Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading
specialty construction company, today reported its financial
results for the third quarter ended September 30, 2023.
Highlights for the quarter ended
September 30, 2023:
- Contract revenues of $168.5
million
- GAAP net loss was $0.7 million or
$0.02 per diluted share
- Adjusted net income was $0.8
million or $0.02 per diluted share
- Adjusted EBITDA was $9.4
million
- Signed contract valued over $100
million with Grand Bahama Shipyard Limited (GBSL) for the turnkey
design-build of the Grand Bahama Shipyard Dry Dock Replacement
Project
- Other recently awarded new
contracts in both the Concrete and Marine segments for a combined
total of approximately $121 million
- Backlog and contracts awarded
subsequent to quarter end totaled $920 million
See definitions and reconciliation of non-GAAP
measures elsewhere in this release.
Management Commentary
“As CFO Scott Thanisch and I marked our first
anniversary with Orion, we are incredibly proud of how our people
have worked collaboratively to embrace change and deliver positive
results,” said Travis Boone, Chief Executive Officer of Orion Group
Holdings. “Backlog is a key metric and indicator of the health of
the business. As of September 30, backlog stood at $878 million
compared with backlog of $549 million in the prior year period. We
have won several prestigious projects including the $435 million
contract to build a dry dock at Pearl Harbor for the US Navy and a
contract valued over $100 million with the Grand Bahama Shipyard
Limited (GBSL) for the turnkey design-build of the Grand Bahama
Shipyard Dry Dock Replacement Project.”
“Last quarter we told you that we expected
continued improvement in profitability through the back half of the
year, and we are delivering on that promise. Third-quarter Adjusted
EBITDA was $9.4 million versus $3.7 million in the second quarter
of 2023. While our third quarter revenue of $169 million is down
year-over-year due to our exit from the Central Texas concrete
business, the higher quality of our revenue is delivering improved
profitability.”
“Since March, our Concrete business has been
profitable and improving on an Adjusted EBITDA basis. Adjusted
EBITDA margin increased from negative 1.7% to positive 2.4%
year-over-year. In addition, the Concrete business was operating
income positive on an unconsolidated basis in the third quarter. In
Marine, we have a lot of momentum with projects won and potential
future projects. There’s a tremendous amount of pent-up demand that
we think will be a significant tailwind for us well into 2024 and
2025.”
“As we look ahead to the fourth quarter and beyond, we are
optimistic. Our investments in business development are paying off,
and we have sufficient capacity and a more disciplined approach to
optimize our people and assets. We will see continued improvement
in our margins and benefit from operating leverage as we grow the
top line. We are excited to build on our success this year and
continue growing profitably in 2024,” concluded Boone.
Third Quarter 2023 Results
Contract revenues of $168.5 million decreased 7.7% from $182.6
million in the third quarter last year, primarily due to our
decision to exit the unprofitable concrete business in central
Texas, partially offset by an increase in marine segment revenue
related to the Pearl Harbor, Hawaii drydock project (the “Pearl
Harbor Project”).
Gross profit was $19.1 million or 11.3% of revenue up from $13.4
million or 7.4% of revenue in the third quarter of 2022. The
increase in gross profit dollars and margin was primarily driven by
margin improvements in both segments stemming from higher quality
projects and improved execution, partially offset by lower
equipment and labor utilization in our dredging business.
Selling, general and administrative (“SG&A”) expenses were
$17.1 million, up 11.4% from $15.4 million in the third quarter of
2022. As a percentage of total contract revenues, SG&A
expenses increased to 10.2% from 8.5%, primarily due to lower
revenues and an increase in SG&A in the third quarter. The
increase in SG&A dollars reflected an increase in IT and
business development spending and higher legal costs related to
customer claims.
Net loss for the third quarter was $0.7 million or $0.02 per
diluted share compared to net income of $0.2 million or $0.01 per
diluted share in the third quarter of 2022.
The third quarter 2023 net loss included $1.5 million ($0.04
diluted income per share) of non-recurring items. Third quarter
2023 adjusted net income was $0.8 million ($0.02 diluted income per
share).
EBITDA for the third quarter of 2023 was $8.7 million,
representing a 5.2% EBITDA margin, as compared to EBITDA of $7.2
million, or a 4.0% EBITDA margin in the third quarter last year.
Adjusted for non-recurring items, EBITDA for the third quarter of
2023 was $9.4 million, representing a 5.6% adjusted EBITDA margin,
as compared to adjusted EBITDA for the third quarter of 2022 of
$8.8 million, representing a 4.8% adjusted EBITDA margin.
Backlog
Total backlog at September 30, 2023 was $877.5 million,
compared to $818.7 million at June 30, 2023 and $548.6 million at
September 30, 2022. Backlog for the Marine segment was $699.9
million, compared to $614.9 million at June 30, 2023 and $280.2
million at September 30, 2022. Backlog for the Concrete segment was
$177.6 million, compared to $203.8 million at June 30, 2023 and
$268.4 million at September 30, 2022. In addition, the Company has
been awarded $43 million in new project work subsequent to the end
of the quarter ended September 30, 2022 that is not included in
backlog at the end of the quarter.
