Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading
specialty construction company, today reported its financial
results for the second quarter ended June 30, 2023.
Highlights for the quarter ended June
30, 2023:
- Contract revenues of $182.5 million
increased 14.7% sequentially
- Net loss was $0.3 million or $0.01
per diluted share
- Adjusted EBITDA was $3.7
million
- Concrete segment returned to
profitability during the second quarter
- Marine awarded two dredging
contracts totaling $45 million from the Army Corps of
Engineers
- Backlog and awarded contracts
totaled $903 million at quarter end
See definitions and reconciliation of non-GAAP
measures elsewhere in this release.
Management Commentary
“Our second quarter performance was a
significant improvement over our first quarter results and
reflected the progress our team is making in executing our strategy
to achieve long-term growth and value creation,” said Travis Boone,
Chief Executive Officer of Orion Group Holdings.
“Nine months ago, we began our journey to turn
Orion around. We started with a long checklist and have ticked off
many of the boxes—all focused on de-risking the business to clear
the path for long-term growth and profitability. After two years of
reporting losses, our Concrete business turned profitable in the
month of March and continues to generate profit each month. We have
attracted great talent to focus on business development and drive
growth. And perhaps most critical, we shored up our balance sheet
and liquidity, securing a new $103 million ABL credit facility and
providing $25 million in liquidity through sale-leaseback
transactions.”
“Looking ahead, we are optimistic that we will
see continued improvement for the rest of this year and beyond. Our
company is now fundamentally stronger and well positioned for
accelerated growth. We are fortunate to have the most
exceptional people in the industry and two businesses with
different catalysts of growth—Concrete more driven by the private
sector; Marine by the public sector—that can balance one another
during challenging times and different business cycles. When both
businesses are performing well—as we believe is within reach in
2024—they can deliver dramatic growth and strong results for all
stakeholders,” concluded Boone.
Second Quarter 2023 Results
Contract revenues of $182.5 million increased
14.7% sequentially and decreased 6.2% from $194.6 million in the
second 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 primarily related to the
Pearl Harbor, Hawaii drydock project.
Gross profit was $13.8 million or 7.6% of
revenue down from $14.3 million or 7.4% of revenue in the second
quarter of 2022. The increase in gross profit margin was primarily
driven by margin improvements in the concrete business, partially
offset by lower equipment and labor utilization in our marine
segment as compared to the prior year period.
Selling, general and administrative (“SG&A”)
expenses were $18.1 million, up 5.1% from $17.2 million in the
comparable period. As a percentage of total contract revenues,
SG&A expenses increased to 9.9% from 8.9%, primarily due
to lower revenues in the second quarter. The increase in
SG&A dollars reflected an increase in compensation expense for
key new hires, partially offset by lower consulting expense related
to the completion of the management transition.
Net loss for the second quarter was $0.3 million
or $0.01 per diluted share compared to a net loss of $3.1 million
or $0.10 per diluted share year-over-year.
The second quarter 2023 net loss included $4.3
million ($0.13 diluted loss per share) of non-recurring items.
Second quarter 2023 adjusted net loss was $4.5 million ($0.14
diluted loss per share).
EBITDA for the second quarter of 2023 was $7.6
million, representing a 4.2% EBITDA margin, as compared to EBITDA
of $3.3 million, or a 1.7% EBITDA margin in the second quarter last
year. Adjusted for non-recurring items, EBITDA for the second
quarter of 2023 was $3.7 million, representing a 2.0% adjusted
EBITDA margin, as compared to adjusted EBITDA for the second
quarter of 2022 of $5.7 million, representing a 2.9% adjusted
EBITDA margin.
Backlog
Total backlog at June 30, 2023 was
$818.7 million, compared to $467.4 million at March 31, 2023 and
$603.2 million at June 30, 2022 due in substantial part to the
award of the Hawaii contract. Backlog for the Marine segment was
$614.9 million, compared to $187.0 million at March 31, 2023 and
$281.0 million at June 30, 2022. Backlog for the Concrete segment
was $203.8 million, compared to $280.4 million at March 31, 2023
and $322.2 million at June 30, 2022. In addition, the Company has
been awarded $84 million in new project work not included in
backlog at the end of the quarter.
Recent Wins
Orion was awarded two additional contracts
totaling $45 million for work that will be performed in 2023, both
contracts from the Army Corps of Engineers. The first is a $27
million contract for dredging in Texas. The second is an $18
million contract for dredging in Louisiana.
