Orion Group Holdings Inc 10-Q for FY2025 Q2
Orion Group Holdings Inc (ORN)
About this 10-Q
Orion Group Holdings Inc filed this 10-Q on July 30, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $205.29M
- up 6.8% from $192.17M a year earlier
- Net income
- $841K
- compared with a net loss of $6.6M a year earlier
- Diluted EPS
- $0.02
- compared with -$0.20 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
Commission file number:
(Exact name of registrant as specified in its charter)
State of Incorporation | IRS Employer Identification Number |
| |
Address of Principal Executive Office | ( Registrant’s telephone number (including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
| Trading Symbol(s) |
| Name of Each Exchange on Which Registered |
| | NYSE Texas |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days: ☑
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, "accelerated filer", "smaller reporting company” and "emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐ | |
Non-accelerated filer ☐ | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
There were
ORION GROUP HOLDINGS, INC.
Quarterly Report on Form 10-Q for the period ended June 30, 2025
Index
2
Part
PART I.FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Information)
|
| June 30, |
| December 31, | ||
| | 2025 |
| 2024 | ||
ASSETS |
| | (Unaudited) |
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Current assets: |
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Cash and cash equivalents | | $ | | | $ | |
Accounts receivable: | |
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Trade, net of allowance for credit losses of $ | |
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Retainage | |
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Income taxes receivable | |
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Other current | |
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Inventory | |
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Contract assets | |
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Prepaid expenses and other | |
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Total current assets | |
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Property and equipment, net of accumulated depreciation | |
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Operating lease right-of-use assets, net of accumulated amortization | | | | | | |
Financing lease right-of-use assets, net of accumulated amortization | | | | | | |
Inventory, non-current | |
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Deferred income tax asset | | | | | | |
Other non-current | |
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Total assets | | $ | | | $ | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
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Current liabilities: | |
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Current debt, net of debt issuance costs | | $ | | | $ | |
Accounts payable: | |
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Trade | |
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Retainage | |
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Accrued liabilities | |
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Income taxes payable | |
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Contract liabilities | |
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Current portion of operating lease liabilities | | | | | | |
Current portion of financing lease liabilities | | | | | | |
Total current liabilities | | | | | | |
Long-term debt, net of debt issuance costs | |
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Operating lease liabilities | | | | | | |
Financing lease liabilities | | | | | | |
Other long-term liabilities | |
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Deferred income tax liability | |
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Total liabilities | |
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Stockholders’ equity: | |
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Preferred stock -- $ | |
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Common stock -- $ | |
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Treasury stock, | |
| ( | |
| ( |
Additional paid-in capital | |
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Retained loss | |
| ( | |
| ( |
Total stockholders’ equity | |
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Total liabilities and stockholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements
3
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Information)
(Unaudited)
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Contract revenues | | $ | | | $ | | | $ | | | $ | |
Costs of contract revenues | |
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Gross profit | |
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Selling, general and administrative expenses | |
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Gain on disposal of assets, net | |
| ( | |
| ( | |
| ( | |
| ( |
Operating income (loss) | |
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| ( | |
| | |
| ( |
Other (expense) income: | |
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Interest expense | |
| ( | |
| ( | |
| ( | |
| ( |
Other income | |
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Other expense, net | |
| ( | |
| ( | |
| ( | |
| ( |
Income (loss) before income taxes | |
| | |
| ( | |
| ( | |
| ( |
Income tax (benefit) expense | |
| ( | |
| | |
| ( | |
| |
Net income (loss) | | $ | | | $ | ( | | $ | ( | | $ | ( |
| | | | | | | | | | | | |
Basic income (loss) per share | | $ | | | $ | ( | | $ | ( | | $ | ( |
Diluted income (loss) per share | | $ | | | $ | ( | | $ | ( | | $ | ( |
Shares used to compute income (loss) per share: | |
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Basic | |
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Diluted | |
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The accompanying notes are an integral part of these condensed consolidated financial statements
4
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(In Thousands, Except Share and Per Share Information) (Unaudited)
|
| Common |
| Treasury |
| Additional |
| | |
| | | |||||||
| | Stock | | Stock |
| Paid-In |
| Retained | | | | ||||||||
| | Shares |
| Amount | | Shares |
| Amount |
| Capital | | Loss | | Total | |||||
Balance, January 1, 2025 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | | | | — | | | |
Exercise of stock options | | | | | | | | | | | | | | | | | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | ( | | | — | | | — |
Employee share purchase plan issuance | | | | | | | | | | | | | | | | | | | |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — |
Net loss |
| — | | | — | | — | | | — | | | — | | | ( | | | ( |
Balance, March 31, 2025 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | | | | — | | | |
Exercise of stock options | | — | | | — | | — | | | — | | | — | | | — | | | — |
Issuance of restricted stock | | | | | | | — | | | — | | | ( | | | — | | | — |
Employee share purchase plan issuance | | — | | | — | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock | | ( | | | ( | | — | | | — | | | | | | — | | | — |
Net income |
| — | | | — | | — | | | — | | | — | | | | | | |
Balance, June 30, 2025 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | ( | | $ | |
|
| Common |
| Treasury |
| Additional |
| | |
| | | |||||||
| | Stock | | Stock |
| Paid-In |
| Retained | | | | ||||||||
| | Shares |
| Amount | | Shares |
| Amount |
| Capital | | Loss | | Total | |||||
Balance, January 1, 2024 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | | | | — | | | |
Exercise of stock options | | | | | — | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | ( | | | — | | | — |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — |
Net loss |
| — | | | — | | — | | | — | | | — | | | ( | | | ( |
Balance, March 31, 2024 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | | | | — | | | |
Exercise of stock options | | | | | — | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | ( | | | — | | | — |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — |
Payments related to tax withholding for share-based compensation | | ( | | | — | | — | | | — | | | ( | | | — | | | ( |
Net loss |
| — | | | — | | — | | | — | | | — | | | ( | | | ( |
Balance, June 30, 2024 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | ( | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements
