ORN - Earnings call transcript Q3 2018 | Orion Group Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Preliminary Q3 2018 Orion Group Holdings Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, Mr. Shane Martin.

begin. may You

Shane Martin

welcome XXXX and Orion Holdings Group Good Conference to Call. Quarter Update Third morning, the

Joining are Vice Chief President Executive Financial me President and of Officer; Holdings today Officer; Chris Mark Finance. Stauffer, DeAlmeida, Tabb, Executive Robert President Chief Group and Vice Orion and

prepared update quarter Regarding format on results. occurred the third for delays, will call, which impact Mark about XX we've which the in allocated will that our the minutes of remarks, provide an in

for sell-side the call questions will for of the We then remainder analyst time. the open Instructions]. [Operator

this to from current SEC, call I'll otherwise. President factors Executive undertake or could future website Also, additional over providing awards this the of that, EBITDA course and of other and estimates These expenditures. call, those whether During risk please actual for Mark revenues, October filings statements materially results. any turn EBITDA, negotiation risks Mark? in to XXXX, an projections that make past morning, indicator with our growth, as our projections and forward-looking is XX, regarding quarterly end assumptions developments pending to may backlog, this XXXX and our refer no Stauffer, press margins, the information, our subject results forward-looking of statements performance statements. gross uncertainties, that among By actual well conference are gross regarding, to update we our including discussions as and margin, EBITDA, necessarily we expenses to obligation are gross margin, materially that or not which from revise those Officer. in EBITDA and will With our to described result differ statements are the on available issued annual Chief profit, release future for expectations. markets, or as new and our other administrative projects things, capital the cause Moreover, margin, XX-K results predictions of and a differ cause

Mark Stauffer

the you, call discuss and regarding press well this us for third as results third morning. moment, to CFO cover Thank the morning quarter first, in to items issued releases our market I'll preliminary holding morning I'd change but in we strategy this as outlook. results this role. quarter discuss several thanks the a related to the joining our and Shane, We're preliminary this like

million plan, across demand We solid will which we shareholder in First, both will future. services value. for we we deliver profitable strategic business for believe our segments current have the strong growth see to solid long-term opportunities with a believe continue bid believe $XX.X expand the we of addressable produced solid sector trailing second opportunities. market four demonstrating of positive the our ability our quarter have EBITDA, our to to generate results At quarter opportunities end XXXX, industrial of results. with We

third were of we have XXXX, win the work bid $XXX $XXX of currently on of approximately bids of quarter $X.X a representing successful During on rate We billion million, outstanding. XX.X%. million and

tracking billion Additionally, of opportunities. we currently are $X over

more in quarter detail. the Now looking third at

schedules. we new in During customer the quarter, awards experienced and delays project

a As average X the quick-turn a reminder, are to X we only business, months. job lasting with

or backlog, only into short we the of with total head such, period revenues new expected coming other a awards. projects quick-burn portion given cycle, the As any the in from remainder

projects. Marine our During segment, quick-burn saw significantly we less short-cycle, the third quarter, particularly in

and a expect normal However, are we to head return of as continuing, we types into projects XXXX. to activity these see

and we be of originally delayed cases prevented burning awards Concrete in timing segment, delays planned. we Texas, which different particularly the us schedules our other our our caused customer across some related and market to cases Also, in during in areas during permitting rainfall due work production to significant projects primarily in the work timing continuous backlog. Additionally, September, experienced the of delays quarter in our from than to executing

lowest our volume yards and the was This, impacted volume only of course, Concrete in generation normal placed September placed quarter. revenue fact, fraction of average In cubic the decade, a cubic monthly a yards. of segment's third and cost of month we burn during this

results. remain due Going we our customer in weather completed and company are third enjoy normal with schedules for solid outside with will We second we in improve, patterns backlog quarter cubic profitable weather projects end future patterns and our Despite impacted volume all ended normal. the yard strong the our growth. to but bid return the impact third highest expect company's control forward, Unfortunately, of and confident history. as nevertheless to to be markets, quarter, our placement our delays solid to outlook the the believe with market, drivers long-term we continues as

based However, the business of will in lumpy timing and the on construction be from projects from can weather backlog. and quarter-to-quarter liquidation of impacts awards,

during timing said, you of significantly we of result affected the delays favorable outperformed focus on fluctuations we we XXXX weather projects the project and and quarter-to-quarter of results quarter. reminder, that a as solid unfortunate execution to as conditions. do third some long-term normal It's not in working first half a fluctuations. the encourage and As That

