much more selective of the bids that we&rsquo;re going after. The total bid activity is up and
we&rsquo;re trying to make sure that we&rsquo;re not leaving too much money on the table that we&rsquo;re chasing the right bids
and getting every penny we can out of it.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Vahid Khorsand &ndash; BWS Financial, Inc.&gt;:
</B>Okay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Thank you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Our next question is a follow-up question from Tahira
Afzal with KeyBanc. Please proceed with your questions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Hey Paul, given all the weather nuances you are seeing and who knows, maybe they are sort of permanent with climate
change, we are seeing flash floods across the country and draughts in others. Are you seeing water infrastructure opportunities
becoming more visible for you at all?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah. As you know, in Texas where these torrential rains and floods have really impacted the entire economy
down here, compounded with the oil price impact. I would tell you that there is an awful lot of conversation about new water projects,
particularly flood control projects coming up. Unfortunately, they&rsquo;re right now in the conceptual stage that&rsquo;ll be
followed by the budgeting and design phase, followed by the bidding and construction phase. So I think it&rsquo;s a year out before
we&rsquo;ll see meaningful numbers of projects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">But in the water area, particularly flood control, we&rsquo;re
going to see more and more of those projects and particularly here in Texas which is, we&rsquo;re very thankful for that [ph] side
from (40:22) the fact we needed is the fact that that really does hit our sweet spot very well; large diameter pipe, flood control
projects are really one of our strongest projects with one of our best margins.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Okay. And Paul in that regards, can you sort of hash out how much of your revenue is roughly awarded infrastructure
right now? And let&rsquo;s say if these are opportunities to materialize, let&rsquo;s say two years, three years out, how much
that could grow by?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Joe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah. If you take a look at our water, Tahira,
depending on the year, it varies between 3% to 5% and a lot of that is in the Texas market, predominantly. We&rsquo;re starting
to grow some of that out on the West Coast, but predominantly in Texas.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>And in terms of the second half of the question about how much it would grow, I would say it&rsquo;ll grow to,
as much as, 10% to 15%, but never be the dominant player just because of the sheer size of the market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Got it. And last question on that Paul. I know that [ph] crazy pipeline project (41:28) in California on the water
side, it seems like it&rsquo;s strangely gaining some momentum. To the extent it actually goes through, is that something you guys
could potentially play on?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>We looked at that and the project size is only the subcontracted. The project sizes are considerably outside
of what we&rsquo;d call our sweet spot and some of the bigger contracts will not want to bite it off entirely. So we could be part
of either a joint venture or certainly a subcontractor in a part of it. We think that&rsquo;s a long way off and we think that
we&rsquo;ll be invited in to play with some of the bigger players, but I don&rsquo;t believe that we will be on point for that
kind of work.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Thanks, Paul and Joe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Our next question is a follow-up question from William
Bremer with Maxim. Please proceed with your question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Yeah,
hi. This question maybe is for Paul, maybe is for Ron or even Joe. I guess what I&rsquo;m trying to put and understand is, your
public projects are well north of 90%, surely the better margins on the private side. Have you been gearing up maybe your P3 activity
to go after the higher margin projects? I&rsquo;m just trying to grasp why you&rsquo;re in so much of the lower margin versus the
higher margin projects that are on the docket right now?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>It&rsquo;s actually a great question, Bill, because I had said for quite a while, the observation I&rsquo;d
make is this is a business that is very competitive on a good day. It&rsquo;s very competitive and it drives margins lower. So
I agree that our mix of public work, publicly bid work to private work is going to change.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Directionally, we&rsquo;re going to blend in more private work.
And we&rsquo;re going to &ndash; and our observation comes from simple things like right now our best margin work is with our private
customers like the railroads. And it has everything to do with the fact that a railroad, a private business understands the time
value of money.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">And so if you say to a railroad company, we can replace your
bridge in a month for x, or in three weeks for 2x, or maybe not 2x, but x plus something, they almost always jump on it because
they understand the time [ph] value of (44:12) money. In the public sector, our customers like TxDOT are obligated to be very transparent
and to bid to as many contractors who can get bonded and are willing to spend the money to bid. There is no limit on how many people
did the work. And as a result, between mistakes made by others and just pure competitiveness, margins will never get to be gigantically
high. They will always get &ndash; if we&rsquo;re they&rsquo;ll crawl up into the double digits, but it&rsquo;ll be low-double
digits. What would you add to that, Joe?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A&gt;: </B>Yeah, I think Bill, you read on &ndash; if
you go and read our strategy, part of what we&rsquo;ve gone back and evaluated and looked at as we&rsquo;re going forward is we
do see some very nice margin opportunities in the adjacent markets, which a lot of that is private space, which could be commercial
customers, could be even touching in some of the residential space, airports, rail, the margins are significantly higher. You go
upstream in the activity, so there is a less competition at the bid table [ph] at the day of (45:19) bid or maybe no competition,
if you&rsquo;re part of the design team and that&rsquo;s really what we&rsquo;re trying to drive for the longer term growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>And the only thing I would add is concrete is concrete, whether it&rsquo;s placed on a road for a public company,
whether it&rsquo;s on a P3 project, something that I know you have asked about several times and we certainly are looking more
at that. Whether it&rsquo;s other industrial customers, concrete is concrete and we are convinced that there&rsquo;re opportunities
to help improve. We will never abandon our core business, but to blend in higher margin stuff is certainly direction we&rsquo;re
going in. Thank you, Bill.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Ron,
this is a follow-up for you based on that. Based on the mix, your other income line, what are you forecasting there for the year,
given the mix of the backlog and your JV activity?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>We don&rsquo;t really give guidance at that level, but I think the second quarter was very, very strong and
the balance of the year will be as strong. I&rsquo;m hesitant to say it&rsquo;s times two, but &ndash; the second quarter times
two, but there continue to have some good backlog that will [indiscernible] (46:35) in the back half of the year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Okay.
