Orion Marine Group (NYSE: ORN) reported Q4 EPS of $0.12, $0.04 better than the analyst estimate of $0.08. Revenue for the quarter came in at $170.18 million versus the consensus estimate of $180.36 million.

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.”

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