Recent Wins
On September 22, the Company entered into a
design-build contract valued over $100 million for its Marine and
Engineering business. The contract was awarded by Grand Bahama
Shipyard Limited (GBSL) for the turnkey design-build of the Grand
Bahama Shipyard Dry Dock Replacement Project, situated in Grand
Bahama, Bahamas. In addition, the Company was recently awarded
other new contracts in both its concrete and marine segments for a
combined total of approximately $121 million.
Safety Award
Orion Group Holdings, Inc. was presented with
the Company Award for Leadership in Safety from the Council of
Dredging and Marine Construction Safety (CDMCS). The award,
presented at the 2023 CDMCS Annual Awards Dinner in Washington,
D.C. on September 28, recognizes outstanding safety leadership in
the dredging and marine construction industry.
Orion Group Holdings was recognized for advancing a safety-first
culture through safety-conscious policies and procedures in the
workplace, mentoring others in safety, training on identifying and
properly controlling hazards, and placing high personal value on
collaborative and proactive work toward improving safety.
Balance Sheet Update
As of September 30, 2023, current assets were $228.5 million,
including unrestricted cash and cash equivalents of $3.9 million.
Total debt outstanding as of September 30, 2023 was $50.3 million.
At the end of the quarter, the Company had $13.5 million in
outstanding borrowings under its revolving credit facility.
Conference Call Details
Orion Group Holdings will host a conference call
to discuss results for the third quarter 2023 at 9:00 a.m. Eastern
Time/8:00 a.m. Central Time on Thursday, October 26, 2023. To
participate, please dial (800) 715-9871 and ask for the Orion Group
Holdings Conference Call. A live audio webcast of the call will
also be available on the Investor Relations section of Orion’s
website at https://www.oriongroupholdingsinc.com/investor/ and
will be archived for replay.
About Orion Group Holdings
Orion Group Holdings, Inc., a leading specialty construction
company serving the infrastructure, industrial and building
sectors, provides services both on and off the water in the
continental United States, Alaska, Hawaii, Canada and the Caribbean
Basin through its marine segment and its concrete segment. The
Company’s marine segment provides construction and dredging
services relating to marine transportation facility construction,
marine pipeline construction, marine environmental structures,
dredging of waterways, channels and ports, environmental dredging,
design and specialty services. Its concrete segment provides
turnkey concrete construction services including place and finish,
site prep, layout, forming, and rebar placement for large
commercial, structural and other associated business areas. The
Company is headquartered in Houston, Texas with regional offices
throughout its operating areas. The Company’s website is located
at: https://www.oriongroupholdingsinc.com.
Backlog Definition
Backlog consists of projects under contract that have either (a)
not been started, or (b) are in progress but are not yet complete.
The Company cannot guarantee that the revenue implied by its
backlog will be realized, or, if realized, will result in earnings.
Backlog can fluctuate from period to period due to the timing and
execution of contracts. The typical duration of the Company’s
projects ranges from three to nine months on shorter projects to
multiple years on larger projects. The Company's backlog at any
point in time includes both revenue it expects to realize during
the next twelve-month period as well as revenue it expects to
realize in future years.
Non-GAAP Financial Measures
This press release includes the financial measures “adjusted net
income/loss,” “adjusted earnings/loss per share,” “EBITDA,”
"Adjusted EBITDA" and “Adjusted EBITDA margin." These
measurements are “non-GAAP financial measures” under rules of
the Securities and Exchange Commission, including Regulation
G. The non-GAAP financial information may be determined or
calculated differently by other companies. By reporting such
non-GAAP financial information, the Company does not intend to give
such information greater prominence than comparable GAAP financial
information. Investors are urged to consider these non-GAAP
measures in addition to and not in substitute for measures prepared
in accordance with GAAP.
Adjusted net income/loss and adjusted earnings/loss per share
should not be viewed as an equivalent financial measure to net
income/loss or earnings/loss per share. Adjusted net income/loss
and adjusted earnings/loss per share exclude certain items that
management believes impairs a meaningful evaluation of the
Company’s financial performance. The Company believes these
adjusted financial measures are a useful supplement to
earnings/loss calculated in accordance with GAAP because they
better inform our common stockholders as to the Company's
operational trends and performance relative to other companies.
Generally, items excluded are one-time items or items whose timing
or amount cannot be reasonably estimated. Accordingly, any guidance
provided by the Company generally excludes information regarding
these types of items.
