<SEC-DOCUMENT>0001171843-16-012853.txt : 20161102
<SEC-HEADER>0001171843-16-012853.hdr.sgml : 20161102
<ACCEPTANCE-DATETIME>20161102151158
ACCESSION NUMBER:		0001171843-16-012853
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20161031
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20161102
DATE AS OF CHANGE:		20161102

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:		161967600

	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_110216.htm
<DESCRIPTION>FORM 8-K
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></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"><B>FORM 8-K</B></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"><B>CURRENT REPORT</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported):
<B>October 31, 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">
<TR STYLE="vertical-align: top">
    <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>
    <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;&nbsp;</P>

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

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<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 5%">&#9744;</TD>
    <TD STYLE="width: 95%">Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&#9744;</TD>
    <TD>Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&#9744;</TD>
    <TD>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; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&#9744;</TD>
    <TD>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17&nbsp;CFR 240.13e-4(c))</TD></TR>
</TABLE>

<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 October 31, 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 nine months ended September 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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <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 October 31, 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">October 31, 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>

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    <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;November 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&#9;</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"><B></B></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>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <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 October 31, 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">October 31, 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="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


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

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<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 THIRD 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: center"><B><U>Revises Guidance to Reflect Slower
than Anticipated Turnaround in Texas Sterling Division</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&rsquo;s Four Other Businesses
Performing at or Above Expectations</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>Average Gross Margin in Backlog Continues
to Improve</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>Strengthened Balance Sheet and Improved
Liquidity</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>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">THE WOODLANDS, TX &ndash; October 31, 2016
&ndash; Sterling Construction Company, Inc. (NasdaqGS: STRL) (&ldquo;Sterling&rdquo; or &ldquo;the Company&rdquo;) today announced
financial results for the third quarter ended September 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>Third Quarter 2016 Financial Results
Compared to Third 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 grew 16.8% to $205.6 million compared to $176.0 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 8.3% of revenues compared to gross margin of 8.2%;</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 $3.7 million compared to $2.4 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">Net income attributable to Sterling common stockholders was $2.4
million compared to $0.3 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 $0.10
compared to $0.01.</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>Third 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 September 30, 2016 of
$820 million was up 7.8% from December 31, 2015 and was up 14.2% from the third 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 September 30, 2016 excluded
$94 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 September 30, 2016 averaged 8.0% as compared with 6.5% the end of the third quarter of 2015, while expected gross margin of
the projects awarded in the first nine months of 2016 averaged more than 8.5%.</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">Third quarter 2016 revenues increased 16.8%
compared to the third quarter of 2015 driven by increased project activity with the majority of this increase due to a substantial
ramp up of two projects in process by Sterling&rsquo;s Utah Subsidiary construction joint ventures.</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 $17.0 million in the third
quarter of 2016 compared to $14.5 million in the prior year third quarter, reflecting the strong revenue increase combined with
a small improvement in gross margin compared to the prior year quarter as the proportion of zero or near zero margin projects has
diminished this year.</P>

