EXHIBIT 99.1
ORION GROUP HOLDINGS REPORTS
FOURTH QUARTER AND FULL YEAR 2023 RESULTS
HOUSTON – February 28, 2024 – Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading specialty construction company, today reported its financial results for the fourth quarter and full year ended December 31, 2023.
Highlights for the quarter ended December 31, 2023:
Highlights for the year ended December 31, 2023:
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
“We are pleased that our fourth-quarter results demonstrated progress against our strategic plan to deliver profitable growth. Fourth-quarter 2023 adjusted EBITDA was $14.8 million or a 7.3% adjusted EBITDA margin--a significant year-over-year improvement from fourth quarter 2022 adjusted EBITDA of $3.2 million or an adjusted EBITDA margin of 1.6%,” said Travis Boone, CEO of Orion Group Holdings.
“While our 2023 financial performance improved over the prior year, I think we are in the early stages of what our team can deliver going forward. What we accomplished in 2023 has transformed Orion into a more focused, more competitive and more driven company. In a short time, we implemented a disciplined project bidding and delivery strategy; attracted high-caliber business development executives; invested in systems, training and tools; secured a three-year, $103 million credit facility; and closed over $25 million in equipment and real estate sale-leaseback transactions. With these critical building blocks in place, we are prepared to take advantage of our industry tailwinds.”
“In 2024, we expect our financial performance to continue to improve relative to 2023. Given the positive changes we have implemented, the improving market outlook, the quality of our current backlog and the volume of opportunities in our pipeline, we are confident that 2025 will be even stronger than 2024,” concluded Boone.
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Fourth Quarter 2023 Results
Contract revenues of $201.6 million increased 2.8% from $196.2 million in the fourth quarter last year, primarily due to an increase in marine segment revenue related to the Pearl Harbor, Hawaii drydock project, partially offset by a decrease in concrete segment revenue reflecting the planned wind down of the Company’s Central Texas concrete operations.
Gross profit increased to $23.0 million or 11.4% of revenue, up from $10.2 million or 5.2% of revenue in the fourth quarter of 2022. The increase in gross profit dollars and margin was primarily driven by margin improvements in both segments stemming from higher quality projects and improved execution, partially offset by lower margin and mix of dredging revenue.
Selling, general and administrative (“SG&A”) expenses were $17.2 million, up from $13.7 million in the fourth quarter of 2022. As a percentage of total contract revenues, SG&A expenses increased to 8.5% from 7.0%. The increase in SG&A dollars and percentage reflected an increase in IT and business development spending and higher legal costs related to pursuing project-related claims.
Net loss for the fourth quarter was $4.4 million or $0.13 per diluted share compared to net loss of $4.9 million or $0.15 per diluted share in the fourth quarter of 2022.
Fourth quarter 2023 net income included $7.0 million ($0.21 diluted income per share) of non-recurring items. Fourth quarter 2023 adjusted net income was $2.6 million ($0.08 diluted income per share).
EBITDA for the fourth quarter of 2023 was $6.5 million, representing a 3.2% EBITDA margin, as compared to EBITDA of $2.2 million, or a 1.1% EBITDA margin in the fourth quarter last year. Adjusted for non-recurring items, EBITDA for the fourth quarter of 2023 increased to $14.8 million, representing a 7.3% adjusted EBITDA margin, as compared to adjusted EBITDA for the fourth quarter of 2022 of $3.2 million, representing a 1.6% adjusted EBITDA margin.
Total backlog at December 31, 2023 was $762.2 million, compared to $877.5 million at September 30, 2023 and $448.8 million at December 31, 2022. Backlog for the Marine segment was $602.5 million, compared to $699.9 million at September 30, 2023 and $216.7 million at December 31, 2022. Backlog for the Concrete segment was $159.7 million, compared to $177.6 million at September 30, 2023 and $232.1 million at December 31, 2022. In addition, the Company has been awarded $121 million in new project work subsequent to the fourth quarter that is not included in backlog at the end of the quarter.
