<SEC-DOCUMENT>0001171843-17-000794.txt : 20170209
<SEC-HEADER>0001171843-17-000794.hdr.sgml : 20170209
<ACCEPTANCE-DATETIME>20170209162557
ACCESSION NUMBER:		0001171843-17-000794
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20170208
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20170209
DATE AS OF CHANGE:		20170209

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:		17587882

	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_020917.htm
<DESCRIPTION>FORM 8-K
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<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>UNITED STATES</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font-size: 10pt; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font-size: 10pt; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>FORM 8-K</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>CURRENT REPORT</B></P>

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

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">Date of Report (Date of earliest event reported): <B>February 8,
2017</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 12pt"><B>STERLING CONSTRUCTION COMPANY, INC.</B></FONT></P>


<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">(Exact name of registrant as specified in its charter)</P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD COLSPAN="3" 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="3" 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="3" STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font-size: 10pt; text-align: center; margin: 0pt 4.35pt 0pt 0"><B>1800 Hughes Landing Blvd.</B></P>
        <P STYLE="font-size: 10pt; text-align: center; margin: 0pt 4.35pt 0pt 0"><B>The Woodlands, Texas</B></P></TD>
    <TD 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="2" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(Address of principal executive offices)</FONT></TD>
    <TD 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 STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Registrant&rsquo;s telephone number, including area code:&nbsp;&nbsp;<B>(281) 214-0800</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="width: 34%">&nbsp;</TD>
    <TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 38%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font-size: 10pt; text-align: left; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">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 (<U>see</U> General Instruction
A.2. below):</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 15pt; text-align: left">&#9633;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0"></P>

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<TD STYLE="width: 15pt; text-align: left">&#9633;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: left">&#9633;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17&nbsp;CFR
240.14d-2(b))</TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 0pt 0 0pt 0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: left">&#9633;</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17&nbsp;CFR
240.13e-4(c))</TD>
</TR></TABLE>

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<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0"></P>

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<TD STYLE="width: 0pt"></TD><TD STYLE="width: 49.5pt"><B>Item 2.02</B></TD><TD STYLE="text-align: left"><B>Results of Operations and Financial Condition.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">On February 8, 2017, Sterling Construction Company, Inc. (the &ldquo;Company&rdquo;)
issued a press release and on February 9, 2017, hosted a conference call announcing preliminary financial results for the fourth
quarter ended December 31, 2016. The press release and 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-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">The information provided in this Item 2.02 (including Exhibit
99.1 and 99.2) 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-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Item 9.01</B></TD><TD STYLE="text-align: left"><B>Financial Statements and Exhibits.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: left; margin: 0pt 0">d) Exhibits</P>

<P STYLE="font-size: 10pt; text-align: left; margin: 0pt 0">&nbsp;</P>

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<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 February 8, 2017. (Furnished herewith)</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">Conference call transcript. (Furnished herewith)</FONT></TD></TR>
</TABLE>
<P STYLE="font-size: 10pt; font-weight: bold; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-align: center; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; text-align: center; margin: 0pt 0">SIGNATURES</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0">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-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 43%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 57%; text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>STERLING CONSTRUCTION COMPANY, INC.</B></FONT></P>
                                             <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Date:&nbsp;&nbsp;February 9, 2017</FONT></TD>
    <TD>
        <P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">By: <U>&nbsp;/s/ Ronald A. Ballschmiede&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
        <P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0 0pt -20pt; text-indent: 37.25pt">Ronald A. Ballschmiede</P>
        <P STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; margin: 0pt 0 0pt 20pt">Executive Vice President &amp;</P>
        <P STYLE="font-size: 10pt; text-align: left; text-indent: 0pt; margin: 0pt 0 0pt 20pt">Chief Financial Officer</P></TD></TR>
</TABLE>
<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: left; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>Exhibit Index</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>&nbsp;</B></P>

