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Orion Group Holdings, Inc. Reports Second Quarter 2022 Results

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Orion Group Holdings, Inc.
Orion Group Holdings, Inc.

HOUSTON, July 27, 2022 (GLOBE NEWSWIRE) -- Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading specialty construction company, today reported a net loss of $3.1 million ($0.10 diluted loss per share) for the second quarter ended June 30, 2022. Excluding non-recurring items, adjusted net loss was $0.9 million ($0.03 diluted loss per share).

Second Quarter 2022 Highlights

  • Operating loss was $2.8 million for the second quarter of 2022 compared to operating income of $5.6 million for the second quarter of 2021.

  • Net loss was $3.1 million ($0.10 diluted loss per share) for the second quarter of 2022 compared to net income of $3.5 million ($0.11 diluted earnings per share) for the second quarter of 2021.

  • The second quarter 2022 net loss included $0.8 million ($0.03 loss per diluted share) of non-recurring items and $1.4 million ($0.04 per diluted share) of tax impact from valuation allowances. Second quarter 2022 adjusted net loss was $0.9 million ($0.03 diluted loss per share).  (Please see page 7 of this release for an explanation of adjusted net loss, adjusted loss per share and a reconciliation to the nearest GAAP measure). 

  • EBITDA, adjusted to exclude the impact of the aforementioned non-recurring items, was $5.7 million in the second quarter of 2022, which compares to adjusted EBITDA of $7.4 million for the second 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 second quarter was $603.2 million on a second quarter book-to-bill of 1.00x.

“I want to thank the entire team for embracing the changes and new expectations that are being set”, stated Austin Shanfelter, Orion’s Interim Chief Executive Officer. “I appreciate the actions that are underway and needed to provide a successful path forward.”

Mr. Shanfelter continued, “As we endeavor to conclude the onboarding of leadership, the steps we are taking now enhances the foundation for success of the new leadership team. These steps include:

  • Company-wide focus to obtain margin improvements on all projects

  • Ensuring the ability to capture all cost escalations

  • Downsizing unproductive markets

  • Monetizing real estate

  • Improving liquidity

  • Increasing project wins from negotiations, not just low bidding

  • Onboarding new management

Consolidated Results for Second Quarter 2022 Compared to Second Quarter 2021

  • Contract revenues were $194.6 million, an increase of $48.7 million or 33.4% as compared to $145.9 million. The increase was primarily driven by higher volume in the concrete segment and the start up on large jobs awarded in the second half of 2021 in the marine segment.

  • Gross profit was $14.3 million, as compared to $12.3 million. Gross profit margin was 7.4%, as compared to 8.4%. The increase in gross profit dollars was primarily driven by efficiencies in equipment and labor utilization and a change in the mix of work in the marine segment in the current period, partially offset by unabsorbed indirect expenses in the concrete segment. The decrease in gross profit percentage was primarily driven by additional costs in the concrete segment as a result of project performance and conditions and a change in the mix of work in the current period partially offset by the impact from change orders recognized related to work primarily recognized in previous periods.

  • Selling, General, and Administrative expenses were $17.2 million, as compared to $13.7 million. As a percentage of total contract revenues, SG&A expenses decreased from 9.3% to 8.9%, primarily due to higher revenues in the current period. The increase in SG&A dollars was driven primarily by severance, consulting fees related to the management transition, property tax true-ups in the current year period and as a result of a true-up reducing bonus expense in the prior year period.

  • Operating loss was $2.8 million as compared to operating income of $5.6 million in the prior year period.

