ORN - Earnings call transcript Q2 2024 | Orion Group Holdings, Inc.

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Operator

Good day, and welcome to the Orion Group Holdings Second Quarter of 2024 Conference Call. [Operator Instructions] Please also note that this call is being recorded today. I would now like to turn the call over to Margaret Boyce of Investor Relations. Please go ahead.

Margaret Boyce

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

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

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

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

Travis Boone

joining Thank market we you, the to quarter EBITDA results, cover then good and to call. morning, wins XXXX second million. everyone, Margaret. turn it quarter, you I'll results. In And and Scott our start generated a an and and second our revenue overview our $X.X $XXX of million recent financial conference quarter of of second update, I'll with over for thank adjusted

and don't surprises large with As the we like discussed consensus. over that first year. the we short anticipated projects of over X We of past slower ramp-up we quarters, a X half fell the recognize

we This a have There's we me seeing doing nothing do. ahead. transparent more is we say to what than were challenge. We important what short-term been about will

foundation talented huge incredibly a opportunity team We market with have a ahead. and strong an

uncommon teams our Dock to Grand construction, the the Pearl work beyond project our logistical control working had delays our not on we Shipyard back are can now from Harbor schedule. get results sometimes to track, on and Dry cause is setbacks some While and back are double vary In quarter, project time on in quarter-to-quarter. our late Bahama

the remain revenue of the contracts unchanged, will value shift. recognition While total

are these on full they not impact any financial will critical delays of have large While completion expected projects, affect results. our year these to XXXX the

we $XXX a to our guidance $XXX to this million million annual reason, to adjusted of of EBITDA $XX range and revenue lowering are an For $XX million. million range

on are We basis. half to target very second a still a strong on deliver comparable

our importantly, remains outlook strong. long-term More very

business. We are our about our to perform no ability less grow confident and in

XXXX. a billion. our increased and We us puts continue opportunities in projects to This of pipeline to add great our than more for backlog position an attractive $XX have to outstanding

Our market is coming continue developing as the ramping will up we thought is years. it would. over Activity and

business noteworthy concrete our into including development business our some first in and both Florida there. Marine award second since efforts Our expanding Concrete large wins in translated Concrete Orion segments, quarter

far announced, In across to so $XXX our work the in addition total million previously have total we in both bringing to and awarded July, won backlog $XXX million. work a awards of segments,

the customer, encapsulated and Lauderdale. systems, and next Everglades For replacement bulkhead concrete sheet continue caps. scope of combi-wall soil aging year. steel of contract announced business, our a including an This includes has million $XX X,XXX large diameter Port of Marine in through with started work Fort project anchors The feet over walls, linear long-standing we pile will

Bay. for million project a also announced our customer, $XX long-time We Port Tampa

to throughout infrastructure expand country's and to example our additional breasting dolphins the connected ports improve prime high have include that XX-year over project, a mooring projects will the upgrades we is points. them Tampa wind Bay and onshore ] the This several In with project berth port a [ completed walkways a have are and new last marine this XX years. needed with relationship building capabilities. We Port of

located expanding since our contractor. The to is Phase we one also a This largest the of the Saint and general North market. Orion Costco regions. of Texas facility Southeast with Turning major fastest-growing project project Concrete as first XXth center significant $XX the building Depot pivotal today. is business Construction contract Costco's Lucie a Florida, a data project Concrete nation's Port will construction award in segment, southeast distribution by to for hyperscaler. through Costco in our one X, a Industrial for This Florida. It reputation the a project our Wholesale centers be our is large million Costco concrete new won center Florida distribution was in of awarded

range in million. fully be the cannot disclosed, scope details the $XX While of is

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

have an our culture X for extraordinary of time has and X We consecutive safety had years, team incidents. lost

$XX Corps $XX several to South we won we addition previously Marina, additional In million [indiscernible] and dredging projects. Clearwater a Beach at In Texas project $XX.X US project won Engineers. X the XXth we wins and data projects center million data project of Marine, projects segments. In million, center a XXrd and for construction $X during million of the million a notable Galveston, a million our for Concrete Army July, for Concrete, $X and in project announced, construction $XX won our Port the Marine in and

the Demand we suited our and our is feel expertise. ability increasing data perfectly this going center to data helping construction driven development marine center gap, juggernaut. successful commercial continue a is is market to at rate work market good and The strong for interest when the higher Looking in that area massive fill to about for the time this by slowing filling, forward, being be is is environment. work is in AI

significant the private in investment large for facilities multiple Gulf in the We along infrastructure to capital forward. alternative Chinese expansion opportunities $X.X restoration projects by to and methanol for Pacific, going expect along the business LNG, Marine of strong drive coastal trillion bill, deter and fuels tailwinds U.S. the Coast. Coast, potential like Navy port ammonia, expansion primarily our the These investments U.S. numerous include

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

enter the of company. second teams, Together with to are made much strides instilling half disciplined optimistic future. year, investing By foundation today. we business our our systems, continue in I we've the stronger our IT great be about in in As the of we processes, development, training strengthening

same look Scott improving outstanding results for the over Our it to delivering teams predictable stakeholders. I'll to financial review. our on are execution. delivering forward turn the aligned excellence mission, through We for Scott?