Balance Sheet Update
As of December 31, 2023, current assets were $271.8 million, including unrestricted cash and cash equivalents of $30.9 million. Total debt outstanding as of December 31, 2023 was $37.2 million. At the end of the quarter, the Company had no outstanding borrowings under its revolving credit facility. On December 1, 2023, the Company and White Oak amended the Company’s credit facility to extend the maturity date for the $15.0 million pre-payment. On February 27, 2024, the Company and White Oak further amended the Company’s credit facility to lower the interest rate on its $65 million revolver by 50 basis points and its $38 million term loan by 100 basis points.
Asset Sales
The Company entered into a contract for the sale of its East West Jones properties in Harris County, Texas. The purchase price is $34 million and the transaction is expected to close in the second quarter of 2024. The Company expects to use the proceeds to reduce debt and for general corporate purposes.
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Orion Group Holdings will host a conference call to discuss results for the fourth quarter and full year 2023 at 9:00 a.m. Eastern Time/8:00 a.m. Central Time on Thursday, February 29, 2024. To participate, please call (844) 481-2994 and ask for the Orion Group Holdings Conference Call. A live audio webcast of the call will also be available on the Investor Relations section of Orion’s website at https://www.oriongroupholdingsinc.com/investor/ and will be archived for replay.
About Orion Group Holdings
Orion Group Holdings, Inc., a leading specialty construction company serving the infrastructure, industrial and building sectors, provides services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through its marine segment and its concrete segment. The Company’s marine segment provides construction and dredging services relating to marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design and specialty services. Its concrete segment provides turnkey concrete construction services including place and finish, site prep, layout, forming, and rebar placement for large commercial, structural and other associated business areas. The Company is headquartered in Houston, Texas with regional offices throughout its operating areas. The Company’s website is located at: https://www.oriongroupholdingsinc.com.
Backlog Definition
Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress but are not yet complete. The Company cannot guarantee that the revenue implied by its backlog will be realized, or, if realized, will result in earnings. Backlog can fluctuate from period to period due to the timing and execution of contracts. The typical duration of the Company’s projects ranges from three to nine months on shorter projects to multiple years on larger projects. The Company's backlog at any point in time includes both revenue it expects to realize during the next twelve-month period as well as revenue it expects to realize in future years.
Non-GAAP Financial Measures
This press release includes the financial measures “adjusted net income/loss,” “adjusted earnings/loss per share,” “EBITDA,” "Adjusted EBITDA" and “Adjusted EBITDA margin." These measurements are “non-GAAP financial measures” under rules of the Securities and Exchange Commission, including Regulation G. The non-GAAP financial information may be determined or calculated differently by other companies. By reporting such non-GAAP financial information, the Company does not intend to give such information greater prominence than comparable GAAP financial information. Investors are urged to consider these non-GAAP measures in addition to and not in substitute for measures prepared in accordance with GAAP.
Adjusted net income/loss and adjusted earnings/loss per share should not be viewed as an equivalent financial measure to net income/loss or earnings/loss per share. Adjusted net income/loss and adjusted earnings/loss per share exclude certain items that management believes impairs a meaningful evaluation of the Company’s financial performance. The Company believes these adjusted financial measures are a useful supplement to earnings/loss calculated in accordance with GAAP because they better inform our common stockholders as to the Company's operational trends and performance relative to other companies. Generally, items excluded are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the Company generally excludes information regarding these types of items.
Orion Group Holdings defines EBITDA as net income/loss before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is calculated by adjusting EBITDA for certain items that management believes impairs a meaningful comparison of operating results. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA for the period by contract revenues for the period. The GAAP financial measure that is most directly
3
comparable to EBITDA and Adjusted EBITDA is net income, while the GAAP financial measure that is most directly comparable to Adjusted EBITDA margin is operating margin, which represents operating income divided by contract revenues. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are used internally to evaluate current operating expense, operating efficiency, and operating profitability on a variable cost basis, by excluding the depreciation and amortization expenses, primarily related to capital expenditures and acquisitions, and net interest and tax expenses. Additionally, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information regarding the Company's ability to meet future debt service and working capital requirements while providing an overall evaluation of the Company's financial condition. In addition, EBITDA is used internally for incentive compensation purposes. The Company includes EBITDA, Adjusted EBITDA and Adjusted EBITDA margin to provide transparency to investors as they are commonly used by investors and others in assessing performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have certain limitations as analytical tools and should not be used as a substitute for operating margin, net income, cash flows, or other data prepared in accordance with GAAP, or as a measure of the Company's profitability or liquidity.