Orion Group Holdings defines EBITDA as net income/loss
before net interest expense, income taxes, depreciation and
amortization. Adjusted EBITDA is calculated by adjusting EBITDA for
certain items that management believes impairs a meaningful
comparison of operating results. Adjusted EBITDA margin is
calculated by dividing Adjusted EBITDA for the period by contract
revenues for the period. The GAAP financial measure that is most
directly comparable to EBITDA and Adjusted EBITDA is net income,
while the GAAP financial measure that is most directly comparable
to Adjusted EBITDA margin is operating margin, which represents
operating income divided by contract revenues. EBITDA, Adjusted
EBITDA and Adjusted EBITDA margin are used internally to evaluate
current operating expense, operating efficiency, and operating
profitability on a variable cost basis, by excluding the
depreciation and amortization expenses, primarily related to
capital expenditures and acquisitions, and net interest and tax
expenses. Additionally, EBITDA, Adjusted EBITDA and Adjusted EBITDA
margin provide useful information regarding the Company's ability
to meet future debt service and working capital requirements while
providing an overall evaluation of the Company's financial
condition. In addition, EBITDA is used internally for incentive
compensation purposes. The Company includes EBITDA, Adjusted EBITDA
and Adjusted EBITDA margin to provide transparency to investors as
they are commonly used by investors and others in assessing
performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
have certain limitations as analytical tools and should not be used
as a substitute for operating margin, net income, cash flows, or
other data prepared in accordance with GAAP, or as a measure of the
Company's profitability or liquidity.
Forward-Looking Statements
The matters discussed in this press release may constitute or
include projections or other forward-looking statements within the
meaning of the “safe harbor” provisions of Section 27A of the
Securities Exchange Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, of which provisions
the Company is availing itself. Certain forward-looking statements
can be identified by the use of forward-looking terminology, such
as 'believes', 'expects', 'may', 'will', 'could', 'should',
'seeks', 'approximately', 'intends', 'plans', 'estimates', or
'anticipates', or the negative thereof or other comparable
terminology, or by discussions of strategy, plans, objectives,
intentions, estimates, forecasts, outlook, assumptions, or goals.
In particular, statements regarding future operations or results,
including those set forth in this press release, and any other
statement, express or implied, concerning future operating results
or the future generation of or ability to generate revenues,
income, net income, gross profit, EBITDA, Adjusted EBITDA, Adjusted
EBITDA margin, or cash flow, including to service debt, and
including any estimates, forecasts or assumptions regarding future
revenues or revenue growth, are forward-looking statements.
Forward-looking statements also include project award
announcements, estimated project start dates, anticipated revenues,
and contract options which may or may not be awarded in the future.
Forward-looking statements involve risks, including those
associated with the Company's fixed price contracts that impacts
profits, unforeseen productivity delays that may alter the final
profitability of the contract, cancellation of the contract by the
customer for unforeseen reasons, delays or decreases in funding by
the customer, levels and predictability of government funding or
other governmental budgetary constraints, and any potential
contract options which may or may not be awarded in the future, and
are at the sole discretion of award by the customer. Past
performance is not necessarily an indicator of future results. In
light of these and other uncertainties, the inclusion of
forward-looking statements in this press release should not be
regarded as a representation by the Company that the Company's
plans, estimates, forecasts, goals, intentions, or objectives will
be achieved or realized. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. The Company assumes no obligation to update
information contained in this press release whether as a result of
