Orion Group Holdings, Inc. Reports Fourth Quarter and Full Year 2020 Results

February 24, 2021 4:43 PM EST
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HOUSTON--(BUSINESS WIRE)-- Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading specialty construction company, today reported net income of $3.7 million ($0.12 diluted earnings per share) for the fourth quarter ended December 31, 2020. Fourth quarter highlights are discussed below. For full year results please refer to the financial statements starting on page 7.

Fourth Quarter 2020 Highlights

  • Operating income was $5.1 million for the fourth quarter of 2020 compared to operating income of $2.7 million for the fourth quarter of 2019.
  • Net income was $3.7 million ($0.12 diluted earnings per share) for the fourth quarter of 2020 compared to net income of $0.2 million ($0.01 diluted earnings per share) for the fourth quarter of 2019.
  • The fourth quarter 2020 net income included $0.6 million ($0.02 earnings per diluted share) of non-recurring items and $0.7 million ($0.02 earnings per diluted share) of tax benefit associated with the movement of certain valuation allowances. Fourth quarter 2020 adjusted net income was $3.5 million ($0.12 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 items, was $12.6 million in the fourth quarter of 2020, which compares to adjusted EBITDA of $11.5 million for the fourth 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 at the end of the fourth quarter was $439.5 million on a fourth quarter book-to-bill of 1.06x.

“We delivered strong growth in profitability and cash flow for the full year 2020,” stated Mark Stauffer, Orion’s Chief Executive Officer. “Despite the headwinds to the U.S. economy and our business resulting from the COVID-19 pandemic, our adjusted EBITDA increased more than 35% over 2019 and we improved our adjusted EBITDA margin by 210 basis points. This was the direct result of the commitment and resolve of our employees, coupled with the benefits of our Invest, Scale and Grow program, which we initiated in 2019.”

“Fourth quarter results were in-line with our expectations. Gross profit improved year over year in both dollars and margin, with gross profit margin improving by 320 basis points. The improvement was driven by production efficiency gains at the project level in both segments. Consolidated adjusted EBITDA for the fourth quarter also increased by 9.2% year over year. Our team’s focus remains on continued performance efficiency despite any macroeconomic challenges. We view our ability to generate improved profitability in a difficult market as a testament to Orion’s processes, procedures, and focus on bottom line results. We believe that this profitability improvement will be sustainable and scalable moving forward as bidding opportunities begin to normalize.”

“While bidding opportunities have been affected in some of our end markets, we still see bidding activity in both of our segments, largely driven by end markets that are continuing operations through the COVID-19 pandemic. As we have said previously, our efforts are focused on targeting the end markets in which we expect to have the best opportunities and on projects that we expect to be the most profitable projects. One of the key strengths of our Company is the wide array of potential users of our broad range of services, enabling us to pursue the most attractive bid opportunities in the end markets that are providing opportunities at any given point in time. This strategy has served us well and we believe it will continue to do so.”

“We continue to be confident in our ability to profitably execute our projects in backlog, and in our ability to maintain and grow our backlog level by targeting and winning new bid opportunities. We believe chances for a new infrastructure bill have improved, and if enacted, will be a further catalyst for continued strength in our end-market opportunities. We continue to focus on our liquidity position, which remains strong and provides us with more than sufficient financial flexibility to continue to pursue new awards and execute on existing projects in backlog. Our diverse end markets, broad range of construction capabilities and assets, and our highly experienced and professional personnel make us confident in our ability to deliver increasing levels of profitability and free cash flow, particularly in a post-pandemic environment.”