Forward-Looking Statements
The matters discussed in this press release may constitute or include projections or other forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, of which provisions the Company is availing itself. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'seeks', 'approximately', 'intends', 'plans', 'estimates', or 'anticipates', or the negative thereof or other comparable terminology, or by discussions of strategy, plans, objectives, intentions, estimates, forecasts, outlook, assumptions, or goals. In particular, statements regarding future operations or results, including those set forth in this press release, and any other statement, express or implied, concerning future operating results or the future generation of or ability to generate revenues, income, net income, gross profit, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, or cash flow, including to service debt, and including any estimates, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward-looking statements also include project award announcements, estimated project start dates, anticipated revenues, and contract options which may or may not be awarded in the future. Forward-looking statements involve risks, including those associated with the Company's fixed price contracts that impacts profits, unforeseen productivity delays that may alter the final profitability of the contract, cancellation of the contract by the customer for unforeseen reasons, delays or decreases in funding by the customer, levels and predictability of government funding or other governmental budgetary constraints, and any potential contract options which may or may not be awarded in the future, and are at the sole discretion of award by the customer. Past performance is not necessarily an indicator of future results. In light of these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that the Company's plans, estimates, forecasts, goals, intentions, or objectives will be achieved or realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update information contained in this press release whether as a result of new developments or otherwise, except as required by law.
Please refer to the Company's 2022 Annual Report on Form 10-K, filed on March 16, 2023, which is available on its website at www.oriongroupholdingsinc.com or at the SEC's website at www.sec.gov, for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts.
Contacts:
Financial Profiles, Inc.
Margaret Boyce 310-622-8247
orn@finprofiles.com
4
Orion Group Holdings, Inc. and Subsidiaries
Condensed Statements of Operations
(In Thousands, Except Share and Per Share Information)
(Unaudited)
| | Three months ended | | Twelve months ended | ||||||||
| | December 31, | | December 31, | ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
Contract revenues |
| | 201,594 |
| | 196,195 |
| | 711,778 |
| | 748,322 |
Costs of contract revenues |
| | 178,627 |
| | 186,032 |
| | 650,115 |
| | 697,580 |
Gross profit |
| | 22,967 |
| | 10,163 |
| | 61,663 |
| | 50,742 |
Selling, general and administrative expenses |
| | 17,160 |
| | 13,720 |
| | 69,431 |
| | 62,503 |
Amortization of intangible assets |
| | 44 |
| | 310 |
| | 427 |
| | 1,239 |
Gain on disposal of assets, net | | | (540) |
| | (409) |
| | (8,455) |
| | (4,970) |
Intangible asset impairment loss |
| | 6,890 |
| | — |
| | 6,890 |
| | — |
Operating loss |
| | (587) |
| | (3,458) |
| | (6,630) |
| | (8,030) |
Other (expense) income: |
| |
|
| |
|
| |
|
| |
|
Other income |
| | 49 |
| | 52 |
| | 641 |