<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; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">General and administrative expenses were
$9.6 million in the third quarter of 2016, or 4.7% of revenues compared to $11.1 million or 6.3% in the third quarter of 2015.
The decrease in G&amp;A expense as a percentage of revenues reflects the higher level of revenues in the third quarter of 2016,
along with a decrease in employee benefit costs and the non-recurring employee severance costs paid in the third 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">Other operating expense, net totaled $3.8
million in the third quarter of 2016 compared to $1.0 million in the third quarter of the prior year. The increase in expense was
primarily due to higher noncontrolling interest expense, driven by the combined increase in income generated by the Company&rsquo;s
two partially owned subsidiaries.</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>Financial Position at September 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 $43.0 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 $40.6 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">Total debt was reduced to $11.6 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">Tangible net worth was $59.6 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"><B>&nbsp;</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;We generated revenues in the third quarter that were in-line with our expectations heading into the period, and
meaningfully stronger than in the third quarter of 2015. Net income, however, was below our expectations as our Texas subsidiary
(TSC) continued to lag in profitability. While TSC has been making headway in burning off its low margin legacy backlog and beginning
to execute more of its higher margin contracts, both have occurred at a slower pace than we&rsquo;d previously forecast as a result
of challenging weather conditions in the first half of the year and slower ramp up of new work driven by owner delays. Fortunately,
this drag was partially offset by strong performances by our other business units, which enabled us to deliver year-over-year improvement
on our bottom line. We are also very pleased with our increasing average margin in backlog, which reflects our selective and more
disciplined bidding process and improved project execution.&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;We also made
meaningful progress in our goal to diversify our project mix towards more profitable opportunities. While road and highway building
will always be an important part of our business, we believe that we have the combination of experience, capability and reputation
to win new awards at attractive margins in existing and adjacent markets. As an example, we were pleased with the sizeable airport
projects we announced in Arizona and Utah earlier this month and expect to add similar projects in the coming quarters. Overall,
the bidding landscape throughout our operating geographies continues to look favorable and, given the federal and state funding
outlook, we expect the volume and pace of project lettings to continue its current momentum for the balance of 2016 and into 2017.
As a result, we are optimistic that our strategy of selectively bidding projects that give us the greatest opportunity to improve
profitability will remain successful in the coming year.&rdquo;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;During the third quarter we deployed
proceeds of our May 2016 equity offering to reduce our debt. We also strengthened our balance sheet with cash provided by operating
activities of approximately $9 million. Given our improved cash balance and liquidity, we intend to refinance our asset-based credit
facility with a lower cost, higher capacity, revolving credit line which will further strengthen our financial position to support
future growth. We maintain our original target of the first half of 2017 to complete this refinancing.&rdquo;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mr. Varello concluded, &ldquo;Turning to
our outlook for the remainder of 2016, the majority of our business units are performing at expected levels, which makes us confident
in our previously announced guidance for full year 2016 revenues. This extrapolates to fourth quarter revenue in the range of $150
million to $170 million. As mentioned previously, however, our Texas business has not recovered as rapidly as we originally anticipated,
and remains below our targets from a profitability standpoint. As a result, we are revising our outlook for the balance of 2016
and now expect our net income for the fourth quarter, one of our seasonally slowest quarters, to approximate breakeven. Our focus
remains on gross margin improvement and tight G&amp;A cost controls to further enable us to grow our bottom line. In summary, we
are continuing to make progress with Sterling&rsquo;s turnaround, and expect to deliver additional improvements for the balance
of 2016 and into 2017.&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 on Monday, October 31, 2016 at 4:30 p.m. ET/3:30 p.m.
CT. 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>

<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>

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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: 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>

<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>September 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>Nine Months Ended</b></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 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">$</TD><TD STYLE="width: 10%; text-align: right">205,629</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">176,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">521,778</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">471,107</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">(188,597</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">(161,542</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">(484,827</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">(454,374</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; padding-left: 30pt; text-indent: -10pt">Gross profit &#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,032</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,458</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,951</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,733</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">(9,575</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,119</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,221</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,320</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">(3,785</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">(958</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">(7,143</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">1,128</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: 30pt; text-indent: -10pt">Operating income (loss)&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,672</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,381</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,459</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">15</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">464</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">(491</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,087</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,176</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,103</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">--</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">--</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">3,196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,326</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,570</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,338</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) benefit&#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">(41</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">39</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">(68</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">8</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: 30pt; text-indent: -10pt">Net income (loss)&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,155</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,638</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,330</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">(740</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">(1,109</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">(1,252</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">(2,948</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">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">2,415</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">256</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">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">(2,890</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">)</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">(19,278</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; padding-left: 30pt; text-indent: -10pt">Basic and diluted&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.01</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.12</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1.00</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; padding-left: 30pt; text-indent: -10pt">Basic&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,002,964</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,627,674</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,914,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,269,123</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: 30pt; text-indent: -10pt">Diluted&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,364,881</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,627,674</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,914,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,269,123</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>

