ORN 8-K
Orion Group Holdings Inc (ORN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02 Results of Operations and Financial Condition.
On March 4, 2025, Orion Group Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2024. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 2.02 to the Company’s Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for any purpose, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Use of Non-GAAP Financial Information
To help understand the Company’s financial performance, the Company has supplemented its financial results that it provides in accordance with generally accepted accounting principles (“GAAP”) with non-GAAP financial measures. Such financial measures include Adjusted Net Income (Loss), Adjusted Earnings (Loss) Per Common Share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), Adjusted EBITDA, and Adjusted EBITDA Margin.
We believe these non-GAAP financial measures are frequently used by investors, securities analysts and other parties in the evaluation of our performance and liquidity with that of other companies in our industry. Management uses these measures to evaluate our operating performance, liquidity and capital structure. In addition, our incentive compensation plan measures performance based on our consolidated EBITDA, along with other factors. The methods we use to produce these non-GAAP financial measures may differ from methods used by other companies. These measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP. Applicable reconciliations to the nearest GAAP financial measure of each non-GAAP financial measure are included in the attached Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description |
Press Release of Orion Group Holdings, Inc. dated March 4, 2025. | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
EXHIBIT INDEX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Orion Group Holdings, Inc. | ||
Dated: March 4, 2025 | By: | /s/ Travis J. Boone |
President and Chief Executive Officer | ||
EXHIBIT 99.1
ORION GROUP HOLDINGS REPORTS
FOURTH QUARTER AND FULL YEAR 2024 RESULTS
HOUSTON – March 4, 2025 – Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading specialty construction company, today reported its financial results for the fourth quarter and full year ended December 31, 2024.
Highlights for the quarter ended December 31, 2024:
Highlights for the year ended December 31, 2024:
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
“2024 ended on a high note with our team delivering improved performance through the disciplined execution of our strategic objectives. We remain focused on smart, profitable revenue growth and better earnings. For the full year, revenue was up almost 12% to $796.4 million, gross profit improved 48% to $91 million, and Adjusted EBITDA increased 76%,” said Travis Boone, Chief Executive Officer of Orion Group Holdings.
“We did what we said we would do and we have built a cohesive organization that is focused on winning high-value, long-term projects with the right pricing to drive improved profitability. In Marine, our opportunity continues to be immense, and we have a growing pipeline in the Atlantic and Gulf regions as well as the Department of Defense work in the Pacific. Orion Concrete is a great turnaround story and our outstanding work is being recognized by Tier-one general contractors, who trust our team to deliver their projects successfully. With these partners, we are expanding both in scope and geography, ranging from 35 data centers in several states to Costco’s largest distribution center in Florida.”
“Through our high-quality work and commitment to safety, we have strengthened our reputation in our markets, and we are attracting new clients and partners, as well as deepening our longstanding relationships. Our recent contract awards reflect the value of building these strong and enduring relationships. So far in the first quarter of 2025, we have been successful in winning almost $250 million of new contract awards. We have a disciplined approach to winning projects that reflects our value.”
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“In 2025, we are focused on continuing to make investments that will help us capture key opportunities within our pipeline, which now sits at approximately $16 billion. Given Marine’s longer lead times on large projects in our backlog, we expect 2025 revenue to be slightly higher than 2024 revenue. While strategically investing in future opportunities, we are focused on continued progress expanding margins in 2025 and building our backlog. We see 2026 as a year of transformational growth.”
Fourth Quarter 2024 Results
Contract revenues of $216.9 million increased $15.3 million or 7.6% from $201.6 million in the fourth quarter last year, primarily due to an increase in revenue in both the Marine and Concrete segments.
Gross profit increased to $30.3 million or 14.0% of revenue, up from $23.0 million or 11.4% of revenue in the fourth quarter of 2023. The increases in gross profit dollars and margin were primarily driven by improved performance of projects in both segments stemming from higher-quality projects and improved execution.
Selling, general and administrative (“SG&A”) expenses were $21.6 million, up from $17.2 million in the fourth quarter of 2023. As a percentage of total contract revenues, SG&A expenses increased to 9.9% from 8.5%. The increases in SG&A dollars and percentage reflect an increase in the fourth quarter of 2024 in compensation expense, business development spending and legal expenses.