| | 199 |
Interest income |
| | 13 |
| | 33 |
| | 103 |
| | 104 |
Interest expense |
| | (3,985) |
| | (1,543) |
| | (11,659) |
| | (4,456) |
Other expense, net |
| | (3,923) |
| | (1,458) |
| | (10,915) |
| | (4,153) |
Loss before income taxes |
| | (4,510) |
| | (4,916) |
| | (17,545) |
| | (12,183) |
Income tax expense |
| | (145) |
| | 33 |
| | 330 |
| | 429 |
Net loss | | $ | (4,365) | | $ | (4,949) | | $ | (17,875) | | $ | (12,612) |
| | | | | | | | | | | | |
Basic loss per share | | $ | (0.13) | | $ | (0.15) | | $ | (0.55) | | $ | (0.40) |
Diluted loss per share | | $ | (0.13) | | $ | (0.15) | | $ | (0.55) | | $ | (0.40) |
Shares used to compute loss per share: | |
|
| |
|
| |
|
| |
|
|
Basic | |
| 32,528,213 | | | 32,060,822 | |
| 32,346,992 | | | 31,402,328 |
Diluted | |
| 32,528,213 | | | 32,060,822 | |
| 32,346,992 | | | 31,402,328 |
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Orion Group Holdings, Inc. and Subsidiaries
Selected Results of Operations
(In Thousands, Except Share and Per Share Information)
(Unaudited)
| | Three months ended December 31, | | ||||||||
| | 2023 | | 2022 | | ||||||
|
| Amount |
| Percent |
| Amount |
| Percent |
| ||
| | (dollar amounts in thousands) | | ||||||||
Contract revenues | | | | | | | | | | | |
Marine segment | | | |
| | | | | | | |
Public sector | | $ | 98,275 | | 72.7 | % | $ | 73,006 | | 75.8 | % |
Private sector | | | 36,888 | | 27.3 | % | | 23,310 | | 24.2 | % |
Marine segment total | | $ | 135,163 | | 100.0 | % | $ | 96,316 | | 100.0 | % |
Concrete segment | | | |
| | | | |
| | |
Public sector | | $ | 2,635 | | 4.0 | % | $ | 7,216 | | 7.2 | % |
Private sector | | | 63,796 | | 96.0 | % | | 92,663 | | 92.8 | % |
Concrete segment total | | $ | 66,431 | | 100.0 | % | $ | 99,879 | | 100.0 | % |
Total | | $ | 201,594 |
| | | $ | 196,195 |
| | |
| | | | | | | | | | | |
Operating income (loss) | |
|
|
|
| |
|
|
|
| |
Marine segment | | $ | 4,257 |
| 3.1 | % | $ | 234 |
| 0.2 | % |
Concrete segment | |
| (4,844) |
| (7.3) | % |
| (3,692) |
| (3.7) | % |
Total | | $ | (587) | | | | $ | (3,458) |
|
| |
| | | | | | | | | | | |
| | Twelve months ended December 31, | | ||||||||
| | 2023 | | 2022 | | ||||||
|
| Amount |
| Percent |
| Amount |
| Percent |
| ||
| | (dollar amounts in thousands) | | ||||||||
Contract revenues | | | | | | | | | | | |
Marine segment | | | |
| | | | | | | |
Public sector | | $ | 292,088 | | 73.8 | % | $ | 237,363 | | 70.0 | % |
Private sector | | | 103,829 | | 26.2 | % | | 101,850 | | 30.0 | % |
Marine segment total | | $ | 395,917 | | 100.0 | % | $ | 339,213 | | 100.0 | % |
Concrete segment | | | |
| | | | |
| | |
Public sector | | $ | 20,297 | | 6.4 | % | $ | 30,284 | | 7.4 | % |
Private sector | | | 295,564 | | 93.6 | % | | 378,825 | | 92.6 | % |
Concrete segment total | | $ | 315,861 | | 100.0 | % | $ | 409,109 | | 100.0 | % |
Total | | $ | 711,778 |
| | | $ | 748,322 |
| | |
| | | | | | | | | | | |
Operating income (loss) | |
|
|
|
| |
|
|
|
| |
Marine segment | | $ | 3,670 |
| 0.9 | % | $ | 9,787 |
| 2.9 | % |
Concrete segment | |
| (10,300) |
| (3.3) | % |
| (17,817) |
| (4.4) | % |
Total | | $ | (6,630) | | | | $ | (8,030) |
|
| |
6
Orion Group Holdings, Inc. and Subsidiaries
Reconciliation of Adjusted Net Income (Loss)
(In thousands except per share information)
(Unaudited)
| | Three months ended | | Twelve months ended | ||||||||
| | December 31, | | December 31, | ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
Net loss | | $ | (4,365) | | $ | (4,949) | | $ | (17,875) | | $ | (12,612) |