  • EBITDA was $3.3 million, representing a 1.7% EBITDA margin, as compared to EBITDA of $12.1 million, or an 8.3% EBITDA margin. When adjusted for non-recurring items, adjusted EBITDA for the second quarter of 2022 was $5.7 million, representing a 2.9% adjusted EBITDA margin, as compared to adjusted EBITDA for the second quarter of 2021 of $7.4 million, representing a 5.1% adjusted 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 June 30, 2022 was $603.2 million, which compares with backlog of work under contract as of June 30, 2021, of $394.4 million. The second quarter 2022 ending backlog was composed of $281.0 million in the marine segment, and $322.2 million in the concrete segment. At the end of the second quarter 2022, the Company had approximately $2.5 billion worth of bids outstanding, including successful bids on approximately $153 million of projects, subsequent to the end of the second quarter of 2022, of which approximately $149 million pertains to the marine segment and approximately $4 million to the concrete segment.

“During the second quarter, we converted to backlog approximately $194 million of the approximately $1.8 billion of work on which we bid,” continued Mr. Shanfelter. “This resulted in a 1.00 times book-to-bill ratio and a win rate of 10.8%. In the marine segment, we bid on approximately $671 million during the second quarter 2022 and were successful on approximately $46 million, representing a win rate of 6.8% and a book-to-bill ratio of 0.56 times. In the concrete segment we bid on approximately $1.1 billion of work and were awarded approximately $148 million, representing a win rate of 13.2% and a book-to-bill ratio of 1.32 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 second quarter 2022 at 10:00 a.m. Eastern Time/9:00 a.m. Central Time on Thursday, July 28, 2022. To listen to the call live, dial 800-715-9871 in the US and Canada or 646-307-1963 in the US and ask for the Orion Group Holdings Conference Call. To listen to the call via the Internet, please visit https://edge.media-server.com/mmc/p/eywdkzdf. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the conference call may be accessed for approximately 30 days after the call at Orion Group Holdings' website.

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/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.

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 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, except as required by law.

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.

 

 

 

CONTACT:

 

 

Orion Group Holdings Inc.

 

 

Francis Okoniewski, VP Investor Relations

 

 

(346) 616-4138

 

 

www.oriongroupholdingsinc.com

 

 


Orion Group Holdings, Inc. and Subsidiaries
Condensed Statements of Operations
(In Thousands, Except Share and Per Share Information)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30, 

 

June 30, 

 

    

2022

 

    

2021

 

    

2022

 

    

2021

 

Contract revenues

 

 

194,575

 

 

 

145,875

 

 

 

369,506

 

 

 

299,184

 

Costs of contract revenues

 

 

180,244

 

 

 

133,574

 

 

 

342,359

 

 

 

271,428

 

Gross profit

 

 

14,331

 

 

 

12,301

 

 

 

27,147

 

 

 

27,756

 

Selling, general and administrative expenses

 

 

17,233

 

 

 

13,715

 

 

 

33,403

 

 

 

28,345

 

Amortization of intangible assets

 

 

310

 

 

 

381

 

 

 

620

 

 

 

761

 

Gain on disposal of assets, net

 

 

(364

)

 

 

(7,361

)

 

 

(1,173

)

 

 

(8,971

)

Operating (loss) income

 

 

(2,848

)

 

 

5,566

 

 

 

(5,703

)

 

 

7,621

 

Other (expense) income:

 

 

  

 

 

  

 

 

  

 

 

  

Other income

 

 

55

 

 

 

72

 

 

 

99

 

 

 

109

 

Interest income

 

 

16

 

 

 

25

 

 

 

35

 

 

 

51

 

Interest expense

 

 

(958

)

 

 

(2,943

)

 

 

(1,698

)

 

 

(3,983

)

Other expense, net

 

 

(887

)

 

 

(2,846

)

 

 

(1,564

)

 

 

(3,823

)

(Loss) income before income taxes

 

 

(3,735

)

 

 

2,720

 

 

 

(7,267

)

 

 

3,798

 

Income tax (benefit) expense

 

 

(681

)

 

 

(810

)

 

 

643

 

 

 

(660

)

Net (loss) income

 

$

(3,054

)

 

$

3,530

 

 

$

(7,910

)

 

$

4,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

 