5
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in Thousands)
(Unaudited)
| | Six Months Ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Cash flows from operating activities: |
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Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
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Operating activities: | |
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Depreciation and amortization | |
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Amortization of ROU operating leases | | | | | | |
Amortization of ROU finance leases | | | | | | |
Amortization of deferred debt issuance costs | | | | | | |
Deferred income taxes | |
| | |
| ( |
Share-based compensation | |
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| |
Gain on disposal of assets, net | |
| ( | |
| ( |
Allowance for credit losses | |
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Change in operating assets and liabilities: | |
| | |
| |
Accounts receivable | |
| ( | |
| ( |
Income tax receivable | |
| ( | |
| ( |
Inventory | |
| | |
| ( |
Prepaid expenses and other | |
| | |
| |
Contract assets | |
| | |
| |
Accounts payable | |
| | |
| |
Accrued liabilities | |
| ( | |
| ( |
Operating lease liabilities | | | ( | | | ( |
Income tax payable | |
| ( | |
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Contract liabilities | |
| | |
| ( |
Net cash used in operating activities | |
| ( | |
| ( |
Cash flows from investing activities: | |
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Proceeds from sale of property and equipment | |
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Purchase of property and equipment | |
| ( | |
| ( |
Net cash used in investing activities | |
| ( | |
| ( |
Cash flows from financing activities: | |
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Borrowings on Credit Facility | |
| | |
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Payments on Credit Facility | |
| ( | |
| ( |
Payments on failed sale-leasebacks | | | ( | | | — |
Loan costs from Credit Agreement and prior credit facility | |
| ( | |
| ( |
Payments of finance lease liabilities | | | ( | | | ( |
Proceeds from issuance of common stock under ESPP | | | | | | — |
Payments related to tax withholding for share-based compensation | | | — | | | ( |
Exercise of stock options | |
| | |
| |
Net cash (used in) provided by financing activities | |
| ( | |
| |
Net change in cash, cash equivalents and restricted cash | |
| ( | |
| ( |
Cash, cash equivalents and restricted cash at beginning of period | |
| | |
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Cash, cash equivalents and restricted cash at end of period | | $ | | | $ | |
| | | | | | |
Supplemental disclosures of cash flow information: | |
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Cash paid during the period for: | |
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Interest | | $ | | | $ | |
Taxes, net of refunds | | $ | | | $ | |
Noncash investing activity: | | | | | | |
Purchase of property and equipment in accounts payable | | $ | | | $ | — |
The accompanying notes are an integral part of these condensed consolidated financial statements
6
Orion Group Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and per Share Amounts)
(Unaudited)
1.Description of Business and Basis of Presentation
Description of Business
Orion Group Holdings, Inc. and its subsidiaries (hereafter collectively referred to as the “Company”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine and concrete segments. We are headquartered in Houston, Texas with regional offices throughout our operating areas.
Basis of Presentation
The accompanying condensed consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Accordingly, these financial statements do not include certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should be read together with our 2024 Annual Report on Form 10-K. For the periods presented, there were no items of other comprehensive income.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. Such adjustments are of a normal recurring nature. Interim results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results realizable for the year ending December 31, 2025.
2.Recent Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issues accounting standards and updates (each, an “ASU”) from time to time to its Accounting Standards Codification (“ASC”), which is the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers applicability to its business. All ASUs are adopted by their respective due dates and in the manner prescribed by the FASB.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. This will not impact our financial position or results of operations, but is expected to result in expanded tax disclosures in the full year financial statements for the year ended December 31, 2025.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. The amendments require entities to provide enhanced disaggregation of certain expense categories presented in the income statement, including details on significant
7
components within those categories, to provide greater transparency and decision-useful information to users of financial statements. The ASU is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the disclosures within its consolidated financial statements.
3.Revenue
Contract revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The following table represents a disaggregation of the Company’s contract revenues by service line for the marine and concrete segments:
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Marine Segment |
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Construction | | $ | | | $ | | | $ | | | $ | |
Dredging | |
| | |
| | |
| | |
| |
Specialty services | |
| | |
| | |
| | |
| |
Marine segment contract revenues | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Concrete Segment | |
|
| |
|
| |
|
| |
|
|
Structural | | $ | | | $ | | | $ | | | $ | |
Light commercial | |
| | |
| | |
| | |
| |
Concrete segment contract revenues | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Total contract revenues | | $ | | | $ | | | $ | | | $ | |
The Company has determined that it has
Additionally, the table below represents contract revenue by type of customer for the three and six months ended June 30, 2025 and 2024, respectively:
|
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| ||||||||||||||||
|
| 2025 |
| % |
| 2024 |
| % |
| 2025 |
| % |
| 2024 |
| % |
| ||||
Federal Government |
| $ | |
| | % | $ | |
| | % | $ | |
| | % | $ | |
| | % |
State Governments |
|
| |
| | % |
| |
| | % |
| |
| | % |
| |
| | % |
Local Government |
|
| |
| | % |
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| | % |
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| | % |
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| | % |
Private Companies |
|
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| | % |
| |
| | % |
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| | % |
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| | % |
Total contract revenues |
| $ | |
| | % | $ | |
| | % | $ | |
| | % | $ | |
| | % |
On March 10, 2023, the United States Navy awarded the Dragados/Hawaiian Dredging/Orion Joint Venture a contract to complete the construction of a dry dock at Pearl Harbor Naval Shipyard. The Company’s joint venture with Dragados/Hawaiian Dredging is a related-party transaction. The Company’s portion of work as a dedicated subcontractor totals $
8
For the three months ended June 30, 2025 and 2024, the United States Navy, included in the Federal Government category, accounted for
For the three months ended June 30, 2025 and 2024, the Company’s revenue related to the joint venture subcontract was approximately $
The Company does not believe that the loss of any one of its customers would have a material adverse effect on the Company or its subsidiaries and affiliates since no single specific customer sustains such a large portion of receivables or contract revenue over time.
Contract revenues generated outside the United States totaled
4.Concentration of Risk and Enterprise-Wide Disclosures
Accounts receivable include amounts billed to governmental agencies and private customers and do not bear interest. Balances billed to customers but not paid pursuant to retainage provisions generally become payable upon contract completion and acceptance by the owner.