Scott Thanisch

over of up quarter, X% second Travis. revenue last Thanks, year. $XXX.X In million, our generated we

Marine year. mentioned, in back to first the expect ramp Travis XX%. delayed as we projects were in half was revenue half that revenue focus bidding change second down at to win reflects As attractive quality of Concrete mix are continued quarter, on adopted of segment. as up XX%, and well was mix shift. the the revenue on the in growth the our disciplined margins work This Marine to Concrete our segment opportunities last Similar while in revenue standards we track, to

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

expense, increase XX%. percentage SG&A reflected increased The total in SG&A development from business legal to XX.X% expenses contract in and As percentage compensation of cost. revenue increase spending revenues, of dollars and a an

the Over share our office. the information we will for and progress the tools next will our ground. manage projects improving rolling these ability few tools out processes to new provide insight months, and operations our of These projects, be effectively and our back IT to on

to are delivering the also business segments our line the financial across migrating platform, entire We greatly improving same of and business. sight efficiencies our

adjusted an million diluted per second in Turning of per or $X.X $X.XX in diluted of net compared or loss $X.X net million reported year an profitability, period. share prior to $X.XX adjusted to share loss the the quarter we

per quarter second million diluted loss of $X.X items. The or $X.XX share net included non-recurring

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

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

year. last Concrete our XX, I'm backlog, our out this June segment. and of last at June compared $XXX.X of Marine sorry, XX at $XXX.X $XXX.X March segment million of was to million was in million and -- second year our in $XXX.X was XXth million $XXX.X year June million of XXth backlog As quarter our Breaking

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

generate and on at dredging the our of profitability delivering in our field projects project for segment a margins margins. to starts maintenance marine right better-than-bid digits to Margins year quarter, EBITDA teams our they pleased Marine As result our retreated progress been in and concrete. margins since a margins. With projects starting efficiently unabsorbed related Concrete winning Everything to with with lower practices our business point, reminder, better costs to jobs of somewhat goal adjusted the from new low-double this more a largely and have with good is EBITDA digits this the We've business. high-single delayed our customers ago. returned in focused implemented

increase. to of as see the expect the in year half marine improve activity margins back levels We

to Turning sheet. the balance

revolving at last June end our total $XX of we borrowings and outstanding East debt deal the Jones quarter. the In facility West June, was of We outstanding of cash buyer in terminated. million. XX, As under did $X.X and credit $XX.X close million our with had million not in had the

the and Throughout East are or million agreement serious close Partners interest remediation or on to to that of before have West a the entered identifying X, specific this XX, interest confident we related to lack into buyers, difficulties multiple due Capital a an been we with sale any Jones had disappointing, to process, sale We we've not for July will related to Development for environment due completed liquidity close the this property with growth. XXXX. anticipated without the property. On that is this this purchase sale our September While $XX.X additional remain the closing issues free has sale property. in been in the confident diligence rate and good we fuel

XXXX. and anticipate backlog top substantially we line our the growing mentioned, Travis As over

half back of same We expect year. revenue [ effectively, managing nice ]. a to will to margins continue At more ramp efficiently up, in the the to we the plan and improve see more flow and we more cash business increase time, by productively the in

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

Operator

[Operator Aaron Instructions] Craig-Hallum. Spychalla come And with from will our question first here

Aaron Spychalla

projects, back Travis large you detail the maybe get Bahama X and setbacks at and working Scott, bit on more little Hawaii give the that to first of schedule. logistical the some issues just a in on Grand for me on you're can

make timing Just where overall profitability the projects really to changes up? you like confidence sounds it still more se, not per And on can any just that there.

Travis Boone

Sure. Yes. Thanks, Aaron.

