Good day, everyone and welcome to Sterling Construction’s fourth quarter 2008 conference call. At this time, I would like to inform you that this conference is being recorded and that all participants are currently in a listen-only mode. I will now turn the conference over to CFO, Jim Allen. Please go ahead, sir.

Thank you, Regina. I want to say good morning ladies and gentlemen, who are all on the conference call. I would like to welcome you to this conference call to discuss the results of the fourth quarter and the year ended December 31, 2008, which we released this morning. I’m joined today by Pat Manning, our Chairman and Chief Executive Officer and Joe Harper, our President and Chief Operating Officer. First, I must remind you that this call may include certain statements that fall within the definition of forward-looking statements under the Private Securities Litigation Reform Act of 1995. Any such statements including our 2009 guidance are subject to risk and uncertainties, including overall economic and market conditions, competitors, customers and suppliers’ actions and weather conditions, as well as other risks identified in our filings with the Securities and Exchange Commission, which could cause actual results to differ materially from those anticipated. Accordingly, any such statements should be considered in light of these risks. Although we may give guidance about future results, this is only a statement of managements’ beliefs at the time the statement is made. Predictions that we may make may not continue to reflect management’s beliefs and we do not undertake to publicly update guidance. It is the company’s current policy to provide guidance only on our annual results, and we do not issue guidance about quarterly results. Now, turning to the financial results, I am pleased to report that the company achieved another record year in 2008 in terms of revenues, profits, working capital and stockholder’s equity as follows. Revenues for the year of 2008 were up 36% to $415 million. A majority of the increase in revenues was due to the revenues earned by our Nevada operations, which we acquired on October 31, 2007 and…

Thanks, Jim and good morning, everyone. 2008 was a record year for Sterling by every financial measure. We’re very proud to be part of the team responsible for our substantial increases in revenue, gross profit and EPS. It would have been much better were it not for the impact of Hurricane Ike, issues with a steel supplier in Houston and the sudden bankruptcy in Nevada. In addition to excellent financial results, it was a good year when viewed from the perspective of operations and strategic positioning. We continue to make substantial investments in the resources, which allow us to produce these results, equipment and experienced leaders in the field. Across all operating divisions, our project managers and superintendents continued to perform at levels at or above our expectations. They are continuing execution on contracts, which allows us to produce results like those achieved this year. While we had a few growing pains at our Dallas operation, the rapid growth deserves increased oversight. We’re all pleased with our current organization in all the markets. Looking at the last quarter and current operating results, Dallas is adding nicely to our gross profit line. Results in San Antonio and Houston exceeded our budget with lower costs and exceptional realization of incentive possibilities on contracts. In Nevada, our management team expanded operations to include two substantial contracts in the southern region of the state and are continuing to exceed our expectations with excellent execution. With the first full year results in for road and highway builders, I can tell you our first acquisition of size has been a resounding success. We’re very pleased to have their organization as part of our team. Looking ahead, our resources are fully deployed as we speak with some availability showing up in the 3rd quarter in virtually all…

Thanks, Joe. We are pleased with last year’s financial results as well as the progress we made in finding new areas in which to compete. But as we move into 2009, we face new challenges with this economy. We’ve seen additional competition in the marketplace, not so much with new companies, but with more bidders on individual projects. This is especially true on the smaller jobs under $20 million, but to a lesser extent, even on the larger jobs. We were, though, able to pick up a number of smaller jobs this quarter, both here in Houston and in Nevada, which we typically do not announce. With additional bidders, we have pressure on margins, and these economic conditions, that’s to be expected. On the other hand, as Joe mentioned, we have signed contracts which will be completed in 2009 of $380 million and backlog that extends into 2010. TXDOT spending is scheduled to be $2.9 billion this fiscal year up 38% from last year. You can you add to that another $1.2 billion in stimulus funding, which is expected to be committed by June 30, 2009 and $1.2 billion more a year from that date. The Texas economy is the strongest in the country with an $11 billion budget surplus. And this is where we recognize a majority of our revenue. We are also expecting increased bidding activity on our municipal markets as they approach their fiscal year ends after a rather slow winter. While we were not successful in the March TXDOT lending, we were competitive. We prefer to hold the line on margins expecting that with the stimulus program, our markets will return to normal. This is a balancing act which we are intimately familiar with, margin achievement versus the adding of new backlog. We have made good…