One-time charges and the tax effects: | | | | | | | | | | | | |
Net gain on Port Lavaca South Yard property sale | | | — | | | — | | | (5,202) | | | — |
ERP implementation | | | 568 | | | 308 | |
| 1,378 | |
| 1,867 |
Severance | |
| 683 | |
| 4 | |
| 809 | |
| 948 |
Intangible asset impairment loss | | | 6,890 | | | — | | | 6,890 | | | — |
Professional fees related to management transition | |
| — | |
| — | |
| — | |
| 1,118 |
Tax rate applied to one-time charges (1) | |
| (1,456) | |
| (265) | |
| (642) | |
| (544) |
Total one-time charges and the tax effects | |
| 6,685 | |
| 47 | |
| 3,233 | |
| 3,389 |
Federal and state tax valuation allowances | |
| 277 | |
| 1,158 | |
| 3,238 | |
| 2,114 |
Adjusted net income (loss) | | $ | 2,597 | | $ | (3,744) | | $ | (11,404) | | $ | (7,109) |
Adjusted EPS | | $ | 0.08 | | $ | (0.12) | | $ | (0.35) | | $ | (0.23) |
| (1) | Items are taxed discretely using the Company's effective tax rate which differs from the Company’s statutory federal rate primarily due to state income taxes and the non-deductibility of other permanent items. |
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Orion Group Holdings, Inc. and Subsidiaries
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations
(In Thousands, Except Margin Data)
(Unaudited)
| | Three months ended | | Year ended |
| ||||||||
| | December 31, | | December 31, |
| ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Net loss | | $ | (4,365) | | $ | (4,949) | | $ | (17,875) | | $ | (12,612) | |
Income tax (benefit) expense | |
| (145) | |
| 33 | |
| 330 | |
| 429 | |
Interest expense, net | |
| 3,972 | |
| 1,510 | |
| 11,556 | |
| 4,352 | |
Depreciation and amortization | |
| 6,996 | |
| 5,631 | |
| 23,878 | |
| 24,057 | |
EBITDA (1) | |
| 6,458 | |
| 2,225 | |
| 17,889 | |
| 16,226 | |
Stock-based compensation | | | 209 | | | 639 | | | 2,042 | | | 2,754 | |
Net gain on Port Lavaca South Yard property sale | | | — | | | — | | | (5,202) | | | — | |
ERP implementation | | | 568 | | | 308 | | | 1,378 | | | 1,867 | |
Professional fees related to management transition | |
| — | |
| — | |
| — | |
| 1,118 | |
Severance | |
| 683 | |
| 4 | |
| 809 | |
| 948 | |
Intangible asset impairment loss | | | 6,890 | | | — | | | 6,890 | | | — | |
Adjusted EBITDA(2) | | $ | 14,808 | | $ | 3,176 | | $ | 23,806 | | $ | 22,913 | |
Operating income margin | |
| (0.3) | % |
| (1.8) | % |
| (0.9) | % |
| (1.1) | % |
Impact of depreciation and amortization | |
| 3.5 | % |
| 2.9 | % |
| 3.3 | % |
| 3.2 | % |
Impact of stock-based compensation | | | 0.1 | % | | 0.3 | % | | 0.3 | % | | 0.4 | % |
Impact of net gain on Port Lavaca South Yard property sale | | | — | % | | — | % | | (0.7) | % | | — | % |
Impact of ERP implementation | | | 0.3 | % | | 0.2 | % | | 0.2 | % | | 0.3 | % |
Impact of professional fees related to management transition | |
| — | % |
| — | % |
| — | % |
| 0.1 | % |
Impact of severance | |
| 0.3 | % |
| — | % |
| 0.1 | % |
| 0.2 | % |
Impact of intangible asset impairment loss | | | 3.4 | % |
| — | % |
| 1.0 | % |
| — | % |
Adjusted EBITDA margin(2) | |
| 7.3 | % |
| 1.6 | % |
| 3.3 | % |
| 3.1 | % |
| (1) | EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. |
| (2) | Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for stock-based compensation, net gain on Port Lavaca South Yard property sale, ERP implementation, professional fees related to management transition, severance and intangible asset impairment loss. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues. |
