ORN - Earnings call transcript Q1 2024 | Orion Group Holdings, Inc.

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Operator

Good morning, and welcome to the Orion Group Holdings First Quarter 2024 Earnings Conference Call. [Operator Insrtuctions]Please note this event is being recorded. I would now like to turn the conference over to Margaret Boyce of Investor Relations for Orion. Please go ahead.

Margaret Boyce

Thank you, operator, and thank you all for joining us today to discuss Orion Group Holdings' First Quarter 2024 financial results. release last earnings our issued after night. market We Relations our website available on Orion of Investor the inc.com. It's at section Group Holdings today Chief Boone, Scott Officer. with of here and Financial Thanisch, Executive Orion Chief I'm Officer Travis today's open the we'll On and your up management prepared call will remarks, call, then questions. for provide

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

Statements identified comparable intend, are statements phrases. are believe, words by other anticipate or as facts be, Forward-looking historical words will, expect, and are that not statements. such forward-looking

and Our actual statements. of financial that reports to materially like vary XX-Q from these I'd please from forward-looking With of that, contemplated condition turn XX-K. to go could forward-looking on results Form to in statements such ahead. materially operations our including results differ are contained may Travis. now and by cause factors those these call our the over SEC Travis, our Discussion filings,

Travis Boone

good first thank cover quarter results us. start as morning, financial overview first with on our Thank I'll you, more of providing Scott everyone, a call. joining tremendous Margaret, to turn you results. our million to adjusted as quarter of conference and revenue color it $X.X the We over I'll Then million. $XXX.X before opportunities generated and and quick XXXX quarter first of for well our EBITDA

continuing our to are We focus increasing on margins.

with the current pipeline throughout expect and year opportunities. our revenue build to We of backlog strong

These under or construction generated completion contracts. outside our is from major margins anticipated the control. delays on delays related critical affected total reduced X for by of contract first our impact normal projects not occur. In these was unexpected these being impacts activity It large for scheduling quarter to seasonally projects projects the revenues slowest should addition revenue period, to to on of

be. teams quickly projects where respond to project to nimble and have back We they that the get need strong are able to

this the $XXX the work back services, recover with million year in reiterating range to the for of in on After work business. We $XX of momentum are EBITDA the million expect in million healthier upcoming of hard range with construction, to foundation reap throughout and in are level much adjusted especially quarters the are first seeing our to now the activity we $XXX strong in we in revenue expectations benefits. and transforming position XXXX, We Based XXXX the our full half that year. marine we million. $XX quarter the the business a solid entered a our a to for

We teams have and on invested for strategic are predictable in excellence our the put mission, and clear our vastly and processes. have development business everyone growth execution. improved procedures disciplines, crystal and team same in delivering Expectations place. through outstanding is aligned We processes

count in has Finally, opportunity we pursue. increased that efforts business reflects opportunities to organization. driving changes and are projects pipeline energy assets. a and our measure strengthened to is potential the balance the sheet In throughout best These way and The of might noncore we momentum all gaining $X grown pipeline The from over traction. are a over just of real $XX our development large we year, investments billion. volume in made our billion have the part monetize

and specialized The of and gives supply. to new our coming our demand is areas on for attention construction addition, intensifying win exceed could diversity years, In of projects both our footprint funding drive sources and are believe construction market. great geographic the confidence in expertise, industry me we marine growth. we overlaid ability contracts the that and exploding, with In

fit our be on construction mainly projects this capitalizing marine space quality energy Orion's and in that on of will unique number focus opportunities. capabilities, the Given

we grow, marine will and construction. are as an remain these are to of be revenue marine comparison smaller here portion a integral trends of but examples. We driving secular our some to dredging it expect Strong part opportunities, business in our

such First, funding, transportation $X bridges waterways, government the for $X.X bridges ports, other for billion infrastructure water billion for projects. and trillion infrastructure and The among bill and projects public a things. multiyear will major as $XXX waterways has provide catalyst planned and ports roads, sector

are and XXXX funds will these just projects We flow they more in beginning to beyond. to start see and believe drive

the ships Panama to today through were XX larger years ships expansion The or than larger they much pass Canal ports. Second, are XX ago. allows of

