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Delaware		1600		25-1655321
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Geoffrey K. Walker Meredith S. Mouer Andrews Kurth LLP 600 Travis, Suite 4200 Houston, Texas 77002 Telephone: (713) 220-4757 Facsimile: (713) 238-7433		Christopher J. Voss John D. Kauffman Stoel Rives LLP 600 University St., Suite 3600 Seattle, Washington 98101 Telephone: (206) 624-0900 Facsimile: (206) 386-7500

Proposed Maximum

Proposed Maximum

Title of Each Class of

Amount to

Offering Price

Aggregate

Amount of

Securities to be Registered

be Registered

Per Share(1)

Offering Price(1)

Registration Fee(2)

Common Stock, $0.01 par value per share

2,325,021 shares

$16.70

$38,827,851

$4,567

(1)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based on the average of the high and low prices reported by the American Stock Exchange on December 30, 2005. Includes the common stock issuable upon the exercise of the underwriters overallotment option.
(2)	$3,914 previously paid at a filing fee rate of $117.70 per million and applied in connection with the initial filing of this Form S-1. The fee for the additional $5,577,851 being registered was calculated using a filing fee rate of $107.00 per million.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

		Per Share				Total
Offering price		$				$
Discounts and commissions to underwriters		$				$
Offering proceeds to us, before expenses		$				$
Offering proceeds to the selling stockholders, before expenses		$				$

D.A. Davidson & Co.	Morgan Joseph & Co. Inc.

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		Page
Summary			1
Risk Factors			8
Cautionary Note Regarding Forward-Looking Statements			19
Use of Proceeds			20
Market Price of Common Stock			21
Dividend Policy			21
Capitalization			22
Selected Historical Consolidated Financial and Operating Data			23
Guidance			25
Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Business			40
Management			49
Principal and Selling Stockholders			58
Certain Transactions			60
Description of Capital Stock			62
Shares Eligible for Future Sale			66
Underwriting			67
Legal Matters			71
Experts			71
Where You Can Find More Information			71
Index to Financial Statements			F-1
Opinion of Andrews Kurth LLP
Seventh Amendment to Credit Agreement and Waiver
Eight Amendment to Credit Agreement
Ninth Amendment to Credit Agreement
Tenth Amendment to Credit Agreement
Eleventh Amendment to Credit Agreement
Twelfth Amendment to Credit Agreement
Form of Warrant to Purchase Common Stock
Subsidiaries
Consent of Grant Thornton LLP
Consent of Milton L. Scott

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	•	onsite conditions that differ from those assumed in the original bid;
	•	delays caused by weather conditions;
	•	contract modifications creating unanticipated costs not covered by change orders;
	•	changes in availability, proximity and costs of materials, including steel, concrete, aggregate and other construction materials (such as stone, gravel and sand), as well as fuel and lubricants for our equipment;
	•	availability and skill level of workers in the geographic location of a project;
	•	our suppliers’ or subcontractors’ failure to perform;
	•	fraud or theft committed by our employees;
	•	mechanical problems with our machinery or equipment;
	•	citations issued by any governmental authority, including the Occupational Safety and Health Administration;
	•	difficulties in obtaining required governmental permits or approvals;
	•	changes in applicable laws and regulations; and
	•	claims or demands from third parties alleging damages arising from our work or from the project of which our work is part.

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	•	difficulties in the integration of operations and systems;
	•	the key personnel and customers of the acquired company may terminate their relationships with the acquired company;
	•	we may experience additional financial and accounting challenges and complexities in areas such as tax planning and financial reporting;
	•	we may assume or be held liable for risks and liabilities (including for environmental-related costs) as a result of our acquisitions, some of which we may not discover during our due diligence;
	•	our ongoing business may be disrupted or receive insufficient management attention; and
	•	we may not be able to realize the cost savings or other financial benefits we anticipated.

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	•	make distributions and dividends;
	•	incur liens or encumbrances;
	•	incur indebtedness;
	•	guarantee obligations;
	•	dispose of a material portion of assets or otherwise engage in a merger with a third party;
	•	pledge accounts receivable, in the case of the Steel City Products revolving credit facility; and
	•	incur negative income for two consecutive quarters, in the case of the construction business revolving credit facility.

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	•	a shortfall in operating revenue or net income from that expected by securities analysts and investors;
	•	changes in securities analysts’ estimates of our financial performance or the financial performance of our competitors or companies in our industry generally;
	•	general conditions in our industry;
	•	announcements of significant contracts by us or our competitors;
	•	the passage of legislation or other regulatory developments that affect us adversely;
	•	general conditions in the securities markets;
	•	the limited trading volume of our common stock;
	•	investor expectations resulting from the filing of the registration statement, of which this prospectus is a part;
	•	our issuance of a significant number of shares of our common stock upon exercise of employee stock options or warrants; and
	•	the other risk factors described herein.

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	•	changes in general economic conditions or reductions in government funding for infrastructure services;
	•	adverse economic conditions in our markets in Texas;
	•	delays or difficulties related to the completion of our contracts, including additional costs, reductions in revenues or the payment of completion penalties or liquidated damages;
	•	actions of suppliers, subcontractors, customers, competitors and others which are beyond our control;
	•	the estimates inherent in our percentage-of-completion accounting policies;
	•	possible cost escalations associated with our fixed-price contracts;
	•	our dependence on a few significant customers;
	•	adverse weather conditions;
	•	the presence of competitors with greater financial resources and the impact of competitive services and pricing;
	•	our ability to successfully identify, complete and integrate acquisitions; and
	•	the other factors discussed in more detail under “Risk Factors.”

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	•	capital expenditures to acquire property, plant and equipment to more efficiently complete a number of projects in our contract backlog as well as position us to capitalize on future project opportunities;
	•	repayments of certain related party promissory notes as described in “Certain Transactions  — Contemplated Transactions”; and
	•	other general corporate purposes, including working capital to increase our bonding capacity, to finance ongoing business operations and to fund future growth of our construction business and additions to our construction services capabilities.

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			High				Low
Year Ended December 31, 2003
	First Quarter		$	1.95			$	1.16
	Second Quarter		$	2.80			$	1.55
	Third Quarter		$	4.45			$	2.20
	Fourth Quarter		$	5.35			$	2.75
Year Ended December 31, 2004
	First Quarter		$	8.94			$	3.60
	Second Quarter		$	4.60			$	2.99
	Third Quarter		$	6.33			$	3.02
	Fourth Quarter		$	6.40			$	4.32
Year Ended December 31, 2005
	First Quarter		$	7.97			$	5.16
	Second Quarter		$	9.00			$	6.70
	Third Quarter		$	28.35			$	7.25
	Fourth Quarter		$	26.30			$	16.71

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	•	on an actual basis; and
	•	on an as adjusted basis, reflecting the completion of the anticipated repayment of certain related party promissory notes described in “Certain Transactions — Contemplated Transactions” and the application of the estimated net proceeds from this offering, after deducting $2.4 million for the estimated underwriting discounts and commissions and estimated offering expenses, as set forth under “Use of Proceeds.”

					At September 30, 2005
					Actual				As adjusted
					(Amounts in thousands,
					except share data)
Cash and cash equivalents					$	20,138			$	37,530
Debt:
	Current maturities of long-term debt(1)(4)				$	2,235			$	651
	Steel City Products revolving credit facility(2)					4,302				4,302
	Long-term debt:
		Construction business revolving credit facility(3)				15,742				15,742
		Related party notes(1)(4)				6,865				—
		Mortgages				809				809
		Other indebtedness				58				58
			Total debt		$	30,011			$	21,562
Stockholders’ equity:
	Common stock, $0.01 par value, 14,000,000 shares authorized; 8,147,483 shares issued and outstanding, actual; 10,169,241 shares issued and outstanding, as adjusted(5)				$	81			$	98
	Preferred stock, $0.01 par value, 1,000,000 shares authorized; no shares issued and outstanding					—				—
	Accumulated deficit					(39,385	)			(39,385	)
	Additional paid-in capital					82,506				108,330
		Total stockholders’ equity			$	43,202			$	69,043
Total capitalization					$	53,075			$	53,075

(1)	Current maturities of long-term debt include $528,000 of principal on related party notes, which was due and paid in December 2005.
(2)	Steel City Products’ revolving credit facility provides for revolving loans up to a maximum of $5.0 million with a maturity date of May 31, 2007. The interest rate at September 30, 2005 was 6.75%. Steel City Products has been classified as discontinued operations in our financial statements.
(3)	The construction business revolving credit facility provides for revolving loans up to a maximum of $17.0 million with a maturity date of May 1, 2007. The interest rate at September 30, 2005 was 6.75%.
(4)	See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Debt” and “Certain Transactions” for a discussion of the existing related party notes and the planned prepayment with cash in connection with this offering.
(5)	As of September 30, 2005, we had 8,147,483 shares of common stock outstanding; 1,252,873 shares of common stock reserved for issuance upon the exercise of outstanding stock options at a weighted average exercise price per share of $2.558; 75,880 shares of common stock reserved for future awards under our stock option plans; and 527,339 shares of common stock reserved for issuance upon the exercise of outstanding warrants at an exercise price per share of $1.50.

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																						Nine Months Ended
		Year Ended				Year Ended December 31,																September 30,
		February 28,
		2001(1)				2001(1)(2)				2002				2003				2004				2004				2005
																						(Unaudited)
		(Amounts in thousands, except share and per share data)
Statement of Operations Data:
Revenues		$	—			$	48,654			$	111,747			$	149,006			$	132,478			$	95,161			$	157,805
Cost of revenues			—				44,694				98,935				131,181				119,217				83,970				141,541
Gross profit			—				3,960				12,812				17,825				13,261				11,191				16,264
General and administrative expenses, net			1,283				2,741				6,862				7,400				7,696				5,844				6,771
Operating (loss) income			(1,283	)			1,219				5,950				10,425				5,565				5,347				9,493
Interest expense, net of interest income			1,675				1,919				2,427				1,842				1,456				1,053				1,198
(Loss) income from continuing operations before loss from equity investments, minority interest and income taxes			(2,958	)			(700	)			3,523				8,583				4,109				4,294				8,295
Loss from equity investments			(4,557	)			(1,217	)			—				—				—				—				—
Minority interest(3)			—				647				873				1,627				962				862				—
(Loss) income from continuing operations before income taxes			(7,515	)			(2,564	)			2,650				6,956				3,147				3,432				8,295
Income tax (benefit) expense			(160	)			—				(174	)			1,752				(2,134	)			1,167				2,820
Net (loss) income from continuing operations			(7,355	)			(2,564	)			2,824				5,204				5,281				2,265				5,475
Net income (loss) from discontinued operations			683				(62	)			528				215				372				342				532
Net (loss) income		$	(6,672	)		$	(2,626	)		$	3,352			$	5,419			$	5,653			$	2,607			$	6,007

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																							Nine Months Ended
			Year Ended				Year Ended December 31,																September 30,
			February 28,
			2001(1)				2001(1)(2)				2002				2003				2004				2004				2005
																							(Unaudited)
			(Amounts in thousands, except share and per share data)
Basic (loss) income per share:
	Continuing operations		$	(1.49	)		$	(0.51	)		$	0.56			$	1.02			$	0.99			$	0.43			$	0.72
	Discontinued operations			0.14				(0.01	)			0.10				0.04				0.07				0.06				0.07
			$	(1.35	)		$	(0.52	)		$	0.66			$	1.06			$	1.06			$	0.49			$	0.79
Diluted (loss) income per share:
	Continuing operations		$	(1.49	)		$	(0.51	)		$	0.46			$	0.80			$	0.75			$	0.32			$	0.58
	Discontinued operations			0.14				(0.01	)			0.09				0.03				0.05				0.05				0.06
			$	(1.35	)		$	(0.52	)		$	0.55			$	0.83			$	0.80			$	0.37			$	0.64
Weighted average number of shares outstanding used in computing per share amounts:
	Basic			4,943,018				5,055,516				5,061,598				5,089,849				5,342,847				5,274,730				7,638,261
	Diluted			4,943,018				5,055,516				6,101,515				6,488,376				7,027,682				7,158,697				9,467,306
Balance sheet data (end of period):
Cash and cash equivalents			$	3			$	2,620			$	2,111			$	2,651			$	3,449			$	2,851			$	20,138
Working capital				(17,918	)			6,102				9,556				6,834				16,052				18,167				22,599
Total assets				16,507				59,141				72,757				75,578				89,544				84,902				122,789
Total debt				18,329				28,944				32,784				20,058				29,379				24,347				30,011
Stockholders’ equity				(9,938	)			6,135				10,825				16,636				35,208				19,900				43,202
Other operating data:
Depreciation and amortization			$	—			$	1,706			$	3,755			$	4,690			$	4,545			$	3,487			$	3,826
Capital expenditures				—				1,204				4,245				4,340				3,555				2,527				9,948
Contract backlog at end of period (unaudited)(4)				110,000				103,000				138,000				141,000				232,000				227,000				288,000

(1)	In November 2001, our board of directors voted to change our fiscal year-end from the last day of February to December 31. Accordingly, results for fiscal 2001 are for the ten-month period from March 1 through December 31, 2001.
(2)	In July 2001, we increased our percentage equity ownership in Texas Sterling Construction, L.P., or TSC, from 12% to 80.1%. The original investments were recorded using the cost method. The acquisition in July 2001 resulted in step-acquisition treatment of the original investments.
(3)	Minority interest represents the 19.9% of TSC not owned by us until December 2004. See Note 16 of the Notes to the Consolidated Financial Statements for the fiscal year ended December 31, 2004, included in this prospectus.
(4)	Contract backlog is our estimate of the billings that we expect to make in future periods on our construction contracts. We add the revenue value of new contracts to our contract backlog, typically when we are the low bidder on a public sector contract and management determines that there are no apparent impediments to award of the contract. As construction on our contracts progresses, we increase or decrease contract backlog to take account of changes in estimated quantities under fixed unit price contracts, as well as to reflect changed conditions, change orders and other variations from initially anticipated contract revenues and costs, including completion penalties and bonuses. We subtract from contract backlog the amounts we bill on contracts.