Balance Sheet Update
As of June 30, 2023, current assets were $226.7
million, including unrestricted cash and cash equivalents of $8.9
million. Total debt outstanding as of June 30, 2023 was $36.9
million. At the end of the quarter, the Company had no outstanding
revolver draws.
Conference Call Details
Orion Group Holdings will host a conference call
to discuss results for the second quarter 2023 at 9:00 a.m. Eastern
Time/8:00 a.m. Central Time on Thursday, July 27, 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.
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 are not an alternative 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 comparison of operating results. The
Company believes these adjusted financial measures are a useful
adjunct to earnings/loss calculated in accordance with GAAP because
management uses adjusted net income/loss 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/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 |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Contract revenues |
|
|
182,534 |
|
|
|
194,575 |
|
|
|
341,708 |
|
|
|
369,506 |
|
Costs of
contract revenues |
|
|
168,748 |
|
|
|
180,244 |
|
|
|
322,082 |
|
|
|
342,359 |
|
Gross profit |
|
|
13,786 |
|
|
|
14,331 |
|
|
|
19,626 |
|
|
|
27,147 |
|
Selling,
general and administrative expenses |
|
|
18,119 |
|
|
|
17,233 |
|
|
|
35,136 |
|
|
|
33,403 |
|
Amortization
of intangible assets |
|
|
162 |
|
|
|
310 |
|
|
|
324 |
|
|
|
620 |
|
Gain on
disposal of assets, net |
|
|
(6,534 |
) |
|
|
(364 |
) |
|
|
(7,230 |
) |
|
|
(1,173 |
) |
Operating income (loss) |
|
|
2,039 |
|
|
|
(2,848 |
) |
|
|
(8,604 |
) |
|
|
(5,703 |
) |
Other
(expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
250 |
|
|
|
55 |
|
|
|
543 |
|
|
|
99 |
|
Interest income |
|
|
41 |
|
|
|
16 |
|
|
|
69 |
|
|
|
35 |
|
Interest expense |
|
|
(2,627 |
) |
|
|
(958 |
) |
|
|
(4,260 |
) |
|
|
(1,698 |
) |
Other expense, net |
|
|
(2,336 |
) |
|
|
(887 |
) |
|
|
(3,648 |
) |
|
|
(1,564 |
) |
Loss before income taxes |
|
|
(297 |
) |
|
|
(3,735 |
) |
|
|
(12,252 |
) |
|
|
(7,267 |
) |
Income tax
(benefit) expense |
|
|
(42 |
) |
|
|
(681 |
) |
|
|
598 |
|
|
|
643 |
|
Net
loss |
|
$ |
(255 |
) |
|
$ |
(3,054 |
) |
|
$ |
(12,850 |
) |
|
$ |
(7,910 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss
per share |
|
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.26 |
) |
Diluted loss
per share |
|
$ |
(0.01 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.40 |
) |
|
$ |
(0.26 |
) |
Shares used
to compute loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
32,290,392 |
|
|
|
30,949,298 |
|
|
|
32,235,842 |
|
|
|
30,960,277 |
|
Diluted |
|
|
32,290,392 |
|
|
|
30,949,298 |
|
|
|
32,235,842 |
|
|
|
30,960,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orion Group
Holdings, Inc. and SubsidiariesSelected Results of
Operations(In Thousands, Except Share and Per
Share Information)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
2023 |
|
2022 |
|
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
|
|
(dollar amounts in thousands) |
|