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

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

<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">September 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">
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 10pt; text-indent: -10pt">ASSETS</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</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="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: White">
    <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">$</TD><TD STYLE="width: 12%; text-align: right">43,021</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</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: rgb(204,238,255)">
    <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">105,415</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: White">
    <TD STYLE="text-align: left; padding-left: 30pt; 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">31,989</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: rgb(204,238,255)">
    <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">4,000</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: White">
    <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">9,469</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: rgb(204,238,255)">
    <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">6,170</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: White">
    <TD STYLE="text-align: left; padding-left: 40pt; text-indent: -10pt">Total current assets&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,064</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: rgb(204,238,255)">
    <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">70,363</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: White">
    <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: rgb(204,238,255)">
    <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: White">
    <TD STYLE="text-align: left; padding-left: 40pt; 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">$</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: right">328,215</TD><TD STYLE="border-bottom: Black 2.25pt double; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; text-align: left">$</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: rgb(204,238,255)">
    <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: White">
    <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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 30pt; text-indent: -10pt">Accounts payable&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">76,861</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">58,959</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 30pt; 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">61,896</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 30pt; 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">4,653</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: White">
    <TD STYLE="text-align: left; padding-left: 30pt; text-indent: -10pt">Income taxes payable&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 30pt; text-indent: -10pt">Accrued compensation&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,412</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: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 30pt; 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">5,545</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 40pt; 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">159,430</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: White">
    <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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; 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">6,952</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: White">
    <TD STYLE="text-align: left; padding-left: 10pt; 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">46,466</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt; 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">911</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: White">
    <TD STYLE="text-align: left; padding-left: 10pt; 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">54,329</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt">Commitments and contingencies (Note 5)</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: 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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 30pt; 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: White">
    <TD STYLE="padding-left: 30pt; 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: rgb(204,238,255)">
    <TD STYLE="padding-left: 30pt; 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: White">
    <TD STYLE="text-align: left; padding-left: 30pt; text-indent: -10pt">Additional paid in capital&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">208,435</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 30pt; 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">(95,390</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: White">
    <TD STYLE="text-align: left; padding-left: 40pt; 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">113,295</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: 30pt">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">1,161</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: White">
    <TD STYLE="text-align: left; padding-left: 40pt; 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">114,456</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: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 40pt; 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">328,215</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>
</TABLE>