new developments or otherwise, except as required by law.
Please refer to the Company's 2022 Annual Report on Form 10-K,
filed on March 16, 2023, which is available on its website at
www.oriongroupholdingsinc.com or at the SEC's website at
www.sec.gov, for additional and more detailed discussion of risk
factors that could cause actual results to differ materially from
our current expectations, estimates or forecasts.
Contacts:
Financial Profiles, Inc.Margaret Boyce
310-622-8247orn@finprofiles.com
Orion Group Holdings, Inc. and
SubsidiariesCondensed Statements of
Operations(In Thousands, Except Share and Per
Share Information)(Unaudited)
| |
Three months
ended |
|
Nine months
ended |
| |
September 30, |
|
September 30, |
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Contract revenues |
|
168,476 |
|
|
|
182,621 |
|
|
|
510,184 |
|
|
|
552,127 |
|
| Costs of
contract revenues |
|
149,406 |
|
|
|
169,189 |
|
|
|
471,488 |
|
|
|
511,548 |
|
|
Gross profit |
|
19,070 |
|
|
|
13,432 |
|
|
|
38,696 |
|
|
|
40,579 |
|
| Selling,
general and administrative expenses |
|
17,135 |
|
|
|
15,380 |
|
|
|
52,271 |
|
|
|
48,783 |
|
| Amortization
of intangible assets |
|
59 |
|
|
|
309 |
|
|
|
383 |
|
|
|
929 |
|
| Gain on
disposal of assets, net |
|
(685 |
) |
|
|
(3,388 |
) |
|
|
(7,915 |
) |
|
|
(4,561 |
) |
|
Operating income (loss) |
|
2,561 |
|
|
|
1,131 |
|
|
|
(6,043 |
) |
|
|
(4,572 |
) |
| Other
(expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
49 |
|
|
|
48 |
|
|
|
592 |
|
|
|
147 |
|
|
Interest income |
|
21 |
|
|
|
36 |
|
|
|
90 |
|
|
|
71 |
|
|
Interest expense |
|
(3,414 |
) |
|
|
(1,215 |
) |
|
|
(7,674 |
) |
|
|
(2,913 |
) |
|
Other expense, net |
|
(3,344 |
) |
|
|
(1,131 |
) |
|
|
(6,992 |
) |
|
|
(2,695 |
) |
|
Loss before income taxes |
|
(783 |
) |
|
|
— |
|
|
|
(13,035 |
) |
|
|
(7,267 |
) |
| Income tax
(benefit) expense |
|
(123 |
) |
|
|
(247 |
) |
|
|
475 |
|
|
|
396 |
|
| Net (loss)
income |
$ |
(660 |
) |
|
$ |
247 |
|
|
$ |
(13,510 |
) |
|
$ |
(7,663 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Basic (loss)
income per share |
$ |
(0.02 |
) |
|
$ |
0.01 |
|
|
$ |
(0.42 |
) |
|
$ |
(0.25 |
) |
| Diluted
(loss) income per share |
$ |
(0.02 |
) |
|
$ |
0.01 |
|
|
$ |
(0.42 |
) |
|
$ |
(0.25 |
) |
| Shares used
to compute (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
32,384,446 |
|
|
|
31,613,519 |
|
|
|
32,285,921 |
|
|
|
31,180,417 |
|
|
Diluted |
|
32,384,446 |
|
|
|
31,613,519 |
|
|
|
32,285,921 |
|
|
|
31,180,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesSelected Results of
Operations(In Thousands, Except Share and Per
Share Information)(Unaudited)
| |
Three months
ended September 30, |
|
| |
2023 |
|
2022 |
|
| |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
| |
(dollar amounts in thousands) |
|
|
Contract revenues |
|
|
|
|
|
|
|
|
|
|
| Marine
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
$ |
61,144 |
|
|
75.6 |
|
% |
$ |
54,769 |
|
|
72.0 |
|
% |
|
Private sector |
|
19,769 |
|
|
24.4 |
|
% |
21,329 |
|
|
28.0 |
|
% |
|
Marine segment total |
$ |
80,913 |
|
|
100.0 |
|
% |
$ |
76,098 |
|
|
100.0 |
|
% |
| Concrete
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
$ |
7,974 |
|
|
9.1 |
|
% |
$ |
10,070 |
|
|
9.5 |
|
% |
|
Private sector |
|
79,589 |
|
|
90.9 |
|
% |
|
96,453 |
|
|
90.5 |
|
% |
|
Concrete segment total |
$ |
87,563 |
|
|
100.0 |
|
% |
$ |
106,523 |
|
|
100.0 |
|
% |
|
Total |
$ |
168,476 |
|
|
|
|
$ |
182,621 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
| Marine
segment |
$ |
2,001 |
|
|
2.5 |
|
% |
$ |
5,197 |
|
|
6.8 |
|
% |
| Concrete
segment |
|
560 |
|
|
0.6 |
|
% |
|
(4,066 |
) |
|
(3.8 |
) |
% |
|
Total |
$ |
2,561 |
|
|
|
|
$ |
1,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Nine months
ended September 30, |
|
| |
2023 |
|
2022 |
|
| |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
| |
(dollar amounts in thousands) |
|
|
Contract revenues |
|
|
|
|
|
|
|
|
|
|
| Marine
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
$ |
193,813 |
|
|
74.3 |
|
% |
$ |
164,357 |
|
|
67.7 |
|
% |
|
Private sector |
|
66,941 |
|
|
25.7 |
|
% |
78,540 |
|
|
32.3 |
|
% |
|
Marine segment total |
$ |
260,754 |
|
|
100.0 |
|
% |
$ |
242,897 |
|
|
100.0 |
|
% |
| Concrete
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
$ |
17,662 |
|
|
7.1 |
|
% |
$ |
23,068 |
|
|
7.5 |
|
% |
|
Private sector |