Net income for the fourth quarter was $6.8 million ($0.17 per diluted share) compared to a net loss of $4.4 million ($0.13 per diluted share) in the fourth quarter of 2023.
Fourth quarter 2024 net income included $0.4 million ($0.01 diluted loss per share) of non-recurring items. Fourth quarter 2024 adjusted net income was $6.4 million ($0.16 diluted income per share).
EBITDA for the fourth quarter of 2024 was $14.9 million, resulting in a 6.9% EBITDA margin, as compared to EBITDA of $6.5 million, resulting in a 3.2% EBITDA margin for the fourth quarter last year. Adjusted EBITDA increased to $17.1 million, or a 7.9% Adjusted EBITDA margin. This compares to Adjusted EBITDA of $14.8 million, or 7.3% Adjusted EBITDA margin in the prior year period.
Total backlog at December 31, 2024 was $729.1 million, compared to $690.5 million at September 30, 2024 and $762.2 million at December 31, 2023. Backlog for the Marine segment was $582.8 million at December 31, 2024, compared to $537.0 million at September 30, 2024 and $602.5 million at December 31, 2023. Backlog for the Concrete segment was $146.3 million at December 31, 2024, compared to $153.5 million at September 30, 2024 and $159.7 million at December 31, 2023.
Total backlog, including awards issued subsequent to quarter end, increased almost $100 million to $977 million as of the issuance of this release compared to total backlog, including awards issued subsequent to quarter end last year, of $883 million.
Balance Sheet Update
As of December 31, 2024, current assets were $269.3 million, including unrestricted cash and cash equivalents of $28.3 million. Total debt outstanding as of December 31, 2024 was $23.2 million. At the end of the quarter, the Company had no outstanding borrowings under its revolving credit facility.
On March 4, 2025, the Company executed Amendment No. 6 to the Loan Agreement with White Oak Commercial Finance, LLC and the Lenders party thereto. This amendment, among other things, (i) reduces term loan and revolver pricing by 50 basis-points, (ii) provides greater operational and administrative flexibility, including less restrictive financial covenants and (iii) extends the maturity date to May 15, 2028 resetting the prepayment and make-whole.
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2025 Financial Guidance
The following forward-looking guidance reflects the Company’s current expectations and beliefs as of March 4, 2025 and is subject to change. The following statements apply only as of the date of this disclosure and are expressly qualified in their entirety by the cautionary statements included elsewhere in this document.
For the full year 2025, Orion currently anticipates the following:
| ● | Revenue in the range of $800 million to $850 million |
| ● | Adjusted EBITDA in the range of $42 million to $46 million |
| ● | Adjusted EPS in the range of $0.11 to $0.17 |
| ● | Capital expenditures in the range of $25 million to $35 million |
Orion Group Holdings will host a conference call to discuss the fourth quarter and full year 2024 financial results at 9:00 a.m. Eastern Time/8:00 a.m. Central Time on Wednesday, March 5, 2025. To participate, please call (844) 481-2994 and ask for the Orion Group Holdings Conference Call. A live audio webcast of the call will also be available on the Investor Relations section of Orion’s website at https://www.oriongroupholdingsinc.com/investor/ and will be archived for replay.
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, Hawaii, 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 place and finish, site prep, layout, forming, and rebar placement for large commercial, structural and other associated business areas. The Company is headquartered in Houston, Texas with regional offices throughout its operating areas. The Company’s website is located at: https://www.oriongroupholdingsinc.com.
Backlog Definition
Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress but are 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. The typical duration of the Company’s projects ranges from three to nine months on shorter projects to multiple years on larger projects. The Company's backlog at any point in time includes both revenue it expects to realize during the next twelve-month period as well as revenue it expects to realize in future years.
Non-GAAP Financial Measures
This press release includes the financial measures “adjusted net income/loss,” “adjusted earnings/loss 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 that use similarly titled measures. 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/loss and adjusted earnings/loss per share should not be viewed as an equivalent financial measure to net income/loss or earnings/loss per share. Adjusted net income/loss and adjusted earnings/loss per share exclude certain items that management believes are one-time items or items whose timing or amount cannot be reasonably estimated. The Company believes these adjusted financial measures are a useful supplement to earnings/loss calculated in accordance with GAAP.