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Orion Group Holdings, Inc. and Subsidiaries
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations by Segment
(In Thousands, Except Margin Data)
(Unaudited)
|
| Marine | | Concrete |
| ||||||||
| | Three months ended | | Three months ended |
| ||||||||
| | December 31, | | December 31, |
| ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Operating income (loss) |
| | 4,257 |
| | 234 |
| | (4,844) |
| | (3,692) | |
Other income |
| | 49 |
| | 52 |
| | — |
| | — | |
Depreciation and amortization |
| | 5,801 |
| | 3,841 |
| | 1,195 |
| | 1,790 | |
EBITDA (1) |
| | 10,107 |
| | 4,127 |
| | (3,649) |
| | (1,902) | |
Stock-based compensation | | | 175 | | | 636 | | | 34 | | | 3 | |
ERP implementation | | | 352 | | | 160 | | | 216 | | | 148 | |
Severance |
| | 683 |
| | 4 |
| | — |
| | — | |
Intangible asset impairment loss | | | — | | | — | | | 6,890 | | | — | |
Adjusted EBITDA(2) | | $ | 11,317 | | $ | 4,927 | | $ | 3,491 | | $ | (1,751) | |
Operating income margin | |
| 3.1 | % |
| 0.2 | % |
| (7.3) | % |
| (3.7) | % |
Impact of other income | | | — | % |
| — | % |
| — | % |
| — | % |
Impact of depreciation and amortization | |
| 4.3 | % |
| 4.0 | % |
| 1.8 | % |
| 1.8 | % |
Impact of stock-based compensation | | | 0.1 | % | | 0.7 | % | | 0.1 | % | | — | % |
Impact of ERP implementation | | | 0.3 | % | | 0.2 | % | | 0.3 | % | | 0.1 | % |
Impact of severance | |
| 0.5 | % |
| — | % |
| — | % |
| — | % |
Impact of intangible asset impairment loss | | | 0.1 | % |
| — | % |
| 10.4 | % |
| — | % |
Adjusted EBITDA margin (2) | |
| 8.4 | % |
| 5.1 | % |
| 5.3 | % |
| (1.8) | % |
| | | | | | | | | | | | | |
| | Marine | | Concrete |
| ||||||||
| | Year ended | | Year ended |
| ||||||||
| | December 31, | | December 31, |
| ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Operating income (loss) |
| | 3,670 |
| | 9,787 |
| | (10,300) |
| | (17,817) | |
Other income |
| | 641 |
| | 199 |
| | — |
| | — | |
Depreciation and amortization |
| | 18,219 |
| | 16,592 |
| | 5,659 |
| | 7,465 | |
EBITDA (1) |
| | 22,530 |
| | 26,578 |
| | (4,641) |
| | (10,352) | |
Stock-based compensation | | | 1,958 | | | 2,671 | | | 84 | | | 83 | |
Net gain on Port Lavaca South Yard property sale | | | (5,202) | | | — | | | — | | | — | |
ERP implementation | | | 766 | | | 846 | | | 612 | | | 1,021 | |
Professional fees related to management transition |
| | — |
| | 494 |
| | — |
| | 624 | |
Severance |
| | 721 |
| | 948 |
| | 88 |
| | — | |
Intangible asset impairment loss | | | — | | | — | | | 6,890 | | | — | |
Adjusted EBITDA(2) | | $ | 20,773 | | $ | 31,537 | | $ | 3,033 | | $ | (8,624) | |
Operating income margin | |
| 0.8 | % |
| 2.9 | % |
| (3.3) | % |
| (4.4) | % |
Impact of other income | | | 0.2 | % |
| — | % |
| — | % |
| — | % |
Impact of depreciation and amortization | |
| 4.6 | % |
| 5.0 | % |
| 1.9 | % |
| 1.9 | % |
Impact of stock-based compensation | | | 0.5 | % | | 0.8 | % | | — | % | | — | % |
Impact of net gain on Tampa property sale | | | (1.3) | % | | — | % | | — | % | | — | % |
Impact of ERP implementation | | | 0.2 | % | | 0.2 | % | | 0.2 | % | | 0.2 | % |
Impact of professional fees related to management transition | |
| — | % |
| 0.1 | % |
| — | % |
| 0.2 | % |
Impact of severance | |
| 0.2 | % |
| 0.3 | % |
| — | % |
| — | % |
Impact of intangible asset impairment loss | | | — | % |
| — | % |
| 2.2 | % |
| — | % |
Adjusted EBITDA margin (2) | |
| 5.2 | % |
| 9.3 | % |
| 1.0 | % |
| (2.1) | % |
| (1) | EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. |