|
231,768 |
|
|
92.9 |
|
% |
286,162 |
|
|
92.5 |
|
% |
|
Concrete segment total |
$ |
249,430 |
|
|
100.0 |
|
% |
$ |
309,230 |
|
|
100.0 |
|
% |
|
Total |
$ |
510,184 |
|
|
|
|
$ |
552,127 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
|
|
|
|
|
|
|
|
| Marine
segment |
$ |
(587 |
) |
|
(0.2 |
) |
% |
$ |
9,553 |
|
|
3.9 |
|
% |
| Concrete
segment |
|
(5,456 |
) |
|
(2.2 |
) |
% |
|
(14,125 |
) |
|
(4.6 |
) |
% |
|
Total |
$ |
(6,043 |
) |
|
|
|
$ |
(4,572 |
) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesReconciliation of Adjusted Net Income
(Loss)(In thousands except per share
information)(Unaudited)
| |
Three months
ended |
|
Nine months
ended |
| |
September 30, |
|
September 30, |
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net (loss) income |
$ |
(660 |
) |
|
$ |
247 |
|
|
$ |
(13,510 |
) |
|
$ |
(7,663 |
) |
|
One-time charges and the tax effects: |
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on Port Lavaca South Yard property sale |
|
— |
|
|
|
— |
|
|
|
(5,202 |
) |
|
|
— |
|
|
ERP implementation |
|
314 |
|
|
|
330 |
|
|
|
810 |
|
|
|
1,559 |
|
|
Professional fees related to management transition |
|
— |
|
|
|
310 |
|
|
|
— |
|
|
|
1,118 |
|
|
Severance |
|
— |
|
|
|
4 |
|
|
|
126 |
|
|
|
944 |
|
|
Tax rate applied to one-time charges (1) |
|
264 |
|
|
|
(183 |
) |
|
|
814 |
|
|
|
(279 |
) |
| Total
one-time charges and the tax effects |
|
578 |
|
|
|
461 |
|
|
|
(3,452 |
) |
|
|
3,342 |
|
|
Federal and state tax valuation allowances |
|
891 |
|
|
|
78 |
|
|
|
2,961 |
|
|
|
956 |
|
| Adjusted net
income (loss) |
$ |
809 |
|
|
$ |
786 |
|
|
$ |
(14,001 |
) |
|
$ |
(3,365 |
) |
| Adjusted
EPS |
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
(0.43 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
(1) |
Items are taxed discretely using the Company's effective tax rate
which differs from the Company’s statutory federal rate primarily
due to state income taxes and the non-deductibility of other
permanent items. |
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesAdjusted EBITDA and Adjusted EBITDA
Margin Reconciliations(In Thousands, Except Margin
Data)(Unaudited)
| |
Three months
ended |
|
Nine months
ended |
|
| |
September 30, |
|
September 30, |
|
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Net loss |
$ |
(660 |
) |
|
$ |
247 |
|
|
$ |
(13,510 |
) |
|
$ |
(7,663 |
) |
|
| Income tax
(benefit) expense |
|
(123 |
) |
|
|
(247 |
) |
|
|
475 |
|
|
|
396 |
|
|
| Interest
expense, net |
|
3,393 |
|
|
|
1,179 |
|
|
|
7,584 |
|
|
|
2,842 |
|
|
| Depreciation
and amortization |
|
6,093 |
|
|
|
6,065 |
|
|
|
16,882 |
|
|
|
18,426 |
|
|
| EBITDA
(1) |
|
8,703 |
|
|
|
7,244 |
|
|
|
11,431 |
|
|
|
14,001 |
|
|
| Stock-based
compensation |
|
364 |
|
|
|
951 |
|
|
|
1,833 |
|
|
|
2,115 |
|
|
| Net gain on
Port Lavaca South Yard property sale |
|
— |
|
|
|
— |
|
|
|
(5,202 |
) |
|
|
— |
|
|
| ERP
implementation |
|
314 |
|
|
|
330 |
|
|
|
810 |
|
|
|
1,559 |
|
|
| Professional
fees related to management transition |
|
— |
|
|
|
310 |
|
|
|
— |
|
|
|
1,118 |
|
|
|
Severance |
|
— |
|
|
|
4 |
|
|
|
126 |
|
|
|
944 |
|
|
| Adjusted
EBITDA(2) |
$ |
9,381 |
|
|
$ |
8,839 |
|
|
$ |
8,998 |
|
|
$ |
19,737 |
|
|
| Operating
income margin |
|
1.6 |
|
% |
|
0.6 |
|
% |
|
(1.1 |
) |
% |
|
(0.8 |
) |
% |
| Impact of
other income |
|
— |
|
% |
|
— |
|
% |
|
— |
|
% |
|
— |
|
% |
| Impact of
depreciation and amortization |
|
3.6 |
|
% |
|
3.3 |
|
% |
|
3.3 |
|
% |
|
3.3 |
|
% |
| Impact of
stock-based compensation |
|
0.2 |
|
% |
0.5 |
|
% |
0.4 |
|
% |
0.4 |
|
% |
| Impact on
net gain on Port Lavaca South Yard property sale |
|
— |
|
% |
— |
|
% |
(1.0 |
) |
% |
— |
|
% |
| Impact of
ERP implementation |
|
0.2 |
|
% |
0.2 |
|
% |
0.2 |
|
% |
0.3 |
|
% |
| Impact of
professional fees related to management transition |
|
— |
|
% |
|
0.2 |
|
% |
|
— |
|
% |
|
0.2 |
|
% |
| Impact of
severance |
|
— |
|
% |
|
— |
|
% |
|
— |
|
% |
|
0.2 |
|
% |
| Adjusted
EBITDA margin(2) |
|
5.6 |
|
% |
|
4.8 |
|
% |
|
1.8 |
|
% |
|
3.6 |
|
% |
|
|
|
|
|
(1) |
EBITDA is a non-GAAP measure that represents earnings before
interest, taxes, depreciation and amortization. |
|
(2) |
Adjusted EBITDA is a non-GAAP measure that represents EBITDA
adjusted for stock-based compensation, ERP implementation,
professional fees related to management transition and severance.