Orion Group Holdings defines EBITDA as net income/loss before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is calculated by adjusting EBITDA for certain items that management believes
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are one-time items or items whose timing or amount cannot be reasonably estimated. 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 GAAP, or as a measure of the Company's profitability or liquidity.
Forward-Looking Statements
The matters discussed in this press release may constitute or include projections or other forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, of which provisions 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, guidance, outlook, assumptions, or goals. In particular, statements regarding our pipeline of opportunities, financial guidance and future operations or results, including those set forth in this press release, and any other statement, express or implied, concerning financial guidance or 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 or maintain compliance with debt covenants, and including any estimates, guidance, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward-looking statements also include project award announcements, estimated project start dates, ramp-up of contract activity 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, 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. Considering 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, except as required by law.
Please refer to the Company's 2023 Annual Report on Form 10-K, filed on March 1, 2024 which is available on its website at www.oriongroupholdingsinc.com or at the SEC's website at www.sec.gov, and filings and press releases subsequent to such Annual Report on Form 10-K (including the Company’s 2024 Annual Report on Form 10-K once filed) for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts.
Contacts:
Financial Profiles, Inc.
Margaret Boyce 310-622-8247
4
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Information)
(Unaudited)
| | Three months ended | | Year ended | ||||||||
| | December 31, | | December 31, | ||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Contract revenues |
| | 216,880 |
| | 201,594 |
| | 796,394 |
| | 711,778 |
Costs of contract revenues |
| | 186,603 |
| | 178,627 |
| | 705,234 |
| | 650,115 |
Gross profit |
| | 30,277 |
| | 22,967 |
| | 91,160 |
| | 61,663 |
Selling, general and administrative expenses |
| | 21,557 |
| | 17,160 |
| | 82,537 |
| | 69,431 |
Amortization of intangible assets |
| | — |
| | 44 |
| | — |
| | 427 |
Gain on disposal of assets, net | | | (912) |
| | (540) |
| | (2,898) |
| | (8,455) |
Intangible asset impairment loss |
| | — |
| | 6,890 |
| | — |
| | 6,890 |
Operating income (loss) |
| | 9,632 |
| | (587) |
| | 11,521 |
| | (6,630) |
Other (expense) income: |
| |
|
| |
|
| |
|
| |
|
Other income |
| | 58 |
| | 49 |
| | 357 |
| | 641 |
Interest income |
| | 110 |
| | 13 |
| | 207 |
| | 103 |
Interest expense |
| | (3,045) |
| | (3,985) |
| | (13,381) |
| | (11,659) |
Other expense, net |
| | (2,877) |
| | (3,923) |
| | (12,817) |
| | (10,915) |
Income (loss) before income taxes |
| | 6,755 |
| | (4,510) |
| | (1,296) |
| | (17,545) |
Income tax expense (benefit) |
| | 1 |
| | (145) |
| | 348 |
| | 330 |
Net income (loss) | | $ | 6,754 | | $ | (4,365) | | $ | (1,644) | | $ | (17,875) |
| | | | | | | | | | | | |
Basic income (loss) per share | | $ | 0.17 | | $ | (0.13) | | $ | (0.05) | | $ | (0.55) |
Diluted income (loss) per share | | $ | 0.17 | | $ | (0.13) | | $ | (0.05) | | $ | (0.55) |