Consolidated Results for Fourth Quarter 2020 Compared to Fourth Quarter 2019

  • Contract revenues were $170.2 million, down 14.8% as compared to $199.8 million. The decrease was primarily driven by the timing of projects for the marine and concrete segments.
  • Gross profit was $21.7 million, as compared to $19.1 million. Gross profit margin was 12.8%, as compared to 9.6%. The increase in gross profit dollars and percentage was primarily driven by production efficiency gains in both segments.
  • Selling, General, and Administrative expenses were $17.4 million, as compared to $16.3 million. As a percentage of total contract revenues, SG&A expenses increased to 10.2% from 8.2%. The increase in SG&A dollars was primarily attributable to the increased accrual of the annual incentive compensation plan during the current year period as compared to the prior year period.
  • Operating income was $5.1 million as compared to $2.7 million. The operating income in the fourth quarter of 2020 reflects the aforementioned factors that improved gross profit.
  • EBITDA was $11.7 million, representing a 6.9% EBITDA margin, as compared to EBITDA of $10.0 million, or a 5.0% EBITDA margin. When adjusted for non-recurring items, adjusted EBITDA for the fourth quarter of 2020 was $12.6 million, representing a 7.4% EBITDA margin. (Please see page 10 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 December 31, 2020 was $439.5 million, which compares with backlog under contract at December 31, 2019 of $558.5 million. The fourth quarter 2020 ending backlog was comprised of $202.6 million for the marine segment, and $236.9 million for the concrete segment. At the end of 2020, the Company had approximately $1.6 billion worth of bids outstanding, including approximately $96 million on which it is the apparent low bidder or has been awarded contracts subsequent to the end of the fourth quarter of 2020, of which approximately $46 million pertains to the marine segment and approximately $50 million to the concrete segment.

“During the fourth quarter, we bid on approximately $954 million of work and were successful on approximately $181 million of these bids,” stated Robert Tabb, Orion Group Holding's Vice President and Chief Financial Officer. “This resulted in a 1.06 times book-to-bill ratio and a win rate of 19.0%. In the marine segment, we bid on approximately $254 million during the fourth quarter 2020 and were successful on approximately $59 million, representing a win rate of 23.1% and a book-to-bill ratio of 0.60 times. In the concrete segment we bid on approximately $700 million of work and were awarded approximately $122 million, representing a win rate of 17.5% and a book-to-bill ratio of 1.69 times."

Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress and 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 fourth quarter 2020 at 10:00 a.m. Eastern Time/9:00 a.m. Central Time on Thursday, February 25, 2021. To listen to a live webcast of the conference call, or access the replay, visit the Calendar of Events page of the Investor Relations section of the website at www.oriongroupholdingsinc.com. To participate in the call, please dial (201) 493-6739 and ask for the Orion Group Holdings Conference Call.

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,” “adjusted earnings 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 and adjusted earnings per share are not an alternative to net income or earnings per share. Adjusted net income and adjusted earnings 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 calculated in accordance with GAAP because management uses adjusted net income 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 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 generally accepted accounting principles in the United States, 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 Private Securities Litigation Reform Act of 1995, the provisions of which 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.

Please refer to the Company's Annual Report on Form 10-K, filed on February 28, 2020, 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.

Orion Group Holdings, Inc. and Subsidiaries

Condensed Statements of Operations

(In Thousands, Except Share and Per Share Information)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Contract revenues

 

 

170,176

 

 

 

199,793

 

 

 

709,942

 

 

 

708,390

 

Costs of contract revenues

 

 

148,476

 

 

 

180,704

 

 

 

625,239

 

 

 

644,349

 

Gross profit

 

 

21,700

 

 

 

19,089

 

 

 

84,703

 

 

 

64,041

 

Selling, general and administrative expenses

 

 

17,440

 

 

 

16,335

 

 

 

65,091

 

 

 

61,012

 

Amortization of intangible assets

 

 

518

 

 

 

660

 

 

 

2,070

 

 

 

2,640

 

Gain on disposal of assets, net

 

 

(1,310

)

 

 

(607

)

 

 

(9,044

)

 

 

(1,804

)

Operating income

 

 

5,052

 

 

 

2,701

 

 

 

26,586

 

 

 

2,193

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

96

 

 

 

197

 

 

 

347

 

 

 

771

 

Interest income

 

 

32

 

 

 

36

 

 

 

183

 

 

 

353

 

Interest expense

 

 

(1,198

)

 

 

(1,827

)

 

 

(4,920

)

 

 

(6,808

)

Other expense, net

 

 

(1,070

)

 

 

(1,594

)

 

 

(4,390

)