Contract revenues |
|
|
|
|
|
|
|
|
|
|
|
Marine
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
|
$ |
79,171 |
|
|
78.7 |
|
% |
$ |
52,280 |
|
|
63.5 |
|
% |
Private sector |
|
|
21,372 |
|
|
21.3 |
|
% |
30,039 |
|
|
36.5 |
|
% |
Marine segment total |
|
$ |
100,543 |
|
|
100.0 |
|
% |
$ |
82,319 |
|
|
100.0 |
|
% |
Concrete
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
|
$ |
6,261 |
|
|
7.6 |
|
% |
$ |
7,505 |
|
|
6.7 |
|
% |
Private sector |
|
|
75,730 |
|
|
92.4 |
|
% |
104,751 |
|
|
93.3 |
|
% |
Concrete segment total |
|
$ |
81,991 |
|
|
100.0 |
|
% |
$ |
112,256 |
|
|
100.0 |
|
% |
Total |
|
$ |
182,534 |
|
|
|
|
$ |
194,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Marine
segment |
|
$ |
3,492 |
|
|
3.5 |
|
% |
$ |
2,516 |
|
|
3.1 |
|
% |
Concrete
segment |
|
|
(1,453 |
) |
|
(1.8 |
) |
% |
|
(5,364 |
) |
|
(4.8 |
) |
% |
Total |
|
$ |
2,039 |
|
|
|
|
$ |
(2,848 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2023 |
|
2022 |
|
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
|
|
(dollar amounts in thousands) |
|
Contract revenues |
|
|
|
|
|
|
|
|
|
|
|
Marine
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
|
$ |
132,669 |
|
|
73.8 |
|
% |
$ |
109,588 |
|
|
65.7 |
|
% |
Private sector |
|
|
47,172 |
|
|
26.2 |
|
% |
57,211 |
|
|
34.3 |
|
% |
Marine segment total |
|
$ |
179,841 |
|
|
100.0 |
|
% |
$ |
166,799 |
|
|
100.0 |
|
% |
Concrete
segment |
|
|
|
|
|
|
|
|
|
|
|
Public sector |
|
$ |
9,688 |
|
|
6.0 |
|
% |
$ |
12,998 |
|
|
6.4 |
|
% |
Private sector |
|
|
152,179 |
|
|
94.0 |
|
% |
189,709 |
|
|
93.6 |
|
% |
Concrete segment total |
|
$ |
161,867 |
|
|
100.0 |
|
% |
$ |
202,707 |
|
|
100.0 |
|
% |
Total |
|
$ |
341,708 |
|
|
|
|
$ |
369,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
|
|
|
|
|
|
|
|
|
|
Marine
segment |
|
$ |
(2,588 |
) |
|
(1.4 |
) |
% |
$ |
4,356 |
|
|
2.6 |
|
% |
Concrete
segment |
|
|
(6,016 |
) |
|
(3.7 |
) |
% |
|
(10,059 |
) |
|
(5.0 |
) |
% |
Total |
|
$ |
(8,604 |
) |
|
|
|
$ |
(5,703 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orion Group
Holdings, Inc. and SubsidiariesReconciliation of
Adjusted Net Income (Loss)(In thousands except per
share information)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
|
$ |
(255 |
) |
|
$ |
(3,054 |
) |
|
$ |
(12,850 |
) |
|
$ |
(7,910 |
) |
One-time charges and the tax effects: |
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on Port Lavaca South Yard property sale |
|
|
(5,202 |
) |
|
|
— |
|
|
|
(5,202 |
) |
|
|
— |
|
ERP implementation |
|
|
310 |
|
|
|
323 |
|
|
|
496 |
|
|
|
1,229 |
|
Professional fees related to management transition |
|
|
— |
|
|
|
394 |
|
|
|
— |
|
|
|
808 |
|
Severance |
|
|
24 |
|
|
|
867 |
|
|
|
126 |
|
|
|
940 |
|
Tax rate applied to one-time charges (1) |
|
|
584 |
|
|
|
(809 |
) |
|
|
550 |
|
|
|
(96 |
) |
Total
one-time charges and the tax effects |
|
|
(4,284 |
) |
|
|
775 |
|
|
|
(4,030 |
) |
|
|
2,881 |
|
Federal and state tax valuation allowances |
|
|
13 |
|
|
|
1,362 |
|
|
|
2,070 |
|
|
|
878 |
|
Adjusted net
loss |
|
$ |
(4,526 |
) |
|
$ |
(917 |
) |
|
$ |
(14,810 |