So Bahama of on one, our That delay I'll subcontractors have project. one a site. with with getting did Grand we start shipyard

They early it their late Fortunately, was work -- got the the in work. critical in on July. get did in a second path quarter finished and site

project, if the So revenue. And of just a there able in we year about without had few these some from be then before -- you bit a getting will, catch up had completed to delays we with delay with done And some some we coming of related the piles before, some we've were Hawaii we on the to that early Panama material to other wasn't but to a of the in issues impacting did overall talked from our projects, the that needed Houston that Canal hiccups, work, going work Hawaii. time. are on there and then deliveries our and through

a be done. waiting a we to were our bit able in scenario, work of waiting so get to And

the on push good was it to control. And and going everything our cases, out both forward that the can feel we're in of to done we'll for catch So on up year. the about we've we able finish project, rest of where issues be one Hawaii to to and continue

Aaron Spychalla

just came process the there? still out. about for overall outside the as and on time coming opportunities that the broadly, just second, Navy maybe then And that opportunity the Navy you additional RFP that And opportunity, the RFP then billion just line $XX you years? there saw talk the in Can of are well? Is with

Travis Boone

MACC, that there. Contracts. the that on RFP work Timing was several PDI that they'll for billion It's a for contractors which -- $XX the for Construction the be we'll X stands working Definitely, months. out Multiple was Award is, the proposal contract, here came select

I to anticipating selection Pacific. the they're contracting one MACC that's [ or is the year using year. basically, ] going think multiple they're mechanisms dollars Navy that this next the early billions late in other for contracts spending of of and be And

months. already pursued coming will one just different that's pursuing of the -- contracts either So that we've in or be are that multiple

those that. quite a of like there there's few So out

Aaron Spychalla

then last one. And maybe All right. just

$XX starting to about then are just equipment Army that managing come how mentioned bit? dredging market you're a for You project market there little you a given Corps, dynamics? maybe your see back million the And talk fleet

Travis Boone

market new projects the a norm We're couple -- still of to fairly bid. still seeing with disrupted. Yes. not still not ago coming what It's been to slow returning was years that

us. So challenge to it's for continued be a

won the Fortunately, we've and doing been core. a that and few busy contracts able some to earlier work last keep we dredges our with other year year the in on private

has back happen. obviously continue out. normal maintenance some And it's they to those So point, will it do dredging because that pursue get we'll come at when projects to to

and -- work ongoing never to there's intercoastal shipping an It's so channels process maintain And that the the waterways. ends.

Operator

Julio will Company. our And Romero & come next from question Sidoti with

Julio Romero

of Can in speak very strong confidence Maybe the growth sales range, end to start of maybe secondly, the implies And out still the quarters. the for fourth on you the at fourth low with guidance lower year-over-year -- then the quarters? guidance? third and of range, your you end third sales even in the hitting kind guidance the to the of if the your of -- sales cadence us help could expected and

Travis Boone

Sure.

that's the the rest gaining we So Atlantic expect the the the a the good year. half happening in half performance And of do and in then obviously, large the of second Caribbean, there project feel really Florida momentum, we've division in year. year. of amount we cranked the strong work in really last about that's our got There's Hawaii up for of

throughout got opportunities our we're that both concrete we marine. multiple to areas operating pursue Additionally, and continuing in

So the we're feeling of half good about second the year and...

Scott Thanisch

in second it kind quarter, substantial comes the it develops you'll of that how Yes. sorry, pretty see And substantial to the when it pace kind you'll quarter. increase of will the third and pretty quarter, over a a out, I'm over fourth second hang the increase see quarter, the at -- then

the So as we expect jump it year, quarter. bit the it big -- through to in increase but a develop will is the third little go we

Julio Romero

on the the And the on guidance helpful change adjusted? both guidance EPS That's GAAP sales lines does translate to Okay. and and there. how very then EBITDA

Scott Thanisch

guidance delayed terms EBITDA seen there's dropping bit the what In of the on lot offset we performance think of impact to that that second we've the million, that the it we those we improve little $X recognizing projects. quarter, change in does can a line? the a How continue of as of

confident pretty cited about the the we So level. full at new where range, as EBITDA feel about think year we you've

Julio Romero

you. Got

mean, earnings how that had share does that share? [ adjusted EPS Sorry, you ] just per to and clarify, I EBITDA the from to per translate guidance GAAP

Scott Thanisch

press there's you. a various misunderstood Yes, down in from gives of EPS. I the down walk kind the release the to that believe lines you reconciliation Sorry, I

should So the you give components. that

Julio Romero

the sorry, guidance. for that's I'm And that's --

Scott Thanisch

Yes. press There's of in the release. range reconciliation the guidance a

Julio Romero

I for look, it's opportunity order a Okay. sales but pipeline $XX then that how just about you for X I'll XXXX. how the at over up take next And talked afterwards another of up you you then us stage, And you last would guess pipeline the in that. opportunity have early the would I one bit? And that on think 'XX? me thoughts billion expand standing that there? sets sets little Can how know any does you be, for growth quarters? maybe growth about and kind now for

Travis Boone

Sure.

remember $X around pipeline may just our You our increased about billion we last billion. billion talked since over call. being call, quarterly -- last on It's $XX $XX our

in pursue. So it's past definitely -- market opportunities And a more constrained the year, space. the there and and it's marine increased us multiple it's millions to which over for indicates more out again,

there. is business a to pipeline And concrete that. feel is because our shorter good that so out we marine the number opportunities really work primarily about of that just And visibility are

So the sorry. or pipeline is that concrete project -- marine is of majority projects,

Operator

question And Riley B. with our from will come next Securities. Rygiel Alex

Min Chung Cho

this and Min is Alex. Travis Scott, for

Just couple of questions.

a increase just So bulk you bit pipeline there. it the the of talk about details new is Just kind any of funding, opportunity for what Is kind you talk did growing. Can about that federal geographies? more little of from?