| (2) | Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for stock-based compensation, net gain on Port Lavaca South Yard property sale, ERP implementation, professional fees related to management transition, severance and intangible asset impairment loss. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues. |
9
Orion Group Holdings, Inc. and Subsidiaries
Condensed Statements of Cash Flows Summarized
(In Thousands)
(Unaudited)
| | Three months ended | | Year ended | ||||||||
| | December 31, | | December 31, | ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
Net loss | | $ | (4,365) | | $ | (4,949) | | $ | (17,875) | | $ | (12,612) |
Adjustments to remove non-cash and non-operating items | | | 16,248 | | | 7,249 | | | 32,641 | | | 27,413 |
Cash flow from net loss after adjusting for non-cash and non-operating items | | | 11,883 | | | 2,300 | | | 14,766 | | | 14,801 |
Change in operating assets and liabilities (working capital) | | | 33,796 | | | (1,836) | | | 2,412 | | | (5,236) |
Cash flows provided by operating activities | | $ | 45,679 | | $ | 464 | | $ | 17,178 | | $ | 9,565 |
Cash flows (used in) provided by investing activities | | $ | (3,221) | | $ | (3,549) | | $ | 2,170 | | $ | (9,704) |
Cash flows (used in) provided by financing activities | | $ | (15,401) | | $ | 4,132 | | $ | 7,806 | | $ | (8,370) |
| | | | | | | | | | | | |
Capital expenditures (included in investing activities above) | | $ | (2,231) | | $ | (3,957) | | $ | (8,909) | | $ | (14,584) |
10
Orion Group Holdings, Inc. and Subsidiaries
Condensed Statements of Cash Flows
(In Thousands)
(Unaudited)
| | Year ended December 31, | ||||
|
| 2023 |
| 2022 | ||
Cash flows from operating activities |
| |
|
| |
|
Net loss | | $ | (17,875) | | $ | (12,612) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Depreciation and amortization | |
| 18,844 | |
| 20,915 |
Amortization of ROU operating leases | |
| 6,763 | |
| 4,813 |
Amortization of ROU finance leases | |
| 5,034 | |
| 3,142 |
Write-off of debt issuance costs upon debt modification | |
| 119 | |
| — |
Amortization of deferred debt issuance costs | |
| 1,616 | |
| 424 |
Deferred income taxes | |
| (103) | |
| 13 |
Stock-based compensation | |
| 2,042 | |
| 2,754 |
Gain on disposal of assets, net | |
| (8,455) | |
| (4,970) |
Intangible asset impairment loss | | | 6,890 | | | — |
Allowance for credit losses | | | (109) | | | 322 |
Change in operating assets and liabilities: | | | | | | |
Accounts receivable | |
| 14,129 | |
| (28,660) |
Income tax receivable | |
| (224) | |
| 3 |
Inventory | |
| (729) | |
| (1,485) |
Prepaid expenses and other | |
| (55) | |
| 1,645 |
Contract assets | |
| (37,619) | |
| (15,374) |
Accounts payable | |
| (4,507) | |
| 39,370 |
Accrued liabilities | |
| 11,817 | |
| (6,630) |
Operating lease liabilities | |
| (6,807) | | | (4,748) |
Income tax payable | |
| 48 | |
| (79) |
Contract liabilities | |
| 26,359 | |
| 10,722 |
Net cash provided by operating activities | |
| 17,178 | |
| 9,565 |
Cash flows from investing activities: | | | | | | |
Proceeds from sale of property and equipment | |
| 11,079 | |
| 4,880 |
Purchase of property and equipment | |
| (8,909) | |
| (14,584) |
Net cash provided by (used in) investing activities | |
| 2,170 | |
| (9,704) |
Cash flows from financing activities: | | | | | | |
Borrowings on credit | |
| 106,958 | |
| 24,000 |
Payments made on borrowings on credit | |
| (104,431) | |
| (28,274) |
Proceeds from failed sale-leaseback arrangement | |
| 14,702 | |