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		Year Ending				Year Ending
		December 31, 2005				December 31, 2006
		(In thousands)
						Range
Revenues from continuing operations		$	210,000			$230,000 - $250,000
Income from continuing operations before income taxes		$	10,500			$ 11,500 - $ 13,000
Net income from continuing operations		$	6,800			$  7,500 - $  8,500

	•	Guidance for 2006 does not reflect any effects from this offering. Weighted average shares outstanding are approximately 9.9 million for 2005, and are expected to be about 10.0 million for 2006, excluding any shares that may be issued in the offering.
	•	Pending verification by the respective customers, updated guidance for 2005 does not include certain potential fourth quarter performance incentives of up to $1.5 million, before taxes, that may be earned on the early completion of certain projects.
	•	The above figures include results from continuing operations of the construction business, and do not include results of discontinued operations of the distribution business operated by Steel City Products.
	•	Net income from continuing operations for both guidance periods reflects a full tax charge. We have available NOLs that should shelter from taxes most income for 2005 and 2006.
	•	Guidance figures for 2005 were previously updated on November 7, 2005, and included forecast Earnings before Income Taxes, Depreciation and Amortization, or EBITDA; we have decided to discontinue use of the non-GAAP EBITDA measure.

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	•	The level and potential profitability of uncompleted contracts in backlog;
	•	The size of our equipment fleet, its suitability for the contracts in backlog and expected to be added, and the capital expenditures that may be required, or equipment rental costs if such equipment is not required on a permanent basis;
	•	Forecast depreciation, which is based on our existing fleet and expected additions and disposals;
	•	Our existing work crews, their suitability for the contracts in backlog and expected to be added, and our ability to add further crews if necessary;
	•	The bidding climate, which affects our ability to replace contracts built and also affects the gross margins that may be achieved on new contract wins;
	•	The levels of activity in the various geographic markets in which we operate, and the opportunities available to enter new markets;
	•	Our competitors and their expected impacts on our markets;
	•	Our expectations about efficiency, which means the extent to which we can best match our equipment and work crews to the mix of contracts in backlog at any time;
	•	Our expectations about the weather. We assume that we will suffer rain interruptions based on historical averages, and this is inherently inaccurate;
	•	The expected availability and cost of bonding, which depends on levels of working capital and stockholders’ equity, among other factors;
	•	Our expectations about changes in the availability and prices of materials, sub-contract services, fuel, and other third party expense items;
	•	Expectations about changes in the number and compensation of our construction crews;
	•	Expected additions to, and costs of, our supervisory and project management staff;
	•	Expected changes in overhead expense levels to support the level of our business;
	•	Employee incentive compensation, which is generally budgeted at the level expected to be paid if the budget is achieved;
	•	Our expected insurance costs, which are significant and can fluctuate materially;
	•	Other anticipated changes in our expense structure; and
	•	Our expectations as to the likelihood of incurring or achieving any contract performance penalties or bonuses that depend on the timeliness of project completion.

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	Use of Estimates

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	Revenue Recognition

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	Valuation of Long-Term Assets

	Deferred Taxes

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			2004				2005				% Change
			(Dollar amounts
			in thousands)
Revenues			$	95,161			$	157,805				65.8	%
Gross profit				11,191				16,264				45.3	%
	Gross profit %			11.8	%			10.3	%			(12.7	)%
General and administrative expenses				5,844				6,771				15.9	%
Operating income				5,347				9,493				77.5	%
	Operating income %			5.6	%			6.0	%			7.1	%
Interest expense, net				1,053				1,198				13.8	%
Income from continuing operations, before minority interest				4,294				8,295				93.2	%
Minority interest				862				—				(100.0	)%
Income taxes				1,167				2,820				141.6	%
Net income from continuing operations				2,265				5,475				141.7	%
Net income from discontinued operations				342				532				55.6	%
Net income			$	2,607			$	6,007				130.4	%
	Contract backlog, end of period		$	227,000			$	288,000				26.9	%

	•	a growing contract backlog, which enabled us to expand our equipment fleet and to hire more field crews, especially in the San Antonio market;
	•	the continuing expansion of our construction capabilities, which allowed us to bid for and take on more complex work; and

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	•	certain water main contracts in process in the third quarter of the current year included large diameter pipe, facilitating greater revenues to be generated by our crews; and
	•	better weather in the first half of 2005 provided for continuous work on construction contracts, compared with one of the wettest periods on record in the first half of 2004.

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	Fiscal Year Ended December 31, 2004 (Fiscal 2004) Compared with Fiscal Year Ended December 31, 2003 (Fiscal 2003)

			2003				2004				% Change
			(Dollar amounts in
			thousands)
Revenues			$	149,006			$	132,478				(11.1	)%
Gross profit				17,825				13,261				(25.6	)%
	Gross profit %			12.0	%			10.0	%			(16.6	)%
General and administrative expenses				7,400				7,696				(4.0	)%
Operating income				10,425				5,565				(46.6	)%
	Operating income %			6.9	%			4.2	%			(39.1	%)
Interest expense, net				1,842				1,456				(21.0	)%
Income from continuing operations, before minority interest				8,583				4,109				(52.1	)%
Minority interest				1,627				962				(40.9	)%
Income taxes				1,752				(2,134	)			N/A
Net income from continuing operations				5,204				5,281				1.5	%
Net income from discontinued operations				215				372				73.0	%
Net income			$	5,419			$	5,653				4.3	%
	Contract backlog, end of year		$	141,000			$	232,000				64.5	%

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		Fiscal				Fiscal
		2003				2004
		(Amounts in
		thousands, except
		per share data)
Income from continuing operations before income taxes, as reported		$	6,956			$	3,147
Provision for income taxes (assuming a 34% effective rate)			2,365				1,070
Net income from continuing operations, as if a 34% rate had been applied		$	4,591			$	2,077
Basic income from continuing operations per common share		$	0.90			$	0.39
Diluted income from continuing operations per common share		$	0.71			$	0.30

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	Fiscal Year Ended December 31, 2003 (Fiscal 2003) Compared with Fiscal Year Ended December 31, 2002 (Fiscal 2002)

			2002				2003				% Change
			(Dollar amounts in
			thousands)
Revenues			$	111,747			$	149,006				33.3	%
Gross profit				12,812				17,825				39.1	%
	Gross profit %			11.5	%			12.0	%			4.3	%
General and administrative expenses				6,862				7,400				7.8	%
Operating income				5,950				10,425				75.2	%
	Operating income %			5.3	%			6.9	%			30.2	%
Interest expense, net				2,427				1,842				(24.1	)%
Income from continuing operations, before minority interest				3,523				8,583				143.6	%
Minority interest				873				1,627				86.4	%
Income taxes				(174	)			1,752				N/A
Net income from continuing operations				2,824				5,204				84.3	%
Net income from discontinued operations				528				215				(59.3	)%
Net income			$	3,352			$	5,419				61.7	%
	Contract backlog, end of year		$	138,000			$	141,000				2.2	%

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		Fiscal				Fiscal
		2002				2003
		(Amounts in
		thousands, except
		per share data)
Income from continuing operations before income taxes, as reported		$	2,650			$	6,956
Provision for income taxes (assuming a 34% effective rate)			901				2,365
Net income from continuing operations, as if a 34% rate had been applied		$	1,749			$	4,591
Basic income from continuing operations per common share		$	0.35			$	0.90
Diluted income from continuing operations per common share		$	0.29			$	0.71

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															Nine Months Ended
			Year Ended December 31,												September 30,
			2002				2003				2004				2004				2005
															(Unaudited)
			(Amounts in thousands)
Cash and cash equivalents (at end of period)			$	2,111			$	2,651			$	3,449			$	2,851			$	20,138
Net cash provided by (used in) continuing operations:
	Operating activities			5,004				18,185				4,171				(980	)			25,368
	Investing activities			(6,801	)			(4,270	)			(5,809	)			(2,374	)			(9,678	)
	Financing activities			1,288				(13,376	)			2,436				3,553				999
Cash from discontinued operations				33				(181	)			(47	)			387				132
Capital expenditures				4,245				4,340				3,555				2,527				9,948
Working capital (at end of period)				9,556				6,834				16,052				18,167				22,599

	Operating activities

	•	depreciation and amortization, which for the first nine months of 2005 totaled $3.8 million, an increase of $0.3 million from the same period in 2004, as a result of the increase in the size of our construction fleet in 2005; and
	•	tax expense, which increased by $1.6 million during the first nine months of 2005 due to the increase in operating income.

	•	there was a decrease of $2.6 million in costs in excess of billings on uncompleted contracts in 2005, compared with an increase of $3.9 million in 2004. These changes reflect the resolution of timing differences as contracts progress;
	•	billings in excess of costs on uncompleted contracts increased by $7.5 million in 2005, whereas in 2004 there was a decrease of $5.0 million. These changes principally reflect fluctuations in the timing and amount of mobilization payments to assist in the start-up on certain contracts;
	•	trade payables increased by $14.9 million in 2005, compared with an increase of $4.5 million in 2004, principally reflecting the increased level of revenues in 2005; and
	•	contracts receivable increased $14.5 million in 2005, compared with an increase of $6.9 million in 2004, principally reflecting the revenue increase and related level of customer retentions.

	Investing activities

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	Financing activities

	Construction Business Revolver

	Steel City Products Revolver

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	Related Party Notes

	Mortgages

	Contractual Obligations

		Payments due by Period
						Less Than				1–3				4–5				More Than
		Total				One Year				Years				Years				5 Years
		(Amounts in thousands)
Debt		$	16,954			$	3,625			$	13,329			$	—			$	—
Capital leases			58				25				23				10				—
Operating leases			1,604				555				1,049				—				—
Related party notes(1)			11,349				3,593				3,878				3,878				—
Other long-term liabilities			1,018				123				246				246				403
		$	30,983			$	7,921			$	18,525			$	4,134			$	403

(1)	See “— Other Debt” and “Certain Transactions” for a discussion of the existing related party notes and the planned prepayment in cash in connection with this offering.

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	Capital Expenditures

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	Types of Contracts

	Contract Management Process

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Name		Position		Age
Patrick T. Manning		Chairman of the Board of Directors & Chief Executive Officer			59
Joseph P. Harper, Sr.		President & Chief Operating Officer and a Director			60
Maarten D. Hemsley		Chief Financial Officer and a Director			56
Roger M. Barzun		Vice President, Secretary and General Counsel			64
David R. A. Steadman		Director			68
John D. Abernathy		Director			68
Robert W. Frickel		Director			62
Milton L. Scott		Director			49
Christopher H. B. Mills		Director			53

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	Audit Committee

	•	review our financial reports and other financial information, our internal accounting and financial controls, our controls and procedures relating to public disclosure of information, and the audit of our financial statements by our independent auditors;
	•	appoint our independent auditors, approve their compensation, supervise their work, oversee their independence and evaluate their qualifications and performance;
	•	review with management and the independent auditors our audited and interim financial statements that are included in filings with the SEC;
	•	review the quality of our accounting policies;
	•	review with management our major financial risk exposures;
	•	review all proposed “related party transactions” in which the amount involved exceeds $50,000, which are subject to the prior written approval of the committee; and
	•	provide for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.