So back half similar to the first half?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>I didn&rsquo;t say that.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Okay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>I just think it&rsquo;s going to be continue to strong.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; Bill Bremer &ndash; Maxim Group LLC&gt;: </B>Thank
you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Our next question is a follow-up question from John
Rogers with D.A. Davidson. Please proceed with your question.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Hi, thanks. Just a couple of quick things. [ph] What&rsquo;s your (47:02) average project size now in backlog and how does
that compare to 12 months ago?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>I think if you looked at our average project size, we&rsquo;re in the $20 million to $25 million led. It&rsquo;ll
actually be a little lower than $20 million. And I don&rsquo;t &ndash; off the top of my head, I don&rsquo;t have exactly where
that compares to 12 months ago, to be honest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">It&rsquo;s probably &ndash; let me just step back and answer
it maybe a little differently. If I look at the size of the bids that we&rsquo;re winning year-to-date, it is slightly smaller
than the jobs we won last year, year-to-date. So even though we&rsquo;ve won, as percentage is very flat, the number of jobs we&rsquo;re
bidding are higher as we&rsquo;re getting the increase in the backlog. So they&rsquo;re slightly smaller, John.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Okay. Thank you for that. And then secondly, in terms of the refinancing that you&rsquo;re now hoping for in first half of
2017, what&rsquo;s the &ndash; your assessment of the cost save opportunity there?</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Great question and it&rsquo;s pretty significant from &ndash; if you just start with the stated interest rates
that we&rsquo;re playing today [indiscernible] (48:20), our line requires us to pay a 12% coupon rate, if you will, for interest
expense. But in addition, for any asset based type loan, type program, there&rsquo;s other costs that are incurred. Everything
from appraisal costs periodically to the cost of increase and decrease collateral as you move equipment around or sell out and
to buy new.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">So, I think in total, that number is between 13% and 14%. Certainly,
the key of achieving our late 2016, early 2017 will be continued performance because most financial institutions like that. Second
key is one we can check off, which is the equity market. The equity raise allowed us to have a balance sheet and liquidity picture
that is much stronger than it was prior to that.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">So I&rsquo;m going to go with half the interest rate cost, maybe
a little bit less depending on when we structure it and how we structure it. I would suggest it&rsquo;ll still be sort of a combination
of a revolver and otherwise. But that&rsquo;s sort of what we&rsquo;re looking at.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">And fortunately, right now, the only thing we have outstanding
is our term balance of [indiscernible] (49:34) at June 30 of about $15 million, we were un-borrowed under the revolver. So while
the interest rates are high, our borrowing is low at this point in time. So you&rsquo;re talking about percentages in dollars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Yeah. So Ron, as you&rsquo;re looking at it right now for calendar 2016, how much are you actually going to be paying relative
to that 13% to 14%? I mean, will you go into the line at all? So I mean, I understand that it&rsquo;ll be...</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>And according to line, if we go &ndash; yes, probably, go in and out of the line...</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Yeah.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>...I guess done in days or weeks, but I wouldn&rsquo;t expect the end quarters with the balance in the line.
So I would suggest that $15 million at the end of the quarter times 12% plus a little rounding up for the other cost is probably
at a high end of what I would expect for the balance of the year &ndash; balance is following two quarters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&lt;Q &ndash; John Rogers &ndash; D. A. Davidson &amp; Co.&gt;:
</B>Okay. That is helpful. Thank you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Thank you. Mr. Varello, we have no further questions
at this time. I would now like to turn the floor back over to you for closing comments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid">Paul J. Varello, Chief
Executive Officer &amp; Director</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thank you very much, Christine. I&rsquo;d like to thank everybody
on the call today for your time and patience and for your questions. If you would like to schedule a call with us, a follow-up
call, please feel free to contact our Director of Investor Relations, Jennifer Maxwell or our partners at The Equity Group. Their
contact information can be found on the bottom of our press release.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Operator: Ladies and gentlemen, this does conclude today&rsquo;s
teleconference. You may disconnect your line at this time, and thank you for your participation and have a wonderful day.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Disclaimer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The information herein is based on sources
we believe to be reliable but is not guaranteed by us and does not purport to be a complete or error-free statement or summary
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