$

(0.10

)

 

$

0.12

 

 

$

(0.26

)

 

$

0.15

 

Diluted (loss) earnings per share

 

$

(0.10

)

 

$

0.11

 

 

$

(0.26

)

 

$

0.15

 

Shares used to compute (loss) income per share:

 

 

  

 

 

  

 

 

  

 

 

  

Basic

 

 

30,949,298

 

 

 

30,671,952

 

 

 

30,960,277

 

 

 

30,569,284

 

Diluted

 

 

30,949,298

 

 

 

30,702,151

 

 

 

30,960,277

 

 

 

30,601,669

 


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

 

$

52,280

 

 

63.5

%

 

$

44,667

 

 

69.9

%

Private sector

 

 

30,039

 

 

36.5

%

 

 

19,275

 

 

30.1

%

Marine segment total

 

$

82,319

 

 

100.0

%

 

$

63,942

 

 

100.0

%

Concrete segment

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

7,505

 

 

6.7

%

 

$

6,500

 

 

7.9

%

Private sector

 

 

104,751

 

 

93.3

%

 

 

75,433

 

 

92.1

%

Concrete segment total

 

$

112,256

 

 

100.0

%

 

$

81,933

 

 

100.0

%

Total

 

$

194,575

 

 

 

 

$

145,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

Marine segment

 

$

2,516

 

 

3.1

%

 

$

8,606

 

 

13.5

%

Concrete segment

 

 

(5,364

)

 

(4.8

)%

 

 

(3,040

)

 

(3.7

)%

Total

 

$

(2,848

)

 

 

 

$

5,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 

 

 

2022

 

 

2021

 

 

    

Amount

 

Percent

 

Amount

 

Percent

 

 

(dollar amounts in thousands)

Contract revenues

 

 

 

 

 

 

 

 

 

 

Marine segment

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

109,588

 

 

65.7

%

 

$

86,336

 

 

63.4

%

Private sector

 

 

57,211

 

 

34.3

%

 

 

49,752

 

 

36.6

%

Marine segment total

 

$

166,799

 

 

100.0

%

 

$

136,088

 

 

100.0

%

Concrete segment

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

12,998

 

 

6.4

%

 

$

11,279

 

 

6.9

%

Private sector

 

 

189,709

 

 

93.6

%

 

 

151,817

 

 

93.1

%

Concrete segment total

 

$

202,707

 

 

100.0

%

 

$

163,096

 

 

100.0

%

Total

 

$

369,506

 

 

 

 

$

299,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

Marine segment

 

$

4,356

 

 

2.6

%

 

$

11,454

 

 

8.4

%

Concrete segment

 

 

(10,059

)

 

(5.0

)%

 

 

(3,833

)

 

(2.4

)%

Total

 

$

(5,703

)

 

 

 

$

7,621

 

 

 


Orion Group Holdings, Inc. and Subsidiaries
Reconciliation of Adjusted Net Income (Loss)
(In thousands except per share information)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30, 

 

June 30, 

 

    

2022

 

    

2021

 

    

2022

 

    

2021

 

Net (loss) income

 

$

(3,054

)

 

$

3,530

 

 

$

(7,910

)

 

$

4,458

 

One-time charges and the tax effects:

 

 

 

 

 

 

 

 

 

 

 

 

ERP implementation

 

 

323

 

 

 

853

 

 

 

1,229

 

 

 

1,439

 

Professional fees related to management transition

 

 

394

 

 

 

 

 

 

808

 

 

 

 

Severance

 

 

867

 

 

 

 

 

 

940

 

 

 

 

Costs related to debt extinguishment

 

 

 

 

 

2,062

 

 

 

 

 

 

2,062

 

Net gain on Tampa property sale

 

 

 

 

 

(6,767

)

 

 

 

 

 

(6,767

)

Tax rate applied to one-time charges (1)

 

 

(809

)

 

 

886

 

 

 