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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">Q3 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">Oct. 31, 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>
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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 0pt 20pt"><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 0pt 20pt"><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 0pt 20pt"><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 0pt 20pt"><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 0pt 20pt"><B>Tahira Afzal</B> &ndash; Analyst, KeyBanc Capital Markets,
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: 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
Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A 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">I would now like to turn the conference your host, Ms. Jennifer
Maxwell, Director of Investor Relations for Sterling Construction Company. Thank you, you may begin.</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, Sam, and good afternoon, everybody. Participating with
me on our call today is our Chief Executive Officer, Paul Varello; our Chief Financial Officer, Ron Ballschmiede; and our Chief
Business and Development Officer, [ph] Joe Cutillo (00:48). 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.</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">Such statements are subject to risks and uncertainties, including
overall economic and market conditions, federal, state and local government funding, competitors and customers 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 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 to actually reflect management&rsquo;s belief 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 the call over to our CEO, Paul
Varello. 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, Jennifer, and good morning, everybody. I&rsquo;m happy
to report that our turnaround efforts continue to make good progress and produce positive results. Our backlog has grown for the
last six consecutive quarters and the average margin has been increasing over that time period. Our balance sheet and our liquidity
continued to improve and our net income for the quarter increased, once again giving us two consecutive quarters of improved profitability.</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">Of course, we are well aware that two back-to-back quarters
of profitable results doesn&rsquo;t constitute a trend, but it&rsquo;s a step in the right direction. Still, sustaining momentum
and consistent improvement in the turnaround situation takes time and focus. We&rsquo;re on the right track, but we still have
work to do.</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">Four of our five business units had strong performance, with
only our Texas unit still not recovering as rapidly as we had anticipated. Part of the problem in Texas was that challenging weather
conditions in the first half of the year caused some projects to be delayed and owners took a long time in starting those projects
and giving us notice to proceed.</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 made good progress in our strategy to shift budget mix to
more profitable opportunities. As an example, [audio gap] (03:17) heavy highway work in backlog grew from just 8% a year ago to
21% by the end of the third quarter. We believe that our strategy of a more focused approach on adjacent market opportunities will
continue to generate increased margins in the coming years. Later on in this call [ph] Joe Cutillo (03:41), our Executive Vice
President of Strategy and Business Development, will provide greater details on our bid results and our strategy going forward.</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">Overall, backlog volume and margins continued to increase with
a total of $914 million in combined projects awarded plus apparent low bids. The average margin in the combined backlog has increased
to 8.2%. We also made substantial progress in strengthening our balance sheet and reducing our expensive debt in preparation for
refinancing our loan facility. Our CFO, Ron Ballschmiede will provide more details when he reports.</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 revenue outlook for the remainder of this year,
we believe that we&rsquo;ll meet our previously announced full year revenue guidance, which means that our fourth quarter should
be in the range of $150 million to $170 million. From a net income perspective however, and as mentioned earlier, our Texas business
has not recovered as rapidly as we had originally anticipated. As a result, we are revising our net income for Q4 to approximately
break-even.</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">Longer term, our efforts will remain focused on increasing net
earnings, improving project execution, diversifying project mix, controlling G&amp;A and further optimizing our asset base and
our business units. In conclusion, we believe that our turnaround efforts, although not complete, will continue to drive significant
improvement in earnings and build a solid 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 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, Sterling Construction Co., Inc.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thanks, Paul, and good afternoon, everyone. Let me start with
building on Paul&rsquo;s backlog comments by providing a few additional details around our recent backlog trends. At September
30, 2016 our backlog stood at $820 million compared to the third quarter of 2015 where our backlog totaled $716 million. As Paul
mentioned, our combined backlog at the end of 2016 third quarter, which includes projects where we were the apparent low bidder
but the contracts were not yet signed, total $914 million, consistent with the level of combined backlog at the end of the second
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 backlog is a steady improvement
of the embedded gross margin in backlog. At September 30, 2015, the backlog margin was 6.5%. The backlog margin has increased each
subsequent quarter. And at September 30, 2016, the margin backlog increased by 150 basis points to 8%. We believe this trend reflects
progress made in the diligence around selecting the right projects to bid on, solid project execution, continued progress to complete