) |
|
$ |
(4,151 |
) |
Adjusted
EPS |
|
$ |
(0.14 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________(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 |
|
Six months ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net loss |
|
$ |
(255 |
) |
|
$ |
(3,054 |
) |
|
$ |
(12,850 |
) |
|
$ |
(7,910 |
) |
|
Income tax
(benefit) expense |
|
|
(42 |
) |
|
|
(681 |
) |
|
|
598 |
|
|
|
643 |
|
|
Interest
expense, net |
|
|
2,586 |
|
|
|
942 |
|
|
|
4,191 |
|
|
|
1,663 |
|
|
Depreciation
and amortization |
|
|
5,343 |
|
|
|
6,098 |
|
|
|
10,789 |
|
|
|
12,361 |
|
|
EBITDA
(1) |
|
|
7,632 |
|
|
|
3,305 |
|
|
|
2,728 |
|
|
|
6,757 |
|
|
Stock-based
compensation |
|
|
945 |
|
|
|
794 |
|
|
|
1,469 |
|
|
|
1,164 |
|
|
Net gain on
Port Lavaca South Yard property sale |
|
|
(5,202 |
) |
|
|
— |
|
|
|
(5,202 |
) |
|
|
— |
|
|
ERP
implementation |
|
|
310 |
|
|
|
323 |
|
|
|
496 |
|
|
|
1,229 |
|
|
Professional
fees related to management transition |
|
|
— |
|
|
|
394 |
|
|
|
— |
|
|
|
808 |
|
|
Severance |
|
|
24 |
|
|
|
867 |
|
|
|
126 |
|
|
|
940 |
|
|
Adjusted
EBITDA(2) |
|
$ |
3,709 |
|
|
$ |
5,683 |
|
|
$ |
(383 |
) |
|
$ |
10,898 |
|
|
Operating
income margin |
|
|
1.1 |
|
% |
|
(1.5 |
) |
% |
|
(2.5 |
) |
% |
|
(1.5 |
) |
% |
Impact of
other income |
|
|
0.1 |
|
% |
|
0.1 |
|
% |
|
0.2 |
|
% |
|
— |
|
% |
Impact of
depreciation and amortization |
|
|
2.9 |
|
% |
|
3.1 |
|
% |
|
3.2 |
|
% |
|
3.3 |
|
% |
Impact of
stock-based compensation |
|
|
0.5 |
|
% |
0.4 |
|
% |
0.4 |
|
% |
0.3 |
|
% |
Impact on
net gain on Port Lavaca South Yard property sale |
|
|
(2.8 |
) |
% |
— |
|
% |
(1.5 |
) |
% |
— |
|
% |
Impact of
ERP implementation |
|
|
0.2 |
|
% |
0.2 |
|
% |
0.1 |
|
% |
0.3 |
|
% |
Impact of
professional fees related to management transition |
|
|
— |
|
% |
|
0.2 |
|
% |
|
— |
|
% |
|
0.2 |
|
% |
Impact of
severance |
|
|
— |
|
% |
|
0.4 |
|
% |
|
— |
|
% |
|
0.3 |
|
% |
Adjusted
EBITDA margin(2) |
|
|
2.0 |
|
% |
|
2.9 |
|
% |
|
(0.1 |
) |
% |
|
2.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________(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 |
|
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Operating income (loss) |
|
|
3,492 |
|
|
|
2,516 |
|
|
|
(1,453 |
) |
|
|
(5,364 |
) |
|
Other
income |
|
|
250 |
|
|
|
55 |
|
|
|
— |
|
|
|
— |
|
|
Depreciation
and amortization |
|
|
3,812 |
|
|
|
4,236 |
|
|
|
1,531 |
|
|
|
1,862 |
|
|
EBITDA
(1) |
|
|
7,554 |
|
|
|
6,807 |
|
|
|
78 |
|
|
|
(3,502 |
) |
|
Stock-based
compensation |
|
|
923 |
|
|
|
768 |
|
|
|
22 |
|
|
|
26 |
|
|
Net gain on
Port Lavaca South Yard property sale |
|
|
(5,202 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
ERP
implementation |
|
|
168 |
|
|
|
117 |
|
|
|
142 |
|
|
|
206 |
|
|
Professional
fees related to management transition |
|
|
— |
|
|
|
165 |
|
|
|
— |
|
|
|
229 |
|
|
Severance |
|
|
2 |
|
|
|
867 |
|
|
|
22 |
|
|
|
— |
|
|
Adjusted
EBITDA(2) |
|
$ |
3,445 |
|
|
$ |
8,724 |
|
|
$ |
264 |
|
|
$ |
(3,041 |
) |
|
Operating
income (loss) margin |
|
|
3.5 |
|
% |
|
3.1 |
|
% |
|
(1.9 |
) |
% |
|
(4.8 |
) |
% |
Impact of
