Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a
leading specialty construction company, today reported a net loss
of $4.9 million ($0.16 diluted loss per share) for the first
quarter ended March 31, 2022. Excluding non-recurring items,
adjusted net loss was $3.2 million ($0.10 diluted loss per
share).
First Quarter 2022 Highlights
- Operating loss was $2.9 million for the first quarter of 2022
compared to operating income of $2.1 million for the first quarter
of 2021.
- Net loss was $4.9 million ($0.16 diluted loss per share) for
the first quarter of 2022 compared to net income of $0.9 million
($0.03 diluted earnings per share) for the first quarter of
2021.
- The first quarter 2022 net loss included $2.1 million ($0.07
loss per diluted share) of non-recurring items and $0.5 million
($0.02 per diluted share) of tax impact from valuation allowances.
First quarter 2022 adjusted net loss was $3.2 million ($0.10
diluted loss per share). (Please see page 7 of this release for a
reconciliation of adjusted net income).
- EBITDA, adjusted to exclude the impact of the aforementioned
non-recurring items, was $5.2 million in the first quarter of 2022,
which compares to adjusted EBITDA of $9.5 million for the first
quarter of 2021. (Please see page 8 of this release for an
explanation of EBITDA, adjusted EBITDA and a reconciliation to the
nearest GAAP measure).
- Backlog at the end of the first quarter was $604.1 million on a
first quarter book-to-bill of 1.08x.
“Since stepping in as Orion Group Holdings’ interim CEO a few
weeks ago, I have been working closely with leaders to ensure that
we are well positioned to capitalize on industry tailwinds, improve
the quality of our backlog, enhance margins and ultimately deliver
for our shareholders and customers,” stated Austin Shanfelter,
Orion’s Interim Chief Executive Officer. “We ended the first
quarter with a solid foundation for the future, including improving
markets and a backlog up 66 percent year-over-year. Since the end
of the quarter, we have successfully bid for an additional $112
million in projects.”
Mr. Shanfelter continued, “I am committed to working with our
teams to meet or exceed our goals and I would like to thank our
team members, our business partners and our clients for their
leadership and support.”
Consolidated Results for First Quarter 2022 Compared to First
Quarter 2021
- Contract revenues were $174.9 million, an increase of $21.6
million or 14.1% as compared to $153.3 million. The increase was
primarily driven by the beginning of large jobs awarded in the
second half of 2021 in the marine segment and increased cubic yard
production on light commercial projects in the concrete
segment.
- Gross profit was $12.8 million, as compared to $15.5 million.
Gross profit margin was 7.3%, as compared to 10.1%. The decrease in
gross profit dollars and percentage was primarily driven by
write-downs in the concrete segment as a result of project
conditions, reduced dredging volume in the current quarter and a
change in the mix of work in the current period.
- Selling, General, and Administrative expenses were $16.2
million, as compared to $14.6 million. As a percentage of total
contract revenues, SG&A expenses decreased from 9.5% to 9.2%,
primarily due to higher revenues in the current period. The
increase in SG&A dollars was driven primarily by additional
consulting fees related to the management transition and additional
property taxes, partially offset by reduced bonus expense.
- Operating loss was $2.9 million as compared to operating income
of $2.1 million in the prior year period.
- EBITDA was $3.5 million, representing a 2.0% EBITDA margin, as
compared to EBITDA of $8.6 million, or a 5.6% EBITDA margin. When
adjusted for non-recurring items, adjusted EBITDA for the first
quarter of 2022 was $5.2 million, representing a 3.0% EBITDA
margin. (Please see page 8 of this release for an explanation of
EBITDA, Adjusted EBITDA and a reconciliation to the nearest GAAP
measure).
Backlog
Backlog of work under contract as of March 31, 2022 was $604.1
million, which compares with backlog under contract as of March 31,
2021, of $364.8 million. The first quarter 2022 ending backlog was
composed of $317.4 million in the marine segment, and $286.7
million in the concrete segment. At the end of the first quarter
2022, the Company had approximately $2.1 billion worth of bids
outstanding, including successful bids on approximately $112
million in projects subsequent to the end of the first quarter of
2022, of which approximately $30 million pertains to the marine
segment and approximately $82 million to the concrete segment.
“During the first quarter, we converted approximately $189
million of the approximately $1.3 billion of work on which we bid,”
continued Mr. Shanfelter. “This resulted in a 1.08 times
book-to-bill ratio and a win rate of 14.0%. In the marine segment,
we bid on approximately $419 million during the first quarter 2022
and were successful on approximately $25 million, representing a
win rate of 6.0% and a book-to-bill ratio of 0.30 times. In the
concrete segment we bid on approximately $927 million of work and
were awarded approximately $164 million, representing a win rate of
17.7% and a book-to-bill ratio of 1.81 times."