XXXX to this - a per release XX% of $X.XX our As be in we $X.XX believe said range will share. we loss quarter in results morning, the XX% to our third

a increased million during As the renewal of $X.X reminder, extension unamortized credit the our as facility. cost expense and of third interest quarter as we result approximately of loan a expensed

business positive that preliminary including are we loan and to we and EBITDA the potentially at our announcement year company for success we continue our to focused moving our on third Additionally, drivers. Please these quarterly X. and results and market expect and closing quarter, our normal fundamental positioning in full which value. long-term us the shareholder subject increasing Separately have remains of the unrelated is continue completely company note interim test. start procedures, plan, our a strategic our performing strong the completion on to that review I the confident covenants November and customary to to XXXX, full in for for guidance leave hold outlook on the of earnings update DeAlmeida Chris quarter of the all Also, third I'm quarter, a XXXX an with forward, X, goodwill a sheet has decided flow. third opportunity new call, to after be private will of results company November competitor. therefore, XXXX were end the cash not compliance and our we to with preliminary balance

a is us today Orion external CFO for success. the candidates We and company fill will I'm Chris grow grateful strong future and it positioning into both role. to to consider for internal helping

past future integrity, the Orion with XX him strong wish in Over his leadership years, and we well endeavors. Chris served has and

of and result to our been up departure. the the abilities. for open in that, possesses a strategic business, I've full part current an this named integral upon Robert deep the As plan, Finance, the questions. senior and four the markets have I as Tabb, a Officer Robert's management confidence Robert President operator of our Financial team has call Vice He of past for turn Interim company's Chris' over to line change, understanding the of Chief years. With we'll

Operator

from with our Securities. [Operator Jon Instructions]. CJS question comes first Tanwanteng And

Jonathan Tanwanteng

And talk should customer whether permitting nature what been that delays of customary about quarter's will the also be resolved? think about a those a the the discuss awarded and little that it's the bit that - you the between were and split since ended weather Can how real issues? or has and when the we

Mark Stauffer

the things Concrete split state. - Yes, number first a of it's see affected to the revenue pretty so in of going even pretty Well, Obviously, is pullback in by kind more even. weather the answer split your - segments. was of we're both question, to the the in a part

end Our that Marine affected, of also activity storms, an didn't have side for And towards in probably had like or to and we we We while obviously the as suffer you some anything the any are those damage quarter. uptick hurricane secure did was direct aware. that, impact. had tail

they quick-burn just there's more think the will things, caused awards half expect, us permits we work, related back as to side, we'll just around temporary just the awards, I those our alter into quicker affected into we are. year get of on - on that the lull with as present call-out of Marine some - that, next the Other work, of and year, importantly, timing and the be always schedule.

quarters So timing just the thought related work quarter that future the we would will work - that actually some the the to of in Marine burn awards. of side during burn on

any to when impact. in our markets, end certainly, the So I again, is don't don't I It's burn all, It we're - I saying as has and in my lumpy kind of think today also, that anything strategy. remarks, unfortunate, all our then think and I have - able business. just it in - this timing but a weather said the of confidence full work our I drivers, we're it's

Jonathan Tanwanteng

hurricane you rate? And know run great. Then more is just I at think Okay, heading about think October. then do a normalized into XXXX, in as you'll be there you another

much pushes I'm So just until of wondering this how through year? next

Mark Stauffer

was weather I mean said, Texas 'XX, had out in a hurricane obviously, to in severe we thing. concentrated Texas a you in with time. point yes, one weather. impact October. still want in The is weather, - around I I as it but little activity pattern again, mean, funky Well, there's with respect to and QX specific a

over I you're affected pouring saw a of going us in going not. weather from to in To not able cases, of or really we was just It's to in again, you're in you're forward, pour just that the your it whether normalize. operation. a we're - guessing significant days on answer As think, question in just of number and increase going days, be to particularly some or number prevented And the concrete. time, September, get

project things seen nature, think with of course, awards the respect to of some. your we've that I and

before but award have foreign, that million would have the did it we We announced to permitting $XX big issues. that We around award have steel the be great a think in on domestic project a get whether couple would thought be that delays, us. did. procurement - Didn't for us. of we to with project projects September, to the do we tariff with of it's going project, do that One actually months great a and for

out out backlog, over overall, is, that's got but lumpiness work which some quoted just $X said, there's a there - just causing as there's the billion there's opportunities, I impacts, of some lot there. again, of we've So the

of course, see. So we'll confident we to But of - events that pattern to normalize as about pattern, days, means rain to going But terms in have weather it's over what time. and everything. actual feel real weather the rain

Jonathan Tanwanteng

great. Okay,

quick one one. Just

earnings any You sense have Do the impact impact? out you quarter. called the in of revenue the

Christopher DeAlmeida

significantly pretty be below be I And back pull below. sequentially. The think will it revenue will impact - year-over-year, we'll

Operator

next Riley question with from Cho comes our And Min B. FBR.

