Sterling Results Presentation Deck

32 (1) Consists of transaction expenses related to mergers and acquisitions, associated earn-outs, investor management fees, and costs related to the IPO. (2) Consists of restructuring-related costs, including executive recruiting and severance charges, and lease termination costs and disposal of fixed assets related to our real estate consolidation efforts. During 2019 and 2020, we executed an extensive restructuring program, significantly strengthening our management team and creating a client-facing industry-specific Vertical organization. This program was completed by the end of 2020 and the final costs related to this program were incurred through the first quarter of 2021. Beginning in 2020, we began executing a virtual-first strategy, closing offices and reducing office space globally. (3) Includes costs related to technology modernization efforts. We believe that these costs are discrete and non-recurring in nature, as they relate to a one-time restructuring and decommissioning of our on-premise production systems and corporate technological infrastructure and the move to a managed service provider, decommissioning redundant fulfillment systems and modernizing internal functional systems. As such, they are not normal, recurring operating expenses and are not reflective of ongoing trends in the cost of doing business. The significant majority of these are related to the last two phases of Project Ignite, with the remainder related to an investment made to modernize internal functional systems in preparation for our public company infrastructure. Project Ignite is expected to be completed by the fourth quarter of 2022. (4) Consists of non-recurring settlements impacting comparability. (5) Consists of (gain) loss on interest rate swaps. See Form 10-K "Part II. Item 7A. Quantitative and Qualitative Disclosures about Market Risk- Interest Rate Risk" for additional information on interest rate swaps. (6) Consists of costs related to a local government mandate in India, (gain) loss on foreign currency transactions, impairment of capitalized software and other costs outside of the ordinary course of business. (7) Effective tax rates of 26%, 21%, and 23% have been used to compute Adjusted Net Income for the 2020 periods, the three months ended December 31, 2021, and the twelve months ended December 31, 2021, respectively. As of December 31, 2021, The Company has $80.7 million of US federal net operating loss carryforwards, $73.1 million that expire between 2026 and 2036 and $7.6 million that do not expire. The Company has a total of $5.4 million of deferred tax asset for US state net operating loss carryforwards certain of which have various expiration periods from 2022 to 2040 and certain of which do not expire. The Company has $2.8 million of deferred tax asset for foreign net operating loss carryforwards that do not expire. The amount of actual cash taxes the Company pays for federal, state, and foreign income taxes differs significantly from the effective income tax rate computed in accordance with GAAP, and from the normalized rate shown above. For further detail, see footnotes of Form 10-K in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations". Sterling

View entire presentation