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<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 February 8, 2017. (Furnished herewith) </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">Conference call transcript. (Furnished herewith)</FONT></TD></TR>
</TABLE>
<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</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-top: 0; text-align: center; margin-bottom: 0"><IMG SRC="logo.jpg" ALT=""></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B><U>FOR IMMEDIATE RELEASE</U></B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B><U>STERLING CONSTRUCTION COMPANY <FONT STYLE="text-transform: uppercase">Provides
Preliminary</FONT></U></B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B><U>Fourth Quarter 2016
Results </U></B></FONT></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: center; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">THE WOODLANDS, TX &ndash; February 8, 2017 &ndash; Sterling Construction
Company, Inc. (NasdaqGS: STRL) (&ldquo;Sterling&rdquo; or the &quot;Company&rdquo;) today announced that it expects to report revenues
for the three months ended December 31, 2016 in the range of $165 million to $170 million and a net loss of between $5.5 million
and $6.5 million. This compares to previously reported guidance for the 2016 fourth quarter of $150 million to $170 million of
revenues and net income of approximately breakeven. The net loss for the period was the result of several factors including a $2.5
million non-cash charge on a joint venture project in Texas where Sterling was a 45% minority partner. The charge was the result
of a negotiated global settlement with several entities and allowed the project to be closed-out thus avoiding further negotiation
and litigation expense. The remaining net losses were attributable to charges on projects and under-recovered equipment costs at
Sterling&rsquo;s Texas subsidiary.</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">Paul Varello, Sterling&rsquo;s CEO, commented, &ldquo;These fourth
quarter results are very disappointing relative to the guidance we provided when we reported third quarter earnings in late October.
While we have made substantial progress at improving our Texas operations, we remain focused on improving our ability to reliably
and accurately forecast project costs and the related earnings, particularly on our legacy projects. On a positive note, our other
four subsidiaries collectively exceeded expectations for the quarter. In addition, we continue to win new work, grow backlog and
increase margins. We expect these efforts to yield meaningful earnings improvements in 2017 and beyond.&rdquo;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">Sterling&rsquo;s management will host a conference call on Thursday,
February 9, 2017, at 9:00 am ET/8:00 am CT to discuss the fourth quarter preliminary results as well as recent corporate developments.
Interested parties may participate in the call by dialing (201) 493-6744 or (877) 445-9755. Please call in 10 minutes before the
conference call is scheduled to begin and ask for the Sterling Construction call. Following management&rsquo;s opening remarks,
there will be a question and answer session. Questions may be asked during the live call, or alternatively, you may e-mail questions
in advance to Jennifer.Maxwell@strlco.com. The Company plans to issue audited results for the fourth quarter and year ended December
31, 2016 the first full week of March as well as offer full year 2017 guidance concurrent with the final 2016 results.</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0; 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-size: 10pt; text-align: justify; margin: 0pt 0; color: red">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">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>

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        <P STYLE="font-size: 10pt; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font-size: 10pt; margin: 0pt 0"><B>Contact:</B></P>
        <P STYLE="font-size: 10pt; margin: 0pt 0">Sterling Construction Company, Inc.</P>
        <P STYLE="font-size: 10pt; margin: 0pt 0">Jennifer Maxwell, Director of Investor Relations</P>
        <P STYLE="font-size: 10pt; margin: 0pt 0">281-951-3560</P></TD>
    <TD STYLE="width: 50%">
        <P STYLE="font-size: 10pt; margin: 0pt 0"><B>&nbsp;</B></P>
        <P STYLE="font-size: 10pt; margin: 0pt 0"><B>Investor Relations Counsel:</B></P>
        <P STYLE="font-size: 10pt; margin: 0pt 0">The Equity Group Inc.</P>
        <P STYLE="font-size: 10pt; margin: 0pt 0">Fred Buonocore, CFA&nbsp;&nbsp;212-836-9607</P>
        <P STYLE="font-size: 10pt; margin: 0pt 0">Kevin Towle&nbsp;&nbsp;212-836-9620</P></TD></TR>
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<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>