	Compensation Committee

	•	review and approve any corporate goals and objectives relating to the chief executive officer’s compensation;
	•	evaluate the chief executive officer’s performance in light of those corporate goals and objectives;
	•	either as a committee or together with the other independent directors (as directed by our board of directors), to determine and approve the compensation of our chief executive officer and our other senior officers, and together with the boards of directors of our subsidiaries, to determine and approve the compensation of their senior officers;
	•	either as a committee or together with the other independent directors (as directed by our board of directors), to review and approve any employment agreements, severance arrangements, change-in-control arrangements or special or supplemental employee benefits, and any material amendments to the foregoing, that are applicable to our senior officers and, together with the boards of directors of our subsidiaries, that are applicable to their senior officers;

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	•	either as a committee or together with the other independent directors (as directed by our board of directors), to administer our stock plans and make grants of stock options and other awards as provided in those plans;
	•	make recommendations to our board of directors regarding incentive compensation plans and equity-based plans for our other senior officers and those of our subsidiaries;
	•	advise the corporate governance and nominating committee on the compensation of directors, including the chairman of the board and the chairpersons of the committees of our board of directors; and
	•	provide the report of the compensation committee on executive compensation for inclusion in our annual proxy statement pursuant to the rules and regulations of the SEC.

	Corporate Governance and Nominating Committee

	•	develop and recommend to our board of directors appropriate corporate governance principles and rules;
	•	recommend appropriate policies and procedures to ensure the effective functioning of our board of directors;
	•	identify and nominate qualified candidates for election to our board of directors and its committees;
	•	recommend directors for membership on our committees;
	•	develop and make recommendations to our board of directors regarding standards and processes for determining the independence of our board of directors under applicable laws, rules and regulations;
	•	develop and oversee the operation of an orientation program for new directors and determine whether and what form and level of continuing education for directors is appropriate;
	•	periodically review our code of ethics and insider trading policy to ensure that they remain responsive both to legal requirements and to the nature and size of our business; and
	•	set the remuneration for non-employee directors, committee members and committee chairpersons.

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Annual Fees:
	All Directors		$7,500
	All Directors (at each annual meeting of stockholders)		A ten-year option to purchase 5,000 shares of our common stock, granted at the market price on the date of grant and vesting in full on the date of grant.
Additional Annual Fees:
	Chairman of the Audit Committee		$7,500
	Chairman of the Compensation Committee		$2,500
	Chairman of the Corporate Governance and Nominating Committee		$2,500
Meeting Fees:
	Regularly scheduled in-person Board meeting		$1,250
	Regularly scheduled telephonic Board meeting		$1,000
	Other telephonic Board meeting		$500
	Committee meetings (including the chairman)		$750

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																			Long-Term
							Annual Compensation												Compensation
																			Securities				All
Name and			Fiscal												Other Annual				Underlying				Other
Principal Position			Year				Salary				Bonus				Compensation				Options/SARs				(5)
Patrick T. Manning(1)				2005			$	240,000			$	365,000	(2)		$	28,200				11,500			$	2,215
	Chairman of the Board			2004			$	225,496			$	179,873			$	12,850				13,500				—
	& Chief Executive Officer			2003			$	200,000			$	300,000			$	12,850				3,500				—
Joseph P. Harper, Sr.(3)				2005			$	215,000			$	340,000	(2)		$	30,850				11,500			$	6,450
	President & Chief			2004			$	196,718			$	173,776			$	12,850				13,500			$	5,919
	Operating Officer			2003			$	187,308			$	300,000			$	12,850				3,500			$	5,205
Maarten D. Hemsley(4)				2005			$	108,067			$	50,000	(2)		$	7,660				2,800			$	3,242
	Chief Financial Officer			2004			$	88,269				—			$	4,500				5,000			$	2,550
				2003			$	88,651				—			$	4,500				—				—

(1)	We entered into a three-year employment agreement with Mr. Manning, effective July 18, 2004, as amended, under which he is paid an annual base salary of $240,000. Other annual compensation in 2005 consists of country club fees and monthly dues and a $700 per month car allowance.
(2)	The actual bonus amounts awarded for 2005 will be based on the terms of the respective named executive officer’s employment agreement with us and our financial performance, which has not yet been determined. The amount listed herein is an estimate based on our expected results of operations, as described in “Guidance.”
(3)	We entered into a three-year employment agreement with Mr. Harper, effective July 18, 2004, as amended, under which he is paid an annual base salary of $215,000. Other annual compensation in 2005 consists of country club monthly dues, a $700 per month car allowance and $18,000 for unused vacation time in 2005.
(4)	We entered into a two-year employment agreement with Mr. Hemsley, effective July 18, 2005, under which he is paid an annual base salary of $135,000. Other annual compensation in 2005 consists of the payment by SCC of Mr. Hemsley’s annual long-term disability insurance premium and life insurance premium.
(5)	All other compensation includes employer contributions under our 401(k) plan.

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																Potential Realizable
																Value at Assumed
																Annual Rates of
																Stock Price
																Appreciation for
		Individual Grants														Option Term
		Number of				% of Total Options
		Securities				Granted to				Exercise
		Underlying Options				Employees in				Price
Name		Granted (#)				Fiscal 2004				($/Share)				Expiration Date		5%				10%
Patrick T. Manning			10,000				8.5	%		$	9.69			July 18, 2010		$	26,772			$	59,158
			1,500				1.3	%		$	16.78			September 12, 2010		$	7,087			$	15,696
Joseph P. Harper, Sr.			10,000				8.5	%		$	9.69			July 18, 2010		$	26,772			$	59,158
			1,500				1.3	%		$	16.78			September 12, 2010		$	7,087			$	15,696
Maarten D. Hemsley			2,800				2.3	%		$	9.69			July 18, 2010		$	7,496			$	16,564

		Number of Securities
		Underlying Unexercised								Value of Unexercised
		Options at								In-the-Money Options at
		December 30, 2005								December 30, 2005
Name		Exercisable				Unexercisable				Exercisable				Unexercisable
Patrick T. Manning			7,160				28,540			$	106,000			$	308,648
Joseph P. Harper, Sr.			10,701				24,999			$	157,774			$	256,875
Maarten D. Hemsley			438,924				5,300			$	6,751,800			$	54,317

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	•	each person known by us to beneficially own more than 5% of our outstanding common stock;
	•	each executive officer named above in the summary compensation table;
	•	each of our directors;
	•	all of our executive officers and directors as a group; and
	•	the selling stockholders.

															Shares Beneficially
			Shares Beneficially Owned												Owned After this
			Prior to this Offering												Offering
											Number of
Name of Beneficial Owner			Number				Percent				Shares Offered				Number				Percent
John D. Abernathy				104,162	(1)			1.3	%			—				104,162				1.0	%
Robert W. Frickel				79,000	(2)			1.0	%			—				79,000				*
Joseph P. Harper, Sr.				811,642	(3)			9.8	%			—				811,642				7.6	%
Maarten D. Hemsley				519,812	(4)			6.0	%			—				519,812				4.8	%
Patrick T. Manning				236,380	(5)			2.9	%			—				236,380				2.3	%
Christopher H. B. Mills				887,000	(6)			10.9	%			—				887,000				8.4	%
Milton L. Scott				—				—				—				—				—
David R. A. Steadman				19,000	(7)			*				—				19,000				*
North Atlantic Smaller Companies Investment Trust plc
	c/o North Atlantic Value LLP** Ryder Court 14 Ryder Street London SW1Y 6QB, England			870,000	(8)			10.7	%			—				870,000				8.3	%
J O Hambro Capital Management Group, Limited
	Ryder Court 14 Ryder Street London SW1Y 6QB, England			870,000	(8)			10.7	%			—				870,000				8.3	%
J O Hambro Capital Management Limited
	Ryder Court 14 Ryder Street London SW1Y 6QB, England			870,000	(8)			10.7	%			—				870,000				8.3	%

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															Shares Beneficially
			Shares Beneficially Owned												Owned After this
			Prior to this Offering												Offering
											Number of
Name of Beneficial Owner			Number				Percent				Shares Offered				Number				Percent
Growth Financial Services Limited
	c/o North Atlantic Value LLP** Ryder Court 14 Ryder Street London SW1Y 6QB, England			870,000	(8)			10.7	%			—				870,000				8.3	%
Robert M. Davies
	433 North Street Greenwich, Connecticut 06830			180,492	(9)			2.2	%			180,492				—				—
KTI, Inc.
	c/o Casella Waste Systems, Inc. 25 Greens Hill Lane Rutland, Virginia 05701			100,000	(10)			1.2	%			100,000				—				—
Linda Manning
	14 Highland Green The Woodlands, Texas 77380			41,266	(10)			*				41,266				—				—
All directors and executive officers as a group (9 persons)				2,700,156	(11)			34.7	%			—				2,700,156				27.1	%

	*	Represents beneficial ownership of less than one percent (1%)

	**	Successor to J O Hambro Capital Management Limited

(1)	This number includes 98,166 shares that are issuable under outstanding stock options within 60 days of December 30, 2005 at prices ranging from $0.75 to $6.87 per share.
(2)	This number includes 17,000 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $1.50 to $6.87 per share.
(3)	This number includes 10,700 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $1.50 to $16.78 per share and 127,574 shares issuable under a warrant that is presently exercisable at $1.50 per share.
(4)	This number includes 438,924 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $0.50 to $9.69 per share.
(5)	This number includes 7,160 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $1.50 to $16.78 per share and 22,220 shares issuable under a warrant that is presently exercisable at $1.50 per share.
(6)	This number includes the 870,000 shares that are described in note 10 and 17,000 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $1.50 to $6.87 per share.
(7)	This number includes 5,000 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at $6.87 per share.
(8)	J O Hambro Capital Management Group Limited, JOHCMG, Christopher H. B. Mills, Growth Financial Services Limited and NASCIT claim shared voting power of these shares pursuant to Amendment No. 1 to a Schedule 13G filed with the SEC on February 14, 2002.
(9)	These shares are issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $0.875 to $6.87 per share.

(10)	These shares are issuable under outstanding warrants that are exercisable within 60 days of December 30, 2005 at a price of $1.50 per share.
(11)	This number includes 614,951 shares issuable under outstanding stock options that are exercisable within 60 days of December 30, 2005 at prices ranging from $0.50 to $16.78 per share and 149,794 shares issuable under warrants that are presently exercisable at $1.50 per share.

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	•	refinanced the note issued to Mr. Hemsley by adding the amount of accrued and unpaid interest and reducing the interest rate to 12% per annum and extending the maturity date to July 2005;
	•	refinanced the note issued to James D. Manning by reducing the interest rate to 12% per annum and extending the maturity date to July 2005;
	•	issued a new $187,000 zero coupon promissory note to James D. Manning with an interest rate of 12% per annum, in consideration for his agreeing to amend the original note;
	•	issued an additional note to Mr. Hemsley ($136,421) with an interest rate of 12% per annum, in connection with a business combination; and
	•	issued warrants to purchase shares of our common stock, including warrants to Messrs. James D. Manning, Patrick T. Manning, Joseph P. Harper Sr. and Joseph Harper, Jr. (son of Joseph P. Harper, Sr.) for the acquisition of 120,607, 63,486, 127,574 and 13,119 shares of our common stock, respectively.

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Name		Cash				Shares				Five-Year Notes
Patrick T. Manning		$	460,458				135,474			$	364,831
James D. Manning		$	660,649				218,357			$	2,124,633
Joseph P. Harper, Sr.		$	1,045,764				345,437			$	3,020,201
Maarten D. Hemsley		$	208,397				—			$	207,504
Joseph P. Harper, Jr.		$	102,023				142,339			$	134,772

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	•	restricting dividends on the common stock;
	•	diluting the voting power of the common stock;
	•	impairing the liquidation rights of the common stock; or
	•	delaying or preventing a change in control without further action by the stockholders.

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	•	prior to such time, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
	•	upon consummation of the transaction which resulted in the stockholder becoming an “interested stockholder,” the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding specified shares); or
	•	on or subsequent to such time, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the outstanding voting stock not owned by the interested stockholder.

	•	any person that is the owner of 15% or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the date of determination; and
	•	the affiliates and associates of any such person.

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	•	one percent of the number of shares of common stock then outstanding, which will equal approximately 104,902 shares immediately after this offering, or
	•	the average weekly trading volume of our common stock on the AMEX or Nasdaq, as applicable, during the four calendar weeks preceding the date of filing of a notice on Form 144 with respect to the sale.