Shares used to compute income (loss) per share: | |
|
| |
|
| |
|
| |
|
|
Basic | |
| 38,930,587 | | | 32,528,213 | |
| 34,783,256 | | | 32,346,992 |
Diluted | |
| 38,943,811 | | | 32,528,213 | |
| 34,783,256 | | | 32,346,992 |
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Orion Group Holdings, Inc. and Subsidiaries
Selected Results of Operations
(In Thousands)
(Unaudited)
| | Three months ended December 31, | | ||||||||
| | 2024 | | 2023 | | ||||||
|
| Amount |
| Percent |
| Amount |
| Percent |
| ||
| | (dollar amounts in thousands) | | ||||||||
Contract revenues | | | | | | | | | | | |
Marine segment | | | |
| | | | | | | |
Public sector | | $ | 112,433 | | 78.1 | % | $ | 98,275 | | 72.7 | % |
Private sector | | | 31,526 | | 21.9 | % | | 36,888 | | 27.3 | % |
Marine segment total | | $ | 143,959 | | 100.0 | % | $ | 135,163 | | 100.0 | % |
Concrete segment | | | |
| | | | |
| | |
Public sector | | $ | 7,982 | | 10.9 | % | $ | 2,635 | | 4.0 | % |
Private sector | | | 64,939 | | 89.1 | % | | 63,796 | | 96.0 | % |
Concrete segment total | | $ | 72,921 | | 100.0 | % | $ | 66,431 | | 100.0 | % |
Total | | $ | 216,880 |
| | | $ | 201,594 |
| | |
| | | | | | | | | | | |
Operating income (loss) | |
|
|
|
| |
|
|
|
| |
Marine segment | | $ | 7,165 |
| 5.0 | % | $ | 4,257 |
| 3.1 | % |
Concrete segment | |
| 2,467 |
| 3.4 | % |
| (4,844) |
| (7.3) | % |
Total | | $ | 9,632 | | | | $ | (587) |
|
| |
| | | | | | | | | | | |
| | Year ended December 31, | | ||||||||
| | 2024 | | 2023 | | ||||||
|
| Amount |
| Percent |
| Amount |
| Percent |
| ||
| | (dollar amounts in thousands) | | ||||||||
Contract revenues | | | | | | | | | | | |
Marine segment | | | |
| | | | | | | |
Public sector | | $ | 403,428 | | 77.4 | % | $ | 292,088 | | 73.8 | % |
Private sector | | | 117,822 | | 22.6 | % | | 103,829 | | 26.2 | % |
Marine segment total | | $ | 521,250 | | 100.0 | % | $ | 395,917 | | 100.0 | % |
Concrete segment | | | |
| | | | |
| | |
Public sector | | $ | 28,193 | | 10.2 | % | $ | 20,297 | | 6.4 | % |
Private sector | | | 246,951 | | 89.8 | % | | 295,564 | | 93.6 | % |
Concrete segment total | | $ | 275,144 | | 100.0 | % | $ | 315,861 | | 100.0 | % |
Total | | $ | 796,394 |
| | | $ | 711,778 |
| | |
| | | | | | | | | | | |
Operating income (loss) | |
|
|
|
| |
|
|
|
| |
Marine segment | | $ | 2,318 |
| 0.4 | % | $ | 3,670 |
| 0.9 | % |
Concrete segment | |
| 9,203 |
| 3.3 | % |
| (10,300) |
| (3.3) | % |
Total | | $ | 11,521 | | | | $ | (6,630) |
|
| |
6
Orion Group Holdings, Inc. and Subsidiaries
Reconciliation of Adjusted Net Income (Loss)
(In thousands except per share information)
(Unaudited)
| | Three months ended | | Year ended | ||||||||
| | December 31, | | December 31, | ||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Net income (loss) | | $ | 6,754 | | $ | (4,365) | | $ | (1,644) | | $ | (17,875) |
Adjusting items and the tax effects: | | | | | | | | | | | | |
Net gain on Port Lavaca South Yard property sale | | | — | | | — | | | — | | | (5,202) |
Share-based compensation | | | 1,079 | | | 209 | | | 4,009 | | | 2,042 |
ERP implementation | | | 488 | | | 568 | |
| 2,129 | |
| 1,378 |
Severance | |
| 19 | |
| 683 | |
| 104 | |
| 809 |
Intangible asset impairment loss | | | — | | | 6,890 | | | — | | | 6,890 |
Process improvement initiatives | |
| 589 | |
| — | |
| 982 | |
| — |
Tax rate of 23% applied to adjusting items (1) | |
| (501) | |
| (1,921) | |
| (1,662) | |
| (1,361) |
Total adjusting items and the tax effects | |
| 1,674 | |
| 6,429 | |
| 5,562 | |
| 4,556 |
Federal and state tax valuation allowances | |
