ORN - Earnings call 3 2023 | Orion Group Holdings, Inc.

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Operator

Thank you for standing by, and welcome to the Q3 2023 Orion Group Holdings, Inc. Earnings Conference Call.

I would now like to welcome Margaret Voice, Investor Relations for Orion to begin the call. Margaret, over to you.

Unknown Executive

Thank you all for joining us today to discuss Orion Group Holdings Third Quarter 2023 Financial Results. release last earnings our issued after night. market We Investor of our is available at section the in It website Relations oriongroupholdingsinc.com.

today's Chief I'm Chief here we'll Officer. open Danish, your call and Executive Boone, will On Financial questions. Officer of up prepared today Orion and then with remarks, call, management Travis to provide the Scott

begin, comments laws. statements forward-looking federal securities will I under like remind to would we include Before you today's that the

or be, statements comparable are words by phrases. believe, words other Forward-looking anticipate such as and intend, expect, will, identified

Statements not are historical that statements. facts are forward-looking

in and Our actual statements. reports our of financial that to statements materially vary XX-Q our from Form the on contained from of contemplated condition could XX-K. forward-looking SEC results such filings, materially operations our results forward-looking differ may including by cause and factors those these Discussion are

I'd be to Noble to will Vocation, know presenting Markets that XX Florida. at Xth Conference, also Orion -- let Capital Xrd December [indiscernible] [indiscernible] Noble like you in the

I'd that, please the now to over With ahead. turn go Travis. Travis like to call

Travis Boone

Thank and welcome, September has it's quarter what accomplished. On a back, call. I And and Margaret, Scott exciting team year. Both Orion. I our productive and are to very proud and with conference our XX, XXXX celebrated been third looking Scott our first everyone, anniversary you, of

the embracing to and and opportunity. together up to collaboration pulling When we business a eager assumed on They new our leadership Orion roles, into stepped we change of rely our transform knew that to success people era would performance. move our plate

put we to in into to we the reap the future. and feel We can of continue what benefits changes beginning are we achieve the now bullish about place

through half we told in improvement the and delivering promise. on the we you year, expected continued quarter, are we Last back that of that profitability

$X.XX. came in and diluted income net per revenue our share quarter million, $XXX adjusted around was third Our

EBITDA QX. was versus $X.X $X.X Third quarter adjusted million million in

of quality from our down higher Texas, improved profitability. delivering year-over-year Central due the our was somewhat revenue to revenue exit is While

and concrete operating improving been positive the an March, basis on profitable is it business EBITDA in adjusted Since income and quarter. basis our has third on an unconsolidated

recent will We and of and margins. concrete totaling they deliver expertise projects $XX.X are type strong require that in our have the wins million

our remained in of Dallas and activity Bid core has markets steady Houston.

last we cost to capital win. where restraining we are to pursuing mentioned the I strong, of bids is still our with factor and projects and a focused As but positioned quarter, is staying converting demand backlog, aligned in disciplined are capabilities

and Marine got lot projects. future business. to potential projects Turning We've a on our momentum of with

engineering October, for proceed several significant were in we and for infrastructure project dry very dredging, is facilities teams build new an marine includes This project our providing mooring reasons. a reported and out of awarded design creating Shipyard, in exciting that demonstrated collaboration scoping complex a contract the required to multiple dock and The we competencies power $XXX As enhancements Grand for construction, Bahama million. stability. source skill

onward the largest world. this the substantial promised of Bahamian the to upward shipyards dry venture the cruise in cost country's together. efficiency customers, largest ships historic lifting capable floating Caribbean. in especially excited Western in the Grand the projects will When part about what Bahama completed, team dry project a Hemisphere, is be will Our the of have of being These their state-of-the-art also in floating forward docks the motto savings docks and reflects spirit

completed and XXXX. just in project is Bahamian set we marine. see commence project the example of to will This for be The is immediately one opportunities

larger ships Canal U.S. that East all from work. will up need The for private accommodate billion on recap estimated way Texas at both projects created For spent port in focused the we restoration the are Louisiana facilities. in is be in public expansion to coastal coming for years, a alone the Panama the $XX quick Coast and and expansion to capturing

The marine operation infrastructure capabilities and of within well projects our our in core will bill construction. fund in areas important

quick a update team is Hawaii, our For mobilized. on

the have a starting We for in fourth game Pearl Harbor quarter. people ground and is changer clearly is and equipment the work earnest Orion. in on

spending the Pacific the in projected for be an is is dollars billions years to of of Defense urgent Naval in coming priority government. our and tens