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<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exh_992.htm
<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>

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    <TD STYLE="vertical-align: top; width: 47%; border-right: Black 1pt solid; font-weight: bold; text-align: right; color: #101258">Sterling Construction Co., Inc.</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-right: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="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-size: 10pt; font-weight: normal; color: #5D596A">Q4 2016 Guidance Call</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="font-size: 10pt; font-weight: normal; color: #5D596A">Feb. 9, 2017</FONT></TD></TR>
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    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-weight: bold; text-align: right; color: #101258"><FONT STYLE="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-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-size: 10pt; font-weight: normal; color: #5D596A"><I>Date&#9650;</I></FONT></TD></TR>
</TABLE>


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

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

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0">PARTICIPANTS</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0; border-bottom: Black 0.5pt solid">Corporate Participants</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

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

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

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>Joseph Cutillo</B> &ndash; Executive Vice President and Chief Business Development
Officer, Sterling Construction Co., Inc.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0; border-bottom: Black 0.5pt solid">Other Participants</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>Brent Edward Thielman</B> &ndash; Analyst, D. A. Davidson &amp; Co.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0">MANAGEMENT DISCUSSION SECTION</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: Greetings, and welcome to Sterling Construction&rsquo;s Fourth Quarter 2016
Preliminary Results 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-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">I would now like to turn the conference over to your host, Ms. Jennifer Maxwell, Director
of Investor Relations. Thank you. You may begin.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Thanks, Audrey. And good morning, everybody. Participating with me on our call today
is our Chief Executive Officer, Paul Varello; our Chief Financial Officer, Ron Ballschmiede; and our Chief Strategy and Business
Development Officer, Joe Cutillo. 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-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Any such statements that are subject to risk 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.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; 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 that prediction is made. There can be no assurance
that any prediction once made will continue thereafter to reflect management&rsquo;s belief. The company does not undertake to
publicly update those predictions.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">And now, I would like to turn this call over to our CFO, Ron Ballschmiede. Ron?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

