Orion Marine Group (ORN) Tops Q2 EPS by 4c, Revenues Beat

Orion Marine Group (NYSE: ORN) reported Q2 EPS of $0.04, $0.04 better than the analyst estimate of $0.00. Revenue for the quarter came in at $183.7 million versus the consensus estimate of $162.13 million.

Second Quarter 2020 Highlights

• Contract revenues were $183.7 million, up 10.7% from $166.0 million for the second quarter of 2019.
• Operating income was $4.1 million for the second quarter of 2020 compared to operating loss of $0.4 million for the second quarter of 2019.
• Net income was $2.0 million ($0.07 diluted earnings per share) for the second quarter of 2020 compared to net loss of $1.6 million ($0.06 diluted loss per share) for the second quarter of 2019.
• The second quarter 2020 net income included $0.3 million ($0.01 loss per diluted share) of non-recurring costs and $1.0 million ($0.03 earnings per diluted share) of tax benefit associated with the movement of certain valuation allowances to offset our losses. Second quarter 2020 adjusted net income was $1.3 million ($0.04 diluted earnings per share). (Please see page 9 of this release for a reconciliation of adjusted net income.)
• EBITDA, adjusted to exclude the impact of the aforementioned non-recurring costs, was $12.6 million in the second quarter of 2020, which compares to adjusted EBITDA of $10.1 million for the second quarter of 2019. (Please see page 10 of this release for an explanation of EBITDA, adjusted EBITDA and a reconciliation to the nearest GAAP measure.)
• Backlog was $528.4 million on a second quarter book-to-bill of 0.65x.

“Once again, I would like to thank all of our employees and team members for continuing to safely and diligently work on our projects and in our yards, shops and support offices during this unprecedented period,” stated Mark Stauffer, Orion Group Holdings’ President and Chief Executive Officer. “Despite the continued spread of the COVID-19 virus and the spike in some of the states in which we work, we continue to execute on our projects in backlog while keeping our focus on maintaining the health and safety of the most important resource of our business, our people.”

“We continued to post year-over-year improvement in both our top and bottom line and also generated solid free cash flow in the second quarter, which reflects the benefits of the operational improvement initiatives we implemented over the past 18 months. Our concrete segment significantly improved operating performance driven by higher production volumes during the quarter. On a sequential basis, adjusted EBITDA margin declined for our marine segment due to lower utilization of our dredging assets as we performed scheduled maintenance to ensure continued operation of our dredge fleet for upcoming projects in backlog.”

Mr. Stauffer continued, “While certain of our end markets have been impacted by the COVID-19 pandemic, we continue to see bidding activity in both of our segments. A key element of our growth strategy is the wide array of end markets we serve, which enables us to pursue the most attractive bid opportunities in the end markets that are performing the best at any given point in time. This strategy serves us well in this challenging and uncertain environment, and we will continue to focus our efforts on targeting the end markets and projects we expect to have the best opportunities to be successful and profitable moving forward.”

“Though the pandemic may continue to create uncertainty in the marketplace, we are confident in our ability to efficiently and profitably execute our projects in backlog, and in our ability to maintain or grow our backlog level by targeting and winning new bid opportunities. Our liquidity position remains strong. The additional $16 million of free cash flow that we generated in the second quarter coupled with our $20 million, 1-year revolver that we recently added to our credit facility provides us with more than sufficient financial flexibility to continue to pursue new awards and execute existing backlog. We are encouraged by our strong operational performance in the second quarter and we have the right team in place to continue to perform well despite the macroeconomic challenges. Considering our combination of diverse end markets, broad range of construction capabilities and assets, and our highly experienced and professional personnel, we are confident in our ability to deliver increasing levels of profitability and free cash flow in the quarters and years to come, particularly in a post-pandemic environment,” concluded Mr. Stauffer.

For earnings history and earnings-related data on Orion Marine Group (ORN) click here.

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