Our work leverage of positions Pearl us opportunity. Navy with to the this strategically Harbor

look Orion's point tipping as next growth. back of I the think we'll phase accelerated on the project that this

dry contracts. is a we created We among dredging equipment get competition these questions get that activity. Army out a low. of bids, too will We need margins There's think after of to of dredging tailwind of for a well we that pent-up us winning and issue intense a dribbling Corps trap the projects to utilized lot into about smaller The won has spell Engineers near-term be fall at who XXXX 'XX. players but that demand into are not few will careful be work

and our Altogether, year. doubled end, since subsequent we've quarter A awarded last XX was million. September backlog the contracts $XXX key backlog, is totaled $XXX backlog of it At and indicator to health million, our business

X to the business drive forward. are significant there Overall, areas

good margins That network our pricing predictable then work be attractive and success. on excellence. better will winning First, with more with delivering of a includes projects key driver

relationships cash for performing customer in a special priority every time. development every investment is team safely Second, compliance. business with accountable every to Being and a and member on impetus build responsible

the call and you, over turn to I'll Scott. Thank

Scott Thanisch

Thanks, Travis. review some I'll the results. then cover third highlights quarter and

important liquidity that maintaining of strong . multiple ahead priority top over large Orion. As Financial a years. our out, strategy. span lot growth executing winning opportunity a in is Travis sheet for there's can and balance pointed is contracts a And extremely in strength

to generated our focused channel West from real our last access the monetizing including in a is yard. and million Houston assets has interest we sale-leaseback increased unique East monetizing parties. such opportunity acres in of We property. South and West East As our XXX Jones transactions, the on with estate with on development multiple succeeded as our $XX Jones I Shipping remain million capital Lavaca our $XX sale reported quarter, lenders Port

signed announced We previously land, into but have that on ran this buyer a financing issues. contract

and a will and XXXX. that of grow result a complete -- negotiating confident now performance bonding additional buyer, financial and us We're business We our as increase where are capacity. in invest provide we This we've transaction another with business our to also we to our to that Orion's improved will grow we're projects been capital and greater our and gives able larger significantly ability a position, bid win above today.

balance sheet. wrap To on the up

As had of outstanding of XX, and total $XX.X we million. $X.X cash million of debt September

a quarter underway debt Our is than to due temporary in working capital Hawaii. higher of the the second mobilization investment end in the with

results. to the million the revenue our and dry Marine construction of third prior dock Texas the $XXX.X exit segment quarter, the Central to was Hawaii project. our offset revenue in increased down X% financial Orion The in largely on market, sequentially partially from due our year. produced decline from revenue driven Moving X% from by

quarter business. lower XX.X% The Third by offset million taken in of margin $XX.X actions XXX gross basis X.X% points utilization was to increase the partially and of profit revenue reflected to last primarily compared revenue segment year. dredging Concrete or equipment or $XX.X our margins, labor gross of million improve we've

IT revenues expenses of related revenues X.X% for higher period. grew quarter year the as to of well customer legal in SG&A increased or compared to the costs as million third expenses million to due $XX.X development prior $XX.X SG&A XX.X% claims. were and or business

earnings $XXX,XXX the income diluted result was quarter million or we $X.XX $X.XX net the the $X.X or in for of items. net adjusted diluted same This prior per what Adjusted an year nonrecurring share, excludes per of was income as which achieved period. share

$X.XX or X.X%, period. EBITDA Our loss in was up was EBITDA from was per for prior was share. GAAP third and Adjusted million. net quarter X.X% quarter the the $XXX,XXX the million loss adjusted EBITDA XXXX for $X.X margin year diluted third $X.X

of Turning to the this. In and billion value X.XXx bidding quarter. in won of we a XX% for contract ratio approximately a $XXX third weighted quarter, and This win bid of resulted worth opportunities the of metrics. rate on book-to-bill $X.X million

million quarter As million Concrete out was backlog, the million, on backlog was our $XXX.X to related million this September $XXX $XXX our increase segment. XX, to of a was segment of over XX% Breaking and XX, third our Marine September XXXX. $XXX.X related backlog our