As Baltimore unfortunate along ports The and interests. upgrades a a the Eastern expand throughout larger passing U.S. incident vessels the to on spending to are infrastructure Pacific through required upgrades the all infrastructure initiative accommodate spotlight Navy the ports. result, in needed in Deterrence U.S. billions shines KeyBridge Gulf channels. country deepen The the is Seaboard the and protect to

submarines the subcontractor Our for a the team dock nuclear history, are in project Harbor, we Pearl Navy revitalize Pacific. The is much Puget has to U.S. in in construction largest investment joint the but planned and Sound Naval dry Shipyard facilities the larger to where marine project for Navy $X.X build a not to long. billion venture a other

well-established this to being the anchoring first at team I the was The in Pacific. in We Navy ceremony have now Pacific are in presence to on Harbor. Navy's In Northwest, this a critical Orion established on project. attended Hawaii. billions capitalize We we to February, presence Pro intend honored ceremonial pile the leverage invested and the the drive

continued core activities our construction into by now crews. are has and our driving pile We

in we for Pacific. the compete We a critical project. to a Navy in our Harbor, team part position strong U.S. Navy contracts high-profile of in additional have been on the are work on this Based Pearl

growing the activity Finally, there is construction Gulf. in

advance coastal areas, perfect both Coaster to constructed and ammonia coastal energy is for also construction. includes before, green and a critical in restoration These combination there's by billion alone. projects fit a typically multiple initiatives. mentioned and many a of have $XX planned are I work restoration restoration need LNG, As have Louisiana dredging in of are for in Many terminals being agencies there new methane is been expect planning projects our opened in and be building in invested also New long-standing and planning these private these We've office future. we are engaged more and we'll capital and petrochem major as engaged design and the clients sector a projects are Orleans. well. with projects, we Orion, why them which in work

will XXXX our to to up competitive our expect see We our systems we are project enhance and fleet, volume in through XXXX making ramp the and teams position. improve investments our

to concrete business. Turning our

in established artificial North inventory second Texas this Texas. increase have seeing centers Orion AI-driven to market. segment. we second among half centers Data built drivers to date, in by are and next now of the And this centers infrastructure the We with data demand markets data in the of U.S. of year. is are year. or also ranks necessary building strong is data a expected well for double intelligence number in are last Concrete already XXX% XX in the centers

Arizona Beyond Texas, we're strong contractors pursuing general states. opportunities through with and Utah, those working Nevada also in in relationships our

owners work, is high safety our is Our which advantage competitive also to our not important centers. the extremely record, only these but data of the experience quality unmatched our and of

focused incidents, time safety years home every X going X culture on safely in row, we our lost a For an day. have people and had have we extraordinary

construction pause, persistently XXXX set in to center traditional are our the a then high due to the driving the data With in the market, for data up now and growth hot. shifting commercial are and is rates. summary, While seeing developer-driven is on In resources concrete of for are remainder center concrete taking while our interest we've market headwinds and booming, markets we the success XXXX beyond. company we focused

and immense ahead. to Our platform on capitalize are opportunity leadership in place the

in forward, to year. Looking back a half in of the quarter we growth the with second strong expect accelerate business the the

Meeting turn for has service retiring member, I to years. to encourage been votes for I'd the him those participate our Stockholders. Scott, at down on asset well-earned May to to the retirement. of their our officially both to virtual Before stockholders a XXXX, I public his most best He has on wish as like Richard been XX. of and thank will We with very over management valuable want in in his and Orion board. next XX going month Daerr, XX our it of Chairman in meeting Richard since and step cast Board also Annual serving our Board years

on the materials on find I'll the can call the details website. turn Scott. and to You now our over

Scott Thanisch

everyone. year. Thanks, Starting revenue X% morning, our Travis, We and good of last results. over financial million, quarter $XXX.X generated with up first

during we mentioned, this recover schedule projects experienced in large XXXX. quarters work X Travis over shift the first upcoming in and a to expect As quarter

XX%. opportunities dramatically up This mix quality with focus disciplined largely for attractive total in compared XX% as on as segment. our flat concrete remained in revenue the and segment we down the to revenue growth revenue reflects at to of mix While well revenue margins work adopted marine concrete marine changed our last year, change the bidding standards win quarter