The table below presents the concentrations of current receivables (trade and retainage) at June 30, 2025 and December 31, 2024, respectively:
| | June 30, 2025 | | December 31, 2024 |
| ||||||
Federal Government |
| $ | |
| | % | $ | |
| | % |
State Governments | |
| |
| | % |
| |
| | % |
Local Governments | |
| |
| | % |
| |
| | % |
Private Companies | |
| |
| | % |
| |
| | % |
Gross receivables | | | | | | % | | | | | % |
Allowance for credit losses | | | ( | | | | | ( | | | |
Net receivables | | $ | |
| | | $ | |
| | |
At June 30, 2025, the United States Navy, which is included in the Federal Government category, accounted for
9
5.Contracts in Progress
Contracts in progress are as follows at June 30, 2025 and December 31, 2024:
|
| June 30, |
| December 31, | ||
| | 2025 | | 2024 | ||
Costs incurred on uncompleted contracts | | $ | | | $ | |
Estimated earnings | |
| | |
| |
| |
| | |
| |
Less: Billings to date | |
| ( | |
| ( |
| | $ | | | $ | |
Included in the accompanying Consolidated Balance Sheets under the following captions: | |
|
| |
|
|
Contract assets | | $ | | | $ | |
Contract liabilities | |
| ( | |
| ( |
| | $ | | | $ | |
Included in contract assets is approximately $
Remaining performance obligations represent the transaction price of firm orders or other written contractual commitments from customers for which work has not been performed or is partially completed and excludes unexercised contract options and potential orders. As of June 30, 2025, the aggregate amount of the remaining performance obligations was approximately $
6.Property and Equipment
The following is a summary of property and equipment at June 30, 2025 and December 31, 2024:
|
| June 30, |
| December 31, | ||
| | 2025 | | 2024 | ||
Construction equipment | | $ | | | $ | |
Vessels and other equipment | |
| | |
| |
Building and improvements | |
| | |
| |
Automobiles and trucks | |
| | |
| |
Office equipment | |
| | |
| |
| |
| | |
| |
Less: Accumulated depreciation | |
| ( | |
| ( |
Net book value of depreciable assets | |
| | |
| |
Construction in progress | |
| | |
| |
Land | |
| | |
| |
Property and equipment, net of depreciation | | $ | | | $ | |
Substantially all depreciation expense is included in the cost of contract revenue in the Company’s Condensed Consolidated Statements of Operations. Substantially all of the assets of the Company are pledged as collateral under the Company’s Credit Agreement as discussed in Note 9. Substantially all of the Company’s long-lived assets are located in the United States.
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7.Fair Value
Recurring Fair Value Measurements
The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. Due to their short-term nature, the Company believes that the carrying value of its accounts receivable, other current assets, accounts payable and other current liabilities approximate their fair values.
The Company classifies financial assets and liabilities into the following three levels based on the inputs used to measure fair value in the order of priority indicated:
| ● | Level 1- fair values are based on observable inputs such as quoted prices in active markets for identical assets or liabilities; |
| ● | Level 2 - fair values are based on pricing inputs other than quoted prices in active markets for identical assets and liabilities and are either directly or indirectly observable as of the measurement date; and |
| ● | Level 3 - fair values are based on unobservable inputs in which little or no market data exists. |
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.
Our concrete segment has life insurance policies with a combined face value of $
Other Fair Value Measurements
The fair value of the Company’s debt at June 30, 2025 and December 31, 2024 approximated its carrying value of $
11
8.Accrued Liabilities
Accrued liabilities at June 30, 2025 and December 31, 2024 consisted of the following:
|
| June 30, 2025 |
| December 31, 2024 | ||
Accrued salaries, wages and benefits | | $ | | | $ | |
Accrued liabilities expected to be covered by insurance | |
| | |
| |
Sales taxes | |
| | |
| |
Property taxes | |
| | |
| |
Sale-leaseback arrangement | | | | | | |
Other accrued expenses | |
| | |
| |
Total accrued liabilities | | $ | | | $ | |
9.Debt
The Company’s obligations under debt arrangements consisted of the following:
| | June 30, 2025 | | December 31, 2024 | ||||||||||||||
|
| |
| Debt Issuance |
| |
| |
| Debt Issuance |
| | ||||||
| | Principal | | Costs(1) | | Total | | Principal | | Costs(1) | | Total | ||||||
Other debt | | $ | | | | — | | $ | | | $ | | | | — | | $ | |
Total current debt | |
| | |
| — | |
| | |
| | |
| — | |
| |
Revolver | | | | | | ( | | | | | | — | | | — | | | — |
Term loan | |
| | |
| ( | |
| | |
| | |
| ( | |
| |
Other debt | | | | | | — | | | | | | | | | — | | | |
Total long-term debt | | | | | | ( | | | | | | | | | ( | | | |
Total debt | | $ | | | $ | ( | | $ | | | $ | | | $ | ( | | $ | |
| (1) | Total debt issuance costs include underwriter fees, legal fees, syndication fees and fees related to the execution of the Credit Agreement and the termination and repayment of the Company’s prior credit facility. |
On May 15, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with White Oak ABL, LLC and White Oak Commercial Finance, LLC, providing for a $
The Company has a maximum borrowing capacity under the Revolver of $
The Company is subject to a commitment fee for the unused portion of the maximum borrowing availability under the Revolver. The Revolver termination date is the earlier of the Credit Agreement termination date, May 15, 2028, or the date the outstanding balance is permanently reduced to zero, in accordance with the terms of the Credit Agreement.
As of June 30, 2025, the Company had $
12
The Credit Agreement is used to finance working capital and general corporate purposes, capital expenditures, permitted acquisitions and associated transaction fees, and to refinance existing indebtedness. Borrowings under the Revolver may be repaid and reborrowed, subject to the borrowing base and other conditions.
As amended, the Revolver and Term Loan bear interest at rates based on 30-day plus applicable margins, subject to a SOFR floor. As of June 30, 2025, the applicable margin is
The quarterly weighted average interest rate for the Credit Agreement, as of June 30, 2025 and 2024 was
The Credit Agreement contains customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, asset sales, and dividends, as well as financial maintenance covenants. The financial covenants, as amended, include a minimum Consolidated Fixed Charge Coverage Ratio and/or Consolidated EBITDA thresholds and a minimum liquidity requirement, each tested periodically.
Financial covenants
Restrictive financial covenants under the amended Credit Agreement include:
| ● | A Consolidated Fixed Charge Coverage Ratio to not be less than the following during each noted period: |
| - | Trailing Four Quarter Test Period Ending September 30, 2025 and each Fiscal Quarter thereafter, to not be less than |
| ● | A Revolver Loan Turnover Ratio to not be less than the following during each noted period: |
| - | Fiscal Quarter Ending June 30, 2023 and each Fiscal Quarter thereafter, to not be less than |
| ● | A Term Loan Loan-to-Value Ratio to not be greater than the following during each noted period: |
| - | Fiscal Quarter Ending June 30, 2023 and each Fiscal Quarter thereafter, to not be more than |
| ● | A Minimum EBITDA to not be less than the following during each noted period: |
| - | Trailing Four Quarter Test Period ending June 30, 2025 - $ |
Under the Credit Agreement, the Company may not permit Liquidity (as defined in the Credit Agreement) to fall below $
In addition, the Credit Agreement contains events of default that are usual and customary for similar arrangements, including non-payment of principal, interest or fees; breaches of representations and warranties that are not timely cured; violation of covenants; bankruptcy and insolvency events; and, events constituting a change of control.
The Company was in compliance with all financial covenants under the Credit Agreement as of June 30, 2025.