(96

)

 

 

751

 

Total one-time charges and the tax effects

 

 

775

 

 

 

(2,966

)

 

 

2,881

 

 

 

(2,515

)

Federal and state tax valuation allowances

 

 

1,362

 

 

 

1,121

 

 

 

878

 

 

 

970

 

Adjusted net (loss) income

 

$

(917

)

 

$

1,685

 

 

$

(4,151

)

 

$

2,913

 

Adjusted EPS

 

$

(0.03

)

 

$

0.05

 

 

$

(0.13

)

 

$

0.10

 

(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

 

 

Six months ended

 

 

June 30, 

 

 

June 30, 

 

    

2022

 

 

    

2021

 

 

    

2022

 

 

    

2021

 

 

Net (loss) income

 

$

(3,054

)

 

$

3,530

 

 

 

$

(7,910

)

 

$

4,458

 

 

Income tax expense

 

 

(681

)

 

 

(810

)

 

 

643

 

 

 

 

(660

)

 

Interest expense, net

 

 

942

 

 

 

 

2,918

 

 

 

 

1,663

 

 

 

 

3,932

 

 

Depreciation and amortization

 

 

6,098

 

 

 

 

6,429

 

 

 

 

12,361

 

 

 

 

12,915

 

 

EBITDA (1)

 

 

3,305

 

 

 

 

12,067

 

 

 

 

6,757

 

 

 

 

20,645

 

 

Stock-based compensation

 

 

794

 

 

 

 

1,245

 

 

 

 

1,164

 

 

 

 

1,628

 

 

ERP implementation

 

 

323

 

 

 

 

853

 

 

 

 

1,229

 

 

 

 

1,439

 

 

Professional fees related to management transition

 

 

394

 

 

 

 

 

 

 

 

808

 

 

 

 

 

 

Severance

 

 

867

 

 

 

 

 

 

 

 

940

 

 

 

 

 

 

Net gain on Tampa property sale

 

 

 

 

 

 

(6,767

)

 

 

 

 

 

 

(6,767

)

 

Adjusted EBITDA(2)

 

$

5,683

 

 

 

$

7,398

 

 

 

$

10,898

 

 

 

$

16,945

 

 

Operating income margin

 

 

(1.4

)%

 

 

 

3.8

%

 

 

 

(1.6

)%

 

 

 

2.5

%

 

Impact of depreciation and amortization

 

 

3.1

%

 

 

 

4.4

%

 

 

 

3.4

%

 

 

 

4.5

%

 

Impact of stock-based compensation

 

 

0.4

%

 

 

 

0.9

%

 

 

 

0.3

%

 

 

 

0.5

%

 

Impact of ERP implementation

 

 

0.2

%

 

 

 

0.6

%

 

 

 

0.3

%

 

 

 

0.5

%

 

Impact of professional fees related to management transition

 

 

0.2

%

 

 

 

%

 

0.2

%

 

 

 

%

Impact of severance

 

 

0.4

%

 

 

 

%

 

0.3

%

 

 

 

%

Impact of net gain on Tampa property sale

 

 

%

 

 

 

(4.6

)%

 

 

 

%

 

(2.3

)%

 

Adjusted EBITDA margin(2)

 

 

2.9

%

 

 

 

5.1

%

 

 

 

2.9

%

 

 

 

5.7

%

 

(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

 

 

June 30, 

 

June 30, 

 

    

2022

    

2021

 

    

2022

 

    

2021

 

Operating (loss) income

 

 

2,516

 

 

8,606

 

 

 

(5,364

)

 

 

(3,040

)

Other income (expense), net

 

 

55

 

 

72

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,236

 

 

4,322

 

 

 

1,862

 

 

 

2,107

 

EBITDA (1)

 

 

6,807

 

 

13,000

 

 

 

(3,502

)

 

 

(933

)

Stock-based compensation

 

 

768

 

 

1,219

 

 