<P STYLE="font-size: 10pt; font-weight: bold; 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-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Thanks, Jennifer. Good morning. While our audit is not yet complete, we felt it important
to provide the following preliminary results for the fourth quarter of 2016. We expect to report revenues for the three months
ended December 31, 2016 to be in the range of $165 million to $170 million and the net loss between $5.5 million and $6.5 million.
This compares to previously reported guidance for the 2016 fourth quarter of $150 million to $170 million of revenue and net income
of approximately breakeven. The net loss was a result of several factors.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">The largest single was a non-cash charge of $2.5 million on the Texas project where Sterling
was a 45% minority partner. The charge was the result of a negotiated settlement on a dispute regarding the extra costs incurred
by several entities to relocate utilities on a highway project. The dispute has been underway for more than two years and it was
determined that a negotiated settlement would be the best course to resolve all outstanding items and avoid further negotiations
in the possibility of costs of litigation. That project was completed sometime ago. The fourth quarter loss was primarily &ndash;
was primarily &ndash; sorry. The remaining fourth quarter loss was primarily attributable to additional costs on projects in Texas,
most of which were awarded from 2010 to 2014 and are now substantially complete.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Additionally, the quarter was negatively impacted by higher net equipment cost in Texas,
driven by lower than expected fleet utilization. We are proceeding on a plan to issue our formal final results for the fourth quarter
and the full year ended December 31, 2016 during the first full week of March.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Now I&rsquo;d like to turn this call over to Paul Varello, our Chief Executive Officer
to add his comments. Thanks. Paul?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Thanks, Ron, and good morning, everybody. Our fourth quarter results were certainly disappointing
when compared to the guidance we offered last October. We needed to recognize additional charges associated with a handful of legacy
projects that have been underway for more than four years. In the case of the $2.5 million charge to the project in Texas, which
by the way was completed in late 2014 but not closed out for almost two years, we agreed with our managing partner of the joint
venture that the global settlement would be the best way to end what had become an extended and costly negotiation process and
to avoid the threat of litigation.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">The remaining losses in the quarter were attributable to our Texas operations, which
Ron has already described. When in the late part of the fourth quarter it became apparent that our forecasted costs to complete
in Texas projects were not sufficient, we&rsquo;ve put into place additional protocols to improve project forecasting on all projects
underway. In addition, we have identified the pieces of equipment that were under-utilized and have sold or in the process of selling
off this excess equipment in 2017.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">On a positive note, our four other subsidiaries collectively exceeded expectations for
the fourth quarter. In addition, our new awards or backlog and our margins, all improved during the fourth quarter and will yield
meaningful results in 2017 and beyond.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">I&rsquo;ve asked our Chief Strategy and Business Development Officer, Joe Cutillo, to
provide a little more color around these results. Joe?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0; border-bottom: Black 0.5pt solid">Joseph Cutillo, Executive Vice
President and Chief Business Development Officer, Sterling Construction Co., Inc.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Thanks, Paul. And good morning, everyone. In the fourth quarter of 2016, our combined
backlogs, which includes low bids that are unsigned, grew to just over $1 billion. This equates to a book-to-bill ratio in excess
of 1.3 and a new company backlog record.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">The average gross margin for bids won in Q4 was over 9% and the margin of our overall
combined backlog grew to 8.5%. This was the fifth consecutive quarterly increase in our overall backlog margin. Many of you have
asked about our bidding success with non-heavy highway. We bid on $300 million of non-heavy highway in Q4 and won approximately
one-third. The mix of non-heavy highway backlog has now increased to 25% of our total backlog, which is approximately a 200% improvement
on where we ended 2015.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">We continue to make good progress in improving our heavy highway bid margins as well
as growing our backlog in higher margin adjacent spaces. We believe we&rsquo;re on track to have 50% of our backlog in non-heavy
highway work by the end of 2019. We&rsquo;re off to a great start in 2017 and feel confident we will continue to grow our margins
and backlogs as the next phases of state and federal funding kick in.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">With that, I&rsquo;d like to turn it back to Paul.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">Thanks, Joe. Now we&rsquo;ll be happy to take your questions.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0">QUESTION AND ANSWER SECTION</P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: Thank you. [Operator Instructions] Our first question comes from the line of
Tahira Afzal with KeyBanc Markets. Please continue.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Hi, Paul
and team.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>Good
morning.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>So, Paul,
first question for you. The settlement, does it impact any of the potential [ph] favorable (8:15) to the claim settlements you
were looking for from some of your legacy projects? Does this sort of negate those as well?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>No. The
claims that we&rsquo;re pursuing are still going through that process, and none of these impact those claims, which I believe &ndash;
we continue to believe we&rsquo;re making good progress on. The one item that we did talk about was the $2.5 million charge, and