| (2,069) | |
| 277 | |
| 1,275 | |
| 3,238 |
Adjusted net income (loss) | | $ | 6,359 | | $ | 2,341 | | $ | 5,193 | | $ | (10,081) |
Adjusted EPS | | $ | 0.16 | | $ | 0.07 | | $ | 0.15 | | $ | (0.31) |
| (1) | Items are taxed discretely using the Company's blended tax rate. |
7
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, |
| ||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||
Net income (loss) | | $ | 6,754 | | $ | (4,365) | | $ | (1,644) | | $ | (17,875) | |
Income tax expense (benefit) | |
| 1 | |
| (145) | |
| 348 | |
| 330 | |
Interest expense, net | |
| 2,935 | |
| 3,972 | |
| 13,174 | |
| 11,556 | |
Depreciation and amortization | |
| 5,207 | |
| 6,996 | |
| 22,765 | |
| 23,878 | |
EBITDA (1) | |
| 14,897 | |
| 6,458 | |
| 34,643 | |
| 17,889 | |
Share-based compensation | | | 1,079 | | | 209 | | | 4,009 | | | 2,042 | |
Net gain on Port Lavaca South Yard property sale | | | — | | | — | | | — | | | (5,202) | |
ERP implementation | | | 488 | | | 568 | | | 2,129 | | | 1,378 | |
Severance | |
| 19 | |
| 683 | |
| 104 | |
| 809 | |
Intangible asset impairment loss | |
| — | |
| 6,890 | |
| — | |
| 6,890 | |
Process improvement initiatives | | | 589 | | | — | | | 982 | | | — | |
Adjusted EBITDA(2) | | $ | 17,072 | | $ | 14,808 | | $ | 41,867 | | $ | 23,806 | |
Operating income margin | |
| 4.4 | % |
| (0.3) | % |
| 1.5 | % |
| (1.0) | % |
Impact of depreciation and amortization | |
| 2.5 | % |
| 3.5 | % |
| 2.9 | % |
| 3.4 | % |
Impact of share-based compensation | | | 0.5 | % | | 0.1 | % | | 0.5 | % | | 0.3 | % |
Impact of net gain on Port Lavaca South Yard property sale | | | — | % | | — | % | | — | % | | (0.7) | % |
Impact of ERP implementation | | | 0.2 | % | | 0.3 | % | | 0.3 | % | | 0.2 | % |
Impact of severance | |
| — | % |
| 0.3 | % |
| — | % |
| 0.1 | % |
Impact of intangible asset impairment loss | |
| — | % |
| 3.4 | % |
| — | % |
| 1.0 | % |
Impact of process improvement initiatives | | | 0.3 | % |
| — | % |
| 0.1 | % |
| — | % |
Adjusted EBITDA margin(2) | |
| 7.9 | % |
| 7.3 | % |
| 5.3 | % |
| 3.3 | % |
| (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 share-based compensation, net gain on Port Lavaca South Yard property sale, ERP implementation, severance, intangible asset impairment loss and process improvement initiatives. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues. |
8
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, |
| ||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||
Operating income (loss) |
| | 7,165 |
| | 4,257 |
| | 2,467 |
| | (4,844) | |
Other income |
| | 25 |
| | 49 |
| | 33 |
| | — | |
Depreciation and amortization |
| | 4,288 |
| | 5,801 |
| | 919 |
| | 1,195 | |
EBITDA (1) |
| | 11,478 |
| | 10,107 |
| | 3,419 |
| | (3,649) | |
Share-based compensation | | | 976 | | | 175 | | | 103 | | | 34 | |
ERP implementation | | | 325 | | | 352 | | | 163 | | | 216 | |
Severance |
| | 19 |
| | 683 |
| | — |
| | — | |
Intangible asset impairment loss | | | — | | | — | | | — | | | 6,890 | |
Process Improvement initiatives | | | 387 | | | — | | | 202 | | | — | |
Adjusted EBITDA(2) | | $ | 13,185 | | $ | 11,317 | | $ | 3,887 | | $ | 3,491 | |
Operating income margin | |
| 5.0 | % |
| 3.2 | % |
| 3.4 | % |
| (7.3) | % |
Impact of other income | | | — | % |
| — | % |
| — | % |
| — | % |
Impact of depreciation and amortization | |
| 3.0 | % |
| 4.3 | % |
| 1.3 | % |
| 1.8 | % |
Impact of share-based compensation | | | 0.7 | % | | 0.1 | % | | 0.1 | % | | 0.1 | % |
Impact of ERP implementation | | | 0.2 | % | | 0.3 | % | | 0.2 | % | | 0.3 | % |
Impact of severance | |