legacy projects with little or no margin, and significant increases in the transportation and infrastructure bid opportunities.</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">Revenues for the third quarter of 2016 were $206 million, consistent
with our expectations, and more than $29 million higher than the third quarter of last year, which was $176 million. Our revenues
for the nine-month period ended September 30, 2016 totaled $522 million, a 11% increase over the comparable 2015 period. The 2016
revenue increase reflects the generally stronger transportation infrastructure 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">The most significant revenue increase was attributable to $59
million increase from our Utah subsidiary, primarily driven by the ramp up of two large projects. Somewhat offsetting this revenue
increase was a $12 million decline in our Texas subsidiary&rsquo;s revenue for 2006 year-to-date. Our 2016 revenues in Texas have
been approximately $28 million short of our initial 2016 revenue expectations for the three months ended 9/30, further challenging
the pace of the turnaround.</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">Texas has not recovered as we anticipated, as revenues have
been negatively affected by the challenging weather conditions earlier in the year and continued slower ramp up of new work, primarily
driven by owners&rsquo; delays. We expect fourth quarter 2017 revenues to be in the range of $150 million to $170 million, consistent
with our fourth quarter expectations embedded in our previously articulated revenue guidance.</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 profit for the third quarter totaled $17 million or 8.3%
of revenues compared to $14.5 million or 8.2% for the comparable period in 2015. Our gross margin performance against estimated
margins continued to be solid.</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 I previously mentioned, our backlog as of September 30, 2016
totaled $810 million, an increase of over $100 million from September 30, 2015. In addition to bidding on work with a proper risk
and return characteristics, we continue to focus on improving our project execution. One of our project execution key performance
measures is the reported gross profit impact of changes in estimated cost to complete for every project in our backlog. This collective
gross margin change is reported in each of our quarterly and annual financial filings.</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">For the nine months ended September 30, 2016, the collective
changes in estimated revenues and gross profit resulted in a net charge of $1.1 million, representing 21 basis points of our revenue.
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 expense for the third quarter
was $9.6 million, down from $11.1 million for the comparable period 2015. The year-over-year decline was principally the result
of $1.6 million of non-recurring consulting and severance cost in the 2015 period. Our general and administrative expenses totaled
$29.2 million and $32.3 million for the nine months ended September 30, 2016 and 2015 respectively. As a percent of revenues, our
G&amp;A expense for the same period was 5.6% and 6.9% respectively, a 130-basis point decline. We would expect our G&amp;A to revenue
leverage to continue to improve going forward.</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 operating expense was $3.8 million compared to $1 million
in the third 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. Additionally, one of the subsidiary&rsquo;s 2015 non-controlling
interest was classified below net income and included in non-controlling owner&rsquo;s interest in earnings of subsidiaries and
joint ventures. As a result of amendments to that subsidiary agreement, both 50% owned subsidiary&rsquo;s 2016 controlling interest
are now included in other operating expense.</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">You will note that during the quarter we also reported $740,000
of expense of non-controlling interest in earnings of subsidiaries and joint ventures below the net income line. In 2006, this
represents our construction joint venture partner share of the project&rsquo;s income. The third quarter of 2016 also included
approximately $400,000 contingent purchase price adjustment charge related to a 2011 acquisition. The earn-out period ends on June
30, 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">Interest expense for 2016 third quarter was $491,000 compared
to the third quarter of 2015 of $1.1 million. The decline represents lower borrowing for the 2016 quarter. The summation of all
these items results in a third quarter net income attributable to Sterling common shareholders of $2.4 million and a net income
per share of $0.10, compared to a third quarter 2015 of $300,000 or a $0.01 loss 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 $43 million compared to a cash balance of $4.4 million at December 31, 2015. Our September 30 cash balance includes
approximately $25.1 million of cash held by our 50% own California entity and our consolidated construction joint venture, which
cash is reserved for use in those entities.</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">The balance of the cash is available for general corporate purposes.
Our debt totaled $11.6 million at September 30, 2016 compared to $17.9 million at June 30, 2016. Taken together with our cash,
our cash, net of debt position, at September 30, 2016 was $31.4 million and had improved by over $7 million from the beginning
of the third quarter. Significant cash generating activities during the quarter was driven by approximately $9 million of cash
provided by operating activities.</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">Finally with the strengthening of our balance sheet and liquidity,
as evidenced with my prior comments, and continued improvement in our operating results, we continue to believe that we will be
in a position to return to a more traditional lending relationship in the first half of 2017. We expect the new facility to significantly
lower our borrowing cost, while providing us with the increased borrowing flexibility to grow our company and to continue to generate
additional value for our shareholders.</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 over to [ph] Joe Cutillo (15:11),
our Executive Vice President of Strategy and Business Development.</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">Unverified Participant</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Thanks, Ron. Good afternoon, everyone. I&rsquo;d like to take