Min Cho

Mark, Or you of Marine Concrete $X in between pretty Concrete? about more see that mentioned opportunities. you do you're Is opportunity billion now? tracking right spread evenly and

Mark Stauffer

I little think our - of work in well, a is a Concrete, subcontractor that as we of more weighted course amount Concrete relatively Concrete - a - in that is significant towards track probably there's short.

we have visibility that in number. of So terms less

the So not a tracking we that's have visibility segment, that XX% or been subcontractor. that's Concrete unusual. in of but past couple years, has as in any of so in number the probably Again, given shorter you

industrial, include Marine talked opportunities And about. towards post-Harvey that more and weighted heavily and/or the does so it we it's

Min Cho

delays Florida. kind you Have track XXXX? about million, Okay. for in of Are combi-wall early sense. you on is there? makes expecting that Or Also, That any still the talked you potential for seen $XX delays? the

Mark Stauffer

on the been like job of storm had track. the taking impacted of some But here, still to kind impacted our like secure we we've sites. Panhandle again, That's events I just of did. mean, Florida not hits directly with have

of kind projects. we the have So secured normal

call start-up - into we I to it's disruptions. phase and so get phase, the move is slight in procurement That So ahead as 'XX. it on in track project getting

Min Cho

your buyback right Just the fourth if you then is, shares little And now? given and allowed a way quarter the can any weather potential impact update activity, the continues back buy bit if in in to you're the Okay. talk it miss the there. about quarter

Mark Stauffer

now and We are right the just I'll not ratio leverage touch not is. of we Robert - where let given on kind that Chris - are

Christopher DeAlmeida

from above, quarter, push we Xx, mind us the in preclude do it now. out doing leverage that activity in Xx second which that buybacks, two, under. - going a the Keep that still Unfortunately, so plan push to could of us below once ratio, it have a that allows will do Yes. to allows that's course, below, just we that ratio max. Xx drops buyback But the will above opportunity execute is that there that the us leverage with the well right

Operator

with Management. question Marco And Stonegate Rodriguez from comes our next Capital

Marco Rodriguez

to of still QX. hopefully, expectations wanted about well. rain, underwater Once there is maybe in of bit Concrete all 'XX? in you all as quickly weather November them as Texas projects little pull Just kind work can that into and away, QX? of for that the December, and rain October is you talk starting those more Or them? Obviously, a the in is next in terms pattern pushed some shifts that of regain all how far get as does side on - into work week Can

Mark Stauffer

But to has some ground. mean, bit as get October, much weather to work troubling then. we of can have in a then pretty favorable and get we off able we since how been we'll see kind started on said, when concrete weather. Well, done the actually I you have decently little

So get we our There's work out, in. lets we can been. terms just how quickly up, I and to a dry we'll we have we of of much only pour. can amount we to get certain as When recover have pour, sites that see back we But operations. rain that as in job the think fairly normal can can of

of So hiring all got whatever we out work the been we of work don't and that in Any just our bit do, pour there in out forward. ground. and folks have chomping a of it We've to Dallas lot work not is get to having a there. are at can pretty clip away. there take the good work going up it's at in guys We've concrete. the to that care we we the get on a matter done that weather Dallas. the It's quarter, get out push like just get we'll But go don't

quickly So on ready and possible. as are our jump as guys to we'll jump it, on it

the how So as have go just we to we'll forward out here. see weather plays

Marco Rodriguez

Got update 'XX EBITDA any of guidance? fiscal it. And your in terms

Mark Stauffer

call a We in earnings weeks. couple will do that of the on

Operator

And we with have Tanwanteng a follow-up Jon Securities. call CJS from

Jonathan Tanwanteng

has at situation? talk you competition and about you that Can or pricing on abating weather any the and rain see all if Do the impact easing that?

