ORN - Earnings call transcript Q4 2024 | Orion Group Holdings, Inc.

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Operator

Good day, and welcome to the Orion Group Holdings Fourth Quarter and Full Year 2024 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Margaret Boyce, Investor Relations. Please go ahead.

Margaret Boyce

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

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

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

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

Travis Boone

strong and fourth update, overview Scott you fourth our good I'll with cover thank an results I put what disciplined morning, of and incredible full execution Thank over it our turn call. say then start financial to conference to market on and has and and development you, would our XXXX focus quarter quarter results. since Margaret, results. I'll everyone, our and business said It into do, our action. joining by been is we to for X did years year am we strategic an we delivering now proud plan we and team our

XXX $XX stakeholders. performance, long-term year up objectives Adjusted but to enhanced was goal EBITDA million. points improved value drive full EBITDA to XX% $XXX to in million not our margin only those operational XX% XX% was increased year-over-year. create met basis adjusted X.X%. Gross profit and summarize up To and revenue and Today, many our growth have to profitability, outset, the areas. was we From for all our exceeded efficiency sustainable

we still growth are we to from far We of profitability made While Orion and achieving. have that capable ahead finished. work the have is great progress, reach

to we we focused Throughout to importantly, planned continue XXXX. of to on opportunity in address us. set Most backlog front huge up predictable growth ourselves will market realize excellence XXXX, we'll have executing our emphasize growing be the and our in with

assembled Over the we been safety past us have and commitment our team their expertise, make to driving stronger behind X all and force years, hard outstanding have work a whose an We safer, profitable company. the appreciate efforts more success. to

projects bid is with discipline said winning takes large profitability. with long-term pricing it to I've have driving the on critical we always right high-value the projects organization-wide that to now successfully And that better contracts appropriate quality, February announced The projects and of evaluation the risks awarded the wins were diversity of reflect contingencies. we the in and we can and we win. XXXX throughout built-in complexity

confidence of backlog us grow. will our quality projects gives that This to continue

complex with how has well I as projects. selective as in $XX is breadth Our important are million. our and greatly partners at markets, and can't reputation and projects year-end disciplined position trust very us lets our improved increased years, X have mutual with to long-standing the we to past The pursue. attracting from over the backlog to depth new choose these And emphasize strengthening to its Orion $X right billion of stood we be in the projects our $XXX billion. partners pipeline relationships. enough it deliver

growth. are has which on focus marine now the business I key credit have The that started a our momentum tailwinds. very who driving experienced to development, we a initiative favorable We market of X years was some lot our ago. leaders

a see rehabilitation for see end developments and and we projects, coastal the opportunities Pacific, strong Gulf port opportunities maintenance, the beyond. toward We of of Infrastructure Navy expansion for the Atlantic projects, year. large XXXX into see and to next projects great downstream the pipeline In regions. and we continue in energy year

relationships have to we marine do. and the There have work currency skill, reputation the contractors marketplace. limitations Pacific X our are with with Orion are reputation, company. just for contractors. no our Concrete logistical no as longer quality effectively concrete the capacity recognition team the is the that a that in work geographic Based strong experience operate Concrete's our really concrete where name There can in and creates very Texas real to few trusted we on Tier

projects or are have and building center partnerships for distribution largest-ever why center reputation in top are building data completed date Costco's XX are to Our we Florida. and hyperscalers

reviews our partners. XX-story their winning next wins. awarded and our best in companies with who very project. Company, partnerships a in and work of factors positive multiple gave project Hanover us construction world-class our already are high-rise with ability important project These We completed us have to states most deliver just for recent We're

Another the more on and example large is largest on Laredo. performance, projects border. based recently port in we awarded year, Texas, the Last Laredo, strong a were inland is which our project we won X

as we established this partnerships, our concrete see that always can We and a untapped continue market business, great is has have of our goal. well remain led as repeat We We projects confident business. and Concrete had I to opportunity significant to to which found knew what job, now took starting lot that I been This I move. really a this forward. has is business great turnaround story. and fixable. when were envisioned footing is grow moving the issues are it's dormant its The

healthier. Now It's it's just thriving. not

Mostly questions of to Finally, the pauses. in anticipating the not potential bidding tariffs we and administration about We're during the new to questions have any mitigated tariffs negative our were minimal and of process planning steel a D.C. pursuits. or we impacts lot spending last Since government related for year, fielded exposure. projects have middle

don't opportunities. anticipate to changes pipeline changes any or our spending and haven't had projects government We impacted our by

drive growth in oil likely opportunities the the and will continue increased quite The project in years for Additionally, plans ahead. favorable to energy additional landscape us appetite the Gulf. for our political capital is for and gas projection