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. Given the typical duration of the Company's
projects, which generally range from three to nine months, the
Company's backlog at any point in time usually represents only a
portion of the revenue it expects to realize during a twelve-month
period.
Conference Call Details
Orion Group Holdings will host a conference call to discuss
results for the first quarter 2022 at 10:00 a.m. Eastern Time/9:00
a.m. Central Time on Thursday, April 28, 2022. To listen to a live
webcast of the conference call, or access the replay, visit the
Calendar of Events page of the Investor Relations section of the
website at www.oriongroupholdingsinc.com. To participate in the
call, please dial (201) 493-6739 and ask for the Orion Group
Holdings Conference Call.
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, 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 pour and finish, dirt work, layout,
forming, rebar, and mesh across the light commercial, structural
and other associated business areas. The Company is headquartered
in Houston, Texas with regional offices throughout its operating
areas.
Non-GAAP Financial Measures
This press release includes the financial measures “adjusted net
income,” “adjusted earnings 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 and adjusted earnings per share are not an
alternative to net income or earnings per share. Adjusted net
income and adjusted earnings per share exclude certain items that
management believes impairs a meaningful comparison of operating
results. The company believes these adjusted financial measures are
a useful adjunct to earnings calculated in accordance with GAAP
because management uses adjusted net income available to common
stockholders to evaluate 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 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 generally accepted accounting principles in the
United States, or as a measure of the Company's profitability or
liquidity.
The matters discussed in this press release may constitute or
include projections or other forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
the provisions of which 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 estimated
project start date, 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, the effects of the ongoing
COVID-19 pandemic, 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.
Please refer to the Company's Annual Report on Form 10-K, filed
on March 7, 2022, 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.
Orion Group Holdings, Inc. and
Subsidiaries
Condensed Statements of
Operations
(In Thousands, Except Share
and Per Share Information)
(Unaudited)
Three months ended
March 31,
2022
2021
Contract revenues
174,931
153,309
Costs of contract revenues
162,115
137,854
Gross profit
12,816
15,455
Selling, general and administrative
expenses
16,170
14,630
Amortization of intangible assets
310
380
Gain on disposal of assets, net
(809
)
(1,610
)
Operating (loss) income
(2,855
)
2,055
Other (expense) income:
Other income
44
37
Interest income
19
26
Interest expense
(740
)
(1,040
)
Other expense, net
(677
)
(977
)
(Loss) income before income taxes
(3,532
)
1,078
Income tax expense
1,324
150
Net (loss) income
$
(4,856
)
$
928
Basic (loss) earnings per share
$
(0.16
)
$
0.03
Diluted (loss) earnings per share
$
(0.16
)
$
0.03
Shares used to compute (loss) income per
share:
Basic
30,971,379
30,465,475
Diluted
30,971,379
30,499,978
Orion Group Holdings, Inc. and
Subsidiaries
Selected Results of
Operations
(In Thousands, Except Share
and Per Share Information)
(Unaudited)
Three months ended March
31,
2022
2021
Amount
Percent
Amount
Percent
(dollar amounts in
thousands)
Contract revenues
Marine segment
Public sector
$
57,308
67.8
%
$
41,669
57.8