 

 

(5,684

)

Income (loss) before income taxes

 

 

3,982

 

 

 

1,107

 

 

 

22,196

 

 

 

(3,491

)

Income tax expense

 

 

316

 

 

 

948

 

 

 

1,976

 

 

 

1,868

 

Net income (loss)

 

$

3,666

 

 

$

159

 

 

$

20,220

 

 

$

(5,359

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

0.12

 

 

$

0.01

 

 

$

0.67

 

 

$

(0.18

)

Diluted earnings (loss) per share

 

$

0.12

 

 

$

0.01

 

 

$

0.67

 

 

$

(0.18

)

Shares used to compute income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

30,426,454

 

 

 

29,562,635

 

 

 

30,122,362

 

 

 

29,322,054

 

Diluted

 

 

30,427,940

 

 

 

29,574,145

 

 

 

30,122,362

 

 

 

29,322,054

 

Orion Group Holdings, Inc. and Subsidiaries

Selected Results of Operations

(In Thousands, Except Share and Per Share Information)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

Percent

 

 

Amount

 

Percent

 

 

 

(dollar amounts in thousands)

 

Contract revenues

 

 

 

 

 

 

 

 

 

 

 

 

Marine segment

 

 

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

58,669

 

60.1

%

 

$

77,349

 

69.5

%

Private sector

 

 

38,955

 

39.9

%

 

 

33,875

 

30.5

%

Marine segment total

 

$

97,624

 

100.0

%

 

$

111,224

 

100.0

%

Concrete segment

 

 

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

4,995

 

6.9

%

 

$

8,624

 

9.7

%

Private sector

 

 

67,557

 

93.1

%

 

 

79,945

 

90.3

%

Concrete segment total

 

$

72,552

 

100.0

%

 

$

88,569

 

100.0

%

Total

 

$

170,176

 

 

 

 

$

199,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

Marine segment

 

$

4,492

 

4.6

%

 

$

2,641

 

2.4

%

Concrete segment

 

 

560

 

0.8

%

 

 

60

 

0.1

%

Total

 

$

5,052

 

 

 

 

$

2,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended December 31,

 

 

 

2020

 

 

2019

 

 

 

Amount

 

Percent

 

 

Amount

 

Percent

 

 

 

(dollar amounts in thousands)

 

Contract revenues

 

 

 

 

 

 

 

 

 

 

 

 

Marine segment

 

 

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

240,353

 

61.9

%

 

$

258,039

 

69.9

%

Private sector

 

 

147,820

 

38.1

%

 

 

111,099

 

30.1

%

Marine segment total

 

$

388,173

 

100.0

%

 

$

369,138

 

100.0

%

Concrete segment

 

 

 

 

 

 

 

 

 

 

 

 

Public sector

 

$

41,853

 

13.0

%

 

$

49,175

 

14.5

%

Private sector

 

 

279,916

 

87.0

%

 

 

290,077

 

85.5

%

Concrete segment total

 

$

321,769

 

100.0

%

 

$

339,252

 

100.0

%

Total

 

$

709,942

 

 

 

 

$

708,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

Marine segment

 

$

16,935

 

4.4

%

 

$

1,057

 

0.3

%

Concrete segment

 

 

9,651

 

3.0

%

 

 

1,136

 

0.3

%

Total

 

$

26,586

 

 

 

 

$

2,193

 

 

 

Orion Group Holdings, Inc. and Subsidiaries

Reconciliation of Adjusted Net Income (Loss)

(In thousands except per share information)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Net income (loss)

 

$

3,666

 

 

$

159

 

 

$

20,220

 

 

$

(5,359

)

One-time charges and the tax effects:

 

 

 

 

 

 

 

 

 

 

 

 

ERP implementation

 

 

692

 

 

 

 

 

 

1,488

 

 

 

 

ISG initiative

 

 

 

 

 

919

 

 

 

369

 

 

 

4,781

 

Severance

 

 

55

 

 

 

162

 

 

 

175

 

 

 

645

 

Unamortized debt issuance costs on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

399

 

Insurance recovery on disposal, net

 