Mark Stauffer

you're talking a the assuming on Concrete remains I'm It Well, about pricing. on side. challenge bid still

will compression, had of about segment. We on know, call you time, some the and of As margin I in that that into down compression a - talked it - of head for kind the we the think we a a it comment what got on pricing - had same that as it's hope is pricing from opportunities abate last the just coming kind still the we've We - that that, do seeing lot with and level We us. we're we've we ground there's macro 'XX. lot will road. indicators of

of work time bode a to of relief matter some positive So that only on said, see for improvement lot we're before And that, margin of compression. this, it's think That we I a a should say very we'll very, of go we will there. - well that have after. that

some at sooner see point. feeling kind just a placing we're that we 'XX. that, later. do we're seeing is will than as and where our head margin And again, of there, rather think than some with term, And we indicators bid we're pressure. there's we a we is of Hopefully, to normal expect profile think just sooner very later on back to - this But hopeful that a get that's into for out I mean bullish part is the Texas what concrete. economy long cycle

Jonathan Tanwanteng

events to see One, places? they comes in have months in start just down hit work that to the other started because in talked then stopped were side Got the hurricanes these to any past two, two Marine that back out and and many projects And here. of come to Michael of the Army out the the or Corps the side of resumed? on it. have how And drill of be about you

Mark Stauffer

Yes.

as handful, we some. dozen the projects were just said, it of half had so down, had to that shut a or were Again, impacts, probably about And was a I to kind secure - impacted. a so we more

a Some of longer were days, were impacted others not than much, maybe little couple a that. bit

to around anything have really to expect And term. yet make don't delay see more short-term so to typically passed. of To was weren't any like as near opportunities haven't issues sure it just of a anything secure, really, do. weather second question, We'll seen going - and your answer sort we we or your and part the

the opportunities of road. come type Our down will

be of anything real will. see - Short 'XX - opportunities, out those benefit in these term, see seeing and sort of that expect terms of sometime start will events if that. that to in opportunities we'll you we'll beyond So we no

Jonathan Tanwanteng

year recent schedules due Okay. your seeing all in Last events? QX are change of you question, next the at to

Mark Stauffer

So backlog. far, high-level in work got not changing. Again, a We've backlog. we've got

to work, continue to work, which pick We we've been doing. up

much so seasonally And QX, kind weaker it's quarter. usually usually stronger a of a quarter. QX's again,

can little on Sometimes, has turned that stuff get kind head, it as of this year. a its

working hustling tremendous and on and our group very doing team that we're strong out work, our probably, diligently have is and a We up schedules long both job. company just procurements. a from business and term, very term short standpoint, So there a development

smooth of their improve. I can improve, hopeful The building work. to just will delays these it we that get some things the And we sort work. that and impacting we can we're doing look weather, And make and been so can do, I guarantee these can - external don't And out when. will that will have and to everything are we're know that can weather some us execute like work we I get control that improve. hopefully, to that we of sure customer said, of

Operator

Hirschman comes Blake Stephens. next with our from question And

Blake Hirschman

most my missed just sense to So been if asked, Apologies as have how to wanted any the of give kind ask it, by of but questions on directional but you segment? trended I did backlogs. those

Mark Stauffer

not. We'll normal large update Marine than call. we'll two ex on weighted on specifically did that the pretty weeks more project a call. it's We update bit in that booked. It's towards that evenly just with the but that little earnings split, But that, we

Blake Hirschman

And it, more. Got okay. one just then

the finding people any You or think. at your you I across that up in in - labor and/or hiring people you're has your But ticking the guys trouble your are in Texas markets been and label all? mentioned in general, market, having inflation

Mark Stauffer

a Well, always a five years an bet. our You labor team a choice. diligently years It job ago, is always will be was two from It just out challenge. challenge. But a We've now to be of employer a now. there very very, five is recruiting. Labor years does challenge two or challenge years ago. worked from tremendous

that Our a will I we're we people good are remains always that attuned want it think needed. a be important our work. always a always been a kind always But job do asset something able we've challenge. really place of most to I to find labor being to. that's and been - of as think challenge, And Again, that people

of don't in projects for the on go, us this kind With we're to stay any are we anticipate as being building challenge we cost expect structures our tune move that's through always a we've the challenge forward. and market. to so going we respect And forward. so the inflation, And we as meet able in again, on and been challenge, to meet something into that that these

Operator

the gentlemen, back to would you. call Q&A the Martin. call. Shane that of our and to Ladies portion now over turn I like Thank concludes

Shane Martin

this taking have a Orion for Also, we call. with you free in of you look behalf feel and give follow-up have morning, with time a forward future. if the to speaking Holdings, to talk like to questions, and the any we On day. would thank good us Thanks, to you Group us

Operator

you gentlemen, great have all today. day. program, and ladies a our disconnect. Everyone, may call does the you, conclude Thank you. Thank This and attending for

Orion (ORN) 18 Oct 182018 Q3 Earnings call transcript