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Underwriter		Number of Shares
D.A. Davidson & Co.
Morgan Joseph & Co. Inc.
Total			2,021,758

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Total

Without

With

Overallotment

Overallotment

Per Share

Exercise

Exercise

Public offering price

$

$

$

Underwriting discount payable by us

$

$

$

Underwriting discount payable by the selling stockholders

$

$

$

Proceeds, before expenses, to us

$

$

$

Proceeds, before expenses, to the selling stockholders

$

$

$

	•	Stabilizing transactions consist of certain bids or purchases made to prevent or retard a decline in the market price of our common stock.
	•	Passive market making consists of displaying bids on the Nasdaq no greater than the bid prices of independent market makers and making purchases at prices no higher than these independent bids and effected in response to order flow.
	•	Syndicate short positions involve the sale by the underwriters of a greater number of shares of common stock than they are required to purchase from us in the offering.

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	•	the sale by us and the selling stockholders of shares of common stock to the underwriters;
	•	the issuance by us of shares of common stock pursuant to, or the grant of options under, our existing stock incentive plans or outstanding warrants;
	•	the sale of shares of common stock acquired in the public market after the closing of this offering; or
	•	transfers of shares of common stock or securities convertible into or exercisable or exchangeable for common stock by any of the persons subject to a lock-up agreement (a) as a bona fide gift or gifts, (b) by will or intestacy or (c) to any affiliate or member of the such person’s immediate family or a trust created for the direct or indirect benefit of such person or the immediate family thereof; provided that, in any such case the transferee or transferees shall execute and deliver to the representatives, before such transfer, an agreement to be bound by the restrictions on transfer described above.

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		Page
Interim Financial Statements of Sterling Construction Company, Inc. (unaudited):
Consolidated Balance Sheets as of December 31, 2004 and September 30, 2005			F-2
Consolidated Statements of Operations for the Nine Months Ended September 30, 2004 and 2005			F-3
Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2005			F-4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2005			F-5
Notes to Consolidated Financial Statements			F-6
Audited Financial Statements of Sterling Construction Company, Inc.:
Report of Independent Registered Public Accounting Firm			F-12
Consolidated Balance Sheets as of December 31, 2003 and 2004			F-13
Consolidated Statements of Operations for the Years Ended December 31, 2002, 2003 and 2004			F-14
Consolidated Statement of Stockholders’ Equity for the Years Ended December 31, 2002, 2003 and 2004			F-15
Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2003 and 2004			F-16
Notes to Consolidated Financial Statements			F-17

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				September 30,				December 31,
				2005				2004
				(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents			$	20,138			$	3,449
	Contracts receivable				40,762				26,250
	Costs and estimated earnings in excess of billings on uncompleted contracts				3,296				5,884
	Deferred tax asset				4,824				3,986
	Prepaid taxes				80				—
	Assets of discontinued operations held for sale				8,823				7,343
	Other				847				1,497
		Total current assets			78,770				48,409
Property and equipment, net					27,130				21,028
Goodwill					12,735				12,735
Deferred tax asset					3,400				6,493
Other assets					754				879
					16,889				20,107
		Total assets		$	122,789			$	89,544
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	29,245			$	14,382
	Billings in excess of cost and estimated earnings on uncompleted contracts				12,017				4,477
	Short-term debt, related parties				2,112				3,343
	Current maturities of long term obligations				123				123
	Liabilities of discontinued operations held for sale				8,582				7,786
	Other accrued expenses				4,092				2,246
		Total current liabilities			56,171				32,357
Long-term obligations:
	Long-term debt				15,742				13,329
	Long-term debt, related parties				6,865				7,755
	Other long-term obligations				809				895
					23,416				21,979
Commitments and contingencies
Stockholders’ equity:
	Preferred stock, par value $0.01 per share; authorized 1,000,000 shares, none issued				—				—
	Common stock, par value $0.01 per share; authorized 14,000,000 shares, 8,147,483 and 7,378,681 shares issued				81				74
	Additional paid-in capital				83,642				80,688
	Deferred compensation expense				(1,136	)			(161	)
	Accumulated deficit				(39,385	)			(45,392	)
	Treasury stock, at cost, — and 207 common shares				—				(1	)
		Total stockholders’ equity			43,202				35,208
				$	122,789			$	89,544

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				Nine Months Ended
				September 30,
				2005				2004
				(Unaudited)
Revenues				$	157,805			$	95,161
Cost of revenues					141,541				83,970
Gross profit					16,264				11,191
General and administrative expenses, net					6,771				5,844
Interest expense, net of interest income					1,198				1,053
Income from continuing operations before minority interest and income taxes					8,295				4,294
Minority interest					—				862
Income from continuing operations
	Before income taxes				8,295				3,432
Income taxes					2,820				1,167
Net income from continuing operations					5,475				2,265
Net income from discontinued operations					532				342
Net income				$	6,007			$	2,607
Basic net income per share:
	Income from continuing operations			$	0.72			$	0.43
	Income from discontinued operations			$	0.07			$	0.06
		Net income		$	0.79			$	0.49
Weighted average number of shares outstanding
	Used in computing basic per share amounts				7,638,261				5,274,730
Diluted net income per share:
	Income from continuing operations			$	0.58			$	0.32
	Income from discontinued operations			$	0.06			$	0.05
		Net income		$	0.64			$	0.37
Weighted average number of shares outstanding
	Used in computing diluted per share amounts				9,467,306				7,158,697

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Table of Contents

						Deferred				Additional
		Common				Compensation				Paid-in				Accumulated				Treasury
		Stock				Expense				Capital				Deficit				Stock				Total
		(Unaudited)
Balance at January 1, 2005		$	74			$	(161	)		$	80,688			$	(45,392	)		$	(1	)		$	35,208
Net income			—				—				—				6,007				—				6,007
Stock issued upon option and warrant exercise			7				—				785				—				—				792
Stock options granted			—				(1,331	)			1,331				—				—				—
Deferred compensation expense			—				356				—				—				—				356
Privatization of Steel City Products, Inc.			—				—				—				—				1				1
Reduction of valuation allowance — deferred tax asset			—				—				838				—				—				838
Balance at September 30, 2005		$	81			$	(1,136	)		$	83,642			$	(39,385	)			—			$	43,202

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Table of Contents

				Nine Months Ended
				September 30,
				2005				2004
				(Unaudited)
	Net income			$	6,007			$	2,607
	Net income from discontinued operations				(532	)			(342	)
	Net income from continuing operations				5,475				2,265
	Adjustments to reconcile income from operations to net cash provided by (used in) continuing operating activities:
		Depreciation and amortization			3,826				3,487
		Gain on sale of surplus equipment			(215	)			(18	)
		Deferred tax expense			2,820				1,167
		Deferred compensation expense			356				314
		Minority interest in net earnings of subsidiary			—				862
		Accretion of zero coupon notes			—				466
	Other changes in operating assets and liabilities:
		Increase in contracts receivable			(14,512	)			(6,931	)
		Decrease (increase) in costs and estimated earnings in excess of billings on uncompleted contracts			2,588				(3,880	)
		Decrease in prepaid expense and other assets			660				1,069
		Increase in trade payables			14,863				4,474
		Increase (decrease) in billings in excess of costs and estimated earnings on uncompleted contracts			7,540				(4,993	)
		Increase in accrued compensation and other liabilities			1,967				738
Net cash provided by (used in) continuing operating activities					25,368				(980	)
Cash flows from continuing operations investing activities:
	Additions to property and equipment				(9,948	)			(2,527	)
	Proceeds from sale of surplus equipment				270				153
Net cash used in continuing operations investing activities					(9,678	)			(2,374	)
Cash flows from financing activities:
	Cumulative daily drawdowns of revolvers				112,783				65,576
	Cumulative daily reductions of revolvers				(110,370	)			(60,260	)
	Repayments under long-term obligations				(2,206	)			(2,155	)
	Issuance of common stock, pursuant to options and warrants				792				392
Net cash provided by continuing financing activities:					999				3,553
	Cash used in discontinued operating activities				(268	)			(799	)
	Cash used for discontinued investing activities				—				(31	)
	Cash provided by discontinued financing activities				400				1,217
Net cash provided by discontinued operations					132				387
Net increase in cash and cash equivalents from continuing operations					16,689				199
Cash and cash equivalents at beginning of period					3,449				2,651
Cash and cash equivalents at end of period				$	20,138			$	2,850
Supplemental disclosures of cash flow information:
	Cash paid for interest			$	1,591			$	861
	Cash paid for income taxes			$	155			$	205
Supplemental disclosure of non-cash financing activities:
	Reduction of deferred tax valuation allowance			$	838				—

F-5

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1.	Basis of Presentation

2.	Recent Accounting Pronouncements

F-6

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3.	Critical Accounting Policies

F-7

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4.	Property and Equipment

		September 30,				December 31,
		2005				2004
		(Unaudited)
		(Amounts in thousands)
Construction equipment		$	34,931			$	26,550
Transportation equipment			5,287				4,370
Buildings			1,488				1,488
Office furniture and equipment			486				438
Land			182				182
			42,374				33,028
Less accumulated depreciation			(15,244	)			(12,000	)
		$	27,130			$	21,028

5.	Income Per Share

		Nine Months
		Ended
		September 30,
		2005				2004
Numerator:
Net income from continuing operations, as reported		$	5,475			$	2,265
Add back interest on convertible debt, net of tax			—				33
Net income from continuing operations before interest on convertible debt		$	5,475			$	2,298
Income from discontinued operations, net of taxes		$	532			$	342
Net income before interest on convertible debt		$	6,007			$	2,640
Denominator:
Weighted average common shares outstanding — basic			7,638				5,275
Shares for convertible debt			—				224
Shares for dilutive stock options and warrants			1,829				1,660
Weighted average common shares outstanding and assumed conversions — diluted			9,467				7,159
Continuing operations:
Basic net income per common share		$	0.72			$	0.43
Diluted net income per common share		$	0.58			$	0.32

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		Nine Months
		Ended
		September 30,
		2005				2004
Discontinued operations:
Basic net income per common share		$	0.07			$	0.06
Diluted net income per common share		$	0.06			$	0.05
Total:
Basic net income per common share		$	0.79			$	0.49
Diluted net income per common share		$	0.64			$	0.37

6.	Stock-Based Compensation

		Nine Months
		Ended
		September 30,
		2005				2004
Net income from continuing operations, as reported		$	5,475			$	2,265
Add: Stock-based employee compensation expense included in reported net income, net of related tax effect			356				278
Deduct: Stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(331	)			(60	)
Pro forma net income from continuing operations		$	5,500			$	2,483
Net income from discontinued operations		$	532			$	342
Pro forma net income		$	6,032			$	2,825
Basic and diluted net income per share:
From continuing operations:
Basic, as reported		$	0.72			$	0.43
Diluted, as reported		$	0.58			$	0.32
Pro forma, basic		$	0.72			$	0.47
Pro forma, diluted		$	0.58			$	0.35

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		Nine Months
		Ended
		September 30,
		2005				2004
From discontinued operations:
Basic, as reported		$	0.07			$	0.06
Diluted, as reported		$	0.06			$	0.05
Pro forma, basic		$	0.07			$	0.06
Pro forma, diluted		$	0.06			$	0.05
Total:
Basic, as reported		$	0.79			$	0.49
Diluted, as reported		$	0.64			$	0.37
Pro forma, basic		$	0.79			$	0.53
Pro forma, diluted		$	0.64			$	0.40

7.	Discontinued Operations

		Nine Months Ended
		September 30,
		2005				2004
Net sales		$	17,559			$	17,565
Income before income taxes			798				543
Income taxes			266				201
Income from discontinued operations		$	532			$	342

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			September 30,				December 31,
			2005				2004
			(In thousands)
Assets
	Current assets		$	8,477			$	7,012
	Property, plant and equipment, net			213				199
	Goodwill			128				128
	Other assets			5				4
			$	8,823			$	7,343
Liabilities
	Current liabilities*		$	8,517			$	7,753
	Long-term obligations, net of current portion			65				33
			$	8,582			$	7,786
Net assets (liabilities) of discontinued operations			$	241			$	(443	)

	*	The Steel City revolver is included in current liabilities.