We margins. solid that to work away direct have deliver from energy learned doesn't us that fit walk projects to and our

better Marine project we projects these the $XX you revenue for in segment, typical million for million. that's projects $XX million To shift larger our fairway $XXX is center us. the Data of between in the give project projects, And our million towards of a concrete run in Concrete marine size With increasing visibility over ultimately middle down project. $XX longer also are segment, backlog. gives periods. the large projects a in Targeting right us our size about may a average of time sense and

many managing We small also for in versus large efficiencies gained a project projects. resources

predictable time of Today, this is type Our over would rolling goal the of reliable projects to of job to pursuing starts over and fluctuations business X last a revenue completions. X- these a opportunity in have our dampen Three line had projects and XX time X-year some quarterly of we couple driven our large is pipeline. revenue projects. stream. help by to more a large out year, development At just team

$X.X X.X% First prior in were the improved expenses execution margins segments. $XX XXX was XXXX. year. both profit and year. gross primarily X.X% from SG&A gross increased gross basis million, quarter quarter quarter dollars driven high-quality of from by point The increased or increase million million million last the in revenue, first of gross of or percentage $XX of of over first up and in both the projects consolidated margin segments in improved revenue up pricing to margin margin Both $XX.X

XX.X% XX.X% last As and legal to project-related as SG&A greater in reflected pursue well a increased revenues, contract claims. business total expenses increase The higher IT dollars spending in of cost from percentage as SG&A year. to development

with manage processes effectively financial and on and operations the to our that provide the we ground. software our entire the platform rolling back status new out are deliver sight migrating projects will for We ability of We're line And over and projects, tools implementations. next be to of our information on segments office. will several implementing business months, our improve track and business. IT share same And the improving our our across efficiencies tools greatly

per an $X.X million compared quarter to first the the Turning $X.XX or $X.XX reported of year loss items. diluted We or to an earnings of $XX.X diluted loss million adjusted prior of share period. per diluted of profitability. This share million share in $X per net in excludes or net nonrecurring $X.XX adjusted result

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

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

$XXX.X $XX in our XX, in million additional our backlog April, XXXX. December segment March million to our segment. work. been $XX and million new Marine out and Marine first was segment quarter $XXX.X was million $XXX.X our million In Concrete of work for As Breaking for we at have backlog, concrete project $XXX.X an compared XX, awarded was million segment

at process to and implementing deliver We bidding quality to more work by on attractive our winning margins. profitability a promise continue improve disciplined

up the X.X%, was negative X.X% segment During from year. quarter EBITDA quarter, last negative year. the margin first from margin EBITDA in in last X.X%, X.X% Concrete the Adjusted our Marine to in segment first adjusted up improved

single EBITDA double high concrete. the to our a for generate and digits As in the goal adjusted margins is marine low digits for reminder,

balance Turning to the sheet.

borrowings outstanding of credit in XX, As had under negligible we million March with $X.X facility. revolving our cash

Our on plan to monetize track. noncore assets is

working million close contract West our on are Jones $XX completing We land our with property an East sale in for June. expected

our have of growing unlocked total, value of completion sheet balance will we from transaction, over business. in the With and $XX invest this to million debt in our reduce

over charge To of us be $XX to make credit fleet the XXXX a amended million to XXXX upgrade have for We investments, coverage our to our million more beyond. these X-year are growth and to XXXX our and XX agreement June and spending for through remainder lower our minimum to covenant in accelerated prepared increasing we CapEx $XX our flexibility extension. reduced fixed with prepayment conjunction ratio X:X from give

FCCR Our first X.XX:X. was quarter

same Travis business growing anticipate productively. backlog substantially managing the more expect the ramp mentioned, our continue we plan and we margins line XXXX efficiently up half time, improve to year. top in to and back As revenue the At the the over to of by and

range $XXX the million open guidance of revenue questions. million call both expected for For for the with anticipated that, to of EBITDA to million. $XXX $XX range $XX adjusted the we full reconfirm in million And and the we'll up in year XXXX, our

Operator

We momentarily a time, question-and-answer session. [Operator this we'll assemble At to the begin Instuctions] will now roster. pause

question first from Romero -- first comes from our Sidoti Our question Company. Julio &