other income |
|
|
0.2 |
|
% |
|
0.1 |
|
% |
|
— |
|
% |
|
— |
|
% |
Impact of
depreciation and amortization |
|
|
3.8 |
|
% |
|
5.1 |
|
% |
|
2.0 |
|
% |
|
1.7 |
|
% |
Impact of
stock-based compensation |
|
|
0.9 |
|
% |
0.9 |
|
% |
— |
|
% |
— |
|
% |
Impact on
net gain on Port Lavaca South Yard property sale |
|
|
(5.2 |
) |
% |
— |
|
% |
— |
|
% |
— |
|
% |
Impact of
ERP implementation |
|
|
0.2 |
|
% |
0.1 |
|
% |
0.2 |
|
% |
0.2 |
|
% |
Impact of
professional fees related to management transition |
|
|
— |
|
% |
0.2 |
|
% |
— |
|
% |
0.2 |
|
% |
Impact of
severance |
|
|
— |
|
% |
|
1.1 |
|
% |
|
— |
|
% |
|
— |
|
% |
Adjusted
EBITDA margin (2) |
|
|
3.4 |
|
% |
|
10.6 |
|
% |
|
0.3 |
|
% |
|
(2.7 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marine |
|
Concrete |
|
|
|
Six months ended |
|
Six months ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Operating(loss) income |
|
|
(2,588 |
) |
|
|
4,356 |
|
|
|
(6,016 |
) |
|
|
(10,059 |
) |
|
Other
income |
|
|
543 |
|
|
|
99 |
|
|
|
— |
|
|
|
— |
|
|
Depreciation
and amortization |
|
|
7,647 |
|
|
|
8,559 |
|
|
|
3,142 |
|
|
|
3,802 |
|
|
EBITDA
(1) |
|
|
5,602 |
|
|
|
13,014 |
|
|
|
(2,874 |
) |
|
|
(6,257 |
) |
|
Stock-based
compensation |
|
|
1,442 |
|
|
|
1,111 |
|
|
|
27 |
|
|
|
53 |
|
|
Net gain on
Port Lavaca South Yard property sale |
|
|
(5,202 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
ERP
implementation |
|
|
261 |
|
|
|
555 |
|
|
|
235 |
|
|
|
674 |
|
|
Professional
fees related to management transition |
|
|
— |
|
|
|
365 |
|
|
|
— |
|
|
|
443 |
|
|
Severance |
|
|
38 |
|
|
|
940 |
|
|
|
88 |
|
|
|
— |
|
|
Adjusted
EBITDA(2) |
|
$ |
2,141 |
|
|
$ |
15,985 |
|
|
$ |
(2,524 |
) |
|
$ |
(5,087 |
) |
|
Operating
(loss) income margin |
|
|
(1.4 |
) |
% |
|
2.6 |
|
% |
|
(3.6 |
) |
% |
|
(5.0 |
) |
% |
Impact of
other income |
|
|
0.3 |
|
% |
|
0.1 |
|
% |
|
— |
|
% |
|
— |
|
% |
Impact of
depreciation and amortization |
|
|
4.3 |
|
% |
|
5.1 |
|
% |
|
1.8 |
|
% |
|
2.0 |
|
% |
Impact of
stock-based compensation |
|
|
0.8 |
|
% |
0.7 |
|
% |
— |
|
% |
— |
|
% |
Impact on
net gain on Port Lavaca South Yard property sale |
|
|
(2.9 |
) |
% |
— |
|
% |
— |
|
% |
— |
|
% |
Impact of
ERP implementation |
|
|
0.1 |
|
% |
0.3 |
|
% |
0.1 |
|
% |
0.3 |
|
% |
Impact of
professional fees related to management transition |
|
|
— |
|
% |
|
0.2 |
|
% |
|
— |
|
% |
|
0.2 |
|
% |
Impact of
severance |
|
|
— |
|
% |
|
0.6 |
|
% |
|
0.1 |
|
% |
|
— |
|
% |
Adjusted
EBITDA margin (2) |
|
|
1.2 |
|
% |
|
9.6 |
|
% |
|
(1.6 |
) |
% |
|
(2.5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________(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 |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
|
$ |
(255 |
) |
|
$ |
(3,054 |
) |
|
$ |
(12,850 |
) |
|
$ |
(7,910 |
) |
Adjustments
to remove non-cash and non-operating items |
|
|
1,511 |
|
|
|
8,018 |
|
|
|
8,179 |
|
|
|
15,069 |
|
Cash flow
from net loss after adjusting for non-cash and non-operating
items |
|
|
1,256 |
|
|
|
4,964 |
|
|
|
(4,671 |
) |
|
|
7,159 |
|
Change in
operating assets and liabilities (working capital) |