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F-12

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Table of Contents

				December 31,				December 31,
				2004				2003
ASSETS
Current assets:
	Cash and cash equivalents			$	3,449			$	2,651
	Contracts receivable				26,250				26,504
	Costs and estimated earnings in excess of billings on uncompleted contracts				5,884				1,281
	Inventories				—				822
	Deferred tax asset				3,986				1,452
	Assets of discontinued operations held for sale				7,343				6,522
	Other				1,497				1,348
		Total current assets			48,409				40,580
Property and equipment, net					21,028				22,132
Goodwill					12,735				7,682
Deferred tax asset					6,493				4,527
Other assets					879				657
					20,107				12,866
		Total assets		$	89,544			$	75,578
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	14,382			$	9,895
	Billings in excess of cost and estimated earnings on uncompleted contracts				4,477				9,742
	Short-term debt, related parties				3,343				2,060
	Current maturities of long term obligations				123				686
	Liabilities of discontinued operations held for sale				7,786				7,558
	Other accrued expenses				2,246				3,806
		Total current liabilities			32,357				33,747
Long-term obligations:
	Long-term debt				13,329				6,568
	Long-term debt, related parties				7,755				6,758
	Put liability				—				5,578
	Other long-term obligations				895				1,018
					21,979				19,922
Minority interest					—				5,273
Commitments and contingencies
Stockholders’ equity:
	Preferred stock, par value $0.01 per share; authorized 1,000,000 shares, none issued				—				—
	Common stock, par value $0.01 per share; authorized 14,000,000 shares, 7,378,681 and 5,139,900 shares issued				74				51
	Additional paid-in capital				80,688				67,770
	Deferred compensation expense				(161	)			(139	)
	Accumulated deficit				(45,392	)			(51,045	)
	Treasury stock, at cost, 207 common shares				(1	)			(1	)
		Total stockholders’ equity			35,208				16,636
				$	89,544			$	75,578

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				2004				2003				2002
Revenues				$	132,478			$	149,006			$	111,747
Cost of revenues					119,217				131,181				98,935
Gross profit					13,261				17,825				12,812
Selling and administrative expenses, net					7,696				7,400				6,862
Interest expense, net of interest income					1,456				1,842				2,427
Income from continuing operations before minority interest and income taxes					4,109				8,583				3,523
Minority interest					962				1,627				873
Income from continuing operations before income taxes					3,147				6,956				2,650
Income taxes:
	Current income tax expense				169				236				—
	Deferred income tax (benefit) expense				(2,303	)			1,516				(174	)
	Total income tax (benefit) expense				(2,134	)			1,752				(174	)
Net income from continuing operations					5,281				5,204				2,824
Net income from discontinued operations					372				215				528
Net income				$	5,653			$	5,419			$	3,352
Basic net income per share
	Net income from continuing operations			$	0.99			$	1.02			$	0.56
	Net income from discontinued operations			$	0.07			$	0.04			$	0.10
		Net income		$	1.06			$	1.06			$	0.66
Weighted average number of shares outstanding used in computing basic per share amounts					5,342,847				5,089,849				5,061,598
Diluted net income per share
	Net income from continuing operations			$	0.75			$	0.80			$	0.46
	Net income from discontinued operations			$	0.05			$	0.03			$	0.09
		Net income		$	0.80			$	0.83			$	0.55
Weighted average number of shares outstanding used in computing diluted per share amounts					7,027,682				6,488,376				6,101,515

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						Deferred				Additional
		Common				Compensation				Paid-in				Accumulated				Treasury
		Stock				Expense				Capital				Deficit				Stock				Total
Balance at December 31, 2001		$	50				—			$	65,900			$	(59,816	)		$	(1	)		$	6,133
Stock issued upon option exercise			*				—				9				—				—				9
Reduction of valuation allowance - deferred tax asset			—				—				1,332				—				—				1,332
Net income			—				—				—				3,352				—				3,352
Balance at December 31, 2002			50				—				67,241				(56,464	)			(1	)			10,826
Stock issued upon option exercise			1								108				—				—				109
Stock options granted			—				(439	)			439				—				—				—
Deferred compensation expense			—				300				—				—				—				300
Write off of discounted warrants			—				—				(18	)			—				—				(18	)
Net income			—				—				—				5,419				—				5,419
Balance at December 31, 2003			51				(139	)			67,770				(51,045	)			(1	)			16,636
Stock issued upon option exercise			2								403				—				—				405
Stock options granted			—				(403	)			403				—				—				—
Deferred compensation expense			—				381				—				—				—				381
Conversion of debt to stock			5				—				1,714				—				—				1,719
Shares issued upon settlement of put			16				—				8,051				—				—				8,067
Purchase of minority interest of SCPI			—				—				(49	)			—				—				(49	)
Reduction of valuation allowance- deferred tax asset			—				—				2,396				—				—				2,396
Net income			—				—				—				5,653				—				5,653
Balance at December 31, 2004		$	74			$	(161	)		$	80,688			$	(45,392	)		$	(1	)		$	35,208

*	rounds to less than one thousand

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				2004				2003				2002
	Net income			$	5,653			$	5,419			$	3,352
	Net income from discontinued operations				(372	)			(215	)			(528	)
	Net income from continuing operations				5,281				5,204				2,824
	Adjustments to reconcile income from operations to net cash provided by continuing operating activities:
		Depreciation and amortization			4,545				4,690				3,755
		Loss (gain) loss on sale of property and equipment			4				(11	)			(47	)
		Deferred tax (benefit) expense			(2,303	)			1,516				(174	)
		Deferred compensation expense			381				300				—
		Minority interest in net earnings of subsidiary			962				1,627				873
		Increase in put liability			—				1,001				521
		Accretion of zero coupon notes			—				744				760
		Fair value of induced conversion of debt to equity			257				—				—
	Other changes in operating assets and liabilities:
		Decrease (increase) in contracts receivable			254				(4,286	)			(7,023	)
		(Increase) decrease in costs and estimated earnings in excess of billings on uncompleted contracts			(4,603	)			1,512				(1,061	)
		Decrease (increase) in prepaid expense and other assets			370				(1,206	)			(239	)
		Increase in trade payables			4,487				(619	)			2,567
		(Decrease) increase in billings in excess of costs and estimated earnings on uncompleted contracts			(5,265	)			6,201				(472	)
		(Decrease) increase in accrued compensation and other liabilities			(199	)			1,513				2,720
Net cash provided by continuing operating activities					4,171				18,186				5,004
Cash flows from continuing operations investing activities:
	Net cash paid upon acquisition of Kinsel business				—				—				(2,662	)
	Net cash paid upon acquisition of TSC minority interest				(2,446	)			—				—
	Additions to property and equipment				(3,555	)			(4,340	)			(4,245	)
	Proceeds from sale of property and equipment				192				70				106
Net cash used in continuing investing activities					(5,809	)			(4,270	)			(6,801	)
Cash flows from continuing operations financing activities:
	Cumulative daily drawdowns of revolvers				102,531				97,211				81,602
	Cumulative daily reductions of revolvers				(95,770	)			(104,653	)			(77,592	)
	Repayments under long-term obligations				(4,730	)			(6,043	)			(2,731	)
	Issuance of common stock, pursuant to options				405				109				9
Net cash provided by (used in) continuing financing activities:					2,436				(13,376	)			1,288
	Cash used in discontinued operating activities				(977	)			(388	)			102
	Cash used for discontinued investing activities				(34	)			(10	)			(101	)
	Cash provided by discontinued financing activities				964				217				32
Net cash provided by discontinued operations					(47	)			(181	)			33
Net increase in cash and cash equivalents from continuing operations					798				540				(509	)
Cash and cash equivalents at beginning of period					2,651				2,111				2,620
Cash and cash equivalents at end of period				$	3,449			$	2,651			$	2,111
Supplemental disclosures of cash flow information:
	Cash paid during the period for interest			$	2,097			$	1,943			$	2,316
	Cash paid during period for taxes			$	14			$	10			$	—
Supplemental disclosure of non-cash financing activities:
	Capital lease obligations for new equipment			$	26			$	—			$	32

F-16

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Table of Contents

1.	Summary of Business and Significant Accounting Policies

	Basis of Presentation:

	Organization and business:

	Use of Estimates:

	Revenue Recognition:

	Construction

F-17

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	Distribution

	•	Persuasive evidence of an arrangement exists
	•	Delivery has occurred or service has been rendered
	•	The seller’s price to the buyer is fixed or determinable, and
	•	Collectibility is reasonably assured.

	Cash and Cash Equivalents:

	Contracts Receivable:

	Accounts Receivable:

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Table of Contents

	Retainage:

	Inventories:

	Property and Equipment:

Building and improvements		15-39 years
Construction equipment		5-15 years
Leasehold improvements		3-10 years, depending on the term of the lease*
Transportation equipment		5 years
Office furniture, warehouse equipment and vehicles		3-10 years

*	All leasehold improvements are owned by SCPI, which is reported as discontinued operations.

	Deferred Loan Costs:

	Goodwill:

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Balance, January 1, 2003		$	7,682
Impairment losses			—
Balance, January 1, 2004		$	7,682
Purchase of TSC minority interest			5,053
Impairment losses			—
Balance, December 31, 2004		$	12,735

	Equipment Under Capital Leases:

	Shipping and Handling Costs:

	Federal and State Income Taxes:

F-20

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Table of Contents

	Stock-Based Compensation:

			Fiscal Year				Fiscal Year				Fiscal Year
			Ended				Ended				Ended
			December 31,				December 31,				December 31,
			2004				2003				2002
Net income from continuing operations, as reported			$	5,281			$	5,204			$	2,824
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects				381				300				—
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects				(117	)			(64	)			(50	)
Proforma net income from continuing operations				5,545				5,440				2,774
Net income from discontinued operations				372				215				528
Proforma net income			$	5,917			$	5,655			$	3,302
Basic and diluted net income per share:
From continuing operations:
	Basic, as reported		$	0.99			$	1.02			$	.056
	Diluted, as reported		$	0.75			$	0.80			$	0.46
	Proforma, basic		$	1.03			$	1.07			$	0.56
	Proforma, diluted		$	0.79			$	0.84			$	0.46
From discontinued operations:
	Basic, as reported		$	0.07			$	0.04			$	0.10
	Diluted, as reported		$	0.05			$	0.03			$	0.09
	Proforma, basic		$	0.07			$	0.04			$	0.10
	Proforma, diluted		$	0.05			$	0.03			$	0.09

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			Fiscal Year				Fiscal Year				Fiscal Year
			Ended				Ended				Ended
			December 31,				December 31,				December 31,
			2004				2003				2002
Total:
	Basic, as reported		$	1.06			$	1.06			$	0.66
	Diluted, as reported		$	0.80			$	0.83			$	0.55
	Proforma, basic		$	1.10			$	1.11			$	0.66
	Proforma, diluted		$	0.84			$	0.87			$	0.55

		Fiscal 2004				Fiscal 2003				Fiscal 2002
Numerator:
Net income from continuing operations, as reported		$	5,281			$	5,204			$	2,824
Interest on convertible debt, net of tax			44				44				44
Net income from continuing operations before interest on convertible debt			5,325				5,248				2,868
Income from discontinued operations, net of taxes			372				215				528
Net income before interest on convertible debt		$	5,697			$	5,463			$	3,396
Denominator:
Weighted average common shares outstanding — basic			5,343				5,090				5,062
Shares for convertible debt			—				224				224
Shares for dilutive stock options and warrants			1,685				1,174				816
Weighted average common shares outstanding and assumed conversions — diluted			7,028				6,488				6,102
Basic earnings per common share:
Net income from continuing operations		$	0.99			$	1.02			$	0.56
Net income from discontinued operations		$	0.07			$	0.04			$	0.10
Net income		$	1.06			$	1.06			$	0.66
Diluted earnings per common share:
Net income from continuing operations		$	0.75			$	0.80			$	0.46
Net income from discontinued operations		$	0.05			$	0.03			$	0.09
Net income		$	0.80			$	0.83			$	0.55

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2.	Discontinued operations

		2004				2003				2002
Net sales		$	21,700			$	20,526			$	22,570
Income before income taxes			588				341				822
Income taxes			216				126				294
Income from discontinued operations		$	372			$	215			$	528

			December 31,				December 31,
			2004				2003
			(In thousands)
Assets
	Current assets		$	7,012			$	6,141
	Property, plant and equipment, net			199				247
	Goodwill			128				128
	Other assets			4				6
			$	7,343			$	6,522
Liabilities
	Current liabilities*		$	7,753			$	7,522
	Long-term obligations, net of current portion			33				36
			$	7,786			$	7,558
Net liabilities of discontinued operations			$	(443	)		$	(1,036	)

*	The SCPI revolver is included in current liabilities.