 

 

 

 

 

 

 

(2,859

)

 

 

 

Recovery on disputed receivable

 

 

 

 

 

 

 

 

(898

)

 

 

 

Tax rate of 23% applied to one-time charges (1)

 

 

(172

)

 

 

(250

)

 

 

397

 

 

 

(1,340

)

Total one-time charges and the tax effects

 

 

575

 

 

 

831

 

 

 

(1,328

)

 

 

4,485

 

Federal and state tax valuation allowances

 

 

(722

)

 

 

465

 

 

 

(4,584

)

 

 

916

 

Adjusted net income

 

$

3,519

 

 

$

1,455

 

 

$

14,308

 

 

$

42

 

Adjusted EPS

 

$

0.12

 

 

$

0.05

 

 

$

0.47

 

 

$

 

_______________

(1)

 

Items are taxed discretely using the Company's blended tax rate.

Orion Group Holdings, Inc. and Subsidiaries

Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations

(In Thousands, Except Margin Data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Net income (loss)

 

$

3,666

 

 

$

159

 

 

$

20,220

 

 

$

(5,359

)

Income tax expense

 

 

316

 

 

 

948

 

 

 

1,976

 

 

 

1,868

 

Interest expense, net

 

 

1,166

 

 

 

1,791

 

 

 

4,737

 

 

 

6,455

 

Depreciation and amortization

 

 

6,555

 

 

 

7,065

 

 

 

27,217

 

 

 

28,407

 

EBITDA (1)

 

 

11,703

 

 

 

9,963

 

 

 

54,150

 

 

 

31,371

 

Stock-based compensation

 

 

111

 

 

 

461

 

 

 

1,998

 

 

 

2,753

 

ERP implementation

 

 

692

 

 

 

 

 

 

1,488

 

 

 

 

ISG initiative

 

 

 

 

 

919

 

 

 

369

 

 

 

4,781

 

Severance

 

 

55

 

 

 

162

 

 

 

175

 

 

 

645

 

Insurance recovery on disposal, net

 

 

 

 

 

 

 

 

(2,859

)

 

 

 

Recovery on disputed receivable

 

 

 

 

 

 

 

 

(898

)

 

 

 

Adjusted EBITDA(2)

 

$

12,561

 

 

$

11,505

 

 

$

54,423

 

 

$

39,550

 

Operating income margin (3)

 

 

3.0

%

 

 

1.5

%

 

 

3.8

%

 

 

0.4

%

Impact of depreciation and amortization

 

 

3.9

%

 

 

3.5

%

 

 

3.8

%

 

 

4.0

%

Impact of stock-based compensation

 

 

0.1

%

 

 

0.2

%

 

 

0.3

%

 

 

0.4

%

Impact of ERP implementation

 

 

0.4

%

 

 

%

 

 

0.2

%

 

 

%

Impact of ISG initiative

 

 

%

 

 

0.5

%

 

 

0.1

%

 

 

0.7

%

Impact of severance

 

 

%

 

 

0.1

%

 

 

%

 

 

0.1

%

Impact of insurance recovery on disposal, net

 

 

%

 

 

%

 

 

(0.4

)%

 

 

%

Impact of recovery on disputed receivable

 

 

%

 

 

%

 

 

(0.1

)%

 

 

%

Adjusted EBITDA margin(2)

 

 

7.4

%

 

 

5.8

%

 

 

7.7

%

 

 

5.6

%

_______________

(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, the ISG initiative, severance, insurance recovery on disposal, net, and recovery on disputed accounts receivable. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues.