|
|
(10,199 |
) |
|
|
(3,348 |
) |
|
|
(7,305 |
) |
|
|
4,517 |
|
Cash flows
(used in) provided by operating activities |
|
$ |
(8,943 |
) |
|
$ |
1,616 |
|
|
$ |
(11,976 |
) |
|
$ |
11,676 |
|
Cash flows
provided by (used in) investing activities |
|
$ |
10,700 |
|
|
$ |
(4,148 |
) |
|
$ |
9,400 |
|
|
$ |
(6,958 |
) |
Cash flows
provided by (used in) financing activities |
|
$ |
5,823 |
|
|
$ |
3,895 |
|
|
$ |
9,217 |
|
|
$ |
(8,922 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures (included in investing activities above) |
|
$ |
(2,052 |
) |
|
$ |
(4,478 |
) |
|
$ |
(3,928 |
) |
|
$ |
(8,001 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orion Group
Holdings, Inc. and SubsidiariesCondensed
Statements of Cash Flows(In
Thousands)(Unaudited) |
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
2023 |
|
2022 |
Cash flows
from operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(12,850 |
) |
|
$ |
(7,910 |
) |
Adjustments to reconcile net Loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
9,314 |
|
|
|
10,815 |
|
Amortization of ROU operating leases |
|
|
2,464 |
|
|
|
2,459 |
|
Amortization of ROU finance leases |
|
|
1,475 |
|
|
|
1,546 |
|
Write-off of debt issuance costs upon debt modification |
|
|
119 |
|
|
|
— |
|
Amortization of deferred debt issuance costs |
|
|
537 |
|
|
|
161 |
|
Deferred income taxes |
|
|
5 |
|
|
|
41 |
|
Stock-based compensation |
|
|
1,469 |
|
|
|
1,164 |
|
Gain on disposal of assets, net |
|
|
(7,230 |
) |
|
|
(1,173 |
) |
Allowance for credit losses |
|
|
26 |
|
|
|
56 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(10,068 |
) |
|
|
(23,158 |
) |
Inventory |
|
|
(309 |
) |
|
|
(664 |
) |
Prepaid expenses and other |
|
|
2,794 |
|
|
|
5,050 |
|
Contract assets |
|
|
8,954 |
|
|
|
1,511 |
|
Accounts payable |
|
|
(12,495 |
) |
|
|
25,363 |
|
Accrued liabilities |
|
|
3,188 |
|
|
|
(2,266 |
) |
Operating lease liabilities |
|
|
(2,495 |
) |
|
|
(2,317 |
) |
Income tax payable |
|
|
176 |
|
|
|
192 |
|
Contract liabilities |
|
|
3,146 |
|
|
|
879 |
|
Net cash (used in) provided by operating activities |
|
|
(11,976 |
) |
|
|
11,676 |
|
Cash flows
from investing activities: |
|
|
|
|
|
|
Proceeds from sale of property and equipment |
|
|
13,328 |
|
|
|
1,043 |
|
Purchase of property and equipment |
|
|
(3,928 |
) |
|
|
(8,001 |
) |
Net cash used in investing activities |
|
|
9,400 |
|
|
|
(6,958 |
) |
Cash flows
from financing activities: |
|
|
|
|
|
|
Borrowings on credit |
|
|
57,822 |
|
|
|
5,000 |
|
Payments made on borrowings on credit |
|
|
(54,960 |
) |
|
|
(11,742 |
) |
Proceeds from sale-leaseback arrangement |
|
|
14,140 |
|
|
|
— |
|
Loan costs from Credit Facility |
|
|
(5,978 |
) |
|
|
(611 |
) |
Payments of finance lease liabilities |
|
|
(1,618 |
) |
|
|
(1,472 |
) |
Purchase of vested stock-based awards |
|
|
(189 |
) |
|
|
(97 |
) |
Net cash provided by (used in) financing activities |
|
|
9,217 |
|
|
|
(8,922 |
) |
Net change
in cash, cash equivalents and restricted cash |
|
|
6,641 |
|
|
|
(4,204 |
) |
Cash, cash
