Posted on July 24, 2024
HOUSTON, July 24, 2024 (GLOBE NEWSWIRE) — 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, 2024.
Highlights for the quarter ended June 30, 2024:
- Contract revenues of $192.2 million
- GAAP net loss of $6.6 million or $0.20 per diluted share
- Adjusted net loss of $5.2 million or $0.16 per diluted share
- Adjusted EBITDA of $5.5 million
- Backlog and contracts awarded subsequent to quarter end totaled $876.3 million
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
“In the second quarter, we generated revenue of $192.2 million and Adjusted EBITDA of $5.5 million. As previously indicated, we anticipated a slower ramp up with two large projects. While we had some logistical setbacks late in the quarter, our Grand Bahama Shipyard Dry Dock project is now back on track, and our teams on the Pearl Harbor project are working double time to get back on schedule. In construction, work delays beyond our control are not uncommon and can sometimes cause our results to vary from quarter to quarter. While the total value of the contracts remains unchanged, revenue recognition will shift. While these delays are not expected to have any impact on the critical completion of these large projects, they will affect our full year 2024 financial results. For this reason, we are lowering our annual guidance to a revenue range of $850 million to $900 million and an Adjusted EBITDA range of $40 million to $45 million. We are still on target to deliver a very strong second half on a comparable basis. We also continue to add attractive projects to our backlog, and our pipeline of opportunities has increased to more than $14 billion. This puts us in a great position for an outstanding 2025,” said Travis Boone, Chief Executive Officer of Orion Group Holdings, Inc.
“Our market continues to expand – activity is scaling up. Our business development efforts translated into some significant second-quarter wins in both the Marine and Concrete segments, including our first large Orion Concrete award in Florida since expanding our concrete business there. In addition to the awards previously announced, in July we won a total of $118 million in work across both segments, bringing our total backlog and awarded work to $876 million.
“As we enter the second half of the year, I am optimistic about our future. Together with our teams, we have made great strides in strengthening the foundation and infrastructure of our company. By instilling disciplined bidding and project performance processes, and investing in business development, training and IT systems, we are far stronger today. Most importantly, our teams are aligned on the same mission: delivering predictable excellence through outstanding execution,” concluded Boone.
Second Quarter 2024 Results
Contract revenues of $192.2 million increased 5.3% from $182.5 million in the second quarter last year, primarily due to an increase in Marine segment revenue related to the Pearl Harbor drydock project, partially offset by lower Concrete segment revenue due to our deliberate efforts to adhere to disciplined bidding standards to win quality work at attractive margins.
Gross profit increased to $18.3 million or 9.5% of revenue, up from $13.8 million or 7.6% of revenue in the second quarter of 2023. The increase in gross profit dollars and margin was primarily driven by improved pricing of projects in both segments stemming from higher quality projects and improved execution, partially offset by lower margin and mix of dredging revenue.
Selling, general and administrative (“SG&A”) expenses were $21.1 million, up from $18.1 million in the second quarter of 2023. As a percentage of total contract revenues, SG&A expenses increased to 11.0% from 9.9%. The increase in SG&A dollars and percentage reflected an increase in compensation expense, business development spending and legal expenses.
Net loss for the second quarter was $6.6 million or $0.20 per diluted share compared to net loss of $0.3 million or $0.01 per diluted share in the second quarter of 2023.
Second quarter 2024 net loss included $1.4 million ($0.04 diluted income per share) of non-recurring items. Second quarter 2024 adjusted net loss was $5.2 million ($0.16 diluted loss per share).
EBITDA for the second quarter of 2024 was $3.3 million, representing a 1.7% EBITDA margin, as compared to EBITDA of $7.6 million, or a 4.2% EBITDA margin in the second quarter last year. Adjusted EBITDA increased to $5.5 million, or a 2.9% Adjusted EBITDA margin. This compares to Adjusted EBITDA of $3.7 million, or 2.0% Adjusted EBITDA margin in the prior-year period.
New Contract Awards
Subsequent to quarter end, the Company won several notable projects in its Concrete and Marine segments, which totaled $118 million. In the Marine segment, the Company was awarded a $28 million construction project at the Clearwater Beach Marina, a $28 million construction project for the Port of Galveston, and a $29 million dredging project for the US Army Corps of Engineers. In the Concrete segment, the Company won a $16.5 million concrete project in south Texas and two additional data center projects in North Texas, which brings the total number of data center projects to 24. The data center projects are with Clune Construction for $8 million and $5 million each.
Backlog
Total backlog at June 30, 2024 was $758.4 million, compared to $756.6 million at March 31, 2024 and $818.7 million at June 30, 2023. Backlog for the Marine segment was $567.1 million at June 30, 2024, compared to $569.9 million at March 31, 2024 and $614.9 million at June 30, 2023. Backlog for the Concrete segment was $191.3 million at June 30, 2024, compared to $186.7 million at March 31, 2024 and $203.8 million at June 30, 2023. In addition, the Company has been awarded $118 million in new project work thus far in July 2024.
Balance Sheet Update
As of June 30, 2024, current assets were $261.5 million, including unrestricted cash and cash equivalents of $4.8 million. Total debt outstanding as of June 30, 2024 was $60.3 million. At the end of the quarter, the Company had $21.0 million in outstanding borrowings under its revolving credit facility.
Conference Call Details
Orion Group Holdings will host a conference call to discuss results for the second quarter 2024 at 9:00 a.m. Eastern Time/8:00 a.m. Central Time on Thursday, July 25, 2024. To participate, please call (844) 481-2994 and ask for the Orion Group Holdings Conference Call. A live audio webcast of the call will also be available on the Investor Relations section of Orion’s website at https://www.oriongroupholdingsinc.com/investor/ and will be archived for replay.
About Orion Group Holdings
Orion Group Holdings, Inc., a leading specialty construction company serving the infrastructure, industrial and building sectors, provides services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through its marine segment and its concrete segment. The Company’s marine segment provides construction and dredging services relating to marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design and specialty services. Its concrete segment provides turnkey concrete construction services including place and finish, site prep, layout, forming, and rebar placement for large commercial, structural and other associated business areas. The Company is headquartered in Houston, Texas with regional offices throughout its operating areas. The Company’s website is located at: https://www.oriongroupholdingsinc.com.