(Operator Instructions) Our first question comes from Rich Wesolowski - Sidoti & company. Rich Wesolowski - Sidoti & company: Your 4Q gross margin, it sounds like that didn’t reflect any odd projects and that represents the best estimate of the project pricing in the market today. Is that true?

The fourth quarter had work in it that was bid a long time ago as well as more recent pickups, saw sort of a blend in that. Rich Wesolowski - Sidoti & company : The margin on new work today, if you are holding the line on margin and not getting the some of the work say as you mentioned in the March quarter, it might even be lower than that?

We have bid as low as 6% to 8% range on specific projects where we thought the risks were low enough that that’s what we needed to be doing, but in general, we’re trying to hold the line very well. Rich Wesolowski - Sidoti & company : Typically you guys get about $50 million or so in the book and burn revenue. The guidance implies a good deal more than that. Does that imply some kick from the stimulus work later in the year?

I guess that is one way of looking at it. I think we made the point on several of these calls that we pay a lot of attention to our resource schedules and when those resources are available and we had an unusual amount of availability this year showing up in the third quarter. With the stimulus plan and the increase in the TDOT budget, as well as the rail program, we’re pretty hopeful that the year turns out the way we got it pegged. Rich Wesolowski - Sidoti & company : Can you give us a little historical perspective or refresher on the TXDOT budget? What was the peak number in ‘05 and ‘06?

Pat or Jim you want to take that?

As I remember, ‘06 is somewhere around $2.7 billion. ‘05 I don’t remember. Rich Wesolowski - Sidoti & company: Okay, so this 2.9 approximates as high as they’ve ever been?

No, I think there were some periods of time where it was up over $3 billion, wasn’t it, Pat?

Yeah, I think we hit close to $3.9 billion in 2007. Rich Wesolowski - Sidoti & company : And then finally, the last call we had talked about proposition 14 bonds, it was about $1.8 billion that they were looking to sell and spend. Is that included in the 2.9?

I think those were proposition 12 bonds and $1.8 billion is included in the 2009 and 2010 budgets of TXDOR.

Our next question comes from John Rogers - D.A. Davidson.

In terms of the 12-month backlog that you reported $379 million, a year ago and I can go back and look, but that was what something under $300 million?

I don’t have that number in my mind, John, I’m sorry, I can get that, but I don’t have it right now.

I guess my question, though really relates to in terms of the scheduling you mentioned some open capacity in the third quarter. Are you pretty well booked out then in the first half of the year adjusting for sort of normal seasonality especially in Nevada?

I would say in the first half yes, we are pretty well booked out.

And when I think about margins, for your business, I’m looking at more in terms of an annualized basis; I know they were lower in the fourth quarter, but that 10% margin, that seems to be about the mid point of your estimates, is that right?

I think 10% is right around where we hope to achieve. And I’m again hopeful that we’ll be in that range certainly for the first two quarters. And then we’ll have to see what we pick up and how the stimulus program affects the bidding moving on forward to the rest of the year.

And then the last thing, in terms of acquisitions, it sounded as if you’re hopeful you’ll see something out there, but it doesn’t sound like you’re seeing anything immediately, is that right?

We always have three or four kind of in the pipeline that we’re working on in any one given time. We’re being very conservative and very cautious to make sure we’re doing the right thing especially in these times.

Are you seeing anything Pat in terms of bonding business, working for bonding companies?