for million in backlog Of to third the awarded project our the approximately at end the Concrete over Furthermore, million segment. is quarter. related included is new $XX related marine, $XX to been we've work, this, not of million $XX while

achievable we our think pleased the are team winning our pricing. adjusted Overall, margins Marine. attractive by margins for EBITDA progress with is at to quality are low double-digit improve making We work

performing Marine EBITDA was well. in And X%. margin adjusted quarter, is segment third the Our

impact near-term mix some to dredging experiencing our due are business. from margin in lower We

the to prior margins segment Our Concrete in of margins EBITDA X.X% the negative year. in adjusted quarter compared produced

margins. EBITDA that high We coming concrete goals our toward quarters. continued margins And expect of the achieve believe adjusted these expansion business our single-digit we can over continue to

won As prestigious we the We've and fourth quarter executing look several optimistic. to ahead attractive very we and projects. well. beyond, We're are

We to advantage people and have to opportunities our the optimizing sufficient take we and of capacity assets our are in markets. grow, significant

continue. start upward be the top results there will general off, As will roll project-based and variability business, quarter-to-quarter lines when on any in and with depending bottom projects our trend but in

for backlog our is so markets. player a is reputation our and being targeted growing significant Our in

X and of see we'll our line. and QX into continue the flow positive fruit. There's of as will grow execution through to we leverage to bear should operating that in forward, quarter lot Going a Margin business, improvement continue top XXXX. been momentum

we'll with And to your Operator? call the open that, questions.

Operator

the Our Joe from Gomes Noble Instructions] line Capital. comes [Operator question first of from

Joseph Gomes

on little wanted I than the top the Came revenue. lighter So bit to start expecting. line on we were a just

level? I a was the all upward does a optimistic fourth too -- -- you line consensus trends continue. And the guys' with thinking? even quarter with general we I new softer top for wondering just were than some to online? what coming the line revenue more these think little think the the to was was quarter expecting. I million was fourth there $XXX look thoughts that consensus you for quarter you how Are around prior of contracts But Scott, trend little that is mentioned, in being

Scott Thanisch

what the up. quarter optimistic those think perspective fourth don't there But expectations. is the of pleased where I out No, ended we're the seen and quarter I've with from

We have a growing backlog.

revenue backlog will come. And quarter-to-quarter revenue from growing, the so although with a the the may vary bit timing

we're margin that the see the is margin was and so And significant pretty continue. -- to this quarter, happy performance

with we the it for good we're full some in expect and that going thinking were into think next I to would look line kind we like year, momentum. of what So have originally year,

Joseph Gomes

a little Okay. And the talked you environment. bidding bit then about

guys, that you you environment do what's get you from of Or assuming Are any happening side the on passed seeing in that? especially shouldn't some impact the that on resolution doesn't spending maybe the Washington, an area, you drag think Just it bills impact have continuing been resolution. for continuing of guys' have the in thoughts. the marine given just on the Obviously, much forever? bidding out past that

Travis Boone

and Yes. be in shift not something It's seeing kind next resolution, consistent we're the down any slowing We're yet to fairly opportunity but think Joe. impact does we bid -- seen haven't things because case been on move. to of yet, happens I are the continuing if there, what seen year of continuing

Scott Thanisch

for good And there's we generally on sides aisle from. that the projects benefit I would that both support think of the

So think needs that but space. particularly everyone country Washington has infrastructure, its in marine issues, investment I in the the agrees

Operator

of comes Our Romero Julio line the Sidoti. next question from from

Julio Romero

point the the color can that about proper to allow bid environment the when do something Maybe your like gave competitive think to instances about has targeting? for will And current with margins you're environment when appreciate sense for bid the happened? what's you projects you bidding historical might more Maybe you when abate? environment dredging. you this I

Travis Boone

time, . Obviously, continue it's to late some like going sooner, but while probably year. longer? It's this a for of We think be we'd seems for like it it's probably to to like this somewhat way little it time. to for next period continue going be some going

Scott Thanisch

Yes.

of equipment our time. long some right to our sure of engaged on lock But we're price and that we just appropriately, making mindful dynamics that ourselves and small So not we'll to work of maintenance ride the according to out we're players in than more market ourselves have pricing contributions bidding storm. being periods desperately. kind schedules that our our we're value the to making up cycles in we're at We're be low-margin for act look going and processes the of ourselves disciplined larger