Looking forward, that our deliver of to is in investments our capture the year increase revenue. of help backlog. projects key This future will is watch large focused this and in opportunities. us give metric indication the on pipeline volume The making of an will team

We are the expect some and improving backlog our continued financial performance on through progress our focused year. growing

the enter quality XXXX, exceptional and our confident strong and As of to execution. we total capabilities both am commitment foundation, their people our I in safe

to have results. financial turn our now I've before, in big to I'll it Scott? XXXX. a year As we're said to planning Scott over discuss

Scott Thanisch

morning, and Travis, everyone. good Thanks,

generated million quarter our increased year of EBITDA to grew flow fourth contributor from $XX.X a and results. $XX.X adjusted $XXX was strong million, Our million, to Revenue full X.X% we operations. cash to XX.X%

half As quarters, indicated XXXX, third second driving the improved in the early Pearl both ramped up and we Harbor fourth in Grand and Bahama results. projects

million squarely For and in XXXX year, generated we adjusted our EBITDA the full $X.XX earnings of per $XX.X adjusted guidance. share, EPS of

full our $XXX expected due to million year than revenue in our of of of not revenue While was the softness range, projects, execution markets. lower our timing this is

revenue up far be increase in this opportunities to about significant marine was X.X%. and as plus so by X.X% revenue fourth the quarter, We awarded concrete backlog year. jobs growth continue In increased the evidenced our excited

and after development business Travis standards bidding growing implementing and approach. our As refined disciplined today, mentioned, now is our healthy concrete business

continues in our be concrete While major the we growth immense and see expanding, our be opportunity opportunity Marine driver the will in to ahead.

margins same comparable in profit the or gross XX% last segments. in period quarter XX.X% million period. in XXX point both million the reflect of and fourth The both $XX.X from $XX from Consolidated pricing were to of $XX.X up margin increase basis improved SG&A revenue consolidated expenses million improved increased gross million, or revenue, in up $XX.X execution year.

increase percentage a X.X% to in development largely IT revenues, increased accounted and expense contract Compensation, for of total As SG&A spending, expenses. X.X%. legal from implementations, expenses business SG&A the

net or to and $X.X fourth of for $X.XX EBITDA or diluted Adjusted adjusted quarter last prior Adjusted or million the The income in XX diluted million in year. net was GAAP share $X.X points net per of million or period. profitability. per adjusted income $X.XX to fourth to per Turning to of improved quarter. loss $X.XX EBITDA net adjusted fourth per EBITDA million. grew the increased income $XXX,XXX year share. included fourth $X.X compared diluted income the the share margin per XXXX to X.X% from million $X.XX was basis $XX.X items. X.X% quarter $XX.X for quarter diluted up share

X.X% During margin quarter, fourth last year. segment X.X% the EBITDA to compared Marine the was in adjusted

in And the year our segment Concrete period. prior with consistent margin adjusted X.X%, was EBITDA

Concrete segment. continue Marine high double we in as build goal EBITDA digits and reminder, margins medium-term to to the adjusted a for is our single digits our business, our segment scale in low the generate for As

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

project We from given quarters, expect there quarter win our in our see X of in continue to wins variability capturing next. timing be to to opportunities the particular progress may and some the rate

Marine million segment. to $XXX.X related the backlog, another at year. million $XXX.X the was Breaking the December end the our quarter prior of XX, million of end Concrete out backlog to million $XXX.X was and million of at our our As our was and $XXX.X fourth quarter compared prior to $XXX.X related segment