13
Other debt
The Company has entered into debt agreements with Mobilease for the purpose of financing equipment purchased. As of June 30, 2025 and December 31, 2024, the carrying value of this debt was $
On June 23, 2023, the Company closed on a land-sale leaseback contract for the Company’s Port Lavaca South Yard property located in Port Lavaca, Texas for a purchase price of $
10.Other Long-Term Liabilities
Other long-term liabilities at June 30, 2025 and December 31, 2024 consisted of the following:
|
| June 30, 2025 |
| December 31, 2024 | ||
Sale-leaseback arrangement | | $ | | | $ | |
Deferred compensation | |
| | |
| |
Other | | | | |
| |
Total other long-term liabilities | | $ | | | $ | |
Sale-Leaseback Arrangements
On May 15, 2023, the Company entered into a $
Concurrent with the sale of Company’s Port Lavaca South Yard property, the Company entered into a
On September 27, 2019, the Company entered into a purchase and sale agreement (the “Purchase and Sale Agreement”). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold its 17300 and 17140 Market Street location in Channelview, Texas for a purchase price of $
Related to the failed sale-leasebacks, the Company recorded liabilities for the amounts received, will continue to depreciate the non-land portion of the assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining assets will be zero at the end of the initial lease terms.
14
11.Income Taxes
The Company’s effective tax rate is based on expected income, statutory rates and tax planning opportunities available to it. For interim financial reporting, the Company estimates its annual tax rate based on projected taxable income for the full year and records a quarterly tax provision in accordance with the anticipated annual rate.
Income tax (benefit) expense included in the Company’s accompanying Condensed Consolidated Statements of Operations was as follows:
| | Three Months Ended |
| Six Months Ended |
| ||||||||
| | June 30, | | June 30, | | ||||||||
|
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Income tax (benefit) expense | | $ | ( | | $ | | | $ | ( | | $ | | |
Effective tax rate | |
| ( | % |
| ( | % |
| | % |
| ( | % |
The effective rate for the three and six months ended June 30, 2025 differed from the Company’s statutory federal rate of
The Company assessed the realizability of its deferred tax assets and determined that it was more likely than not that some portion or all the deferred tax assets would not be realized and therefore recorded a valuation allowance on the net deferred tax assets. The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company considers the scheduled reversal of deferred tax liabilities, available carryback periods, and tax-planning strategies in making this assessment. For the three and six months ended June 30, 2025 the Company evaluated positive and negative evidence in determining the amount of deferred tax assets more likely than not to be realized. Based on the review of available evidence, management believes that a valuation allowance on the net deferred tax assets at June 30, 2025 remains appropriate.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes provisions, that may impact our tax rate such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The Company is currently assessing the potential impact on its consolidated financial statements.
12.Earnings Per Share
Basic earnings per share is based on the weighted average number of common shares outstanding during each period. Diluted earnings per share is based on the weighted average number of common shares outstanding as well as the effect of all dilutive common stock equivalents during each period net income is generated. For the three months ended June 30, 2025 and 2024, the Company had
15
ended June 30, 2024 and the six months ended June 30, 2025 and 2024; therefore, all potentially dilutive securities are antidilutive and are excluded from the computation of diluted loss per share for such periods.
The following table reconciles the denominators used in the computations of both basic and diluted earnings per share:
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 |
Basic: |
|
|
| . |
|
|
|
|
Weighted average shares outstanding |
| |
| |
| |
| |
Diluted: |
|
|
|
|
|
|
|
|
Total basic weighted average shares outstanding |
| |
| |
| |
| |
Effect of potentially dilutive securities: |
|
|
|
|
| |
| |
Common stock options |
| |
| |
| |
| |
Employee stock purchase plan | | | | — | | — |
| — |
Total weighted average shares outstanding assuming dilution |
| |
| |
| |
| |
13.Share-Based Compensation
The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s stock incentive plans. In general, the Company’s 2022 LTIP provides for grants of restricted stock and performance-based awards to be issued with a per-share price not less than the fair market value of a share of common stock on the date of grant. The Company accounts for forfeitures of awards as they are incurred.
In May 2024 shareholders approved the ESPP, which became effective on September 16, 2024. The Company has reserved a total of
The table below presents the share-based compensation expense included in the Company’s accompanying condensed consolidated statements of operations:
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
|
| 2025 |
| 2024 | | 2025 |
| 2024 | ||||
Restricted stock awards | | $ | | | $ | | | $ | | | $ | |
Performance stock units | |
| ( | |
| | |
| | |
| |
Employee share purchase plan | | | | |
| — | | | | |
| — |
Total share-based compensation expense | | $ | | | $ | | | $ | | | $ | |
16
Under its approved long-term incentive plan, the Company grants share-based awards to its employees. The following table presents a summary of the Company’s unvested restricted stock awards and performance share units granted under the plan:
| | Restricted stock awards | | Performance stock units | ||||||
|
| |
| Weighted |
| |
| Weighted | ||
| | Number | | Average |
| Number | | Average | ||
| | of | | Fair Value |
| of | | Fair Value | ||
| | Shares | | Per Share |
| Shares | | Per Share | ||
Nonvested at December 31, 2024 |
| | | $ | | | | | $ | |
Granted |
| | | $ | | | | | $ | |
Vested |
| ( | | $ | | | — | | $ | — |
Forfeited shares |
| ( | | $ | | | — | | $ | — |
Nonvested at March 31, 2025 |
| | | $ | | | | | $ | |
Granted | | | | $ | | | — | | $ | — |
Vested | | ( | | $ | | | — | | $ | — |
Forfeited shares | | ( | | $ | | | ( | $ | | |
Nonvested at June 30, 2025 | | | | $ | | | | 1 | $ | |
| (1) | A maximum of |
On March 20, 2025, the Company granted certain executives a total of
The following table presents the assumptions related to the performance share units granted in 2025 related to the relative total shareholder return, as indicated in the previous summary table:
| | 2025 | |
Grant-date fair value | $ | | |
Risk-free interest rate |
| | % |
Volatility factor |
| | % |
Contractual term (years) |
| |
In the six months ended June 30, 2025, there were
17
The following table presents a summary of the unrecognized compensation cost, and the related weighted average recognition period associated with unvested awards and units as of June 30, 2025:
| | Restricted stock awards | | | Performance stock units |
Unrecognized compensation cost | $ | | | $ | |
Weighted average period for recognition (years) |
| |
|
14.Commitments and Contingencies
The Company is involved in various legal and other proceedings that are incidental to the conduct of its business, none of which in the opinion of management will have a material effect on the Company’s financial condition, results of operations or cash flows. Management believes that it has recorded adequate accrued liabilities and believes that it has adequate insurance coverage or has meritorious defenses for these claims and contingencies.
15.Segment Information
The Company has determined that it has two reportable segments pursuant to ASC Topic 280, Segment Reporting. The tools used by the chief operating decision maker (“CODM”) to allocate resources and assess performance are based on two reportable and operating segments: marine and concrete, which operate under the Orion brand and logo.