that one was to a degree something we had felt we could resolve equitably with the owner. As it turned out, they had stronger arguments
than we did. And the better answer rather than continuing a very prolonged and painful and expensive negotiating dance and maybe
litigation was just to settle it. This was an agreement we made with the managing partner of the joint venture. We&rsquo;re a 45%
owner of that. And I think it was the right call to put that behind us because it didn&rsquo;t look like it was going to get settled
and it was burning up good money and management time at a time when we needed to focus on running the business in Texas and getting
our head back into that again.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Got it.
Okay. That&rsquo;s good to hear. I guess the second question I had, and I don&rsquo;t know if this is for you, Paul, Ron or Joe.
But we as analysts focus a lot on your backlog margins. But at the same time, the business is &ndash; the business model is [indiscernible]
(9:52) utilization, weather nuances and all. How should we handicap what&rsquo;s in backlog versus how it translates? If we were
to take the typical nuances into account, should we be putting a 50 basis point haircut and how it translates over the next 12
months? Any help there would be useful.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>I think
that&rsquo;s a good question. I&rsquo;d start with Ron, but &ndash; about that response. But in other words, how much haircut degradation
over &ndash; let me paraphrase, what&rsquo;s in the backlog, whatever we are quoting in the backlog as margin, when it actually
translates into money. Joe, you&rsquo;ve &ndash; profit. Joe, you&rsquo;ve also done some study on it. But I&rsquo;d like to start
with Ron and then ask you to piggyback on it, Joe. Ron?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>Sure.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Thanks,
Paul.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>It&rsquo;s
a great point because obviously there is a couple of components of backlog and we typically call what we just describe project
margin, which of course is right off the backlog. And then it&rsquo;s affected by other things that weren&rsquo;t anticipated.
So we start the year with the objective to recover all of our overhead costs within the gross profit category. So those include
things like equipment, which is the largest, and things like that. And those &ndash; and our rates are adjusted periodically to
accomplish that or our costs are reduced to accomplish that.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; margin: 0pt 0">And then, of course, the year goes by, and utilization better or worse and things happen.
So I would suggest that you have it pretty darn close. It&rsquo;s hard to predict, and we &ndash; when we always want it to be
zero. But half a point would be pretty good performance on the bid for the full year and plus or minus, frankly. If we start getting
more activity, that will over-absorb. And that&rsquo;s where we would really like to be. But I think breakeven plus or minus half
a percentage point is pretty damn good.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>Joe, what
would you add?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Joe Cutillo &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah. I
think you&rsquo;re right on with that. I think, Ron, when I finish if you could kind of use the analogy the pig through the snake.
I think that&rsquo;s the other important part, which is the timing of when the backlog &ndash; what log comes through. But half
a point, if you take a look at the newer projects 2015 and forward that we change and revamp the bid process on and measure the
execution on those, we&rsquo;re well within that half a point of execution.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah.
The famous pig through the python, Ron story, I think, we &ndash; we&rsquo;re trying to do a better job helping people understand
that. Because as you work through a turnaround and importantly those projects, particularly in Texas, with the size and duration
of those projects, as we demonstrated, it takes four years, some times more than four years to get through the pipeline.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>And
as a result, while our average is north of 8% on our backlog at the &ndash; combined backlog at the end of the year, you can &ndash;
and we tell you, we sold at 9% for the whole year. You start doing math that that means on a FIFO basis, you have some perfect
average 7% stuff to work through. And that is absolutely correct. So it would be &ndash; from a &ndash; if you just think about
that for a second, achieving average backlog margin at the beginning of the year for the current year is pretty &ndash; is probably
better than you should expect. In other words -</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>&ndash;
if we &ndash; if before this year or before this year, we sold at that less than 9% in a two-year duration, that means maybe a
third of our revenues are coming out of those 9% &ndash; 8% to 9% jobs with two-thirds coming out at 8% or 7%, call it. So I think
that&rsquo;s a good analysis.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Thanks a
lot, folks. And I have a few more questions, but I&rsquo;ll hop back in the queue.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: Thank you. [Operator Instructions] Our next question comes from the line of
Brent Thielman with D.A. Davidson. Please proceed.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Hi. Good morning.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>Good morning,
Brent.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Hey. Hey, Ron,
in the past, you&rsquo;ve given some numbers in terms of what&rsquo;s left on the legacy lower margin projects. Do you have that?
And then also, should we be thinking about some bleed into first quarter as well?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>I
would tell you that, for all practical purposes, we&rsquo;re substantially complete with those. So the $86 million that we started
2016 with of zero margin work is now, well, single-digit millions. And I think in reality, at this point in time, it becomes normal.
You always have some projects that do better and some projects do work, and I think the trick is to get them to average and we&rsquo;re
pretty much there.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Okay. And then,
is there any way to comment on the margin you earned on the &ndash; I guess the non-legacy Texas work in the quarter, just so we