Adjusted EBITDA margin is a non-GAAP measure calculated by dividing
Adjusted EBITDA by contract revenues. |
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesAdjusted EBITDA and Adjusted EBITDA
Margin Reconciliations by Segment(In Thousands,
Except Margin Data)(Unaudited)
| |
Marine |
|
Concrete |
|
| |
Three months
ended |
|
Three months
ended |
|
| |
September 30, |
|
September 30, |
|
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Operating income (loss) |
|
2,001 |
|
|
|
5,197 |
|
|
560 |
|
|
|
(4,066 |
) |
|
| Other
income |
|
49 |
|
|
|
48 |
|
|
— |
|
|
|
— |
|
|
| Depreciation
and amortization |
|
4,771 |
|
|
|
4,192 |
|
|
1,322 |
|
|
|
1,873 |
|
|
| EBITDA
(1) |
|
6,821 |
|
|
|
9,437 |
|
|
1,882 |
|
|
|
(2,193 |
) |
|
| Stock-based
compensation |
|
341 |
|
|
|
924 |
|
|
23 |
|
|
|
27 |
|
|
| Net gain on
Port Lavaca South Yard property sale |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
| ERP
implementation |
|
153 |
|
|
|
131 |
|
|
161 |
|
|
|
199 |
|
|
| Professional
fees related to management transition |
|
— |
|
|
|
127 |
|
|
— |
|
|
|
183 |
|
|
|
Severance |
|
— |
|
|
|
4 |
|
|
— |
|
|
|
— |
|
|
| Adjusted
EBITDA(2) |
$ |
7,315 |
|
|
$ |
10,623 |
|
$ |
2,066 |
|
|
$ |
(1,784 |
) |
|
| Operating
income (loss) margin |
|
2.4 |
|
% |
|
6.8 |
% |
|
0.7 |
|
% |
|
(3.9 |
) |
% |
| Impact of
other income |
|
0.1 |
|
% |
|
0.1 |
% |
|
— |
|
% |
|
— |
|
% |
| Impact of
depreciation and amortization |
|
5.9 |
|
% |
|
5.5 |
% |
|
1.5 |
|
% |
|
1.8 |
|
% |
| Impact of
stock-based compensation |
|
0.4 |
|
% |
|
1.2 |
% |
|
— |
|
% |
|
— |
|
% |
| Impact on
net gain on Port Lavaca South Yard property sale |
|
— |
|
% |
|
— |
% |
|
— |
|
% |
|
— |
|
% |
| Impact of
ERP implementation |
|
0.2 |
|
% |
|
0.2 |
% |
|
0.2 |
|
% |
|
0.2 |
|
% |
| Impact of
professional fees related to management transition |
|
— |
|
% |
|
0.2 |
% |
|
— |
|
% |
|
0.2 |
|
% |
| Impact of
severance |
|
— |
|
% |
|
— |
% |
|
— |
|
% |
|
— |
|
% |
| Adjusted
EBITDA margin (2) |
|
9.0 |
|
% |
|
14.0 |
% |
|
2.4 |
|
% |
|
(1.7 |
) |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Marine |
|
Concrete |
|
| |
Nine months
ended |
|
Nine months
ended |
|
| |
September 30, |
|
September 30, |
|
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| Operating
(loss) income |
|
(587 |
) |
|
|
9,553 |
|
|
(5,456 |
) |
|
|
(14,125 |
) |
|
| Other
income |
|
592 |
|
|
|
147 |
|
|
— |
|
|
|
— |
|
|
| Depreciation
and amortization |
|
12,418 |
|
|
|
12,751 |
|
|
4,464 |
|
|
|
5,675 |
|
|
| EBITDA
(1) |
|
12,423 |
|
|
|
22,451 |
|
|
(992 |
) |
|
|
(8,450 |
) |
|
| Stock-based
compensation |
|
1,783 |
|
|
|
2,035 |
|
|
50 |
|
|
|
80 |
|
|
| Net gain on
Port Lavaca South Yard property sale |
|
(5,202 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
| ERP
implementation |
|
414 |
|
|
|
686 |
|
|
396 |
|
|
|
873 |
|
|
| Professional
fees related to management transition |
|
— |
|
|
|
492 |
|
|
— |
|
|
|
626 |
|
|
|
Severance |
|
38 |
|
|
|
944 |
|
|
88 |
|
|
|
— |
|
|
| Adjusted
EBITDA(2) |
$ |
9,456 |
|
|
$ |
26,608 |
|
$ |
(458 |
) |
|
$ |
(6,871 |
) |
|
| Operating
(loss) income margin |
|
(0.3 |
) |
% |
|
3.9 |
% |
|
(2.2 |
) |
% |
|
(4.6 |
) |
% |
| Impact of
other income |
|
0.2 |
|
% |
|
0.2 |
% |
|
— |
|
% |
|
0.1 |
|
% |
| Impact of
depreciation and amortization |
|
4.8 |
|
% |
|
5.2 |
% |
|
1.8 |
|
% |
|
1.8 |
|
% |
| Impact of
stock-based compensation |
|
0.7 |
|
% |
|
0.8 |
% |
|
— |
|
% |
— |
|
% |
| Impact on
net gain on Port Lavaca South Yard property sale |
|
(2.0 |
) |
% |
|
— |
% |
|
— |
|
% |
— |
|
% |
| Impact of
ERP implementation |
|
0.2 |
|
% |
|
0.3 |
% |
|
0.2 |
|
% |
0.3 |
|
% |
| Impact of
professional fees related to management transition |
|
— |
|
% |
|
0.2 |
% |
|
— |
|
% |
|
0.2 |
|
% |
| Impact of
severance |
|
— |
|
% |
|
0.4 |
% |
|
— |
|
% |
|
— |
|
% |
| Adjusted
EBITDA margin (2) |
|
3.6 |
|
% |
|
11.0 |
% |
|
(0.2 |
) |
% |
|
(2.2 |
) |
% |
|
|
|
|
|
(1) |
EBITDA is a non-GAAP measure that represents earnings before
interest, taxes, depreciation and amortization. |
|
(2) |
Adjusted EBITDA is a non-GAAP measure that represents EBITDA
adjusted for stock-based compensation, ERP implementation,
professional fees related to management transition and severance.