%
Private sector
27,172
32.2
%
30,477
42.2
%
Marine segment total
$
84,480
100.0
%
$
72,146
100.0
%
Concrete segment
Public sector
$
5,493
6.1
%
$
4,779
5.9
%
Private sector
84,958
93.9
%
76,384
94.1
%
Concrete segment total
$
90,451
100.0
%
$
81,163
100.0
%
Total
$
174,931
$
153,309
Operating (loss) income
Marine segment
$
1,840
2.2
%
$
2,848
3.9
%
Concrete segment
(4,695
)
(5.2
)
%
(793
)
(1.0
)
%
Total
$
(2,855
)
$
2,055
Orion Group Holdings, Inc. and
Subsidiaries
Reconciliation of Adjusted Net
Income (Loss)
(In thousands except per share
information)
(Unaudited)
Three months ended
March 31,
2022
2021
Net (loss) income
$
(4,856
)
$
928
One-time charges and the tax effects:
ERP implementation
906
586
Professional fees related to management
transition
414
—
Severance
73
—
Tax rate applied to one-time charges
(1)
713
(164
)
Total one-time charges and the tax
effects
2,106
422
Federal and state tax valuation
allowances
(484
)
(151
)
Adjusted net income
$
(3,234
)
$
1,199
Adjusted EPS
$
(0.10
)
$
0.04
____________________________ (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
Subsidiaries
Adjusted EBITDA and Adjusted
EBITDA Margin Reconciliations
(In Thousands, Except Margin
Data)
(Unaudited)
Three months ended
March 31,
2022
2021
Net (loss) income
$
(4,856
)
$
928
Income tax expense
1,324
150
Interest expense, net
721
1,014
Depreciation and amortization
6,263
6,485
EBITDA (1)
3,452
8,577
Stock-based compensation
370
383
ERP implementation
906
586
Professional fees related to management
transition
414
—
Severance
73
—
Adjusted EBITDA(2)
$
5,215
$
9,546
Operating income margin
(1.5
)
%
1.4
%
Impact of depreciation and
amortization
3.6
%
4.2
%
Impact of stock-based compensation
0.2
%
0.2
%
Impact of ERP implementation
0.5
%
0.4
%
Impact of professional fees related to
management transition
0.2
%
—
%
Impact of severance
—
%
—
%
Adjusted EBITDA margin(2)
3.0
%
6.2
%
____________________________
(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
Subsidiaries
Adjusted EBITDA and Adjusted
EBITDA Margin Reconciliations by Segment
(In Thousands, Except Margin
Data)
(Unaudited)
Marine
Concrete
Three months ended
Three months ended
March 31,
March 31,
2022
2021
2022
2021
Operating (loss) income (1)
1,840
2,848
(4,695
)
(793
)
Other income (expense), net
44
37
—
—
Depreciation and amortization
4,323
4,358
1,940
2,127
EBITDA (2)
6,207
7,243
(2,755
)
1,334
Stock-based compensation
343
351
27
32
ERP implementation
438
276
468
310
Professional fees related to management
transition
200
—
214
—
Severance
73
—
—
—
Adjusted EBITDA(3)
$
7,261
$
7,870
$
(2,046
)
$
1,676
Operating income margin
2.2
%
3.9
%
(5.1
)
%
(0.9
)
%
Impact of other income (expense), net
0.1
%
0.1
%
—
%
—
%
Impact of depreciation and
amortization
5.1
%
6.0
%
2.1
%
2.6
%
Impact of stock-based compensation
0.4
%
0.5
%
—
%
—
%
Impact of ERP implementation
0.5
%
0.4
%
0.5
%
0.4
%
Impact of professional fees related to
management transition
0.2
%
—
%
0.2
%
—
%
Impact of severance
0.1
%
—
%
—
%
—
%
Adjusted EBITDA margin (3)
8.6
%
10.9
%
(2.3
)
%
2.1
%
____________________________ (1)
In connection with the preparation of the financial statements
for the quarter ended June 30, 2021, the Company has identified and
corrected certain immaterial errors in segment reporting for all
periods presented. Specifically, certain corporate overhead costs
previously recorded to the marine segment as part of operating
income (loss) and allocated from the marine segment to the concrete
segment below operating income in the other income (expense) line
have been allocated from the marine segment to the concrete segment
as part of the determination of operating income for each
segment.
(2)
EBITDA is a non-GAAP measure that represents earnings before
interest, taxes, depreciation and amortization.