 

26

 

 

 

26

 

ERP implementation

 

 

117

 

 

379

 

 

 

206

 

 

 

474

 

Professional fees related to management transition

 

 

165

 

 

 

 

 

229

 

 

 

 

Severance

 

 

867

 

 

 

 

 

 

 

 

 

Net gain on Tampa property sale

 

 

 

 

(6,767

)

 

 

 

 

 

 

Adjusted EBITDA(2)

 

$

8,724

 

$

7,831

 

 

$

(3,041

)

 

$

(433

)

Operating income margin

 

 

3.2

%

 

13.5

%

 

 

(4.8

)%

  

 

(3.7

)%

Impact of other income (expense), net

 

 

%

 

%

  

 

%

  

 

%

Impact of depreciation and amortization

 

 

5.1

%

 

6.8

%

  

 

1.7

%

  

 

2.6

%

Impact of stock-based compensation

 

 

0.9

%

 

1.9

%

  

 

%

  

 

%

Impact of ERP implementation

 

 

0.1

%

 

0.6

%

  

 

0.2

%

  

 

0.6

%

Impact of professional fees related to management transition

 

 

0.2

%

 

%

  

 

0.2

%

  

 

%

Impact of severance

 

 

1.1

%

 

%

  

 

%

  

 

%

Impact of net gain on Tampa property sale

 

 

%

 

(10.6

)%

  

 

%

  

 

%

Adjusted EBITDA margin (2)

 

 

10.6

%

 

12.2

%

  

 

(2.7

)%

  

 

(0.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine

 

Concrete

 

 

Six months ended

 

Six months ended

 

 

June 30, 

 

June 30, 

 

    

2022

    

2021

 

    

2022

 

    

2021

 

Operating income (loss)

 

 

4,356

 

 

11,454

 

 

 

(10,059

)

 

 

(3,833

)

Other income (expense), net

 

 

99

 

 

109

 

 

 

 

 

 

 

Depreciation and amortization

 

 

8,559

 

 

8,680

 

 

 

3,802

 

 

 

4,235

 

EBITDA (1)

 

 

13,014

 

 

20,243

 

 

 

(6,257

)

 

 

402

 

Stock-based compensation

 

 

1,111

 

 

1,570

 

 

 

53

 

 

 

58

 

ERP implementation

 

 

555

 

 

655

 

 

 

674

 

 

 

784

 

Professional fees related to management transition

 

 

365

 

 

 

 

 

443

 

 

 

 

Severance

 

 

940

 

 

 

 

 

 

 

 

 

Net gain on Tampa property sale

 

 

 

 

(6,767

)

 

 

 

 

 

 

Adjusted EBITDA (2)

 

$

15,985

 

$

15,701

 

 

$

(5,087

)

 

$

1,244

 

Operating income margin

 

 

2.6

%

 

8.4

%

  

 

(5.0

)%

  

 

(2.4

)%

Impact of other income (expense), net

 

 

0.1

%

 

%

  

 

%

  

 

%

Impact of depreciation and amortization

 

 

5.1

%

 

6.4

%

  

 

1.9

%

  

 

2.6

%

Impact of stock-based compensation

 

 

0.7

%

 

1.2

%

  

 

0.1

%

  

 

0.1

%

Impact of ERP implementation

 

 

0.3

%

 

0.5

%

  

 

0.3

%

  

 

0.5

%

Impact of ISG initiative

 

 

0.2

%

 

%

  

 

0.2

%

  

 

%

Impact of severance

 

 

0.6

%

 

%

  

 

%

  

 

%

Impact of net gain on Tampa property sale

 

 

%

 

(5.0

)%

  

 

%

  

 

%

Adjusted EBITDA margin (2)

 

 

9.6

%

 

11.5

%

  

 

(2.5

)%

  

 

0.8

%

(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
Condensed Statements of Cash Flows Summarized
(In Thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30, 

 

    