| — | % | | 0.5 | % | | — | % | | — | % |
Impact of intangible asset impairment loss | | | — | % | | — | % | | — | % | | 10.4 | % |
Impact of process improvement initiatives | | | 0.3 | % | | — | % | | 0.3 | % | | — | % |
Adjusted EBITDA margin (2) | |
| 9.2 | % |
| 8.4 | % |
| 5.3 | % |
| 5.3 | % |
| | | | | | | | | | | | | |
| | Marine | | Concrete |
| ||||||||
| | Year ended | | Year ended |
| ||||||||
| | December 31, | | December 31, |
| ||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||
Operating income (loss) |
| | 2,318 |
| | 3,670 |
| | 9,203 |
| | (10,300) | |
Other income |
| | 242 |
| | 641 |
| | 115 |
| | — | |
Depreciation and amortization |
| | 18,693 |
| | 18,219 |
| | 4,072 |
| | 5,659 | |
EBITDA (1) |
| | 21,253 |
| | 22,530 |
| | 13,390 |
| | (4,641) | |
Share-based compensation | | | 3,711 | | | 1,958 | | | 298 | | | 84 | |
Net gain on Port Lavaca South Yard property sale | | | — | | | (5,202) | | | — | | | — | |
ERP implementation | | | 1,393 | | | 766 | | | 736 | | | 612 | |
Severance |
| | 104 |
| | 721 |
| | — |
| | 88 | |
Intangible asset impairment loss | | | — | | | — | | | — | | | 6,890 | |
Process improvement initiatives | | | 643 | | | — | | | 339 | | | — | |
Adjusted EBITDA(2) | | $ | 27,104 | | $ | 20,773 | | $ | 14,763 | | $ | 3,033 | |
Operating income margin | |
| 0.5 | % |
| 0.8 | % |
| 3.4 | % |
| (3.3) | % |
Impact of other income | | | — | % |
| 0.2 | % |
| — | % |
| — | % |
Impact of depreciation and amortization | |
| 3.6 | % |
| 4.6 | % |
| 1.5 | % |
| 1.9 | % |
Impact of share-based compensation | | | 0.7 | % | | 0.5 | % | | 0.1 | % | | — | % |
Impact of net gain on Port Lavaca South Yard property sale | | | — | % | | (1.3) | % | | — | % | | — | % |
Impact of ERP implementation | | | 0.3 | % | | 0.2 | % | | 0.3 | % | | 0.2 | % |
Impact of severance | |
| — | % |
| 0.2 | % |
| — | % |
| — | % |
Impact of intangible asset impairment loss | | | — | % |
| — | % |
| — | % |
| 2.2 | % |
Impact of process improvement initiatives | | | 0.1 | % |
| — | % |
| 0.1 | % |
| — | % |
Adjusted EBITDA margin (2) | |
| 5.2 | % |
| 5.2 | % |
| 5.4 | % |
| 1.0 | % |
| (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 share-based compensation, net gain on Port Lavaca South Yard property sale, ERP implementation, severance, intangible asset impairment loss and process improvement initiatives. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues. |
9
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows Summarized
(In Thousands)
(Unaudited)
| | Three months ended | | Year ended | ||||||||||
| | December 31, | | December 31, | ||||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
Net income (loss) | | $ | 6,754 | | $ | (4,365) | | $ | (1,644) | | $ | (17,875) | ||
Adjustments to remove non-cash and non-operating items | | | 8,144 | | | 16,248 | | | 36,018 | | | 32,641 | ||
Cash flow from net income after adjusting for non-cash and non-operating items | | | 14,898 | | | 11,883 | | | 34,374 | | | 14,766 | ||
Change in operating assets and liabilities (working capital) | | | (1,535) | | | 33,796 | | | (21,698) | | | 2,412 | ||
Cash flows provided by operating activities | | $ | 13,363 | | $ | 45,679 | | $ | 12,676 | | $ | 17,178 | ||
Cash flows (used in) provided by investing activities | | $ | (2,760) | | $ | (3,221) | | $ | (11,482) | | $ | 2,170 | ||
Cash flows (used in) provided by financing activities | | $ | (10,541) | | $ | (15,401) | | $ | (3,816) | | $ | 7,806 | ||
| | | | | | | | | | | | | ||
Capital expenditures (included in investing activities above) | | $ | (3,447) | | $ | (2,231) | | $ | (14,091) | | $ | (8,909) | ||