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3.	Property and Equipment

		December 31,				December 31,
		2004				2003
Construction equipment		$	26,550			$	24,367
Transportation equipment			4,370				4,137
Buildings			1,488				1,488
Office furniture, warehouse equipment and vehicles			437				388
Land			182				182
			33,027				30,562
Less accumulated depreciation			(11,999	)			(8,430	)
		$	21,028			$	22,132

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Current assets			$	7,600
Property, plant and equipment (net)				4,000
Goodwill				5,100
	Total assets acquired			16,700
Current liabilities				(4,200	)
Long-term liabilities				(3,200	)
	Total liabilities assumed			(7,400	)
Put liability				5,800
Purchase price			$	15,100

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										Proforma Fiscal
		Fiscal Year Ended								Year Ended
		December 31,				Proforma				December 31,
		2004				Adjustment				2004
Revenues		$	154,178							$	154,178
Operating profit			6,391								6,391
Interest expense, net of interest income			1,695				344	(b)			2,039
Minority interest			962				(962	)(c)			—
Net income from continuing operations		$	5,281				408			$	5,689
Net income from discontinued operations			372								372
Net income		$	5,653				408			$	6,061
Weighted average shares, basic			5,343				1,794	(d)			7,137
Earnings per share from continuing operations		$	0.99							$	0.80
Earnings per share from discontinued operations		$	0.07							$	0.05
Total earnings per share, basic		$	1.06							$	0.85
Weighted average shares, diluted			7,028				1,794	(d)			8,822
Earnings per share from continuing operations		$	0.75							$	0.65
Earnings per share from discontinued operations		$	0.05							$	0.04
Earnings per share, diluted		$	0.80							$	0.69

										Proforma Fiscal
		Fiscal Year Ended								Year Ended
		December 31,				Proforma				December 31,
		2003				Adjustment				2003
Revenues		$	169,532							$	169,532
Operating profit			10,998				1,001	(a)			11,999
Interest expense, net of interest income			2,074				359	(b)			2,433
Minority interest			1,627				(1,627	)(c)			—
Net income from continuing operations		$	5,204				4,147			$	9,351
Net income from discontinued operations			215								215
Net income		$	5,419			$	4,147			$	9,566
Weighted average shares, basic			5,090				1,794	(d)			6,885
Earnings per share from continuing operations		$	1.02							$	1.36
Earnings per share from discontinued operations		$	0.04							$	0.03
Earnings per share, basic		$	1.06							$	1.39
Weighted average shares, diluted			6,488				1,794	(d)			8,282
Earnings per share from continuing operations		$	0.80							$	1.13
Earnings per share from discontinued operations		$	0.03							$	0.03
Earnings per share, diluted		$	0.83							$	1.16

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										Proforma Fiscal
		Fiscal Year Ended								Year Ended
		December 31,				Proforma				December 31,
		2002				Adjustment				2002
Total revenues		$	134,317							$	134,417
Operating profit			6,988				521	(a)			7,509
Interest expense, net of interest income			2,643				484	(b)			3,127
Minority interest			873				(873	)(c)			—
Net income from continuing operations		$	2,824				601			$	3,425
Net income from discontinued operations			528								528
Net income		$	3,352							$	3,953
Weighted average shares, basic			5,062				1,794	(d)			6,856
Earnings per share from continuing operations		$	0.56							$	0.50
Earnings per share from discontinued operations		$	0.10							$	0.08
Earnings per share, basic		$	0.66							$	0.58
Weighted average shares, diluted			6,103				1,794	(d)			7,897
Earnings per share from continuing operations		$	0.46							$	0.43
Earnings per share from discontinued operations		$	0.09							$	0.07
Earnings per share, diluted		$	0.55							$	0.50

(a)		Reverses the increase of $1.0 million in 2003 and $521,000 in the Put liability during 2002
(b)		Additional interest expense related to the issuance of new notes offset by a decrease in interest expense related to existing notes repaid or replaced as part of the transaction
(c)		Minority interest expense is eliminated
(d)		Reflects the issuance of 1.8 million of shares of common stock in part satisfaction of the Put consideration and certain notes.

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5.	Line of Credit and Long-Term Obligations

		December 31,				December 31,
		2004				2003
TSC Revolving Credit Agreement, due May 2007		$	13,329			$	6,568
Subordinated debt, due quarterly through September 2004			—				1,500
Subordinated zero coupon notes			—				5,213
SCPI Revolving Credit Agreement, due May, 2006			3,625				2,660
Other related party debt			250				1,795
Mortgages payable, due monthly through June 2016			1,018				1,141
Insituform Notes due quarterly through September 2004			—				563
Convertible subordinated notes, due December 2004			—				560
Management/director notes due December 2009			3,343				—
NASCIT five year-note, due December 2009			1,405				—
Management notes issued at settlement of the Put, due December 2009			6,353				—
Other			56				58
			29,379				20,058
Less current maturities of long-term obligations			(123	)			(686	)
Less short-term debt, related parties			(3,343	)			(2,060	)
Amounts included in discontinued operations			(3,934	)			(2,968	)
		$	21,979			$	14,344

	Related Party Notes

	Subordinated Debt

	Subordinated Zero Coupon Notes

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	Management/ Director Notes

	Convertible Subordinated Notes

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	Other Related-Party Debt

	TSC Revolver and SCPI Revolver

	TSC Mortgage

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	Insituform Note

	Other Debt

	Maturity of Debt

Fiscal Year
2005		$	7,399	*
2006			2,063
2007			15,391
2008			2,036
2009			2,011
Thereafter			479
		$	29,379

*	Includes the SCPI revolver, which has been classified in liabilities of discontinued operations.

6.	Financial Instruments

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7.	Derivative Financial Instruments

8.	Income Taxes and Deferred Tax Asset

		December 31, 2004								December 31, 2003
		Current				Long Term				Current				Long Term
ASSETS related to:
Net operating loss carryforwards		$	4,541			$	8,685			$	15,747			$	12,448
Accrued compensation			490				—
Reserve for bad debts			345				—				324				—
Other			—				8				—				46
			5,376				8,693				16,071				12,494
LIABILITIES related to:
Depreciation of property and equipment			—				2,200				—				2,343
Net asset before valuation allowance			5,376				6,493				16,071				10,151
Less: valuation allowance			(1,390	)			—				(14,619	)			(5,624	)
Net asset		$	3,986			$	6,493			$	1,452			$	4,527

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			Fiscal 2004				Fiscal 2003
Utilization of net operating loss carryforwards previously reserved against current taxable income			$	—			$	1,816
Reassessment of valuation allowance based on future taxable income forecasts:
	Effects on income statement			3,787				(319	)
	Effects on additional paid in capital			2,396				—
Expiration of net operating loss carryforwards				12,670				3,444
			$	18,853			$	4,941

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		Fiscal Year Ended
		December 31,				December 31,				December 31,
		2004				2003				2002
Tax expense at the U.S. federal statutory rate		$	1,270			$	2,484			$	1,176
State income tax expense, net of refunds and federal benefits			17				10				14
Utilization of net operating loss carryforwards against current taxable income			—				(1,816	)			—
(Decrease) increase in deferred tax asset valuation allowance			(3,787	)			319				(1,572	)
Non-deductible costs			558				873				504
Other			24				8				(16	)
Income tax (benefit) expense		$	(1,918	)		$	1,878			$	106
Income tax on discontinued operations			216				126				280
Income tax on continuing operations			(2,134	)			1,752				(174	)

Fiscal Year
2005		$	13,358
2008			153
2010			1,466
2011			2,094
2017			3,098
2018			874
Thereafter			17,857
		$	38,900

9.	Costs and Estimated Earnings and Billings on Uncompleted Contracts

		Fiscal Year Ended				Fiscal Year Ended
		December 31,				December 31,
		2004				2003
Costs incurred and estimated earnings on uncompleted contracts		$	95,840			$	99,732
Billings on uncompleted contracts			(94,433	)			(108,193	)
		$	1,407			$	(8,461	)

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		Fiscal Year Ended				Fiscal Year Ended
		December 31,				December 31,
		2004				2003
Costs and estimated earnings in excess of billings on uncompleted contracts		$	5,884			$	1,281
Billings in excess of costs and estimated earnings on uncompleted contracts			(4,477	)			(9,742	)
		$	1,407			$	(8,461	)

10.	Stock Options and Warrants

	Options

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		1991 Plan								Director Plan								1994 Omnibus Plan
						Weighted								Weighted								Weighted
						Average								Average								Average
		Shares				Exercise Price				Shares				Exercise Price				Shares				Exercise Price
Outstanding at December 31, 2001:			128,573			$	2.58				87,502			$	1.77				866,284			$	1.46
Granted			—								—								—
Exercised			—								—								(13,500	)		$	1.07
Expired/forfeited			(29,157	)		$	2.00				—								(30,000	)		$	1.68
Outstanding at December 31, 2002:			99,416			$	2.75				87,502			$	1.77				822,784			$	1.46
Granted			—								—								—
Exercised			(14,996	)		$	2.75				—								(50,000	)		$	2.75
Expired/forfeited			—								—								(2,400	)		$	1.35
Outstanding at December 31, 2003:			84,420			$	2.75				87,502			$	1.77				770,384			$	1.48
Granted			—								—								—
Exercised			—			$	2.75				(37,170	)		$	1.83				(162,192	)		$	1.95
Expired/forfeited			—								(3,000	)		$	2.75				(29,996	)		$	2.42
Outstanding at December 31, 2004:			84,420			$	2.75				47,332			$	1.67				578,196			$	1.29

		1998 Omnibus Plan(a)								2001 Stock Incentive Plan
						Weighted								Weighted
						Average								Average
						Exercise								Exercise
		Shares				Price				Shares				Price
Outstanding at December 31, 2001:			540,500			$	0.54				97,400			$	1.50
Granted			10,000			$	1.50				55,900			$	1.73
Expired/forfeited			—								—
Outstanding at December 31, 2002:			550,500			$	0.55				153,300			$	1.58
Granted			—								60,800			$	3.05
Exercised			(10,000	)		$	0.50				—
Expired/forfeited			—								—
Outstanding at December 31, 2003:			540,500			$	0.56				214,100			$	2.00
Granted			—								157,800			$	3.10
Exercised			(20,375	)		$	1.05				(420	)		$	2.04
Expired/forfeited			(1,500	)		$	1.00				(7,180	)		$	1.82
Outstanding at December 31, 2004:			518,625			$	0.54				364,300			$	2.48

(a)	Of the options to purchase 600,000 shares granted in fiscal 1999, one third were immediately exercisable, one third vested in December 1999 and one third vested in December 2000. The option to purchase 41,000 shares granted in fiscal 2000 vest over a four year period, with one quarter of the total being immediately exercisable.

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		Options Outstanding												Options Exercisable
						Weighted Average				Weighted Average								Weighted Average
		Number of				Remaining Contractual Life				Exercise Price Per				Number of				Exercise Price Per
Range of Exercise Price Per		Shares				(years)				Share				Shares				Share
Share
$0.50 - $0.88			885,532				8.01			$	0.67				885,532			$	0.67
$1.00 - $1.50			214,025				5.85			$	1.27				195,925			$	1.25
$1.73 - $2.00			61,600				6.60			$	1.77				31,041			$	1.80
$2.75 - $3.38			431,716				5.97			$	2.93				229,617			$	2.80
			1,592,873							$	1.41				1,342,115			$	1.13

Fiscal 2004

Fiscal 2003

Fiscal 2002

Risk free interest rate

4.00%

4.00%

4.00%

Expected volatility

78.0%

77.0%

79.0%

Expected life of option

10.0 years

10.0 years

10.0 years

Expected dividends

None

None

None

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Fiscal Year
2005			555
2006			533
2007			516
Thereafter			—
Total future minimum rental payments		$	1,604

		Fiscal 2004								Fiscal 2003								Fiscal 2002
		December 31,								December 31,								December 31,
		2004								2003								2002
		Contract				% of				Contract				% of				Contract				% of
		Revenues				Revenues				Revenues				Revenues				Revenues				Revenues
City of Houston		$	16,512				12.5	%		$	58,441				39.2	%		$	26,044				23.3	%
Texas State Department of Transportation		$	44,461				33.6	%		$	28,412				19.1	%			*				*

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	•	Specific excess reinsurance coverage for medical and prescription drug claims in excess of $40,000 with a maximum lifetime reimbursable of $468,000.
	•	Aggregate reinsurance coverage for medical, dental and prescription drug claims with a plan year maximum of $1,000,000 for claims in excess of approximately $818,000 which is estimated claims cost based on the number of employees.