a few minutes to discuss further the positive trends we are seeing in our markets, as well as the progress we are making to the
strategic efforts. Let&rsquo;s first talk about the market and the market trends. Every major market we are in, with the exception
of California, is up in year-over-year awards. These increases have been driven by the five-year [indiscernible] (15:44), increased
gas taxes, and other state revenue sources like the two constitutional amendments put in place by 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">The overall growth for U.S. transportation construction is forecasted
to be between 2.5% and 3% for the next five years. We believe our markets will perform slightly higher than the national average
and we should see growth rates between 3% and 5% in our heavy highway sector.</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">Next, I would like to discuss the progress we have made with
our bid process, bid margins and diversification of our backlog. We continue to be disciplined in our bid selection as well as
our bid process. We are no longer bidding to grow revenue, but bidding to grow margin. As a result, we have bid 20% less projects
in 2016 when compared to 2015, yet our backlog has grown 7.9%. In addition, we&rsquo;ve seen bid margins 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">Year-to-date, our bid margins are at 8.9% and, in September,
we exceeded 10%. Our total margin in backlog versus September 2015 has increased from 6.5% to 8%. If you add the won but unsigned
contracts, our margins increased to 8.2%. We believe with continued discipline and continued market momentum we should be able
to achieve gross margins in the 10% to 11% range over the next 24 to 36 months.</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">The last area I&rsquo;d like to cover is the progress we&rsquo;ve
made around diversifying our backlog and the growth we are seeing in higher margin adjacent markets. These markets would include
commercial, airport and rail. Historically, less than 10% of our business was made up of these adjacent markets, yet the projects
in these markets were generally our highest margin projects. In 2016, we began an effort to start leveraging our skill sets across
geographies and focusing on specific customers in these markets. As a result, we won over $60 million of airport work in Q3.</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 have increased the amount of non-heavy highway dollars in
our backlog from less than 10% to over 20% and we&rsquo;ll be bidding over $300 million of non-heavy highway work in Q4. As we
go into 2017, we will increase these efforts internally and begin looking for starting acquisitions in these adjacent spaces. Even
though we are early in the strategic transformation of the company, we are happy with the progress to-date and are excited about
the opportunities that lie in front of us as we go forward.</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;d like to turn it back over 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, [ph] Joe (18:39). Now, we&rsquo;d be happy to take your
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: [Operator Instructions] Our first question comes from
the line of John Rogers of 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 afternoon.</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 afternoon, 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>Couple of things. First of all, are the Texas operations profitable at this point?</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>They&rsquo;re right at break-even, but they&rsquo;re not profitable.</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. And then you answered some of my questions about the as-bid margins that are moving higher. You may not want to give
us specifics, but give us the difference between what you&rsquo;re seeing in the private sector versus the public sector? And I&rsquo;m
sorry if you said this, but what portion of your backlog now is private sector 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;A &ndash; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>The second part of that question is 21%. [ph] Joe (20:05) would you mind responding to the question John&rsquo;s
asked?</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>On the margin side, John, when we go into
the private sector versus the public sector, we are seeing margins, I&rsquo;ll call them in the 15% range and higher in large percentage
of that work. Now, that&rsquo;s not perfect for every project. There maybe one or two that are lower, but that&rsquo;s the general
rang that we anticipate the margins to 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;Q &ndash; John Rogers &ndash; D.A. Davidson &amp; Co.&gt;:
</B>Okay. And what would you &ndash; ideally over the next couple of years, as you grow this business, and you talked about the
goals of double-digit margins consistently, what do you think the mix between private and public ought to be for Sterling? Is the
goal 50/50 or...</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, you&rsquo;re right. Our internal objective
is over the next three years to have a 50/50 split of we would call heavy highway or what you&rsquo;re calling the public sector
versus the non-heavy highway, which would be outside that mainstream DoT type business.</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. And then I guess just the last thing, in terms of the fourth quarter and the shortfall there, were there a specific job
that you had to bring &ndash; that your expectations for margins have come down on or kind of what happened there? Because I know
it doesn&rsquo;t take a lot, but it&rsquo;s a pretty big swing from what was expected just a couple of 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; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah. Ron, you want to 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 &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah, I&rsquo;d start, John, by both the third quarter and the fourth quarter were less than our expectation.
So, obviously, the whole delta between our prior guidance and our current full year guidance or fourth quarter plus three quarters
of essentially a year-to-date loss or component of both. In the, let&rsquo;s say, third quarter by itself, there were a couple
of, what I&rsquo;d call, our business is not small, but here is what&rsquo;s in the third 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">I mentioned our year-to-date $1.1 million of cumulative changes