In making this determination, the Company considered the similar economic characteristics of each segment’s operations, including internal processes, customer base, regulatory oversight, and macroeconomic factors that drive each. Both the marine and concrete segments have a single individual responsible for managing the entire segment. Resources are allocated by segment and financial and budgetary information is compiled and reviewed by segment.
Marine Segment
Our marine segment provides construction, dredging and specialty services. Construction services include construction, restoration, maintenance, dredging and repair of marine transportation facilities, marine pipelines, bridges and causeways and marine environmental structures. Dredging services generally enhance or preserve the navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair.
Concrete Segment
Our concrete segment provides turnkey concrete construction services, including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.
18
Segment information for the periods presented is provided as follows:
| Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
| 2025 | 2024 | | 2025 | 2024 | ||||||
| Amount |
| Amount | | Amount |
| Amount | ||||
Marine | (dollar amounts in thousands) | | (dollar amounts in thousands) | ||||||||
Contract revenues | $ | |
| $ | | | $ | |
| $ | |
Cost of contract revenues |
| |
|
| | |
| |
|
| |
Gross profit |
| |
|
| | |
| |
|
| |
Selling, general and administrative expenses |
| |
|
| | |
| |
|
| |
Gain on disposal of assets, net | | ( | | | ( | | | ( | | | ( |
Operating income (loss) | $ | |
| $ | ( | | $ | |
| $ | ( |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total assets | $ | | | $ | | | $ | | | $ | |
Property and equipment, net | $ | | | $ | | | $ | | | $ | |
Depreciation and amortization | $ | | | $ | | | $ | | | $ | |
Capital expenditures | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | |
Concrete | | | | | | | | | | | |
Contract revenues | $ | |
| $ | | | $ | |
| $ | |
Cost of contract revenues |
| |
|
| | |
| |
|
| |
Gross profit |
| |
|
| | |
| |
|
| |
Selling, general and administrative expenses |
| |
|
| | |
| |
|
| |
Gain on disposal of assets, net | | ( | | | ( | | | ( | | | ( |
Operating (loss) income | $ | ( |
| $ | | | $ | ( |
| $ | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total assets | $ | | | $ | | | $ | | | $ | |
Property and equipment, net | $ | | | $ | | | $ | | | $ | |
Depreciation and amortization | $ | | | $ | | | $ | | | $ | |
Capital expenditures | $ | | | $ | | | $ | | | $ | |
There were $
19
16.Leases
The Company has operating and finance leases for office space, equipment and vehicles.
Leases recorded on the balance sheet consists of the following:
|
| June 30, | December 31, | ||
Leases | | 2025 | 2024 | ||
Assets | | | | | |
Operating lease right-of-use assets, net (1) | | $ | | $ | |
Financing lease right-of-use assets, net (2) | |
| |
| |
Total assets | | $ | | $ | |
Liabilities | |
|
|
|
|
Current | |
|
|
|
|
Operating | | $ | | $ | |
Financing | |
| |
| |
Total current | |
| |
| |
Noncurrent | |
|
|
|
|
Operating | |
| |
| |
Financing | |
| |
| |
Total noncurrent | |
| |
| |
Total liabilities | | $ | | $ | |
| (1) | Operating lease right-of-use assets are recorded net of accumulated amortization of $ |
| (2) | Financing lease right-of-use assets are recorded net of accumulated amortization of $ |
Other information related to lease term and discount rate is as follows:
| June 30, |
| December 31, |
|
| 2025 |
| 2024 |
|
Weighted Average Remaining Lease Term (in years) |
| |
| |
Operating leases | | | ||
Financing leases | | | ||
Weighted Average Discount Rate | | | | |
Operating leases | | % | | % |
Financing leases | | % | | % |
20
The components of lease expense are as follows:
| | Three months ended June 30, | Six months ended June 30, | |||||||||
|
| 2025 |
| 2024 | 2025 |
| 2024 |
| ||||
Operating lease costs: |
| |
|
| |
| |
|
| |
| |
Operating lease cost | | $ | | | $ | | $ | | | $ | | |
Short-term lease cost (1) | |
| | |
| |
| | |
| | |
Financing lease costs: | |
| | |
|
|
| | |
|
| |
Interest on lease liabilities | |
| | |
| |
| | |
| | |
Amortization of right-of-use assets | |
| | |
| |
| | |
| | |
Total lease cost | | $ | | | $ | | $ | | | $ | | |
| (1) | Includes expenses related to leases with a lease term of more than one month but less than one year. |
Supplemental cash flow information related to leases is as follows:
| Six Months Ended June 30, | ||||
| 2025 | | 2024 | ||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
Operating cash flows for operating leases | $ | | | $ | |
Operating cash flows for finance leases | $ | | | $ | |
Financing cash flows for finance leases | $ | | | $ | |
Non-cash activity: |
| | |
| |
ROU assets obtained in exchange for new operating lease liabilities | $ | | | $ | |
ROU assets obtained in exchange for new financing lease liabilities | $ | | | $ | |
Maturities of lease liabilities are summarized as follows:
| | Operating Leases | | Finance Leases | ||
Year ending December 31, | | | | | | |
2025 (excluding the six months ended June 30, 2025) | | $ | | | $ | |
2026 | |
| | |
| |
2027 | |
| | |
| |
2028 | |
| | |
| |
2029 | |
| | |
| |
Thereafter | |
| | |
| |
Total future minimum lease payments | |
| | |
| |
Less - amount representing interest | |
| | | | |
Present value of future minimum lease payments | |
| | |
| |
Less - current lease obligations | |
| | |
| |
Long-term lease obligations | | $ | | | $ | |
1
21
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Unless the context otherwise indicates, all references in this Quarterly Report on Form 10-Q to “Orion,” “the Company,” “we,” “our,” or “us” are to Orion Group Holdings, Inc. and its subsidiaries as a whole.
Certain information in this Quarterly Report on Form 10-Q, including but not limited to Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), may constitute forward-looking statements as such term is defined within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical facts, including those that express a belief, expectation, or intention are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, our pipeline of opportunities, conversion of backlog, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes.
We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control, including unforeseen productivity delays and other difficulties encountered in project execution, challenges incurred by virtue of our position as a substantial subcontractor that reports to a significantly larger project contractor, levels of government funding or other governmental budgetary constraints, contract modifications and changes, including change orders and contract cancellation at the discretion of the customer, and the general economic impact of tariffs and trade wars. These and other important factors, including those described under “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 may cause our actual results, performance- or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date of this report; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly.
MD&A provides a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition since the most recent fiscal year-end, and (ii) results of operations during the current fiscal year-to-date period and current fiscal quarter as compared to the corresponding periods of the preceding fiscal year. In order to better understand such changes, this MD&A should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in our 2024 Form 10-K, Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Form 10-K and with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.