can get a feel for the progress you&rsquo;re making outside of these kind of legacy issues?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah.
I think it&rsquo;s a safe assumption to &ndash; for the &ndash; for those legacy projects, they were at zero margin. In other words,
they were previously written down to zero. That&rsquo;s part of the $86 million that we earned -</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>I think
[indiscernible] (15.14) the new stuff. Are you hitting your marks on the new stuff?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah.
They prepared 9% mix, and Joe, you want to comment around that?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Joe Cutillo &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah. I
think on the &ndash; on the new bids, both heavy highway and the adjacent spaces, as I said earlier, we&rsquo;re within 0.5% on
the tolerance of what we&rsquo;re hitting on those projects today.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Okay. That&rsquo;s
great to hear. Thank you.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: Thank you. Our next question is a follow-up from Tahira with KeyBanc. Please
proceed.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Thanks a
lot. So I guess one from the financing side, Ron. Does this charge impact your ability or your timeline for refinancing potentially
or not really?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Ron Ballschmiede &ndash; Sterling Construction Co., Inc.&gt;: </B>In
today&rsquo;s regulatory world with the &ndash; with the, what I&rsquo;ll call the more traditional bank, it absolutely does. But
the ones that we&rsquo;ve been talking with our interested in, all the things that &ndash; the prospect of looking view of the
worlds. So it has an impact. It&rsquo;s hard for me to quantify time or otherwise would that work. But once we get done with the
year, we&rsquo;ll go back at that full speed and see if we can accomplish that. The positive news is, as I told you at the third
quarter call, our borrowings while they&rsquo;re expensive are down to a few million dollars. So, not the end of the world, but
not the right capital structure in the long-term. We&rsquo;re going to fix that.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Got it.
Okay. And then I don&rsquo;t know if the next question is for Paul or for Joe. But we&rsquo;ve been tracking some of these projects,
preliminary projects that have been leaking out of the Congress. Seeing there could be some really good projects in Texas and some
of the other states and really 70% of $136 billion that&rsquo;s been leaked out, and the list could be more extensive, are really
transportation-oriented. And Joe, a lot on the airport side, so the non-heavy highway side making inroads. I know we&rsquo;ve met
in the middle of December to really discuss prospects, and if you&rsquo;re still pretty cautious and rightfully so on how and when
this translates, but do you have any updates on that and any strategy if you are seeing from movement?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>Let me
start and then &ndash; Joe has really stayed on top of that. And I think it&rsquo;s a really great question. This week, I wanted
to tell you along with the non-heavy highway work such as airports, railroads, and other things, which we are definitely building
a bigger and bigger backlog in, we&rsquo;re also getting more of the design construct opportunities. And for example, the job we
announced this week in Utah at about $139 million, with some upside, they could take it to north of that number. That&rsquo;s a
design build job, and I bring that up because we&rsquo;re the managing partner and the margins on that work start to be even more
attractive than most of the heavy highway work we do. And that is a heavy highway job, its bridges and paving, but I &ndash; so,
even in that case, we can really extract substantially better margins by having design construct and by managing the work. So we&rsquo;re
pretty excited about even those kinds of projects and we&rsquo;re seeing more of that. But with that, the broader question, Joe,
is perhaps how you see that funding coming into play.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Joe Cutillo &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah. Yeah.
First I think, we&rsquo;re fortunate right now because we&rsquo;ve got what I call the double tailwind between the incremental
state funding that has been raised and is kicking in in 2017 and in the federal bill that it&rsquo;s already placed. And then the
third piece is this additional infrastructure piece. Realistically it certainly looks very promising, and I think this is one of
the few things that both the democratic and republican side believe in and want to make happen. However, I think we &ndash; it
will happen. I think it&rsquo;s going to be big dollars, but I don&rsquo;t think we&rsquo;re really going to see any impact of
that until mid-to-late 2018.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">If you just think of the process, by the time they agree on what the program looks like,
start to do some of the design activities, pick up funding together, we&rsquo;ll start seeing bid activities maybe late in 2017,
early in 2018, and then those projects would start kicking off after that. So if I was from a planning perspective, that&rsquo;s
how I would look at it right now.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Got it.
Okay. And just a last follow-up on that. Are you seeing the administration or the states really calling in companies such as yourself
to health advice on what project makes sense, the scope of these projects, or you&rsquo;re just waiting on the sidelines to see
if there&rsquo;s &ndash; there will be more of an interactive element to this?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Joe Cutillo &ndash; Sterling Construction Co., Inc.&gt;: </B>Well, it&rsquo;s
interesting. We have received a couple of correspondence to talk about and potentially get involved in some of the projects as
to putting on the slate. But it&rsquo;s early right now. But I do think that this program will be substantially different than
what was called the last stimulus program. We&rsquo;re really nothing &ndash; or very little [indiscernible] (20:42) actual projects.
I think this is really targeting very specific projects, very specific infrastructure needs, and there&rsquo;ll be real activity
out of it.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>And the
only thing I&rsquo;d piggyback is you&rsquo;re quite right that also the organizational structure of the state highway departments