in estimated costs. And what that means is, we compare our margins that we thought we would get on every item of our backlog at
the beginning of the quarter versus what we think at the end of the quarter versus for all the things that occurred. In the quarter,
we had a net charge of about $600,000.</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">So, while we&rsquo;re never happy about charges versus income
what we had in first quarter. You&rsquo;ll always have some of that and it&rsquo;s &ndash; I think that&rsquo;s within the bandwidth
of which isn&rsquo;t [ph] too nuts (22:54). So the goals over a long period of period time, multiple quarters to get that to be
a push.</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">Also, in the quarter we finished the &ndash; we talked about
a project that we had that was in the separate entity that have been created some years ago in the West Coast. Unfortunately, in
the first quarter, we took about $1 million charge on that project as we fully settle up all the sub-contractor claims that we
had and, unfortunately, a couple of them went bad on us. As we essentially have now closed and, I wouldn&rsquo;t say liquidated
yet, but it is empty, it&rsquo;s done, stick a fork in it done, we had about another $600,000 charge in the third quarter for that
item.</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 I will tell you that the bigger factor of all this is the
mix. When you back up and say the revenue &ndash; our revenue came in, in the quarter about what we thought it would, it&rsquo;s
going to come in for the full year or for the fourth quarter what we thought it would. The big change is three of our other four
entities, two because they&rsquo;re 50% owned and one because we have an earn-out, are essentially turnover 50% of their income
to our partners. That&rsquo;s a good thing. The more they make the more we make, but it does show up as you get all 100% of the
margin or 100% of the revenue, 100% of the cost, 100% of GP, 100% of the SG&amp;A, and then the mix really dives in and then you
get your profit sharing on it.</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">Year-to-date, that profit sharing element between those three
entities went from about $3.4 million &ndash; I&rsquo;m sorry, last year about &ndash; just stopped short of $4 million; $3.7 million
last year to almost $8 million this year. And again, we can&rsquo;t complain because that&rsquo;s our share of their earnings.
But it is a big mix item, because that&rsquo;s at the expense, if you will, of making up revenues for our 100% owned primarily
Texas enterprise. So, for every dollar that you switch, you get 50% of the returns. And that&rsquo;s measured in millions of dollars.
That is the big impact of when you think of our business and the mix change that it is harder than we thought in Q3 and, well again,
a little bit less in Q4.</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. So, I guess what I worry about that is the margin &ndash; your margin and backlog keep climbing, but we&rsquo;re getting
this lag before it&rsquo;s showing up in the income statement. And at some point, it&rsquo;s got to go &ndash; I would assume it
goes the other way, but is that out 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; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>Yeah. Well, I&rsquo;ll backup though. It&rsquo;s been steadily marching up, obviously, every quarter, but it
does take time. For instance, it&rsquo;s nice, and [ph] Joe (25:51) can talk about the timing better than I can, but $60 million
of airport work that we announced in the third quarter, I would say, a nada on darn close to it in revenue in 2016 and, by the
time, that ramps it will really be going in full board mid-late 2017. And then you, of course, got multiple year projects that
come rolling in.</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 if, in general, we&rsquo;re a two year backlog kind of thing
or at least a lot of two year duration jobs, each quarter you&rsquo;re filing the bucket by a quarter and taking the quarter off.
And I guess, as long as I am on that topic I&rsquo;m sure that I&rsquo;ll be asked. If you recall, we started the year with $86
million of zero or low income margin from our legacy projects, we continue to make good progress on those.</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 worked that $86 million down to $40 million at the beginning
of the third quarter. And right now, it&rsquo;s about $21 million less to go. It was less than we thought burned, just the factor
of how fast these projects or how slow the projects approach completion. But we&rsquo;re going to stay with our belief that we
would suggest that by the end of the year the remaining work on that legacy work is going to be not big enough to talk about going
forward. It will be sort of in the wash of what is pretty normal for a company like ours to have a couple of those projects in
the backlog, but not move the needle in total.</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. I&rsquo;ll get back in the queue.</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">Operator: Our next question comes from the line Tahira Afzal
of KeyBanc Capital Markets. 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>Hi, folks.</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>Hi, 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>So first question, Ron, is just to sum up what you were really saying. It seems like the projects that you have joint
venturing might have outperformed in terms of revenues.</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. So it gets confusing and I wish I could make it simpler. There is really two elements of that. There is
some very nice joint venture work going on that&rsquo;s driving our Utah subsidiary&rsquo;s revenue. And most of what you see below
the line, I&rsquo;ll call in fact the bottom line of the income statement that [ph] 500 plus (28:21) for the quarter is on projects
like that, where it&rsquo;s a single project joint venture when the venture is gone, the entity is gone. And for the quarter that
&ndash; well, its [indiscernible] (28:33). The balance of it is the success of our combined 50% owned enterprises and both those
are in the other income category starting late [ph] 2005 forward and all of its here in 2006 (28:52).</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>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"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction
Co., Inc.&gt;: </B>2016. So that&rsquo;s the element of mix that is hard to &ndash; there&rsquo;s been so many places over the
