Posted on May 1, 2020
- Orion Group (ORN +17.5%) reported Q1 contract revenue growth of 16.4% Y/Y to $166.6M, reflecting increased project execution in the marine segment.
- Q1 Gross profit margin was 11.9%, as compared to 6.3% a year ago.
- Reported Q1 operating income of $4.4M, compared to operating loss of $6.2M last year.
- Adj. EBITDA was $12.22M (+294.5% Y/Y) and margin was 7.3% up by 510 bps.
- Cash flows provided by operating activities was $15.45M, compare to cash used $1.93M last year.
- Backlog of work under contract as of March 31, 2020 was $609.5M (+48.2% Y/Y).
- During the quarter company bid on ~$1B of work and were successful on ~$204M, resulting in a 1.22 times book-to-bill ratio and a win rate of 20.1%.
- Stating the uncertainty due to the COVID-19 pandemic on the timing and execution of new project awards later in the year company has suspended their FY20 guidance for Adjusted EBITDA, which was in the low to mid $40M range.
- Previously: Orion Group EPS beats by $0.17, beats on revenue (April 29)
DredgeWire Comments on the Call
During the earnings call, management added the following key points:
- New bookings were healthy with a 2:1 ‘Book-to-bill ratio’
- Orion has over $850mm of outstanding bids.
- Management said ‘We feel comfortable with our current liquidity situation’ and noted over $4mm of available credit line capacity.
In response to a question, Orion said their idea of satisfactory margins for the concrete business was ‘high single digits’ and for the marine segment ‘low double digits.’
Finally, due to uncertain market conditions from Covid-19, Orion has suspended earnings guidance for 2020 as so many other public companies have done. Orion noted that all of its business have been deemed ‘essential’ and were operating throughout the pandemic with additional safety measures.