| — |
Proceeds from sale-leaseback financing | |
| 2,397 | |
| — |
Loan costs from Credit Facility | | | (6,537) | | | (664) |
Payments of finance lease liabilities | | | (4,791) | | | (2,992) |
Payments related to tax withholding for share-based compensation | | | (492) | | | (440) |
Net cash provided by (used in) financing activities | |
| 7,806 | |
| (8,370) |
Net change in cash, cash equivalents and restricted cash | |
| 27,154 | |
| (8,509) |
Cash, cash equivalents and restricted cash at beginning of period | |
| 3,784 | |
| 12,293 |
Cash, cash equivalents and restricted cash at end of period | | $ | 30,938 | | $ | 3,784 |
11
Orion Group Holdings, Inc. and Subsidiaries
Condensed Balance Sheets
(In Thousands, Except Share and Per Share Information)
|
| December 31, |
| December 31, | ||
| | 2023 | | 2022 | ||
| | (Unaudited) | | | | |
ASSETS |
| |
|
| |
|
Current assets: |
| |
|
| |
|
Cash and cash equivalents | | $ | 30,938 | |
| 3,784 |
Accounts receivable: | |
| | |
| |
Trade, net of allowance for credit losses of $361 and $606, respectively | |
| 101,229 | |
| 106,758 |
Retainage | |
| 42,044 | |
| 50,873 |
Income taxes receivable | |
| 626 | |
| 402 |
Other current | |
| 3,864 | |
| 3,526 |
Inventory | |
| 2,699 | |
| 2,862 |
Contract assets | |
| 81,522 | |
| 43,903 |
Prepaid expenses and other | |
| 8,894 | |
| 8,229 |
Total current assets | |
| 271,816 | |
| 220,337 |
Property and equipment, net of depreciation | |
| 87,834 | |
| 100,977 |
Operating lease right-of-use assets, net of amortization | |
| 25,696 | |
| 14,978 |
Financing lease right-of-use assets, net of amortization | |
| 23,602 | |
| 15,839 |
Inventory, non-current | |
| 6,361 | |
| 5,469 |
Intangible assets, net of amortization | |
| — | |
| 7,317 |
Deferred income tax asset | | | 26 | | | 70 |
Other non-current | |
| 1,558 | |
| 2,168 |
Total assets | | $ | 416,893 | | $ | 367,155 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
|
| |
|
|
Current liabilities: | |
|
| |
|
|
Current debt, net of issuance costs | | $ | 13,453 | | $ | 34,956 |
Accounts payable: | |
| | |
| |
Trade | |
| 80,294 | |
| 87,605 |
Retainage | |
| 2,527 | |
| 1,198 |
Accrued liabilities | |
| 37,074 | |
| 18,466 |
Income taxes payable | |
| 570 | |
| 522 |
Contract liabilities | |
| 64,079 | |
| 37,720 |
Current portion of operating lease liabilities | |
| 9,254 | |
| 4,738 |
Current portion of financing lease liabilities | |
| 8,665 | |
| 4,031 |
Total current liabilities | |
| 215,916 | |
| 189,236 |
Long-term debt, net of debt issuance costs | |
| 23,740 | |
| 716 |
Operating lease liabilities | |
| 16,632 | |
| 11,018 |
Financing lease liabilities | |
| 13,746 | |
| 11,102 |
Other long-term liabilities | |
| 25,320 | |
| 17,072 |
Deferred income tax liability | |
| 64 | |
| 211 |
Total liabilities | |
| 295,418 | |
| 229,355 |
Stockholders’ equity: | |
|
| |
|
|
Preferred stock -- $0.01 par value, 10,000,000 authorized, none issued | |
| — | |
| — |
Common stock -- $0.01 par value, 50,000,000 authorized, 33,260,011 and 32,770,550 issued; 32,548,780 and 32,059,319 outstanding at December 31, 2023 and December 31, 2022, respectively | |
| 333 | |
| 328 |
Treasury stock, 711,231 shares, at cost, as of December 31, 2023 and December 31, 2022, respectively | |
| (6,540) | |
| (6,540) |
Additional paid-in capital | |
| 189,729 | |
| 188,184 |
Retained loss | |
| (62,047) | |
| (44,172) |
Total stockholders’ equity | |
| 121,475 | |
| 137,800 |
Total liabilities and stockholders’ equity | | $ | 416,893 | | $ | 367,155 |
12