Overview
Orion Group Holdings, Inc. and its subsidiaries (hereafter collectively referred to as the “Company”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing
22
services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine segment and our concrete segment.
Our marine segment provides construction, dredging and specialty services. Construction services include construction, restoration, maintenance, dredging and repair of marine transportation facilities, marine pipelines, bridges and causeways and marine environmental structures. Dredging services generally enhance or preserve the navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair.
Our concrete segment provides turnkey concrete construction services, including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.
Our contracts are obtained primarily through competitive bidding in response to “requests for proposals” by federal, state and local agencies and through negotiation and competitive bidding with private parties and general contractors. Our bidding activity and strategies are affected by factors such as our backlog, current utilization of equipment and other resources, job location, our ability to obtain necessary surety bonds and competitive considerations. The timing and location of awarded contracts may result in unpredictable fluctuations in the results of our operations.
Most of our revenue is derived from fixed-price contracts. We record revenue on construction contracts over time, measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. There are a number of factors that can create variability in contract performance and therefore impact the results of our operations. The most significant of these include the following:
| ● | completeness and accuracy of the original bid; |
| ● | increases in commodity prices such as concrete, steel and fuel; |
| ● | customer delays, work stoppages, and other costs due to weather and environmental restrictions; |
| ● | subcontractor performance; |
| ● | unforeseen site conditions; |
| ● | availability and skill level of workers; and |
| ● | a change in availability and proximity of equipment and materials. |
All of these factors can have a negative impact on our contract performance, which can adversely affect the timing of revenue recognition and ultimate contract profitability. We plan our operations and bidding activity with these factors in mind and they generally have not had a material adverse impact on the results of our operations in the past.
Consolidated Results of Operations
Backlog Information
Our contract backlog represents our estimate of the revenues we expect to realize under the portion of contracts remaining to be performed. Given the typical duration of our contracts, which is generally less than a year, our
23
backlog at any point in time usually represents only a portion of the revenue that we expect to realize during a twelve-month period. We have not been adversely affected by contract cancellations or modifications in the past, however we may be in the future, especially in periods of economic uncertainty.
Backlog as of the periods ended below are as follows (in millions):
| | June 30, 2025 |
| December 31, 2024 | ||
Marine segment | | $ | 554.8 | | $ | 582.8 |
Concrete segment | |
| 190.9 | |
| 146.3 |
Consolidated | | $ | 745.7 | | $ | 729.1 |
Backlog is not necessarily indicative of future results. In addition to our backlog under contract, we also have a substantial number of projects in negotiation or pending award at any given time.
Income Statement Comparisons
Three months ended June 30, 2025 compared with three months ended June 30, 2024.
| | Three Months Ended June 30, | ||||
|
| 2025 | 2024 | |||
|
| Amount |
| Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | $ | 205,286 |
| $ | 192,167 |
Cost of contract revenues | |
| 179,489 |
|
| 173,886 |
Gross profit | |
| 25,797 |
|
| 18,281 |
Selling, general and administrative expenses | |
| 22,774 |
|
| 21,135 |
Gain on disposal of assets, net | | | (409) | | | (86) |
Operating income (loss) | |
| 3,432 |
|
| (2,768) |
Other (expense) income: | |
|
|
|
|
|
Interest expense | |
| (2,920) |
|
| (3,345) |
Other income | |
| 117 |
|
| 127 |
Other expense, net | |
| (2,803) |
|
| (3,218) |
Income (loss) before income taxes | |
| 629 |
|
| (5,986) |
Income tax (benefit) expense | |
| (212) |
|
| 617 |
Net income (loss) | | $ | 841 |
| $ | (6,603) |
Contract Revenues. Contract revenues for the three months ended June 30, 2025 of $205.3 million increased $13.1 million, or 6.8%, as compared to $192.2 million in the prior year period. The increase was primarily due to new awards and higher volume across the marine and concrete segments.
Gross Profit. Gross profit was $25.8 million for the three months ended June 30, 2025 compared to $18.3 million in the prior year period, an increase of $7.5 million, or 41.1%. The increase in gross profit was primarily driven by increased revenue, improvement in marine projects, and reduced indirect expenses, partially offset by favorable concrete project close-outs in 2024 that did not reoccur in 2025.
Selling, General and Administrative Expense. Selling, general and administrative (“SG&A”) expenses were $22.8 million for the three months ended June 30, 2025 compared to $21.1 million in the prior year period, an increase of $1.7 million or 7.8%. The increase in SG&A was primarily due to increased spending to support business growth.
24
Gain on Disposal of Assets, net. During the three months ended June 30, 2025 and 2024 we realized $0.4 million and $0.1 million, respectively, of net gains on disposal of assets.
Other Income, net of Expense. Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.
Income Tax (Benefit) Expense. We recorded a tax benefit of $0.2 million in the three months ended June 30, 2025, compared to a tax expense of $0.6 million in the prior year period. Our effective tax rate for the three months ended June 30, 2025 differs from the federal statutory rate primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.
Six months ended June 30, 2025 compared with six months ended June 30, 2024.
| | Six Months Ended June 30, | ||||
|
| 2025 | 2024 | |||
|
| Amount |
| Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | $ | 393,939 |
| $ | 352,839 |
Cost of contract revenues | |
| 345,127 |
|
| 319,020 |
Gross profit | |
| 48,812 |
|
| 33,819 |
Selling, general and administrative expenses | |
| 45,319 |
|
| 40,134 |
Gain on disposal of assets, net | | | (772) | | | (423) |
Operating income (loss) from operations | |
| 4,265 |
|
| (5,892) |
Other (expense) income: | |
|
|
|
|
|
Interest expense | |
| (5,254) |
|
| (6,719) |
Other income | |
| 344 |
|
| 216 |
Other expense, net | |
| (4,910) |
|
| (6,503) |
Loss before income taxes | |
| (645) |
|
| (12,395) |
Income tax (benefit) expense | |
| (72) |
|
| 265 |
Net loss | | $ | (573) |
| $ | (12,660) |
Contract Revenues. Contract revenues for the six months ended June 30, 2025 of $393.9 million increased $41.1 million or 11.6% as compared to $352.8 million in the prior year period. The increase was primarily due to new awards and higher volume across the marine and concrete segments.
Gross Profit. Gross profit was $48.8 million for the six months ended June 30, 2025 compared to $33.8 million in the prior year period, an increase of $15.0 million, or 44.3%. The increase in gross profit was primarily driven by increased revenue, improvement in marine projects, and reduced indirect expenses, partially offset by favorable concrete project close-outs in 2024 that did not reoccur in 2025.