We are and have been working for travelers in St. Paul’s over the last year. We have not seen any new projects coming up for bid or in other words any contractors going down, while in conversation with travelers, they expect to have some losses this year.

It’s a little early in the cycle for that, John.

Typically, is that something then that you would expect to see later, I don’t know how the cycle plays out, further out into ‘09 or is that a 2010 type event?

I think most of it will be 2010.

Our next question comes from Craig Bell - SMH Capital.

Pat you had mentioned the light rail project in Houston, and you hoped to get some construction work on that starting in August. When do you think you might find out if you’re going to participate in that?

I would say May to June if we’re going to start building in August and Metro has committed that they would have actual construction on the ground in August?

And also you started the bidding on some asphalt work in West Texas. Is that something you think has a lot more opportunities for you on?

Well, we had said that we hoped for some reverse synergies from RHB with that acquisition. And I just wanted to point out that that was the first one that we actually bid here in Texas out of the Nevada office.

And then lastly, obviously we saw a big upward revision in the March letting schedule for TXDOR, so far what I’ve seen, the April one hasn’t had that same effect. Are you expecting to see that revised upward or do you think that will show up more in May?

I think it will show up more in May. They’ve come out with their first three letting proposals so to speak, and they have one more that’s due out today, but I would expect that they’re going to not see a substantial increase.

First question is; is your current level of business or anticipated business high enough to require the company to make new equipment purchases at this point?

Our cap spend was off a little bit in ‘08 from the previous couple of years and budgets for ‘09 are pretty much replacement numbers. Should be maybe 50% to 60% on last year’s spend.

And second question is; what are you guys hearing in terms of the potential size and timing of the new federal highway trust budget?

I heard there was quite an increase in the administration’s proposed budget, but as of yet, we don’t know what the number is. But the last few years’, they’ve averaged around $40 billion a year, so we’re hoping and also they’re discussing the next five years, whatever they call it. I guess it won’t be safety [loop], but whatever they call it. And the talk is that there is a substantial amount of infrastructure work that needs to be done. And that they need to find a different way of funding it from the ways they have in the past. That’s about the extent I can tell you right now.

Your next question comes from Rich Wesolowski - Sidoti & company. Rich Wesolowski - Sidoti & company: A while back we had spoken on a big utility program in Nevada. Has that been put on the shelf or do you have a status update for that?

The lasts thing I’ve seen on it Rich is that there were environmental issues; they scheduled a big meeting for late 2009. So, I believe that optimistically it would be mid-year 2010 before that program kicks off. Rich Wesolowski - Sidoti & company: Okay. But it’s still generally on the board?

Yeah, there’s no reason to think that they don’t need that program to be built. Rich Wesolowski - Sidoti & company: When they have the money, they’ll do it?

That’s right. I think they have the money, I really think it’s environmental issues. They were saying that it’s absolutely necessary by somewhere around 2013 or 2014 to be in service. They can’t push it much further than that, I don’t believe. Rich Wesolowski - Sidoti & company: And the Houston Metro project, how much work do you think there will be in total for sub-contractors that you or your competitors on that?

That first section that they gave the notice to proceed on which is going down Harrisburg to the East, was $390 million and I believe that the majority of that will be construction opportunities. The whole program that was awarded to Parsons was $1.46 billion. Rich Wesolowski - Sidoti & company: But, am I incorrect in thinking that the much of the construction has already been awarded to someone else?

No, none of the construction or very little I think they have awarded two $20 million contracts to do some utility relocations, and that’s the only construction that’s been awarded?

There are no further questions; I will now turn the conference back to management.

We want to thank you for joining us today. And look forward to visiting with you in the future on our conference calls for the first quarter, its here in Houston, let us know and come by and see us. And if not, we don’t see you here; maybe we’ll see you at the Sidoti or BB& T Conferences’. Thank you very much.

Ladies and gentlemen, this concludes our conference for today. Thank you all for participating, and have a nice day. All parties may now disconnect.