Julio Romero

I talking wanted to start number Marine talk about about increasing the wanted there. of to opportunities bidding and with

you the big opportunity go if long. past? won't understand spending Specifically, of U.S. Navy U.S. defense to could project Harbor and about guess opportunity, relative the into the that you for Pearl project the talked magnitude it largest us you how guys is if we expect could the help kind of the I be enabled

Travis Boone

Pacific. tell together It's published. know don't of. of aware what pieces different pulling the compiled very So know -- the number the we I'm in you, billions don't multibillions. projects just on sure by have been and a I exact We tens actually We a it's large not number. that in based can it's we're we've of parts

Julio Romero

Maybe shift that centers about concrete us do in percentage makes your much we now? data understand centers Okay. anticipate for business, help focus concrete to about from are a months then just sales bit? what revenues of the and maybe from like And Got it. up talk can talking concrete XX year how data in a of you trailing

Travis Boone

sure $XX I I'm mean number concrete that done year. last But we're my in kind a of call of million enter. mentioned have in biggest more million -- involved of and there's of the the in completed And there, -- completing up not that the and opportunities we've more on we've on more to center our I several last top seeing -- a especially. the is So $XX to typically of was was we've know head we've I of been got this range million, those, year Scott here And couple of few quite the the that them. kind years, contract few quite roughly don't a $XX data signed date as we others. as spring

the it AI-driven of here so as up moment. ramp to infrastructure the at hot kind And continues is

Julio Romero

how would is a maybe lend little data the understand can that us contractor then specialization some from there or for help center margins a complexity And concrete incremental than concrete your a traditional of different to of And type bid you project? itself project project? does hopefully that perspective, it. Got higher if be just project

Travis Boone

specific a we regular It's business in of it's work basis, necessarily but do it's We metrics. to our we do. we very a just done to center, work Typically, do slightly we've our we've centers the for well than kind project pretty speak already concrete pretty not data on speaking, put generally a on the as work. to far I'm do together that to that of in center lot similar as complex data we've different what a concrete what But concrete. and not well very data it's going done. different a on work -- normally performed similar what super is

Julio Romero

it hop Understood. in I'll the and I'll pass on back queue.

Operator

comes question next Riley. from B. from The Alex Rygiel

Alexander Rygiel

here. of A quick questions couple

very are positive. segment Concrete that's that Commercial how about the But to continue? that. going were First, margins you Congratulations confident

Travis Boone

about minimum of approaching that's Yes, know, last part continue that be we're the more part Thanks, years being good the number a strong to and over you confident so, concrete more getting continue what be it's how will work or We've the lot improving we've We're then pretty our exactly that that and being and concrete that and perform concrete our we disciplined margins good pursue in we've or we're question. perform driven projects kind that we feel have we the our business. we something profitably. bid in disciplined can of very business about deliver part generally our ability well our business, to as done in -- business, to a Alex. -- that Yes, on about confident of business in about X.X other But based good that -- of margins feel of will market discipline devedeliver work it's things. speaking, profitably. whether that

Scott Thanisch

little Yes, was the first time average bit higher than completed I frame. think contracts the the a based do quarter on just during that

necessarily we that continue rest and we I our out the margins forward. we the then year, to year-over-year QX wouldn't go do on run take expect that progress So see as of but

Alexander Rygiel

then talk within for is couple your XXXX? CapEx maybe us That's budget you components about remind And of perfect. that. And what a the can larger

Scott Thanisch

The budget CapEx Yes. the year... for

the we've year maintenance And we about have for talked next million So always making every dredge being $XX in our couple we're about a fleet. our CapEx grow and to over $XX resets fleet talked on typically that that just maintenance years. about we build normal about investments year, have we've needs of and million program that then a

may think of that but those opportunities, you forward. expect going to quantities the mind right of I that have in some are the dollars, kind be that's according the probably There things we now. So should shift

Alexander Rygiel

then Sort you moving helpful. when us construction line long now? can do time the and remind is for Super how of Pearl does And see last lastly, project the for? you it what forward Harbor activity

Travis Boone

Yes.