2022

 

    

2021

 

    

2022

 

    

2021

 

Net (loss) income

 

$

(3,054

)

 

$

3,530

 

 

$

(7,910

)

 

$

4,458

 

Adjustments to remove non-cash and non-operating items

 

 

8,018

 

 

 

2,609

 

 

 

15,069

 

 

 

9,504

 

Cash flow from net (loss) income after adjusting for non-cash and non-operating items

 

 

4,964

 

 

 

6,139

 

 

 

7,159

 

 

 

13,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in operating assets and liabilities (working capital)

 

 

(3,348

)

 

 

(3,982

)

 

 

4,517

 

 

 

(2,687

)

Cash flows provided by operating activities

 

$

1,616

 

 

$

2,157

 

 

$

11,676

 

 

$

11,275

 

Cash flows (used in) provided by investing activities

 

$

(4,148

)

 

$

19,690

 

 

$

(6,958

)

 

$

20,462

 

Cash flows provided by (used in) financing activities

 

$

3,895

 

 

$

(24,079

)

 

$

(8,922

)

 

$

(30,916

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (included in investing activities above)

 

$

(4,478

)

 

$

(3,097

)

 

$

(8,001

)

 

$

(4,715

)


Orion Group Holdings, Inc. and Subsidiaries
Condensed Statements of Cash Flows
(In Thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

Six months ended June 30, 

 

    

2022

 

    

2021

 

Cash flows from operating activities

 

 

  

 

 

  

Net (loss) income

 

$

(7,910

)

 

$

4,458

 

Adjustments to reconcile net (loss) income to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

10,815

 

 

 

11,313

 

Amortization of ROU operating leases

 

 

2,459

 

 

 

2,794

 

Amortization of ROU finance leases

 

 

1,546

 

 

 

1,602

 

Write-off of debt issuance costs upon debt modification

 

 

 

 

 

790

 

Amortization of deferred debt issuance costs

 

 

161

 

 

 

429

 

Deferred income taxes

 

 

41

 

 

 

(81

)

Stock-based compensation

 

 

1,164

 

 

 

1,628

 

Gain on disposal of assets, net

 

 

(1,173

)

 

 

(8,971

)

Allowance for credit losses

 

 

56

 

 

 

 

Change in operating assets and liabilities, net of effects of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

(23,158

)

 

 

5,147

 

Income tax receivable

 

 

(73

)

 

 

(682

)

Inventory

 

 

(664

)

 

 

277

 

Prepaid expenses and other

 

 

5,050

 

 

 

337

 

Contract assets

 

 

1,511

 

 

 

9,159

 

Accounts payable

 

 

25,363

 

 

 

(3,754

)

Accrued liabilities

 

 

(2,266

)

 

 

(5,290

)

Operating lease liabilities

 

 

(2,317

)

 

 

(2,571

)

Income tax payable

 

 

192

 

 

 

(538

)

Contract liabilities

 

 

879

 

 

 

(4,772

)

Net cash provided by operating activities

 

 

11,676

 

 

 

11,275

 

Cash flows from investing activities:

 

 

 

 

 

 

Proceeds from sale of property and equipment

 

 

1,043

 

 

 

24,737

 

Purchase of property and equipment

 

 

(8,001

)

 

 

(4,715

)

Insurance claim proceeds related to property and equipment

 

 

 

 

 

440

 

Net cash (used in) provided by investing activities

 

 

(6,958

)

 

 

20,462

 

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings on credit

 

 

5,000

 

 

 

20,000

 

Payments made on borrowings on credit

 

 

(11,742

)

 

 

(49,086

)

Loan costs from Credit Facility

 

 

(611

)

 

 

 

Payments of finance lease liabilities

 

 

(1,472

)

 

 

(1,675

)

Purchase of vested stock-based awards

 

 

(97

)

 

 

(241

)

Exercise of stock options

 

 

 

 

 

86

 