Adjusted EBITDA margin is a non-GAAP measure calculated by dividing
Adjusted EBITDA by contract revenues. |
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesCondensed Statements of Cash Flows
Summarized(In
Thousands)(Unaudited)
| |
Three months
ended |
|
Nine months
ended |
| |
September 30, |
|
September 30, |
| |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net (loss) income |
$ |
(660 |
) |
|
$ |
247 |
|
|
$ |
(13,510 |
) |
|
$ |
(7,663 |
) |
| Adjustments
to remove non-cash and non-operating items |
|
8,214 |
|
|
|
5,095 |
|
|
|
16,393 |
|
|
|
20,164 |
|
| Cash flow
from net income after adjusting for non-cash and non-operating
items |
|
7,554 |
|
|
|
5,342 |
|
|
|
2,883 |
|
|
|
12,501 |
|
| Change in
operating assets and liabilities (working capital) |
|
(24,079 |
) |
|
|
(7,917 |
) |
|
|
(31,384 |
) |
|
|
(3,400 |
) |
| Cash flows
(used in) provided by operating activities |
$ |
(16,525 |
) |
|
$ |
(2,575 |
) |
|
$ |
(28,501 |
) |
|
$ |
9,101 |
|
| Cash flows
(used in) provided by investing activities |
$ |
(1,650 |
) |
|
$ |
803 |
|
|
$ |
5,391 |
|
|
$ |
(6,155 |
) |
| Cash flows
provided by (used in) financing activities |
$ |
11,631 |
|
|
$ |
(3,580 |
) |
|
$ |
23,207 |
|
|
$ |
(12,502 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Capital
expenditures (included in investing activities above) |
$ |
(2,387 |
) |
|
$ |
(2,626 |
) |
|
$ |
(6,678 |
) |
|
$ |
(10,627 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesCondensed Statements of Cash
Flows(In
Thousands)(Unaudited)
| |
Nine months ended September 30, |
| |
2023 |
|
2022 |
| Cash flows
from operating activities |
|
|
|
|
|
|
Net loss |
$ |
(13,510 |
) |
|
$ |
(7,663 |
) |
|
Adjustments to reconcile net Loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
13,874 |
|
|
|
16,035 |
|
|
Amortization of ROU operating leases |
|
4,456 |
|
|
|
3,612 |
|
|
Amortization of ROU finance leases |
|
3,008 |
|
|
|
2,391 |
|
|
Write-off of debt issuance costs upon debt modification |
|
119 |
|
|
|
— |
|
|
Amortization of deferred debt issuance costs |
|
1,067 |
|
|
|
290 |
|
|
Deferred income taxes |
|
(76 |
) |
|
|
20 |
|
|
Stock-based compensation |
|
1,833 |
|
|
|
2,115 |
|
|
Gain on disposal of assets, net |
|
(7,914 |
) |
|
|
(4,561 |
) |
|
Allowance for credit losses |
|
26 |
|
|
|
262 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(9,410 |
) |
|
|
(21,375 |
) |
|
Income tax receivable |
|
(66 |
) |
|
|
(73 |
) |
|
Inventory |
|
(514 |
) |
|
|
(893 |
) |
|
Prepaid expenses and other |
|
3,076 |
|
|
|
6,239 |
|
|
Contract assets |
|
(715 |
) |
|
|
(7,845 |
) |
|
Accounts payable |
|
(36,223 |
) |
|
|
27,339 |
|
|
Accrued liabilities |
|
7,096 |
|
|
|
(2,329 |
) |
|
Operating lease liabilities |
|
(4,566 |
) |
|
|
(3,556 |
) |
|
Income tax payable |
|
3 |
|
|
|
(84 |
) |
|
Contract liabilities |
|
9,935 |
|
|
|
(823 |
) |
|
Net cash (used in) provided by operating activities |
|
(28,501 |
) |
|
|
9,101 |
|
| Cash flows
from investing activities: |
|
|
|
|
|
|
Proceeds from sale of property and equipment |
|
12,069 |
|
|
|
4,472 |
|
|
Purchase of property and equipment |
|
(6,678 |
) |
|
|
(10,627 |
) |
|
Net cash provided by (used in) investing activities |
|
5,391 |
|
|
|
(6,155 |
) |
| Cash flows
from financing activities: |
|
|
|
|
|
|
Borrowings on credit |
|
89,491 |
|
|
|
9,000 |
|
|
Payments made on borrowings on credit |
|
(73,236 |
) |
|
|
(18,219 |
) |
|
Proceeds from failed sale-leaseback arrangement |
|
14,140 |
|
|
|
— |
|
|
Proceeds from sales-leaseback financing |
|
2,359 |
|
|
|
— |
|
|
Loan costs from borrowings on credit |
|
(6,532 |
) |
|
|
(664 |
) |
|
Payments of finance lease liabilities |