10
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
| | Year ended December 31, | ||||
|
| 2024 |
| 2023 | ||
Cash flows from operating activities |
| |
|
| |
|
Net loss | | $ | (1,644) | | $ | (17,875) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Depreciation and amortization | |
| 15,545 | |
| 18,844 |
Amortization of ROU operating leases | |
| 9,960 | |
| 6,763 |
Amortization of ROU finance leases | |
| 7,220 | |
| 5,034 |
Write-off of debt issuance costs upon debt modification | |
| — | |
| 119 |
Amortization of deferred debt issuance costs | |
| 2,015 | |
| 1,616 |
Deferred income taxes | |
| (27) | |
| (103) |
Stock-based compensation | |
| 4,009 | |
| 2,042 |
Gain on disposal of assets, net | |
| (2,898) | |
| (8,455) |
Intangible asset impairment loss | | | — | | | 6,890 |
Allowance for credit losses | | | 194 | | | (109) |
Change in operating assets and liabilities: | | | | | | |
Accounts receivable | |
| 1,892 | |
| 14,129 |
Income tax receivable | |
| 143 | |
| (224) |
Inventory | |
| (554) | |
| (729) |
Prepaid expenses and other | |
| 41 | |
| (55) |
Contract assets | |
| (2,885) | |
| (37,619) |
Accounts payable | |
| 16,018 | |
| (4,507) |
Accrued liabilities | |
| (10,920) | |
| 11,817 |
Operating lease liabilities | |
| (8,662) | | | (6,807) |
Income tax payable | |
| (63) | |
| 48 |
Contract liabilities | |
| (16,708) | |
| 26,359 |
Net cash provided by operating activities | |
| 12,676 | |
| 17,178 |
Cash flows from investing activities: | | | | | | |
Proceeds from sale of property and equipment | |
| 2,609 | |
| 11,079 |
Purchase of property and equipment | |
| (14,091) | |
| (8,909) |
Net cash (used in) provided by investing activities | |
| (11,482) | |
| 2,170 |
Cash flows from financing activities: | | | | | | |
Borrowings on credit | |
| 72,589 | |
| 106,958 |
Payments made on borrowings on credit | |
| (73,067) | |
| (104,431) |
Payments on term loan | | | (15,000) | | | — |
Proceeds from failed sale-leaseback arrangement | |
| — | |
| 14,702 |
Payments on failed sale-leaseback arrangement | | | (5,855) | | | — |
Proceeds from sale-leaseback financing | |
| — | |
| 2,397 |
Loan costs from Credit Agreement and prior credit facility | | | (393) | | | (6,537) |
Payments of finance lease liabilities | | | (8,929) | | | (4,791) |
Proceeds from issuance of common stock | | | 26,421 | | | — |
Payments related to tax withholding for share-based compensation | | | (479) | | | (492) |
Exercises of stock options | | | 897 | | | — |
Net cash (used in) provided by financing activities | |
| (3,816) | |
| 7,806 |
Net change in cash, cash equivalents and restricted cash | |
| (2,622) | |
| 27,154 |
Cash, cash equivalents and restricted cash at beginning of period | |
| 30,938 | |
| 3,784 |
Cash, cash equivalents and restricted cash at end of period | | $ | 28,316 | | $ | 30,938 |
11
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Information)
|
| December 31, |
| December 31, | ||
| | 2024 | | 2023 | ||
| | (Unaudited) | | | | |
|
| |
|
| |
|
Current assets: |
| |
|
| |
|
Cash and cash equivalents | | $ | 28,316 | | $ | 30,938 |
Accounts receivable: | |
| | |
| |
Trade, net of allowance for credit losses of $555 and $361, respectively | |
| 106,304 | |
| 101,229 |
Retainage | |
| 35,633 | |
| 42,044 |
Income taxes receivable | |
| 483 | |
| 626 |
Other current | |
| 3,127 | |
| 3,864 |
Inventory | |
| 1,974 | |
| 2,699 |
Contract assets | |
| 84,407 | |
| 81,522 |
Prepaid expenses and other | |
| 9,084 | |
| 8,894 |
Total current assets | |