Net cash used in financing activities

 

 

(8,922

)

 

 

(30,916

)

Net change in cash and cash equivalents

 

 

(4,204

)

 

 

821

 

Cash and cash equivalents at beginning of period

 

 

12,293

 

 

 

1,589

 

Cash and cash equivalents at end of period

 

$

8,089

 

 

$

2,410

 


Orion Group Holdings, Inc. and Subsidiaries
Condensed Balance Sheets
(In Thousands, Except Share and Per Share Information)

 

 

 

 

 

 

 

 

    

June 30, 

    

December 31, 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

  

 

 

  

Current assets:

 

 

  

 

 

  

Cash and cash equivalents

 

$

8,089

 

 

 

12,293

 

Accounts receivable:

 

 

 

 

 

 

Trade, net of allowance for credit losses of $380 and $323, respectively

 

 

102,767

 

 

 

88,173

 

Retainage

 

 

49,907

 

 

 

41,379

 

Income taxes receivable

 

 

478

 

 

 

405

 

Other current

 

 

3,321

 

 

 

17,585

 

Inventory

 

 

1,801

 

 

 

1,428

 

Contract assets

 

 

27,018

 

 

 

28,529

 

Prepaid expenses and other

 

 

4,012

 

 

 

8,142

 

Total current assets

 

 

197,393

 

 

 

197,934

 

Property and equipment, net of depreciation

 

 

104,307

 

 

 

106,654

 

Operating lease right-of-use assets, net of amortization

 

 

16,039

 

 

 

14,686

 

Financing lease right-of-use assets, net of amortization

 

 

17,096

 

 

 

14,561

 

Inventory, non-current

 

 

5,709

 

 

 

5,418

 

Intangible assets, net of amortization

 

 

7,936

 

 

 

8,556

 

Deferred income tax asset

 

 

22

 

 

 

41

 

Other non-current

 

 

2,980

 

 

 

3,900

 

Total assets

 

$

351,482

 

 

$

351,750

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

  

 

 

  

Current liabilities:

 

 

  

 

 

  

Current debt, net of issuance costs

 

$

32,184

 

 

$

39,141

 

Accounts payable:

 

 

 

 

 

 

Trade

 

 

72,979

 

 

 

48,217

 

Retainage

 

 

1,327

 

 

 

923

 

Accrued liabilities

 

 

23,059

 

 

 

38,594

 

Income taxes payable

 

 

793

 

 

 

601

 

Contract liabilities

 

 

27,877

 

 

 

26,998

 

Current portion of operating lease liabilities

 

 

4,589

 

 

 

3,857

 

Current portion of financing lease liabilities

 

 

3,876

 

 

 

3,406

 

Total current liabilities

 

 

166,684

 

 

 

161,737

 

Long-term debt, net of debt issuance costs

 

 

859

 

 

 

259

 

Operating lease liabilities

 

 

12,308

 

 

 

11,637

 

Financing lease liabilities

 

 

12,472

 

 

 

10,908

 

Other long-term liabilities

 

 

17,713

 

 

 

18,942

 

Deferred income tax liability

 

 

191

 

 

 

169

 

Interest rate swap liability

 

 

 

 

 

 

Total liabilities

 

 

210,227

 

 

 

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, 31,966,815 and 31,712,457 issued; 31,255,584 and 31,001,226 outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

320

 

 

 

317

 

Treasury stock, 711,231 shares, at cost, as of June 30, 2022 and December 31, 2021, respectively

 

 

(6,540

)

 

 

(6,540

)

Accumulated other comprehensive loss

 

 

 

 

 

 

Additional paid-in capital

 

 

186,945

 

 

 

185,881

 

Retained loss

 

 

(39,470

)

 

 

(31,560

)

Total stockholders’ equity

 

 

141,255

 

 

 

148,098

 

Total liabilities and stockholders’ equity

 

$

351,482

 

 

$

351,750