Selling, General and Administrative Expense. SG&A expenses were $45.3 million for the six months ended June 30, 2025 compared to $40.1 million in the prior year period, an increase of $5.2 million, or 12.9%. The increase in SG&A was primarily due to increased spending to support business growth.
Gain on Disposal of Assets, net. During the six months ended June 30, 2025 and 2024 we realized $0.8 million and $0.4 million, respectively, of net gains on disposal of assets.
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Other Income, net of Expense. Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.
Income Tax (Benefit) Expense. We recorded a tax benefit of $0.1 million in the six months ended June 30, 2025, compared to a tax expense of $0.3 million in the prior year period. Our effective tax rate for the six months ended June 30, 2025 differs from the federal statutory rate primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.
Segment Results
The following table sets forth, for the periods indicated, statements of operations data by segment, segment revenues as a percentage of consolidated revenues and segment operating income (loss) as a percentage of segment revenues.
Three months ended June 30, 2025 compared with three months ended June 30, 2024.
| | Three Months Ended June 30, | ||||
| | 2025 | 2024 | |||
|
| Amount |
| Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | | | | | |
Marine segment | | | |
| | |
Public sector | | $ | 107,243 | | $ | 103,341 |
Private sector | | | 28,059 | | | 27,612 |
Marine segment total | | $ | 135,302 | | $ | 130,953 |
Concrete segment | | | |
| | |
Public sector | | $ | 11,635 | | $ | 6,025 |
Private sector | | | 58,349 | | | 55,189 |
Concrete segment total | | $ | 69,984 | | $ | 61,214 |
Total | | $ | 205,286 |
| $ | 192,167 |
| | | | | | |
Operating income (loss) | |
|
|
|
|
|
Marine segment | | $ | 6,230 |
| $ | (5,466) |
Concrete segment | |
| (2,798) |
|
| 2,698 |
Total | | $ | 3,432 | | $ | (2,768) |
Marine Segment
Revenues for our marine segment for the three months ended June 30, 2025 were $135.3 million compared to $131.0 million for the three months ended June 31, 2024, an increase of $4.3 million, or 3.3%. The increase was primarily due to new awards and higher volume on our marine construction contracts.
Operating income for our marine segment for the three months ended June 30, 2025 was $6.2 million, compared to an operating loss of $5.5 million for the three months ended June 30, 2024, an increase of $11.7 million. The increase in gross profit was primarily driven by increased revenue, reduced indirect expenses, and project delays in 2024 that did not reoccur in 2025.
26
Concrete Segment
Revenues for our concrete segment for the three months ended June 30, 2025 were $70.0 million compared to $61.2 million for the three months ended June 30, 2024, an increase of $8.8 million, or 14.3%. This increase was primarily due to new awards and higher volume on our concrete contracts.
Operating loss for our concrete segment for the three months ended June 30, 2025 was $2.8 million, compared to operating income of $2.7 million for the three months ended March 31, 2024, a decrease of $5.5 million. This decrease was primarily driven by favorable concrete project close-outs in 2024 that did not reoccur in 2025.
Six months ended June 30, 2025 compared with six months ended June 30, 2024.
| | Six Months Ended June 30, | ||||
| | 2025 | 2024 | |||
|
| Amount |
| Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | | | | | |
Marine segment | | | |
| | |
Public sector | | $ | 207,464 | | $ | 196,276 |
Private sector | | | 55,001 | | | 41,002 |
Marine segment total | | $ | 262,465 | | $ | 237,278 |
Concrete segment | | | |
| | |
Public sector | | $ | 19,296 | | $ | 9,429 |
Private sector | | | 112,178 | | | 106,132 |
Concrete segment total | | $ | 131,474 | | $ | 115,561 |
Total | | $ | 393,939 |
| $ | 352,839 |
| | | | | | |
Operating income (loss) | |
|
|
|
|
|
Marine segment | | $ | 11,008 |
| $ | (10,333) |
Concrete segment | |
| (6,743) |
|
| 4,441 |
Total | | $ | 4,265 | | $ | (5,892) |
Marine Segment
Revenues for our marine segment for the six months ended June 30, 2025 were $262.5 million compared to $237.3 million for the six months ended June 30, 2024, an increase of $25.2 million, or 10.6%. The increase was primarily due to new awards and higher volume on our marine construction contracts.
Operating income for our marine segment for the six months ended June 30, 2025 was $11.0 million, compared to an operating loss of $10.3 million for the six months ended June 30, 2024, an increase of $21.3 million. The increase in gross profit was primarily driven by increased revenue, reduced indirect expenses, and project delays in 2024 that did not reoccur in 2025.
Concrete Segment
Revenues for our concrete segment for the six months ended June 30, 2025 were $131.5 million compared to $115.6 million for the six months ended June 30, 2024, an increase of $15.9 million, or 13.8%. This increase was primarily due to new awards and higher volume on our concrete contracts.
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Operating loss for our concrete segment for the six months ended June 30, 2025 was $6.7 million, compared to operating income of $4.4 million for the six months ended June 30, 2024, a decrease of $11.1 million. This decrease was primarily driven by favorable concrete project close-outs in 2024 that did not reoccur in 2025.
Liquidity and Capital Resources
Changes in working capital are normal within our business given the varying mix in size, scope, seasonality and timing of delivery of our projects. At June 30, 2025, our working capital was $76.9 million, as compared to $78.2 million at December 31, 2024. As of June 30, 2025, we had unrestricted cash on hand of $1.7 million. Our borrowing availability under the revolving portion of our Credit Agreement at June 30, 2025 was approximately $21.9 million.
Our primary liquidity needs are to finance our working capital and fund capital expenditures. Historically, our sources of liquidity have been cash provided by our operating activities, sale of underutilized assets, borrowings under our credit facilities, and equity issuances. The assessment of our liquidity requires us to make estimates of future activity and judgments about whether we are compliant with financial covenant calculations under our debt and other agreements and have adequate liquidity to operate. Significant assumptions used in our forecasted model of liquidity include forecasted sales, costs, and capital expenditures, as well as expected timing and proceeds of planned asset sale transactions. As of June 30, 2025, management believes the Company will have adequate liquidity for its operations for at least the next 12 months.