| 269,328 | |
| 271,816 |
Property and equipment, net of depreciation | |
| 86,098 | |
| 87,834 |
Operating lease right-of-use assets, net of amortization | |
| 27,101 | |
| 25,696 |
Financing lease right-of-use assets, net of amortization | |
| 25,806 | |
| 23,602 |
Inventory, non-current | |
| 7,640 | |
| 6,361 |
Deferred income tax asset | | | 17 | | | 26 |
Other non-current | |
| 1,327 | |
| 1,558 |
Total assets | | $ | 417,317 | | $ | 416,893 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
|
| |
|
|
Current liabilities: | |
|
| |
|
|
Current debt, net of issuance costs | | $ | 426 | | $ | 13,453 |
Accounts payable: | |
| | |
| |
Trade | |
| 97,139 | |
| 80,294 |
Retainage | |
| 1,310 | |
| 2,527 |
Accrued liabilities | |
| 26,294 | |
| 37,074 |
Income taxes payable | |
| 507 | |
| 570 |
Contract liabilities | |
| 47,371 | |
| 64,079 |
Current portion of operating lease liabilities | |
| 7,546 | |
| 9,254 |
Current portion of financing lease liabilities | |
| 10,580 | |
| 8,665 |
Total current liabilities | |
| 191,173 | |
| 215,916 |
Long-term debt, net of debt issuance costs | |
| 22,751 | |
| 23,740 |
Operating lease liabilities | |
| 20,837 | |
| 16,632 |
Financing lease liabilities | |
| 11,346 | |
| 13,746 |
Other long-term liabilities | |
| 20,503 | |
| 25,320 |
Deferred income tax liability | |
| 28 | |
| 64 |
Total liabilities | |
| 266,638 | |
| 295,418 |
Stockholders’ equity: | |
|
| |
|
|
Preferred stock -- $0.01 par value, 10,000,000 authorized, none issued | |
| — | |
| — |
Common stock -- $0.01 par value, 50,000,000 authorized, 39,681,597 and 33,260,011 issued; 38,970,366 and 32,548,780 outstanding at December 31, 2024 and December 31, 2023, respectively | |
| 397 | |
| 333 |
Treasury stock, 711,231 shares, at cost, as of December 31, 2024 and December 31, 2023, respectively | |
| (6,540) | |
| (6,540) |
Additional paid-in capital | |
| 220,513 | |
| 189,729 |
Retained loss | |
| (63,691) | |
| (62,047) |
Total stockholders’ equity | |
| 150,679 | |
| 121,475 |
Total liabilities and stockholders’ equity | | $ | 417,317 | | $ | 416,893 |
12
Orion Group Holdings, Inc. and Subsidiaries
Guidance – Adjusted EBITDA Reconciliation
(In Thousands)
(Unaudited)
| | Year Ending | ||||
| | December 31, 2025 | ||||
| | | Low | | | High |
Net (loss) income | | $ | (2,226) | | $ | 1,533 |
Income tax benefit | |
| (291) | |
| (50) |
Interest expense, net | |
| 9,815 | |
| 9,815 |
Depreciation and amortization | |
| 25,613 | |
| 25,613 |
EBITDA (1) | |
| 32,911 | |
| 36,911 |
Share-based compensation | | | 7,604 | | | 7,604 |
ERP implementation | | | 1,485 | | | 1,485 |
Adjusted EBITDA(2) | | $ | 42,000 | | $ | 46,000 |
| (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 share-based compensation and ERP implementation. |
Orion Group Holdings, Inc. and Subsidiaries
Guidance – Adjusted EPS Reconciliation
(In thousands except per share information)
(Unaudited)
| | Year Ending | ||||
| | December 31, 2025 | ||||
| | | Low | | | High |
Net (loss) income | | $ | (2,226) | | $ | 1,533 |
Adjusting items and the tax effects: | | | | | | |
Share-based compensation | | | 7,604 | | | 7,604 |
ERP implementation | | | 1,485 | | | 1,485 |
Tax rate of 23% applied to adjusting items (1) | |
| (2,090) | |
| (2,090) |
Total adjusting items and the tax effects | |
| 6,999 | |
| 6,999 |
Federal and state tax valuation allowances | |
| (471) | |
| (1,632) |
Adjusted net (loss) income | | $ | 4,302 | | $ | 6,900 |
Adjusted EPS | | $ | 0.11 | | $ | 0.17 |
| (1) | Items are taxed discretely using the Company's blended tax rate. |
13