(3)
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
Subsidiaries
Condensed Statements of Cash
Flows Summarized
(In Thousands)
(Unaudited)
Three months ended
March 31,
2022
2021
Net (loss) income
$
(4,856
)
$
928
Adjustments to remove non-cash and
non-operating items
7,051
6,895
Cash flow from net income after adjusting
for non-cash and non-operating items
2,195
7,823
Change in operating assets and liabilities
(working capital)
7,865
1,295
Cash flows provided by operating
activities
$
10,060
$
9,118
Cash flows (used in) provided by investing
activities
$
(2,810
)
$
772
Cash flows used in financing
activities
$
(12,817
)
$
(6,837
)
Capital expenditures (included in
investing activities above)
$
(3,523
)
$
(1,618
)
Orion Group Holdings, Inc. and
Subsidiaries
Condensed Statements of Cash
Flows
(In Thousands)
(Unaudited)
Three months ended March
31,
2022
2021
Cash flows from operating activities
Net (loss) income
$
(4,856
)
$
928
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Depreciation and amortization
5,503
5,704
Amortization of ROU operating leases
1,176
1,348
Amortization of ROU finance leases
760
781
Amortization of deferred debt issuance
costs
32
239
Deferred income taxes
19
50
Stock-based compensation
370
383
Gain on disposal of assets, net
(809
)
(1,610
)
Change in operating assets and
liabilities, net of effects of acquisitions:
Accounts receivable
(13,907
)
3,837
Inventory
(189
)
74
Prepaid expenses and other
2,504
60
Contract assets
4,055
10,474
Accounts payable
12,689
(9,735
)
Accrued liabilities
(3,075
)
(2,371
)
Operating lease liabilities
(1,183
)
(1,196
)
Income tax payable
1,376
137
Contract liabilities
5,595
15
Net cash provided by operating
activities
10,060
9,118
Cash flows from investing activities:
Proceeds from sale of property and
equipment
713
1,950
Purchase of property and equipment
(3,523
)
(1,618
)
Insurance claim proceeds related to
property and equipment
—
440
Net cash (used in) provided by investing
activities
(2,810
)
772
Cash flows from financing activities:
Borrowings from Credit Facility
—
5,000
Payments made on borrowings from Credit
Facility
(11,671
)
(11,155
)
Loan costs from Credit Facility
(494
)
—
Payments of finance lease liabilities
(637
)
(732
)
Purchase of vested stock-based awards
(15
)
(36
)
Exercise of stock options
—
86
Net cash used in financing activities
(12,817
)
(6,837
)
Net change in cash, cash equivalents and
restricted cash
(5,567
)
3,053
Cash, cash equivalents and restricted cash
at beginning of period
12,293
1,589
Cash, cash equivalents and restricted cash
at end of period
$
6,726
$
4,642
Orion Group Holdings, Inc. and
Subsidiaries
Condensed Balance
Sheets
(In Thousands, Except Share
and Per Share Information)
March 31,
December 31,
2022
2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
6,726
12,293
Accounts receivable:
Trade, net of allowance for credit losses
of $323 and $323, respectively
99,780
88,173
Retainage
43,467
41,379
Income taxes receivable
405
405
Other current
3,713
17,585
Inventory
1,467
1,428
Contract assets
24,474
28,529
Prepaid expenses and other
6,008
8,142
Total current assets
186,040
197,934
Property and equipment, net of
depreciation
104,974
106,654
Operating lease right-of-use assets, net
of amortization
15,006
14,686
Financing lease right-of-use assets, net
of amortization
17,472
14,561
Inventory, non-current
5,568
5,418
Intangible assets, net of amortization
8,246
8,556
Deferred income tax asset
40
41
Other non-current
3,530
3,900
Total assets
$
340,876
$
351,750
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Current debt, net of issuance costs
$
27,210
$
39,141
Accounts payable:
Trade
60,537
48,217
Retainage
1,186
923
Accrued liabilities
21,141
38,594
Income taxes payable
1,977
601
Contract liabilities
32,593
26,998
Current portion of operating lease
liabilities
4,005
3,857
Current portion of financing lease
liabilities
4,670
3,406
Total current liabilities
153,319
161,737
Long-term debt, net of debt issuance
costs
929
259
Operating lease liabilities
11,709
11,637
Financing lease liabilities
12,605
10,908
Other long-term liabilities
18,530
18,942
Deferred income tax liability
187
169
Interest rate swap liability
—
—
Total liabilities
197,279
203,652
Stockholders’ equity:
Preferred stock -- $0.01 par value,
10,000,000 authorized, none issued
—
—
Common stock -- $0.01 par value,
50,000,000 authorized, 31,676,725 and 31,712,457 issued; 30,965,494
and 31,001,226 outstanding at March 31, 2022 and December 31, 2021,
respectively
317
317
Treasury stock, 711,231 shares, at cost,
as of March 31, 2022 and December 31, 2021, respectively
(6,540
)
(6,540
)
Accumulated other comprehensive loss
—
—
Additional paid-in capital
186,236
185,881
Retained loss
(36,416
)
(31,560
)
Total stockholders’ equity
143,597
148,098
Total liabilities and stockholders’
equity
$
340,876
$
351,750
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427005908/en/
Orion Group Holdings Inc. Francis Okoniewski, VP Investor
Relations (346) 616-4138 www.oriongroupholdingsinc.com
-OR-
INVESTOR RELATIONS COUNSEL: The Equity Group Inc. Jeremy
Hellman, CFA (804) 595-2083
Orion (NYSE:ORN)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
Orion (NYSE:ORN)
Historical Stock Chart
Von Apr 2023 bis Apr 2024