So in at this middle of up before year. half ramping next year it down latter it, peak somewhat starts kind kind year of of of middle we'll of the operating kind next and fully let's of ramped near capacity be call until, the the

Operator

David The comes Storms from from question Stonegate next Capital.

David Joseph Storms

current could we hoping a backlog. nice with start the It Just jump. had

thing? Kind quarter. timing backlog Was end came roughly $XXX the that win what drove of Was million through? jump? of mentioned You that a big one since this this just the

Travis Boone

It -- thing. one drove number. a timing a wins Concrete both was that. just win We few that wasn't quite Marine had drove there There that specific that in was and

a so is wasn't one thing, And it driven right? which just project, It's by not one. good specific

that's good there think drove I wins that of run had pretty a that number.

David Joseph Storms

of then to any you catch give just you scheduling we should delays maybe are that the will sense be that us on Should And that to of about expect a we be the of of it up? How be equally magnitude QX? mentioned, Or able thinking the of spacing remainder spread the and kind most that? of the year? in through out Understood.

Travis Boone

it be spread will of Yes, out through year. remainder the the

Some on more catch-up QX X some the I then sort of in QX in X. and other think, will projects, of of be the happen the one and probably in will and it, most one of

David Joseph Storms

Understood. And me. one more then just for

onboarding can? try any obviously, pipeline specific as to initiatives Are much as Your you're almost press you your quadrupled. that capture, to pipeline of release there that has this mentioned opportunity

Travis Boone

last had that David. a the past was that which significantly, we've for over market. progress capture to plus quite driven We sense be of has it in improving few things investments lot the a to year going plus, pretty year strong the on doing been work working been a We've and that

already to it now. that we've we're -- it's on new the something we necessarily blossom. not So starting quite as starting for been been working saw some time We've market

David Joseph Storms

in the second luck quarter. Good

Operator

[Operator Noble next Zoepfel Instructions] Our from question from comes Markets. Josh Capital

Joshua Zoepfel

Joe. It's for in filling

But be color on that bit obviously So you a additional Bahama Hawaii. project? seems having you just guys It really looking? some How can the delays. guys to just talked any provide Grand little is

Travis Boone

little moved would the They little it things, had was, very up the good. right. work. subcontractor, some -- the the their some anticipated, a delayed We we'll that on with on work to noncritical the until work or than sort of but and looking starting work kind just their second a portion delays It of path project the other be later a we for but got some path noncritical had of of It's schedule end delayed didn't our again, of quarter. it any impact work and of

Joshua Zoepfel

fourth you half speak Okay. mentioned pick Perfect. now. obviously, there in of expect judging time the but later been of kind you the environment, on still guys lot a the the kind year, can But and And quarter this you between hasn't later of back that. of guys

Travis Boone

say that we're That's will optimistic up what we're back year. -- well, this later it start I'd picking

We been this things haven't core of but while with we're Again, more little same seen of sort of it a it's the a that will here for kind later regularly start has yet, optimistic status clicking signs point. the year. that this while at little

Joshua Zoepfel

Perfect. here. of kind one Okay. the guess this squeeze higher we anticipated. kind year, I of it's the guess expect then rate? SG&A, this of than run in I'll of continue we in to kind And Should throughout kind obviously, I last

Scott Thanisch

the calls, in time which there. there it the the was corrected use and balance forward costs had probably wait incorrect filed that which opportunities more good claims across that we sheet, investing number. been Thanks, typo the wires a incur amount to in Yes, went by with the release is press to as absolute was we to and for going while make development good current release some I business was as of Josh. that be And our run an might debt X-K, That a rate this related to function. has dollar most press a think to that continue say, we in our

Operator

I more any would to on question-and-answer no [Operator like closing are queue. conference remarks. Travis back There for over our to the Instructions] in session. Boone questions the concludes turn This

Travis Boone

bring you, to I all in everyone, guess appreciate work thank want time. to joining who and are in Thank they here profitably working continued day going for and everyone. thank Thanks, work growth confidence closing, can business want in also every safely shareholders I work continued forward just the We every our to forward. and I to employees in best of day. company our hard today. us really that to your for Thank the our to you. look

Operator

you has now Thank attending presentation. conference The today's concluded. for

You disconnect. may now

Orion (ORN) 25 Apr 242024 Q1 Earnings call transcript