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Name		Cash				Shares				Five-year Notes
Patrick T. Manning		$	460,458				135,474			$	365,831
James D. Manning		$	660,649				218,357			$	2,124,633
Joseph P. Harper, Sr.		$	1,045,764				345,437			$	3,020,201
Maarten D. Hemsley		$	208,397				—			$	207,504
Robert M. Davies		$	166,876				—			$	518,641

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18.	Quarterly Financial Information (Unaudited)

		Fiscal 2004 Quarter Ended
		March 31				June 30				September 30				December 31				Total
		(Dollar amounts in thousands, except per share data)
Revenues		$	25,586			$	29,354			$	40,221			$	37,317			$	132,478
Gross profit			2,678				4,615				3.899				2,069				13,261
Income (loss) before minority interest and taxes			345				2,715				1,235				(186	)			4,109
Net income from continuing operations			87				1,531				648				3,015				5,281
Net income from discontinued operations			181				93				68				30				372
Net income		$	268			$	1,624			$	716			$	3,045			$	5,653
Basic income per share:
From continuing operations:		$	0.02			$	0.29			$	0.12			$	0.56			$	0.99
From discontinued operations:		$	0.03			$	0.02			$	0.01			$	0.01			$	0.07
Net income per share, basic:		$	0.05			$	0.31			$	0.13			$	0.57			$	1.06
Diluted income per share:
From continuing operations		$	0.02			$	0.22			$	0.09			$	0.42			$	0.75
From discontinued operations		$	0.02			$	0.01			$	0.01			$	0.01			$	0.05
Net income per share, diluted:		$	0.04			$	0.23			$	0.10			$	0.43			$	0.80

		Fiscal 2003 quarter ended
		March 31				June 30				September 30				December 31				Total
Revenues		$	35,679			$	43,858			$	36,630			$	32,839			$	149,006
Gross profit			3,857				4,451				5,129				4,388				17,825
Income before minority interest and taxes			1,862				2,692				2,911				1,118				8,583
Net income from continuing operations			1,016				1,483				2,324				381				5,204
Net income from discontinued operations			182				89				(32	)			(24	)			215
Net income		$	1,196			$	1,572			$	2,292			$	359			$	5,419
Basic income per share
From continuing operations		$	0.20			$	0.29			$	0.46			$	0.07			$	1.02
From discontinued operations		$	0.04			$	0.02			$	(0.01	)		$	(0.01	)		$	0.04
Net income per share, basic:		$	0.24			$	0.31			$	0.45			$	0.06			$	1.06
Diluted income per share
From continuing operations		$	0.17			$	0.24			$	0.35			$	0.05			$	0.80
From discontinued operations		$	0.03			$	0.01			$	(0.01	)		$	(0.00	)		$	0.03
Net income per share, diluted:		$	0.20			$	0.25			$	0.34			$	0.05			$	0.83

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D.A. Davidson & Co.	Morgan Joseph & Co. Inc.

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Item 13.	Other Expenses of Issuance and Distribution.

Securities and Exchange Commission registration fee			$	4,567
NASD filing fee				4,383
Nasdaq listing fee				—
Accounting fees and expenses				83,000
Legal fees and expenses				400,000
Printing and engraving expenses				35,000
Transfer agent and registrar fees and expenses				10,000
Unallocated underwriters’ expenses				100,000
Other				130,500
	Total		$	767,450

Item 14.	Indemnification of Directors and Officers.

	•	for any breach of the director’s duty of loyalty to us or our stockholders;
	•	for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
	•	under section 174 of the DGCL regarding unlawful dividends and stock purchases; or
	•	for any transaction for which the director derived an improper personal benefit.

	•	we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law, subject to very limited exceptions;
	•	we may indemnify our other employees and agents to the fullest extent permitted by Delaware law, subject to very limited exceptions;

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	•	we are required to advance expenses as incurred, to our directors and officers in connection with a legal proceeding to the fullest extent permitted by DGCL, subject to very limited exceptions;
	•	we may advance expenses, as incurred, to our employees and agents in connection with a legal proceeding; and
	•	the rights conferred in our certificate of incorporation are not exclusive.

Item 15.	Recent Sales of Unregistered Securities.

Name		Cash				Shares				Five-Year Notes
Patrick T. Manning		$	460,458				135,474			$	365,831
James D. Manning		$	660,649				218,357			$	2,124,633
Joseph P. Harper, Sr.		$	1,045,764				345,437			$	3,020,201
Maarten D. Hemsley		$	208,397				—			$	207,504
Joseph P. Harper, Jr.		$	102,023				142,339			$	139,772
Robert M. Davies		$	166,876				—			$	518,641
Linda Manning		$	427,568				262,179			$	1,058,619
Terry Williamson		$	101,708				68,660			$	226,644
Karen Williamson		$	101,708				68,660			$	226,644
Jeffrey Manning		$	313,312				192,118			$	775,732
Brian Manning		$	215,382				132,069			$	533,267
Anthony Colombo		$	124,633				121,521			$	271,822
Kevin Manning		$	116,508				85,861			$	230,783
Julie Crump		$	63,775				21,953				—
NASCIT		$	166,876				—			$	1,404,758

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Item 16.	Exhibits and Financial Statement Schedules.

Number				Exhibit Title
	1	.1**		Form of Underwriting Agreement.
	2	.1		Asset Purchase Agreement, dated September 23, 2002, by and among Texas Sterling Construction, L.P. (“TSC”), Kinsel Industries, Inc. and Tracks of Texas, Inc. (incorporated by reference to Exhibit 10.4 to SCC’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2002 (SEC File No. 000-19450)).
	3	.1		Restated and Amended Certificate of Incorporation of Oakhurst Company, Inc. (“OCI”), dated as of September 25, 1995.
	3	.2		Certificate of Amendment of the Certificate of Incorporation of OCI, dated as of November 12, 2001.
	3	.3		Bylaws of OCI (incorporated by reference to Exhibit 3.2 to OCI’s Annual Report on Form 10-K for the fiscal year ended February 28, 1998, filed on May 29, 1998 (SEC File No. 000-19450)).
	4	.1		Certificate of Designations of OCI’s Series A Junior Participating Preferred Stock, dated as of February 10, 1998 (incorporated by reference to Exhibit 4.2 to OCI’s Annual Report on Form 10-K, filed on May 29, 1998 (SEC File No. 000-19450)).
	4	.2		Warrant to Purchase Common Stock of Sterling Construction Company, Inc. (“SCC”), dated as of March 31, 2003, issued to KTI, Inc.
	4	.3		Rights Agreement, dated as of December 29, 1998, by and between OCI and American Stock Transfer and Trust Company, including the form of Series A Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B and C, respectively (incorporated by reference to Exhibit 99.1 to OCI’s Registration Statement on Form 8-A12G, filed on January 5, 1999 (SEC File No. 000-19450)).
	5	.1*		Opinion of Andrews Kurth LLP.
	10	.1#		Oakhurst Capital, Inc. 1994 Omnibus Stock Plan, with form of option agreement.
	10	.2#		Oakhurst Capital, Inc. 1994 Omnibus Stock Plan, as amended through December 18, 1998, (incorporated by reference to Exhibit 10.21 to OCI’s Annual Report on Form 10-K, filed on June 1, 1999 (SEC File No. 000-19450)).
	10	.3#		Oakhurst Capital, Inc. 1994 Non-Employee Director Stock Option Plan, with form of option agreement.
	10	.4#		OCI 1998 Stock Incentive Plan.
	10	.5#		Form of Stock Incentive Agreements under OCI’s 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.51 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.6#		OCI 2001 Stock Incentive Plan.
	10	.7#		Form of Stock Option Agreements under OCI 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.52 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.8#		Form of Employee Stock Option Agreement, dated as of August 29, 1991, by and between Hallwood Holdings Incorporated (n/k/a SCC) and certain of its directors and officers.
	10	.9#		Employment Agreement, dated as of May 1, 2000, by and between Steel City Products, Inc. (“Steel City Products”) and Terrance W. Allan (incorporated by reference to Exhibit 10.25 to OCI’s Annual Report on Form 10-K for the fiscal year ended February 28, 2001, filed on July 13, 2001 (SEC File No. 000-19450)).
	10	.10#		Amendment No. 1, dated as of October 17, 2002, to the Employment Agreement, dated as of May 1, 2000, by and between Steel City Products and Terrance W. Allan.
	10	.11#		Amendment No. 2, dated as of May 24, 2004, to the Employment Agreement, dated as of May 1, 2000, by and between Steel City Products and Terrance W. Allan.

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Number				Exhibit Title
	10	.12#		Employment Agreement, dated as of July 18, 2004, by and between Patrick T. Manning, SCC and Sterling Houston Holdings, Inc. (“SHH”) (incorporated by reference to Exhibit 99.1 to SCC’s Current Report on Form 8-K, dated as of March 23, 2005, filed on March 28, 2005 (SEC File No. 001-31993)).
	10	.13#		Employment Agreement, dated as of July 18, 2004, by and between Joseph P. Harper, Sr., SCC and SHH (incorporated by reference to Exhibit 99.2 to SCC’s Current Report on Form 8-K, dated as of March 23, 2005, filed on March 28, 2005 (SEC File No. 001-31993)).
	10	.14#		Employment Agreement, dated as of July 13, 2005, by and between Maarten D. Hemsley and SCC (incorporated by reference to Exhibit 10.1 to SCC’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed on November 7, 2005 (SEC File No. 001-31993)).
	10	.15#		Summary of Compensation for Non-Employee Directors of SCC.
	10	.16#		Put Exercise Notice, dated July 16, 2004, by SCC to the Stockholders of SHH (incorporated by reference to Exhibit 10.1 to SCC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, filed on August 13, 2004 (SEC File No. 001-31993)).
	10	.17#		Put Payment Letter Agreement, dated as of July 16, 2004, by and between SCC and certain stockholders of SHH.
	10	.18#		Promissory Note, dated as of November 13, 2004, issued by SCC to Patrick T. Manning (incorporated by reference to Exhibit 10.44 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.19#		Promissory Note, dated as of November 13, 2004, issued by SCC to Joseph P. Harper, Sr. (incorporated by reference to Exhibit 10.45 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.20#		Promissory Note, dated as of December 22, 2004, issued by SCC to Patrick T. Manning (incorporated by reference to Exhibit 10.46 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.21#		Promissory Note, dated as of December 22, 2004, issued by SCC to Joseph P. Harper, Sr. (incorporated by reference to Exhibit 10.47 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.22#		Promissory Note, dated as of December 22, 2004, issued by SCC to Robert M. Davies (incorporated by reference to Exhibit 10.48 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.23#		Promissory Note, dated as of December 22, 2004, issued by SCC to Maarten D. Hemsley (incorporated by reference to Exhibit 10.49 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.24		Promissory Note, dated as of December 22, 2004 issued by SCC to Hare & Co. AC, nominee of NASCIT (incorporated by reference to Exhibit 10.50 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.25#		Note and Warrant Amendment Agreement, dated as of February 3, 2005, by and between SCC, Hare & Co. A/ C Bank of New York, and the holders of certain promissory notes issued by SCC.
	10	.26		Oakhurst Group Tax Sharing Agreement, dated as of July 18, 2001, by and among OCI, Sterling Construction Company, Steel City Products and such other companies set forth on Schedule A thereto (incorporated by reference to Exhibit 10.28 to SCC’s Transition Report on Form 10-K for the ten months ended December 31, 2001, filed on April 8, 2002 (SEC File No. 000-19450)).
	10	.27		Third Amended and Restated Revolving Credit Loan Agreement, dated as of December 23, 2004, by and between Comerica Bank and TSC.
	10	.28		Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products (incorporated by reference to Exhibit 10.1 to OCI’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2001, filed on August 16, 2001 (SEC File No. 000- 19450)).