years, it&rsquo;s hard to bring it in. But I think that big element of that is just the year-to-date number that&rsquo;s currently
being [indiscernible] (29:11) together with our earn-out, almost $8 million and, on a comparable period, it was $3.7 million attribute
to the performance of those two 50% owned entities.</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>So, Ron, I guess you didn&rsquo;t expect it to be this large when you first gave guidance. That&rsquo;s I guess what
I&rsquo;m asking.</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>That is correct. The revenue is greater and their margins were up and their earnings is up. So the collection
of those entities and, I would say, the same thing for our Utah business. So the collective four other entities are just having
a very strong year. Unfortunately, it&rsquo;s not enough to offset some of the shortfall we&rsquo;ve seen out of the Texas side.</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>I get the math of it now, Ron. So it makes sense. The second question is &ndash; thank you for elaborating on some
of the $600,000. You&rsquo;ve seen some sort of push outs in a sense [indiscernible] (30:16). Is that being caused by just the
work? Because I know you recognize profits sometimes based on milestones you&rsquo;ve hit for a project. So I just wanted to clarify
whether that $600,000 was really due to just the stuff sort of working its way [indiscernible] (30:37) or is it really tied to
cost overruns?</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, almost none of our revenue recognition is driven by milestones; it&rsquo;s all pure cost-to-cost calculations.
And that $600,000 is a collection of pluses, minuses of over 100 contracts that are ongoing. No one big project on negative or
the positive side for this quarter or the year-to-date period. So, I think having a number of &ndash; it&rsquo;s been &ndash; for
the three quarters ended, its $1.1 million, 20 basis points. That&rsquo;s pretty good performance. We&rsquo;d like it to be zero
or positive, but 20% delta is not the highlight of the quarter missing our expectations.</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. That makes a lot of sense. And Paul, just wanted to get a sense &ndash; [ph] Joe (31:33), thank you
for really giving us a lot of color on the embedded backlog. If you were to look at what you can do in terms of margins on an annualized
basis as you book all this backlog, your first quarter is weak, your fourth quarter is weak just from a utilization standpoint,
and it seems we&rsquo;re stuck with bad weather in Texas for a while. So when you&rsquo;re looking at that sort of 10% sort of
recognition of a 10% type of margin and backlog, does it really mean on an annualized basis, we should always be looking at, I
think, 100 basis points to 150 basis points below that?</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; Paul Varello &ndash; Sterling Construction
Co., Inc.&gt;: </B>No, I understand your question. I would prefer that to tell you that as we bring up our mix of non-heavy highway
to a higher and higher percentages at a much better margin, the weighted &ndash; plus bringing up the heavy highway margins, which
inevitably starting to creep up to 10% and better, we&rsquo;re going to see the combination of the two, the weighted average being
much more in the mid-teens than it currently is.</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 we&rsquo;re optimistic that the combination of a market that&rsquo;s
doing much better in our heavy highway improving markedly by 1% or more should creep up over 10% and we believe it will hit in
the 11% and maybe 12%. Historically, we hit as high as 13%, but we think that maybe a stretch, but certainly 10% to 12% seems reasonable.
And then in the non-heavy highway, we are really comfortable in saying that we&rsquo;re targeting stuff between 15% to 20% range.
So the weighted average of those two gets to be a very attractive return for us, particularly if we can keep our G&amp;A in line
and not let it go up dramatically and we think we can do 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; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Paul, last question in regards to that. Are we looking at 2018 where we could see margins like those even if you
build in a cushion for weather, et cetera?</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.</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.</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 I think I&rsquo;ll just point out. I think in general, weather should be equal for the year, it may affect
one quarter or another or utilization could be &ndash; utilization will be always be the best in Qs two and three and always the
worst likely in quarter one followed by fourth 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>And I think the dilemma is not the margin variation quarter-to-quarter, but the fact you got this fix nut that&rsquo;s
G&amp;A that sort of divides itself pretty equally in the four quarters. So if you run light in Qs four and one, just because of
condition seasonality, it injures your net earnings but it makes it more than mix it up in Qs two and three, which are the better
one. So the net of all of that should be that margins stay consistent at 10%, but the bigger bite does take place in G&amp;A in
those two off quarters and then is compensated in the stronger 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; Tahira Afzal &ndash; KeyBanc Capital Markets,
Inc.&gt;: </B>Okay. Thank you, Paul. That actually is very helpful.</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: [Operator Instructions] If there are no further questions
at this time, I would like to turn the conference back over to our Chairman, Paul Varello, for closing remarks.</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, Tim. If you wish to schedule a 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 at the bottom of our press release. I&rsquo;d like to thank everyone for joining us today in our call. Thank you.</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">Operator: This concludes today&rsquo;s conference. Thank you
for your participation. You may disconnect your lines at this time. And have a wonderful rest of your day.</P>

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<P STYLE="margin: 0pt 0; text-indent: 0.5in; text-align: right">10</P>



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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