Travis Boone

the stayed new consistent really geographies we that geographies, work not and we've with It's pretty in.

Corps geographies, necessarily on Navy federally are it's of clients showing with so a it federal funded or And for increasing the not a quite like clients. DoD lot regular more that DOTs for opportunities or or a up Engineers. ports Army Yes, few increasing of projects, There's basis and us. is whether for it's opportunities it's

Min Chung Cho

excellent. Okay,

general. little you've of that center a won mentioned You smaller and projects, in they couple data size in seem a

or range? at to the Just want they lower pretty margin within about end or right relative end margin just much target higher your segment to talk targets. Are that

Travis Boone

end the of them and bid then hold been our on there's margins provide perform and speaking, to very Generally margins. steady we We the center margins able data that different at we've different well. have projects, good minimum projects job,

Min Chung Cho

Costco. mentioned concrete you for finally, -- award in then new the And Florida the Okay.

just that Phase I. mentioned also this is You

opportunities maybe there Costco talk the are in general? So about what and with in can you Florida just

Travis Boone

that the opportunities there'll did project But to quite another Costco just win a Phase different in Costco as there's pursuing, Yes, actually and X yesterday. be large door. companies, project that Texas with few on hope we're well others, bring in we that and obviously, a

to to add to work into a the that we whether continuing we're Costco clients regular there, backlog. So that it's with add on continue basis mix other or our

Operator

Capital. Our David of will Stonegate Instructions] Storms from next [Operator question come

David Storms

revenues couple there be should margin mentioned a Just through to sense delay of how I we maybe know wanted and times due of Should balance place into expect that's of to and we that try get catch-up to the margins a XXXX. to going expected to Hawaii about bit to the take of forward. to a think Bahama? XXXX you ramp in the Grand in expansion need are going

Scott Thanisch

delayed do improve. see of we've cost, the the spring we about. those that continue to as to But target gross there. projects come talked to ranges do improvements Well, going activity up on the of margin cost, expect not indirect those They're more absorbing they're up margins levels kind to and just immediately we expect we'll

I forward of kind and look margins of that as as to the single-digit double-digit -- goals. the the just we'll steady opposed would into seeing you projections, say kind on progress the realization So immediate of

David Storms

of expenses you from to helpful. double-digit just in expenses, mentioned low transitions. revenues to rate then low going spending as that, business maybe onetime it via maybe a double-digit run very be relative little little a it, bit coming I more a call sounded expect expenses like That's fair more rate? we run [indiscernible] the increase and Should know nature XX% And little SG&A IT -- a couple, there's Understood. SG&A year-over-year, on

Scott Thanisch

you you quickly. be come second would terms, that I with ramps the the see more quarter I revenue percentage think a that of down you'll saw in assumption. think kind consistent good the what But absolute in as

David Storms

of newer call from one do of then And due to the projects, Is some projects project? larger impact those interruptions Everglades those it, project be more, at any the on, expect great. think? any do Port you Port Sounds going there to just your the you to interruptions or Tampa impact

Travis Boone

anything cause anything, the I'll say foresee well There I any track. and variables projects seem Dave. of field coming but off add don't and on in we to and anticipate don't No, -- guess that up starting lot anticipate issues. on on anything. it that be -- construction. I those don't Those we is are are to a

Operator

like Travis to And turn our session. conference to this I'd remarks. concludes any over Boone the back question-and-answer for closing

Scott Thanisch

is realized EPS that, our says Travis the listed Before just there, in the that release, press I not EBITDA.

range XXXX. that we're the of $X.XX $X.XX for to adjusted expecting EPS So is EPS

go Sorry, ahead, Travis.

Travis Boone

forward today. joining want In Thanks, to our who We really hard employees time. just in best -- of shareholders our closing, the every our day. they can safely the forward. us, work Scott. thank to Thank thank second are to our continued to you, going I Also, bring continued every I want confidence everyone, business Thanks, half thank working to profitably and your and year all I their work to of work for you and day in the everyone. for and appreciate growth in look

Operator

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

You may now disconnect your lines.

Orion (ORN) 25 Jul 242024 Q2 Earnings call transcript