Cash Flow
The following table provides information regarding our cash flows and our capital expenditures for the three and six months ended June 30, 2025 and 2024:
| | Six months ended | ||||
| | June 30, | ||||
|
| 2025 |
| 2024 | ||
Net income (loss) | | $ | (573) | | $ | (12,660) |
Adjustments to remove non-cash and non-operating items | | | 18,510 | | | 19,512 |
Cash flow from net income after adjusting for non-cash and non-operating items | | | 17,937 | | | 6,852 |
Change in operating assets and liabilities (working capital) | | | (26,942) | | | (45,009) |
Cash flows used in operating activities | | $ | (9,005) | | $ | (38,157) |
Cash flows used in investing activities | | $ | (14,976) | | $ | (6,133) |
Cash flows (used in) provided by financing activities | | $ | (2,603) | | $ | 18,189 |
| | | | | | |
Capital expenditures (included in investing activities above) | | $ | (16,165) | | $ | (6,487) |
Operating Activities. During the six months ended June 30, 2025 we used approximately $9.0 million of cash in our operating activities. The net cash outflow was comprised of $26.9 million of outflows related to changes in net working capital, partially offset by $17.9 million of cash inflows from net income, after adjusting for non-cash items. The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $58.8 million cash outflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period and a $3.2 million decrease in operating lease liabilities, partially offset by $34.8 million of cash inflows pursuant to the relative timing and significance of project progression and billings during the period.
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Investing Activities. During the six months ended June 30, 2025, we used approximately $15.0 million of cash in our investing activities. Capital asset additions and betterments to our fleet were $16.2 million and $6.5 million in the six months ended June 30, 2025 and 2024, respectively.
Financing Activities. During the six months ended June 30, 2025, we used approximately $2.6 million of cash in our financing activities. During the six months ended June 30, 2025, we had borrowings on credit of $77.0 million and repayments of $67.0 million on the White Oak revolving credit line, payments on finance lease liabilities of $5.3 million, payments made on failed sale-leaseback arrangements of $7.2 million.
Sources of Capital
On May 15, 2023, we entered into a new three-year $103.0 million Credit Agreement with White Oak, which includes a $65.0 million asset based revolving credit line and a $38.0 million fixed asset term loan. Please see “Note 9 – Debt” in our unaudited condensed consolidated financial statements for a more detailed description of the Credit Facility.
We were in compliance with all financial covenants under the amended agreement as of June 30, 2025.
Bonding Capacity
We are often required to provide various types of surety bonds that provide additional security to our customers for our performance under certain government and private sector contracts. Our ability to obtain surety bonds depends on our capitalization, working capital, past performance and external factors, including the capacity of the overall surety market. At June 30, 2025, the capacity under our current bonding arrangement was $1.1 billion, with approximately $485 million of projects being bonded. While we believe that our current bonding capacity is sufficient to satisfy current demand for our services, any new major project opportunities may require us to seek additional bonding capacity in the future. We believe our balance sheet and working capital position will allow us to access additional bonding capacity as needed in the future.
Effect of Inflation
We are subject to the effects of inflation through increases in the cost of raw materials, and other items such as fuel, concrete and steel. Due to the relative short-term duration of our projects, we are generally able to include anticipated cost increases in the pricing of our bids.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, our results of operations are subject to risks related to fluctuations in commodity prices and fluctuations in interest rates. Historically, our exposure to foreign currency fluctuations has not been material and has been limited to temporary field accounts located in foreign countries where we perform work. Foreign currency fluctuations were immaterial in this reporting period.
Commodity price risk
We are subject to fluctuations in commodity prices for concrete, steel products and fuel. Although we routinely attempt to secure firm quotes from our suppliers, we generally do not hedge against increases in prices for commodity products. Commodity price risks may have an impact on our results of operations due to the fixed-price nature of many of our contracts, although the short-term duration of our projects may allow us to include cost increases to the pricing of our bids.
29
Interest rate risk
At June 30, 2025, we had $33.0 million in outstanding borrowings under our Credit Agreement, with a weighted average ending interest rate of 10.25%. Based on the amounts outstanding under our Credit Agreement as of June 30, 2025, a 100 basis-point increase in SOFR (or an equivalent successor rate) would increase the Company’s annual interest expense by approximately $0.3 million.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2025, we implemented new reporting systems and made changes to related internal controls. There have been no other changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II.OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information about litigation involving us, see Note 14 to the condensed consolidated financial statements in Part I of this report, which we incorporate by reference into this Item 1 of Part II.
ITEM 1A.RISK FACTORS
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors”, of our 2024 Form 10-K.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales or issuer purchases of equity securities in the period ended June 30, 2025.
30
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
None.
ITEM 6. EXHIBITS
Exhibit |
| Description |
|---|---|---|
| Amended and Restated Certificate of Incorporation of Orion Group Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the Securities and Exchange Commission on August 5, 2016 (File No. 001-33891)). | |
| Amended and Restated Bylaws of Orion Group Holdings, Inc. (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 25, 2025 (File No. 001-33891)). | |
10.1† | | Offer Letter for Alison Vasquez dated May 24, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 10, 2025 (File No. 001-33891)). |
10.2† | | Separation Agreement dated June 30, 2025 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 1, 2025 (File No. 001 33891)). |
*31.1 | | Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
*31.2 | | Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
**32.1 | | Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Title 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
31
Exhibit |
| Description |
|---|---|---|
*101.INS | | XBRL Instance Document. |
*101.SCH | | Inline XBRL Taxonomy Extension Schema Document. |
*101.CAL | | Inline XBRL Extension Calculation Linkbase Document. |
*101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
*101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. |
*101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
*104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith
** Furnished herewith
† Management contract or compensatory plan or arrangement
32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| | ORION GROUP HOLDINGS, INC. |
| | |
July 30, 2025 | By: | /s/ Travis J. Boone |
| | Travis J. Boone |
| | |
July 30, 2025 | By: | /s/ Alison G. Vasquez |
| | Alison G. Vasquez |
33
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a - 14(a)/15d - 14(a)
OF THE SECURITIES EXCHANGE ACT, AS AMENDED
I, Travis J. Boone, certify that:
1. I have reviewed this Form 10-Q of Orion Group Holdings, Inc;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By: | /s/ Travis J. Boone |
July 30, 2025 | Travis J. Boone |
| President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a - 14(a)/15d - 14(a)
OF THE SECURITIES EXCHANGE ACT, AS AMENDED
I, Alison G. Vasquez, certify that:
1. I have reviewed this Form 10-Q of Orion Group Holdings, Inc;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
By: | /s/ Alison G. Vasquez |
July 30, 2025 | Alison G. Vasquez |
| Executive Vice President and Chief Financial Officer |
Exhibit 32.1
SECTION 1350 CERTIFICATIONS
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Orion Group Holdings, Inc (the “Company”) on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Travis J. Boone, President and Chief Executive Officer and Alison G. Vasquez, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:
1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
By: | /s/ Travis J. Boone |
July 30, 2025 | Travis J. Boone |
| President and Chief Executive Officer |
| |
By: | /s/ Alison G. Vasquez |
July 30, 2025 | Alison G. Vasquez |
| Executive Vice President and Chief Financial Officer |