As are far to $XXX XXXX, prior plus this off we our is year over XX% end backlog awards the and mentioned, Travis year so up in start of strong a year. million,

quarter $XX.X million million of fourth fourth The generated XXXX. $XX.X flow business to of from during in compared operations the the cash quarter

completion. XXXX from Looking compared timing cash million cash. in net due outstanding consecutive ending cash to $XX.X million, year. second We fourth flow million quarter. the flow in at $XX.X the Cash for operations can a million prior and mobilization ended the of was in in year, the quarter vary Total $XX.X the with from $XX.X to full quarter-to-quarter was position project debt

of to agreement to greater execute XXXX. revolver X, extended to at we reduces we credit pricing our plan. On outstanding no amendment improvements under of the our were because our by continue administrative including points, March lenders restrictive XX basis enhanced with Oak. flexibility, credit recognize and White less amendment operational had These end loan executed an as and provides May credit revolving This quarter. profile financial strategic maturity We our facility the agreement XX, and covenants our term our borrowings the possible date our

processes our we we our several on Over and the office. ERP our using considerable have in January, IT tools last operations for initiatives. Beginning new progress started made back months, and have

new will tools insight to our be segments management business into same will migrating projects projects These information will As greatly business. have procurement of of reminder, which platform, our sight tools. ground. We've been management new give on and entire across our share we line of and a on which project systems our implementing us also clear our improve the been and the the oversight progress provide effective financial

our our operating leverage continued from traction, our efficiencies As generate that gained operational expect we to cost. business growth will of enable benefiting the while improvements in fixed

we're performance pipeline. excited expanding forward, and improving by Looking our

a which our XXXX, in As will winning Travis strategic our delivery plan growth for mentioned, of be key execution XXXX continued projects of will and beyond. include indicator in our backlog

make of million, of year EPS. the a to For the This $X.XX in be to to million. to range $XX of also $XXX range in adjusted million revenue the $X.XX adjusted for ahead. XXXX, to EBITDA growth We'll with to $XXX prepare the we for full expect translates million investments range $XX

CapEx the of take our large of we range to expect acquire million we $XX million pipeline We as to to of $XX use will in advantage be XXXX equipment opportunity.

future is a for seeking foundation to heavy the lifting establish organization lot us. an growth, As firm of a behind

now to there years do, up questions. in we're is the the very open and forward still more call And looking excited to I'll While more XXXX for progress for your we're ahead.

Operator

from Instructions] [Operator question comes The with first Spychalla Aaron today Craig-Hallum.

Aaron Spychalla

Scott. Travis and

about confidence guidance, the shortfall the segment. guidance, items activity. recent me, the you then and for the can order on XXXX And some in Marine you then fourth impacting quarter kind about touch of and on just revenue versus just extension visibility the And of give you you an First talked if have timing there? of just could some -- given into kind talk backlog also of color

that confirm timing typical there much and not seeing project extensions that's want well. Just as really you're to just

Travis Boone

from revenue really in day off Starting us, say the business based we and question been with the getting focused on of have been of revenue. and I'd come. would on we've healthy the we've the Sure. kind revenue saying front pipeline profitability X, that on

the talking getting kind will a far in on that last projects we've on as -- of healthy, our we started and really been We shortfall was the so there And project. revenue -- profitable Hawaii major business couple year primarily the the slippages getting some focused about year, there the as business of early come. were

thought of to this into revenue into Some slipping up come clear. from going the in was 'XX ended 'XX to that we be year, year last it's

last And it initially. so right, would there the thinking were in slid that we came year some things that were not to all like

moved So nothing vanished. right into year. a It to just little this the

we're going the to growth future still and what feeling to confident that's about about So lead feeling have good going the in XXXX, in opportunities bigger we XXXX.

into building this revenue we're really 'XX. focused said, our will turn going in to be on which we As backlog year,

Aaron Spychalla

the can just you then of of key kind All just maybe right. bidding second, the touch on on that broader if there? obviously, And just talk maybe this some on pipeline the market, touch the been drivers billion, And in that, $XX great. of expansion noise about the be good just environment. quarter. of that's you to then expansion with profitability some But would how could

Travis Boone

more of into kind come Yes. opportunities continues grow us. to for The pipeline as view

efforts -- the for more of look every continuing no China like with data things. and like opportunities bidding projects. center Concrete a Marine are both been the There's really with deterrence. seems more on us. it's We've urgency good and Pacific data side In the those winning more, on environment day, it So of and less Navy centers in to there's

in like bidding to strong on. a That's 'XX that things, the the of marine push and to for going opposed some in to just Navy, speaking, side And efforts ago. a are be of generally is albeit strong. going thought of 'XX be as continuing we Lots opportunities year then