|
(2,524 |
) |
|
|
(2,235 |
) |
|
Purchase of vested stock-based awards |
|
(491 |
) |
|
|
(384 |
) |
|
Net cash provided by (used in) financing activities |
|
23,207 |
|
|
|
(12,502 |
) |
| Net change
in cash, cash equivalents and restricted cash |
|
97 |
|
|
|
(9,556 |
) |
| Cash, cash
equivalents and restricted cash at beginning of period |
|
3,784 |
|
|
|
12,293 |
|
| Cash, cash
equivalents and restricted cash at end of period |
$ |
3,881 |
|
|
$ |
2,737 |
|
| |
|
|
|
|
|
Orion Group Holdings, Inc. and
SubsidiariesCondensed Balance
Sheets(In Thousands, Except Share and Per Share
Information)
| |
September 30, |
|
December 31, |
| |
2023 |
|
2022 |
| |
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
3,881 |
|
|
|
3,784 |
|
|
Restricted cash |
|
— |
|
|
|
— |
|
|
Accounts receivable: |
|
|
|
|
|
|
Trade, net of allowance for credit losses of $496 and $606,
respectively |
|
111,624 |
|
|
|
106,758 |
|
|
Retainage |
|
55,096 |
|
|
|
50,873 |
|
|
Income taxes receivable |
|
468 |
|
|
|
402 |
|
|
Other current |
|
3,820 |
|
|
|
3,526 |
|
|
Inventory |
|
2,885 |
|
|
|
2,862 |
|
|
Contract assets |
|
44,618 |
|
|
|
43,903 |
|
|
Prepaid expenses and other |
|
6,073 |
|
|
|
8,229 |
|
|
Total current assets |
|
228,465 |
|
|
|
220,337 |
|
| Property and
equipment, net of depreciation |
|
89,585 |
|
|
|
100,977 |
|
| Operating
lease right-of-use assets, net of amortization |
|
27,374 |
|
|
|
14,978 |
|
| Financing
lease right-of-use assets, net of amortization |
|
20,601 |
|
|
|
15,839 |
|
| Inventory,
non-current |
|
5,961 |
|
|
|
5,469 |
|
| Intangible
assets, net of amortization |
|
6,934 |
|
|
|
7,317 |
|
| Deferred
income tax asset |
|
54 |
|
|
|
70 |
|
| Other
non-current |
|
1,248 |
|
|
|
2,168 |
|
|
Total assets |
$ |
380,222 |
|
|
$ |
367,155 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
Current debt, net of issuance costs |
$ |
13,852 |
|
|
$ |
34,956 |
|
|
Accounts payable: |
|
|
|
|
|
|
Trade |
|
49,435 |
|
|
|
87,605 |
|
|
Retainage |
|
1,799 |
|
|
|
1,198 |
|
|
Accrued liabilities |
|
31,847 |
|
|
|
18,466 |
|
|
Income taxes payable |
|
525 |
|
|
|
522 |
|
|
Contract liabilities |
|
47,655 |
|
|
|
37,720 |
|
|
Current portion of operating lease liabilities |
|
9,089 |
|
|
|
4,738 |
|
|
Current portion of financing lease liabilities |
|
6,342 |
|
|
|
4,031 |
|
|
Total current liabilities |
|
160,544 |
|
|
|
189,236 |
|
| Long-term
debt, net of debt issuance costs |
|
36,452 |
|
|
|
716 |
|
| Operating
lease liabilities |
|
18,406 |
|
|
|
11,018 |
|
| Financing
lease liabilities |
|
12,920 |
|
|
|
11,102 |
|
| Other
long-term liabilities |
|
26,149 |
|
|
|
17,072 |
|
| Deferred
income tax liability |
|
119 |
|
|
|
211 |
|
|
Total liabilities |
|
254,590 |
|
|
|
229,355 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock -- $0.01 par value, 10,000,000 authorized, none
issued |
|
— |
|
|
|
— |
|
|
Common stock -- $0.01 par value, 50,000,000 authorized,
33,053,341 and 32,770,550 issued; 32,342,110 and 32,059,319
outstanding at September 30, 2023 and
December 31, 2022, respectively |
|
331 |
|
|
|
328 |
|
|
Treasury stock, 711,231 shares, at cost, as of September 30, 2023
and December 31, 2022, respectively |
|
(6,540 |
) |
|
|
(6,540 |
) |
| Additional
paid-in capital |
|
189,523 |
|
|
|
188,184 |
|
| Retained
loss |
|
(57,682 |
) |
|
|
(44,172 |
) |
|
Total stockholders’ equity |
|
125,632 |
|
|
|
137,800 |
|
|
Total liabilities and stockholders’ equity |
$ |
380,222 |
|
|
$ |
367,155 |
|
Orion (NYSE:ORN)
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From Mar 2024 to Apr 2024
Orion (NYSE:ORN)
Historical Stock Chart
From Apr 2023 to Apr 2024