(3)

 

Operating income margin is calculated by dividing operating income plus other income (expense), net 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

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Operating income

 

 

4,492

 

 

 

2,641

 

 

 

560

 

 

 

60

 

Other income (expense), net (1)

 

 

3,836

 

 

 

3,214

 

 

 

(3,739

)

 

 

(3,018

)

Depreciation and amortization

 

 

4,306

 

 

 

4,914

 

 

 

2,248

 

 

 

2,152

 

EBITDA (2)

 

 

12,634

 

 

 

10,769

 

 

 

(931

)

 

 

(806

)

Stock-based compensation

 

 

74

 

 

 

406

 

 

 

37

 

 

 

55

 

ERP implementation

 

 

378

 

 

 

 

 

 

314

 

 

 

 

ISG initiative

 

 

 

 

 

781

 

 

 

 

 

 

138

 

Severance

 

 

55

 

 

 

126

 

 

 

 

 

 

36

 

Adjusted EBITDA(3)

 

$

13,141

 

 

$

12,082

 

 

$

(580

)

 

$

(577

)

Operating income margin (4)

 

 

8.5

%

 

 

5.3

%

 

 

(4.3

)%

 

 

(3.3

)%

Impact of depreciation and amortization

 

 

4.4

%

 

 

4.4

%

 

 

3.1

%

 

 

2.4

%

Impact of stock-based compensation

 

 

0.1

%

 

 

0.4

%

 

 

%

 

 

%

Impact of ERP implementation

 

 

0.4

%

 

 

%

 

 

0.4

%

 

 

%

Impact of ISG initiative

 

 

%

 

 

0.7

%

 

 

%

 

 

0.2

%

Impact of severance

 

 

0.1

%

 

 

0.1

%

 

 

%

 

 

%

Adjusted EBITDA margin (3)

 

 

13.5

%

 

 

10.9

%

 

 

(0.8

)%

 

 

(0.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine

 

Concrete

 

 

Year ended

 

Year ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Operating income

 

 

16,935

 

 

 

1,057

 

 

 

9,651

 

 

 

1,136

 

Other income (expense), net (1)

 

 

13,225

 

 

 

11,976

 

 

 

(12,877

)

 

 

(11,206

)

Depreciation and amortization

 

 

18,369

 

 

 

19,889

 

 

 

8,847

 

 

 

8,519

 

EBITDA (2)

 

 

48,529

 

 

 

32,922

 

 

 

5,621

 

 

 

(1,551

)

Stock-based compensation

 

 

1,841

 

 

 

2,470

 

 

 

157

 

 

 

283

 

ERP implementation

 

 

795

 

 

 

 

 

 

693

 

 

 

 

ISG initiative

 

 

190

 

 

 

2,491

 

 

 

179

 

 

 

2,290

 

Severance

 

 

81

 

 

 

609

 

 

 

94

 

 

 

36

 

Insurance recovery on disposal, net

 

 

(2,859

)

 

 

 

 

 

 

 

 

 

Recovery on disputed receivable

 

 

(898

)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(3)

 

$

47,679

 

 

$

38,492

 

 

$

6,744

 

 

$

1,058

 

Operating income margin (4)

 

 

7.8

%

 

 

3.5

%

 

 

(0.9

)%

 

 

(3.0

)%

Impact of depreciation and amortization

 

 

4.7

%

 

 

5.4

%

 

 

2.7

%

 

 

2.5

%

Impact of stock-based compensation

 

 

0.5

%

 

 

0.6

%

 

 

%

 

 

0.1

%

Impact of ERP implementation

 

 

0.2

%

 

 

%

 

 

0.2

%

 

 

%

Impact of ISG initiative

 

 

%

 

 

0.7

%

 

 

0.1

%

 

 

0.7

%

Impact of severance

 

 

%

 

 

0.2

%

 

 

%

 

 

%

Impact of insurance recovery on disposal, net

 

 

(0.7

)%

 

 

%

 

 

%

 

 

%

Impact of recovery on disputed receivable

 

 

(0.2

)%

 

 

%

 

 

%

 

 

%

Adjusted EBITDA margin (3)

 

 

12.3

%

 

 

10.4

%

 

 

2.1

%

 

 

0.3

%

_______________

(1)

 

Primarily consists of corporate overhead costs recorded to the marine segment as part of operating income(loss) and allocated from the marine segment to the concrete segment in other income (expense) line. Allocated amounts net to zero on a consolidated basis.

(2)

 

EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization.

(3)

 

Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for stock-based compensation, ERP implementation, the ISG initiative, severance, insurance recovery on disposal, net, and recovery on disputed accounts receivable. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues.