and other entities that manage to bid out this work and then supervise it, they are inundated with far more work than they can
handle. And so they are reaching out to contractors to use them as an extension to their own ability or their organization to both
put together the bid packages and then monitor the work awarded, monitor it, finish it up. We&rsquo;ll see some of that. We looked
at that. Frankly, it conflicted us from bidding the work, and we would rather sit back and bid the work than put a handful of people
on it and get some small margin from major horsepower you need to put on that work, project managers and above. And so our view
was we&rsquo;d be better off letting others do that and then make sure we could still bid the work we wanted to bid.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Tahira Afzal &ndash; KeyBanc Capital Markets, Inc.&gt;: </B>Got it.
Okay. Thanks, Paul and Joe. That&rsquo;s all I have.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>Thanks,
Tahira.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: Thank you. The next question is a follow-up from Brent Thielman with D.A. Davidson.
Please proceed with your question.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Hi. Thanks.
Paul, I think &ndash; I think it was you that mentioned you guys had put into place some better protocols for kind of project forecasting.
Could you kind of elaborate on what you&rsquo;ve done there?</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>Yeah.
As we &ndash; you can imagine, we did a lot of soul searching when we came up with this kind of loss after we had committed to
a breakeven quarter and trying to figure out what the hell went wrong, pardon my French. But I think part of it was we had brought
on among other things a substantial number of people in Texas, more than 80 at the mid and upper-level management teams in the
last year. During early and mid-2016, many of them came onboard. They inherited some projects that have been underway for several
years, and the leadership of those projects exited the company, leading them to just figure it out on their own.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">We asked them rather early on to make estimates of what it would cost to complete the
work. And I sincerely believe, even though they were talented and tried very hard, they missed some of the elements of work, the
amount of units of work that were left to go and the cost of doing their work. We had to come back in with the estimating team
normally looking at new work and go back into the existing work. And that&rsquo;s a much more difficult job because you&rsquo;ll
never know what material you bought, what&rsquo;s on the ground, what you put in, what you put in that wasn&rsquo;t put in right
and has to be redone.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">And the last pieces of anything you do generally cost you more than the average unit
rate. So, knowing &ndash; for example, if you&rsquo;re doing 10 miles a road, the last 500 yards of concrete you put on that cost
you about twice as much as the average of &ndash; because you can borrow and go on most of it. The last 500 yards is always the
most difficult. It&rsquo;s the patches, it&rsquo;s the last connections, it&rsquo;s the ugly part of it. So you got to price that
up, and we missed it. And sadly, it was good people sincerely doing their jobs, but missing some of the things. We should add much
more people around it and much more focus on it. I think we caught that. And I think we&rsquo;ve got our hands on it and have done
it well.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">I think the other thing I&rsquo;d tell you is on the equipment. We charge ourselves for
equipment on jobs, but you got a fleet of equipment. And that means, you&rsquo;re only charging yourself for the equipment you
are using. Question mark. Is there a lot of it sitting around and not being used. The answer in this case, yes. And we disposed
that equipment and are in the process of doing that. We don&rsquo;t want to carry anymore equipment waiting on the next big job
to come. When the next big job comes, we&rsquo;ll buy or rent equipment to execute that work. But for now, we&rsquo;re going to
lean it up and not be sitting around with a bunch of yellow wire and we don&rsquo;t need.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Okay. That&rsquo;s
helpful. And then, don&rsquo;t mean quite run your Q4 call and outlook to come, but I was kind of curious, you guys have announced
some really sizable jobs in Utah over the last few months. Do those &ndash; those really get ramping in the second half of 2017?
Because I would think that&rsquo;s a nice tailwind for you.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>It is
a fabulous tailwind. The Utah guys, our team at ROW was with our company, are really among our best performers and frankly our
most profitable teams of people. On top of that, the State of Utah, these are our UDOT projects, tends to have their act so well
together that when they award a job, you can start it almost immediately. In the particular case with the job we recently won,
it&rsquo;s design construct. So there&rsquo;s a little bit of time upfront where we&rsquo;ll have to design certainly the bridges
and other things under the contract. But we can&rsquo;t get started rather quickly on the excavating some grading and some other
things that we already know we can do right away and some demolition work. And we will jump on that immediately. What&rsquo;s remarkable
is we&rsquo;re going to spend $139 million and be done according to our own schedule by the end of 2018.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">So it will throw off major earnings in the back-end of this year and then be really hitting
its stride in the second quarter. First quarter in Utah&rsquo;s difficult because of the weather. But by the second quarter, and
certainly beyond, we&rsquo;re hitting our stride with that project. Our management believes, we can also if the weather holds up,
jump on it but the fourth quarter of this year actually have some good progress. That&rsquo;s somewhat weather-dependent. If the
winter closes us down earlier, then it&rsquo;s down in the valley. It&rsquo;s not up in the mountain. So we have a little bit of
shot at it. But the weather can&rsquo;t be a problem in the fourth quarter and first quarter. But I would tell you that, that job
will generate real earnings and major earnings for us in the second half of 2017 and 2018.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