And the It's margins we're We work. about to feel with really and 'XX. going health good and contributors our 'XX some of great have to strong been winning good backlog. all winning be

Scott Thanisch

Yes.

the expanding selective We to on beyond. pretty see for pipeline going it's the projects -- environment. pursue to with margin be there's With way margin market of and us, a environment a deal and expecting be tailwinds that we good is, expect a in nice we're good which it can we 'XX

Aaron Spychalla

All right. then last maybe And me. for

federal kind that's some from touched bit. when is You But transformational bit sounds talk just on in It it's that level year with just a on that setting Can like it you at want on give a Navy maybe up? winning to little funding shaping extending us the I a about a there going business you XXXX, opportunity. of to everything of How little pertains a as make expectations sure XXXX. an update level standpoint? opportunity

Travis Boone

really Yes. change a that on Pacific. Pacific. signs the is procurements, amount year see new We're a expecting the fair we Navy in showing with the or is the turning to the there's work down lot to in slowing in And continuing continuing of done projects definitely that -- no procurements what's to of the to administration work Navy And construction signs MAC direction contract of happened there's next with multiple -- so. that there's in or expect we're be to be Pacific. activity The

Operator

next from The Romero question Sidoti comes & with Julio Co.

Julio Romero

XX%. Scott. start to gross I and margin on you at wanted posted Travis the

so. X I you in think margin posted gross or strongest about that's years the quarterly

do could see drivers you you gross marine leverage talk the the additional you margin? key the once if think Just margin on volumes of on about can through line are flow that what side? see And you

Travis Boone

can Scott then it. and start take I'll

profitability. or quite numbers. delivering performed few we've backlog improved our we've the win the and a these toward couple been margin see Marine having projects, more really and helped been it that, Concrete, health brought since whether projects That's in to about a different both last margins in years you're starting our on the a talking we've building been segments well and pretty on the that we As as of doing of far working that lot quarter here got ago it's

Scott Thanisch

we Yes. can contingency that in we've is risk that, appropriately sure making talked we execute sure about that factored and on we're a for And while making priced just them on well. important for further how to projects

see by customers quarter, you as in fourth execution contingency in teams bidding better our factors deliver better a and our able the as the at so both And that's X our the better utilizing more bid a those projects our start process combination margins. well with to pricing than of driven and therefore, those tools, plan to

Julio Romero

guess, better hearing I I'm execution. it. pricing, Got better just

If you line the aspect. increased on see you And grow Can sustain? margin could these the touch sales? margins gross perhaps just as on leverage

Scott Thanisch

for better also scale. better drive as us we opportunity The through efficiencies. and the are margins absorption, us place project grow increase absorption business help There's for putting continue management to to Yes. tools to we're that going labor to in gross expand equipment our those

So we improving do margins of see operational as well. those our leveraging business in a our trend gross efficiencies through

Julio Romero

Got the about equipment to million absorption. $XX I the CapEx it. Maybe better to ask helpful. about guidance, wanted range. just That's very thinking $XX million

talk are Just projects what embedded growth there? in about

Scott Thanisch

Yes.

about level talked being year. typical maintenance million we've million a $XX CapEx to -- about $XX our $XX So million

help equipment the be and in incremental as might to the It's by that Navy for marine primarily what so equipment. going in Atlantic us construction that's with little bit it's different or the but the really projects to we guidance whether like, see to is projects equipment Gulf that to of some through look the Coast. the projects a project going coming, acquire CapEx And our Pacific that's

Julio Romero

an indicator me it. to X thinking you of for key was that backlog future the would as Got mentioned just last be revenue. about And watch Okay. metric the

progress larger your shifting backlog mix XXXX, quarters have Just the is to about us times especially marine. with longer projects throughout cadence sales how through growth the you we lead of think in as would as

Travis Boone

I when and know What really Yes. a it's to strong all first the we're I dependent So going already, to opportunities, play it's year. we know view good exactly of mean that have had we opportunities the I we've quarter on how -- don't come the a have through right? out is continue in.