(4)

 

Operating income margin is calculated by dividing operating income plus other income (expense), net by contract revenues.

Orion Group Holdings, Inc. and Subsidiaries

Condensed Statements of Cash Flows Summary

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Net income (loss)

 

$

3,666

 

 

$

159

 

 

$

20,220

 

 

$

(5,359

)

Adjustments to remove non-cash and non-operating items

 

 

7,005

 

 

 

8,120

 

 

 

26,338

 

 

 

35,457

 

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

 

 

10,671

 

 

 

8,279

 

 

 

46,558

 

 

 

30,098

 

Change in operating assets and liabilities (working capital)

 

 

(3,015

)

 

 

(7,098

)

 

 

(526

)

 

 

(30,814

)

Cash flows provided by (used in) operating activities

 

$

7,656

 

 

$

1,181

 

 

$

46,032

 

 

$

(716

)

Cash flows used in investing activities

 

$

(932

)

 

$

(3,683

)

 

$

(3,129

)

 

$

(13,331

)

Cash flows (used in) provided by financing activities

 

$

(7,867

)

 

$

2,238

 

 

$

(42,400

)

 

$

6,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (included in investing activities above)

 

$

(5,250

)

 

$

(4,164

)

 

$

(14,694

)

 

$

(17,199

)

Orion Group Holdings, Inc. and Subsidiaries

Condensed Statements of Cash Flows

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Year ended December 31,

 

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

 

 

Net income (loss)

 

$

20,220

 

 

$

(5,359

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

23,893

 

 

 

26,096

 

Amortization of ROU operating leases

 

 

5,874

 

 

 

5,177

 

Amortization of ROU finance leases

 

 

3,324

 

 

 

2,312

 

Write-off of debt issuance costs upon debt modification

 

 

 

 

 

399

 

Amortization of deferred debt issuance costs

 

 

763

 

 

 

453

 

Deferred income taxes

 

 

17

 

 

 

71

 

Stock-based compensation

 

 

1,998

 

 

 

2,753

 

Gain on disposal of assets, net

 

 

(6,185

)

 

 

(1,804

)

Gain on involuntary disposition of assets, net

 

 

(2,859

)

 

 

 

Allowance for credit losses

 

 

(487

)

 

 

 

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

 

 

 

 

 

 

Accounts receivable

 

 

23,587

 

 

 

(51,709

)

Income tax receivable

 

 

543

 

 

 

(495

)

Inventory

 

 

148

 

 

 

503

 

Prepaid expenses and other

 

 

(1,070

)

 

 

131

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

9,118

 

 

 

(32,172

)

Accounts payable

 

 

(22,015

)

 

 

28,894

 

Accrued liabilities

 

 

11,092

 

 

 

1,334

 

Operating lease liabilities

 

 

(5,399

)

 

 

(5,843

)

Income tax payable

 

 

(884

)

 

 

1,523

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

(15,646

)

 

 

27,020

 

Net cash provided by (used in) operating activities

 

 

46,032

 

 

 

(716

)

Cash flows from investing activities:

 

 

 

 

 

 

Proceeds from sale of property and equipment

 

 

5,944

 

 

 

2,015

 

Purchase of property and equipment

 

 

(14,694

)

 

 

(17,199

)

Contributions to CSV life insurance

 

 

(99

)

 

 

(721

)

Insurance claim proceeds related to property and equipment

 

 

5,720

 

 

 

2,574

 

Net cash used in investing activities

 

 

(3,129

)

 

 

(13,331

)

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings from Credit Facility

 

 

10,000

 

 

 

63,000

 

Payments made on borrowings from Credit Facility

 

 

(48,204

)

 

 

(70,210

)

Loan costs from Credit Facility

 

 

(389

)

 

 

(1,680

)

Payments of finance lease liabilities

 

 

(3,619

)

 

 

(2,906

)

Purchase of vested stock-based awards

 

 

(188

)

 

 

 

Exercise of stock options

 

 

 

 

 

35

 

Net cash (used in) provided by financing activities

 

 

(42,400

)