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Number				Exhibit Title
	10	.29		Amendment, dated as of September 12, 2001, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products (incorporated by reference to Exhibit 10.3 to OCI’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2001, filed on October 22, 2001 (SEC File No. 000-19450)).
	10	.30		Second Amendment, dated as of December 13, 2001, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products (incorporated by reference to Exhibit 10.35 to SCC’s Transition Report on Form 10-K for the ten months ended December 31, 2002, filed on April 8, 2002 (SEC File No. 000-19450)).
	10	.31		Third Amendment, dated as of June 27, 2002, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.32		Fourth Amendment, dated as of September 25, 2002, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.33		Fifth Amendment, dated as of November 30, 2002, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.34		Sixth Amendment, dated as of January 15, 2003, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.35*		Seventh Amendment to Credit Agreement and Waiver, dated as of November 6, 2003, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.36*		Eighth Amendment to Credit Agreement, dated as of September 17, 2004, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.37*		Ninth Amendment to Credit Agreement, dated as of December 21, 2004, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.38*		Tenth Amendment to Credit Agreement, dated as of April 18, 2005, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.39*		Eleventh Amendment to Credit Agreement and Note, dated as of June 3, 2005, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.40*		Twelfth Amendment to Credit Agreement, dated as of September 14, 2005, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.41		Lease Agreement, dated November 21, 2000, between SPEDD, Inc. and Steel City Products (incorporated by reference to Exhibit 10.24 to OCI’s Annual Report on 10-K405 for the fiscal year ended February 28, 2001, filed on July 13, 2001 (SEC File No. 000-19450)).
	10	.42#		Amendment No. 1 to Executive Employment Agreement, dated November 2, 2005, by and between Patrick T. Manning, SCC, Sterling General, Inc. and SHH.
	10	.43#		Amendment No. 1 to Executive Employment Agreement, dated November 2, 2005, by and between Joseph P. Harper, Sr., SCC, Sterling General, Inc. and SHH.
	10	.44*#		Form of Warrant to Purchase Common Stock of SCC (including schedule of grantees).
	10	.45#		Note Prepayment Agreement, dated as of December 27, 2005, by and between SCC and certain of its noteholders named therein (incorporated by reference to Exhibit 10.1 to SCC’s Current Report on Form 8-K, dated as of December 27, 2005, filed on December 27, 2005 (SEC File No. 001-31993)).
	10	.46#		Termination Agreement, dated as of December 30, 2005, by and between SCC and certain of its noteholders named therein (incorporated by reference to Exhibit 10.1 to SCC’s Current Report on Form 8-K, dated as of December 30, 2005, filed on January 3, 2006 (SEC File No. 001-31993)).
	21	*		Subsidiaries of SCC.
	23	.1*		Consent of Grant Thornton LLP.
	23	.2*		Consent of Andrews Kurth LLP (included in Exhibit 5.1).
	24	.1		Power of Attorney.
	99	.1*		Consent of Milton L. Scott

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#	Management contract or compensatory plan or arrangement.
*	Filed herewith.

**	To be filed by amendment.

Item 17.	Undertakings.

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	STERLING CONSTRUCTION COMPANY, INC.

	By:	/s/ Patrick T. Manning

	Name: Patrick T. Manning
	Title: Chief Executive Officer

Signature				Title		Date
/s/ Patrick T. Manning Patrick T. Manning				Chairman of the Board of Directors; Chief Executive Officer (Principal Executive Officer)		January 3, 2006
/s/ Joseph P. Harper, Sr. Joseph P. Harper, Sr.				President & Chief Operating Officer; Director		January 3, 2006
/s/ Maarten D. Hemsley Maarten D. Hemsley				Chief Financial Officer; Director (Principal Financial and Accounting Officer)		January 3, 2006
* John D. Abernathy				Director		January 3, 2006
Milton L. Scott				Director		January 3, 2006
* Robert W. Frickel				Director		January 3, 2006
* Christopher H. B. Mills				Director		January 3, 2006
* David R. A. Steadman				Director		January 3, 2006
*By:		/s/ Joseph P. Harper, Sr. Joseph P. Harper Attorney-in-fact

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Number				Exhibit Title
	1	.1**		Form of Underwriting Agreement.
	2	.1		Asset Purchase Agreement, dated September 23, 2002, by and among Texas Sterling Construction, L.P. (“TSC”), Kinsel Industries, Inc. and Tracks of Texas, Inc. (incorporated by reference to Exhibit 10.4 to SCC’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2002 (SEC File No. 000-19450)).
	3	.1		Restated and Amended Certificate of Incorporation of Oakhurst Company, Inc. (“OCI”), dated as of September 25, 1995.
	3	.2		Certificate of Amendment of the Certificate of Incorporation of OCI, dated as of November 12, 2001.
	3	.3		Bylaws of OCI (incorporated by reference to Exhibit 3.2 to OCI’s Annual Report on Form 10-K for the fiscal year ended February 28, 1998, filed on May 29, 1998 (SEC File No. 000-19450)).
	4	.1		Certificate of Designations of OCI’s Series A Junior Participating Preferred Stock, dated as of February 10, 1998 (incorporated by reference to Exhibit 4.2 to OCI’s Annual Report on Form 10-K, filed on May 29, 1998 (SEC File No. 000-19450)).
	4	.2		Warrant to Purchase Common Stock of Sterling Construction Company, Inc. (“SCC”), dated as of March 31, 2003, issued to KTI, Inc.
	4	.3		Rights Agreement, dated as of December 29, 1998, by and between OCI and American Stock Transfer and Trust Company, including the form of Series A Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B and C, respectively (incorporated by reference to Exhibit 99.1 to OCI’s Registration Statement on Form 8-A12G, filed on January 5, 1999 (SEC File No. 000-19450)).
	5	.1*		Opinion of Andrews Kurth LLP.
	10	.1#		Oakhurst Capital, Inc. 1994 Omnibus Stock Plan, with form of option agreement.
	10	.2#		Oakhurst Capital, Inc. 1994 Omnibus Stock Plan, as amended through December 18, 1998, (incorporated by reference to Exhibit 10.21 to OCI’s Annual Report on Form 10-K, filed on June 1, 1999 (SEC File No. 000-19450)).
	10	.3#		Oakhurst Capital, Inc. 1994 Non-Employee Director Stock Option Plan, with form of option agreement.
	10	.4#		OCI 1998 Stock Incentive Plan.
	10	.5#		Form of Stock Incentive Agreements under OCI’s 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.51 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.6#		OCI 2001 Stock Incentive Plan.
	10	.7#		Form of Stock Option Agreements under OCI 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.52 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.8#		Form of Employee Stock Option Agreement, dated as of August 29, 1991, by and between Hallwood Holdings Incorporated (n/k/a SCC) and certain of its directors and officers.
	10	.9#		Employment Agreement, dated as of May 1, 2000, by and between Steel City Products, Inc. (“Steel City Products”) and Terrance W. Allan (incorporated by reference to Exhibit 10.25 to OCI’s Annual Report on Form 10-K for the fiscal year ended February 28, 2001, filed on July 13, 2001 (SEC File No. 000-19450)).
	10	.10#		Amendment No. 1, dated as of October 17, 2002, to the Employment Agreement, dated as of May 1, 2000, by and between Steel City Products and Terrance W. Allan.
	10	.11#		Amendment No. 2, dated as of May 24, 2004, to the Employment Agreement, dated as of May 1, 2000, by and between Steel City Products and Terrance W. Allan.
	10	.12#		Employment Agreement, dated as of July 18, 2004, by and between Patrick T. Manning, SCC and Sterling Houston Holdings, Inc. (“SHH”) (incorporated by reference to Exhibit 99.1 to SCC’s Current Report on Form 8-K, dated as of March 23, 2005, filed on March 28, 2005 (SEC File No. 001-31993)).

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Table of Contents

Number				Exhibit Title
	10	.13#		Employment Agreement, dated as of July 18, 2004, by and between Joseph P. Harper, Sr., SCC and SHH (incorporated by reference to Exhibit 99.2 to SCC’s Current Report on Form 8-K, dated as of March 23, 2005, filed on March 28, 2005 (SEC File No. 001-31993)).
	10	.14#		Employment Agreement, dated as of July 13, 2005, by and between Maarten D. Hemsley and SCC (incorporated by reference to Exhibit 10.1 to SCC’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed on November 7, 2005 (SEC File No. 001-31993)).
	10	.15#		Summary of Compensation for Non-Employee Directors of SCC.
	10	.16#		Put Exercise Notice, dated July 16, 2004, by SCC to the Stockholders of SHH (incorporated by reference to Exhibit 10.1 to SCC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, filed on August 13, 2004 (SEC File No. 001-31993)).
	10	.17#		Put Payment Letter Agreement, dated as of July 16, 2004, by and between SCC and certain stockholders of SHH.
	10	.18#		Promissory Note, dated as of November 13, 2004, issued by SCC to Patrick T. Manning (incorporated by reference to Exhibit 10.44 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.19#		Promissory Note, dated as of November 13, 2004, issued by SCC to Joseph P. Harper, Sr. (incorporated by reference to Exhibit 10.45 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.20#		Promissory Note, dated as of December 22, 2004, issued by SCC to Patrick T. Manning (incorporated by reference to Exhibit 10.46 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.21#		Promissory Note, dated as of December 22, 2004, issued by SCC to Joseph P. Harper, Sr. (incorporated by reference to Exhibit 10.47 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.22#		Promissory Note, dated as of December 22, 2004, issued by SCC to Robert M. Davies (incorporated by reference to Exhibit 10.48 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.23#		Promissory Note, dated as of December 22, 2004, issued by SCC to Maarten D. Hemsley (incorporated by reference to Exhibit 10.49 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.24		Promissory Note, dated as of December 22, 2004 issued by SCC to Hare & Co. AC, nominee of NASCIT (incorporated by reference to Exhibit 10.50 to SCC’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 001-31993)).
	10	.25#		Note and Warrant Amendment Agreement, dated as of February 3, 2005, by and between SCC, Hare & Co. A/ C Bank of New York, and the holders of certain promissory notes issued by SCC.
	10	.26		Oakhurst Group Tax Sharing Agreement, dated as of July 18, 2001, by and among OCI, Sterling Construction Company, Steel City Products and such other companies set forth on Schedule A thereto (incorporated by reference to Exhibit 10.28 to SCC’s Transition Report on Form 10-K for the ten months ended December 31, 2001, filed on April 8, 2002 (SEC File No. 000-19450)).
	10	.27		Third Amended and Restated Revolving Credit Loan Agreement, dated as of December 23, 2004, by and between Comerica Bank and TSC.
	10	.28		Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products (incorporated by reference to Exhibit 10.1 to OCI’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2001, filed on August 16, 2001 (SEC File No. 000- 19450)).
	10	.29		Amendment, dated as of September 12, 2001, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products (incorporated by reference to Exhibit 10.3 to OCI’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2001, filed on October 22, 2001 (SEC File No. 000-19450)).

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Number				Exhibit Title
	10	.30		Second Amendment, dated as of December 13, 2001, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products (incorporated by reference to Exhibit 10.35 to SCC’s Transition Report on Form 10-K for the ten months ended December 31, 2002, filed on April 8, 2002 (SEC File No. 000-19450)).
	10	.31		Third Amendment, dated as of June 27, 2002, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.32		Fourth Amendment, dated as of September 25, 2002, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.33		Fifth Amendment, dated as of November 30, 2002, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.34		Sixth Amendment, dated as of January 15, 2003, to Credit Agreement, dated as of July 13, 2001, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.35*		Seventh Amendment to Credit Agreement and Waiver, dated as of November 6, 2003, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.36*		Eighth Amendment to Credit Agreement, dated as of September 17, 2004, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.37*		Ninth Amendment to Credit Agreement, dated as of December 21, 2004, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.38*		Tenth Amendment to Credit Agreement, dated as of April 18, 2005, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.39*		Eleventh Amendment to Credit Agreement and Note, dated as of June 3, 2005, by and between Steel City Products and National City Bank of Pennsylvania.
	10	.40*		Twelfth Amendment to Credit Agreement, dated as of September 14, 2005, by and between National City Bank of Pennsylvania and Steel City Products.
	10	.41		Lease Agreement, dated November 21, 2000, between SPEDD, Inc. and Steel City Products (incorporated by reference to Exhibit 10.24 to OCI’s Annual Report on 10-K405 for the fiscal year ended February 28, 2001, filed on July 13, 2001 (SEC File No. 000-19450)).
	10	.42#		Amendment No. 1 to Executive Employment Agreement, dated November 2, 2005, by and between Patrick T. Manning, SCC, Sterling General, Inc. and SHH.
	10	.43#		Amendment No. 1 to Executive Employment Agreement, dated November 2, 2005, by and between Joseph P. Harper, Sr., SCC, Sterling General, Inc. and SHH.
	10	.44*#		Form of Warrant to Purchase Common Stock of SCC (including schedule of grantees).
	10	.45#		Note Prepayment Agreement, dated as of December 27, 2005, by and between SCC and certain of its noteholders named therein (incorporated by reference to Exhibit 10.1 to SCC’s Current Report on Form 8-K, dated as of December 27, 2005, filed on December 27, 2005 (SEC File No. 001-31993)).
	10	.46#		Termination Agreement, dated as of December 30, 2005, by and between SCC and certain of its noteholders named therein (incorporated by reference to Exhibit 10.1 to SCC’s Current Report on Form 8-K, dated as of December 30, 2005, filed on January 3, 2006 (SEC File No. 001-31993)).
	21	*		Subsidiaries of SCC.
	23	.1*		Consent of Grant Thornton LLP.
	23	.2*		Consent of Andrews Kurth LLP (included in Exhibit 5.1).
	24	.1		Power of Attorney.
	99	.1*		Consent of Milton L. Scott

	#	Management contract or compensatory plan or arrangement.
	*	Filed herewith.

**	To be filed by amendment.