So cadence backlog year. for a a have year know goes, the expect as answer to you, it I I I as strong building don't throughout but be great if far

Scott Thanisch

the Those Yes. year. beginning XX come times. a have concrete And those lot burn quicker to nice we mostly project we've jobs longer with And and going here concrete marine opportunities year. expect typically, of the our to had the a number of be of backlog at jobs wins a later in are

as So into marine, the up and it we build little dated be 'XX will more a beyond. longer

Operator

comes Brent [Operator question with from Instructions] Davidson. D.A. next Thielman The

Brent Thielman

guess, I looks in CapEx, year. Scott. that's at funded the I'm on come XXXX. get just like that cost, back interest cash here the looking of Does it down going flow step-up this to out

it? fund So trying how to to you figure out expect

Scott Thanisch

Yes. our improvements. expect goal out that our flow. We of is to been cash to largely do own funded That's through our growth our operational really be operating fund

we a CapEx lenders, to more. and our that So they've to employ of spent. relationship a good that's do with capital willingness anticipate being indicated We had most if we how opportunity have provide the us

And option, we flow. operating from that's largely expect that cash so to but do fund always an .

Brent Thielman

Got it.

see But you're stepping it infer to that. a year. from could in step cash up to up. know I sounds you've Yes. like pretty projects got this contributing big going the operations good So

slid than bit. so segment Pearl to I outlook the But visibility I the in the XXXX. when sense like it to know the like more first first guess started you've a the around quarter for get great wanted the always year. you is half maybe seems just got Okay. And concrete seasonality this It I has case. buildup project the Harbor sounds then even and a

of does look the than a in -- So the the is past? year little different years sequencing

Travis Boone

Yes.

Definitely, I quarter quarter that. the year and always think year. buildup in the kind Last from we low first of it Hawaii the like to fourth quarter second fourth half. quite looks was third based and slightly project This starts high like so as seems But and strong weather of up, last different first our things on be it's a see tends year. from to last point of first not then second, first -- wrapping lighter probably as a quarter. half as kind low year, Texas

Brent Thielman

there. the And seems then of great single as kind embedded opportunity like not to Is question, just It get on times that margin be really seems an it that, range high may Again, there footing you since digits you to are get to this in last concrete lead said, on it a good but shorter. got here. business, year? guidance the like visibility

visibility this year. good pretty got You've

Travis Boone

we're continued that. good I to think feel sure get we'll -- more That we way I think there, get make if a really happening think is the a close lot going to I'm improvement. but and there, lot may business good I progress we're it. of things all to concrete we about not toward going

we're closer. going the think if get to but we'll I So all get there, don't close. we'll know I way get

Scott Thanisch

going Yes, goal, as it's spread to bridge growth as our by scale and X we margins. of that more largely efficiently. those over real typically the enabled last . a over businesses of difference fixed target and our costs make will we that to we more be those talk That kind be about being as medium-term

Brent Thielman

just in is any that bidding of timing in just the but sound that's the spending, Or federal comments affected Asia And the like obviously, opportunities appreciate it. last about I the the just projects bidding terms I one. opportunities. of projects? typical guess around of necessarily consternation that's of Pacific. but in causing simply Got these out sort is the questions doesn't the of push moving -- lots these right kind question is or to stuff it just

Scott Thanisch

Yes. in expect starting those pipeline. out that bids projects when to we those in are delay seen our really contracts of part Travis are talked put that MAC to come billion haven't to we a named $XX about, increased as I would say market, that

the funding pause really impacted So areas discussion from. seeing that any we're . I come of think or where cuts the has government don't

Travis Boone

Brian? Does that your question, answer

Brent Thielman

does. I it. appreciate it Yes, No,

Operator

time, [Operator CEO, the like to . over which questions this no remarks. session. turn our at further closing back Instructions] question-and-answer concludes any There I to for conference are would Travis Boone,

Travis Boone

Thank you call. joining for all again our

We clients. safe continue every deliver a every elements end home -- And and get the to the day. year of day. a for for Thank our to who we appreciative out at working to you day look and and joining and strong safely teams forward are be of hard in our all and have good work

Operator

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

disconnect. now may You

Orion (ORN) 5 Mar 252024 Q4 Earnings call transcript