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<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;Q &ndash; Brent Thielman &ndash; D. A. Davidson &amp; Co.&gt;: </B>Okay. Thanks,
guys. Appreciate all the color.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0"><B>&lt;A &ndash; Paul Varello &ndash; Sterling Construction Co., Inc.&gt;: </B>Thanks,
Brent.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: [Operator Instructions]. At this time, there are no further questions. I will
turn it back to Mr. Varello for closing remarks.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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

<P STYLE="font-size: 10pt; margin: 0pt 0">Thank you, Audrey. Thank you, everybody, for participating in our call today. While we&rsquo;ve
made good progress at approving the fundamentals of our Texas operations, it&rsquo;s clear that our work is not yet done. We expect
to continue to make meaningful improvements in 2017. But I&rsquo;m confident that those improvements are already well underway.
While we remain in our year-end quiet period, we look forward to discussing our full-year results during our earnings call, which
is just a few weeks away.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Thank you again, and I&rsquo;ll turn it back to Audrey.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">Operator: Thank you, Mr. Varello. This concludes today&rsquo;s teleconference. You may
disconnect your lines. Thank you for your participation.</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0"><B>Disclaimer</B></P>

<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0">The information herein is based on sources we believe to be reliable
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<P STYLE="font-size: 10pt; text-align: justify; margin: 0pt 0"><I>The contents and appearance of this report are Copyrighted FactSet
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