equivalents and restricted cash at beginning of period |
|
|
3,784 |
|
|
|
12,293 |
|
Cash, cash
equivalents and restricted cash at end of period |
|
$ |
10,425 |
|
|
$ |
8,089 |
|
|
|
|
|
|
|
|
|
Orion Group
Holdings, Inc. and SubsidiariesCondensed Balance
Sheets(In Thousands, Except Share and Per Share
Information) |
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2023 |
|
2022 |
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
8,883 |
|
|
|
3,784 |
|
Restricted cash |
|
|
1,542 |
|
|
|
— |
|
Accounts receivable: |
|
|
|
|
|
|
Trade, net of allowance for credit losses of $576 and $606,
respectively |
|
|
120,010 |
|
|
|
106,758 |
|
Retainage |
|
|
48,232 |
|
|
|
50,873 |
|
Income taxes receivable |
|
|
598 |
|
|
|
402 |
|
Other current |
|
|
3,205 |
|
|
|
3,526 |
|
Inventory |
|
|
2,862 |
|
|
|
2,862 |
|
Contract assets |
|
|
34,949 |
|
|
|
43,903 |
|
Prepaid expenses and other |
|
|
6,370 |
|
|
|
8,229 |
|
Total current assets |
|
|
226,651 |
|
|
|
220,337 |
|
Property and
equipment, net of depreciation |
|
|
91,793 |
|
|
|
100,977 |
|
Operating
lease right-of-use assets, net of amortization |
|
|
22,010 |
|
|
|
14,978 |
|
Financing
lease right-of-use assets, net of amortization |
|
|
14,684 |
|
|
|
15,839 |
|
Inventory,
non-current |
|
|
5,778 |
|
|
|
5,469 |
|
Intangible
assets, net of amortization |
|
|
6,993 |
|
|
|
7,317 |
|
Deferred
income tax asset |
|
|
67 |
|
|
|
70 |
|
Other
non-current |
|
|
1,233 |
|
|
|
2,168 |
|
Total assets |
|
$ |
369,209 |
|
|
$ |
367,155 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Current debt, net of issuance costs |
|
$ |
13,277 |
|
|
$ |
34,956 |
|
Accounts payable: |
|
|
|
|
|
|
Trade |
|
|
73,756 |
|
|
|
87,605 |
|
Retainage |
|
|
1,441 |
|
|
|
1,198 |
|
Accrued liabilities |
|
|
26,106 |
|
|
|
18,466 |
|
Income taxes payable |
|
|
698 |
|
|
|
522 |
|
Contract liabilities |
|
|
40,866 |
|
|
|
37,720 |
|
Current portion of operating lease liabilities |
|
|
6,152 |
|
|
|
4,738 |
|
Current portion of financing lease liabilities |
|
|
3,515 |
|
|
|
4,031 |
|
Total current liabilities |
|
|
165,811 |
|
|
|
189,236 |
|
Long-term
debt, net of debt issuance costs |
|
|
23,659 |
|
|
|
716 |
|
Operating
lease liabilities |
|
|
16,095 |
|
|
|
11,018 |
|
Financing
lease liabilities |
|
|
10,159 |
|
|
|
11,102 |
|
Other
long-term liabilities |
|
|
27,042 |
|
|
|
17,072 |
|
Deferred
income tax liability |
|
|
213 |
|
|
|
211 |
|
Total liabilities |
|
|
242,979 |
|
|
|
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,
33,122,768 and 32,770,550 issued; 32,411,537 and 32,059,319
outstanding at June 30, 2023 and December 31, 2022,
respectively |
|
|
331 |
|
|
|
328 |
|
Treasury stock, 711,231 shares, at cost, as of June 30, 2023 and
December 31, 2022, respectively |
|
|
(6,540 |
) |
|
|
(6,540 |
) |
Additional
paid-in capital |
|
|
189,461 |
|
|
|
188,184 |
|
Retained
loss |
|
|
(57,022 |
) |
|
|
(44,172 |
) |
Total stockholders’ equity |
|
|
126,230 |
|
|
|
137,800 |
|
Total liabilities and stockholders’ equity |
|
$ |
369,209 |
|
|
$ |
367,155 |
|
|
|
|
|
|
|
|
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