 

 

6,449

 

Net change in cash, cash equivalents and restricted cash

 

 

503

 

 

 

(7,598

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

1,086

 

 

 

8,684

 

Cash, cash equivalents and restricted cash at end of period

 

$

1,589

 

 

$

1,086

 

Orion Group Holdings, Inc. and Subsidiaries

Condensed Balance Sheets

(In Thousands, Except Share and Per Share Information)

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,589

 

 

 

128

 

Restricted cash

 

 

 

 

 

958

 

Accounts receivable:

 

 

 

 

 

 

Trade, net of allowance for credit losses of $411 and $2,600, respectively

 

 

96,369

 

 

 

116,540

 

Retainage

 

 

36,485

 

 

 

42,547

 

Income taxes receivable

 

 

419

 

 

 

962

 

Other current

 

 

59,492

 

 

 

2,680

 

Inventory

 

 

1,548

 

 

 

1,114

 

Costs and estimated earnings in excess of billings on uncompleted contracts

 

 

32,271

 

 

 

41,389

 

Prepaid expenses and other

 

 

7,229

 

 

 

5,647

 

Total current assets

 

 

235,402

 

 

 

211,965

 

Property and equipment, net of depreciation

 

 

125,497

 

 

 

132,348

 

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

 

 

18,874

 

 

 

17,997

 

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

 

 

12,858

 

 

 

7,896

 

Inventory, non-current

 

 

6,455

 

 

 

7,037

 

Intangible assets, net of amortization

 

 

10,077

 

 

 

12,147

 

Deferred income tax asset

 

 

70

 

 

 

85

 

Other non-current

 

 

4,956

 

 

 

5,369

 

Total assets

 

$

414,189

 

 

$

394,844

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current debt, net of issuance costs

 

$

4,344

 

 

$

3,668

 

Accounts payable:

 

 

 

 

 

 

Trade

 

 

48,252

 

 

 

70,421

 

Retainage

 

 

716

 

 

 

562

 

Accrued liabilities

 

 

84,637

 

 

 

16,966

 

Income taxes payable

 

 

639

 

 

 

1,523

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

33,135

 

 

 

48,781

 

Current portion of operating lease liabilities

 

 

4,989

 

 

 

5,043

 

Current portion of financing lease liabilities

 

 

3,901

 

 

 

2,788

 

Total current liabilities

 

 

180,613

 

 

 

149,752

 

Long-term debt, net of debt issuance costs

 

 

29,523

 

 

 

68,029

 

Operating lease liabilities

 

 

14,537

 

 

 

13,596

 

Financing lease liabilities

 

 

8,376

 

 

 

3,760

 

Other long-term liabilities

 

 

19,837

 

 

 

20,436

 

Deferred income tax liability

 

 

207

 

 

 

205

 

Interest rate swap liability

 

 

1,602

 

 

 

1,045

 

Total liabilities

 

 

254,695

 

 

 

256,823

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock -- $0.01 par value, 10,000,000 authorized, none issued

 

 

 

 

 

 

Common stock -- $0.01 par value, 50,000,000 authorized, 31,171,804 and 30,303,395 issued; 30,460,573 and 29,592,164 outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

312

 

 

 

303

 

Treasury stock, 711,231 shares, at cost, as of December 31, 2020 and December 31, 2019, respectively

 

 

(6,540

)

 

 

(6,540

)

Accumulated other comprehensive loss

 

 

(1,602

)

 

 

(1,045

)

Additional paid-in capital

 

 

184,324

 

 

 

182,523

 

Retained loss

 

 

(17,000

)

 

 

(37,220

)

Total stockholders’ equity

 

 

159,494

 

 

 

138,021

 

Total liabilities and stockholders’ equity

 

$

414,189

 

 

$

394,844

 

 

Orion Group Holdings Inc.
Francis Okoniewski, VP Investor Relations
(346) 616-4138
www.oriongroupholdingsinc.com

-OR-

INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Fred Buonocore, CFA (212) 836-9607
Mike Gaudreau (212) 836-9620

Source: Orion Group Holdings, Inc.



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