Julio Romero

towards maybe inflect the ballpark? maybe line, that is not maybe marine then second to a it -- quarter on it next -- And specifically top sequentially figure? bit marine question fair the Joe's expected contracted bit. line back upward little in piggybacking a sales the Do side Or the on you quarter's they're -- about because that is is top

Scott Thanisch

in growth contributing. we shipyard early a fourth will Yes. in grand see and produce the We should start production more quarter. really have the off the more that's on line of Bahamas that start coming revenue as to Hawaii, in to marine also Grand just that, starts going continuing

top up line next come the the really the to pretty in of year. So is significantly starting next quarter then into second quarter in earnest and in the starting marine going and first

Operator

next from Our Dave Storms Markets. question of comes line Capital from the Stonegate .

David Joseph Storms

the wanted to that Will buyer? been or East potential start an with about there with new of $XX repriced? West had Just And I tag million. is If that correctly, a property. expected the price has Jones date -- remember close that

Scott Thanisch

Yes.

successfully, conversations the extent early next transaction conclude we're that engaged marketing and timing that of that be right neighborhood, we're the those year. to in that anticipate in and So still the . a continue would now same we

David Joseph Storms

then Very And one me. just for helpful. more

contract the Bahamas, in resource going continent. on have that foreseeing win there to large any challenges great projects are With either side Grand considering to the the of or constraints very you're logistical you're

Travis Boone

and for an delivering multiple it's We've multiple and equipment our and resources, teams both issue people that with got different us. be it's No, really will not project. each crews

So far country. different no internally. resource There's a the as -- concerns constraints It's as

with we're country, things the started and different different quickly So project. go there's Bahama challenges moving -- in it's getting but didn't a on we're mobilizing and

Operator

Rygiel the line Our Alex from next question comes Riley. B. from of

Alexander Rygiel

the profile Grand what's Bahama working any of the in term? some notable Coming project that to relative margin project, needs And the others? short to capital back

Scott Thanisch

Yes. going space our we've being for It's geographic our kind And a nice being talk bear we're fitting than bringing our on. customers. also a just Hawaii, that's both that margins, build project with, got of more also terms balance where different strategic We to design growth but specific services don't that. about happy to in a of some out project of contract really direction in

overall So in happy the and to margin Hawaii we in I'm marine project see with forward. the margins going expect that on as profile the continued improvement execute

Alexander Rygiel

any And in capital amount? needs then short-term working

Scott Thanisch

good There's mobilization for dynamic contract within a payments. that fairly

small. is capital working the relatively So investment

little Grand Obviously, capital modest bit in than it's working different currencies some But a in we working a anticipated need will related relatively build extra have. normally not drive to Bahamas. might what significant

Alexander Rygiel

how fourth expense? we it last fourth then about as quite we know in down the But a bit. to relative here. should in sequentially SG&A And year relates think directionally, quarter think given I to the the work about quarter third? trended increase should How SG&A

Scott Thanisch

expense as I we'll have claims that claims the we're expenses a are as where Yes, I pursuing, growth legal continued in. have little a mentioned that over of around and investing probably term, those think potentially we see going legal be that's a higher to need we couple significant fairly of customer we'll near be that levels we customer that in some kind

the fourth think and stick we're expected quarter quarter to good the where for be would measuring third a in I But beyond. would be

Alexander Rygiel

there West any positive when broke benefit And the East was apart? from

Scott Thanisch

minor. some earnest not a It's but mean material amount. was that I there . relatively money was forfeited,

Operator

Instructions] at to [Operator for to are no time. now There this would the call turn Travis further remarks. I like Boone closing questions over

Travis Boone

Mondi. Thanks,

of to proud with up progress success. for profitable business future made healthier, and transforming are this We set be have the we

we are the said would we what results doing been to have show. starting . We do, and

to appreciate happen, and to us their company. working stronger been hard all has a team make Our of make efforts all we it

adversities of are Finally, and those prayers our who with war. facing thoughts are the

to only company peaceful While for can may praying resolution some keep conflicts. insulation, devastating these being a domestic provide a U.S. we

an opportunity potential to with maintain and as Thank And you investors. communication always, participating line of current we welcome for open the today.

Operator

all to concludes for and now like our presentation, today's would us. speakers call. thank I today's thank you joining for This

may now disconnect. You

Orion (ORN) 26 Oct 232023 Q3 Earnings call transcript