HOUSTON,
"Despite the challenges of the first quarter, we continue to see positive results from our adjusted bidding philosophy in the form of an improved win rate and continued sequential increases in backlog," said
Financial highlights of the Company's first quarter 2012 include:
First Quarter 2012
First quarter 2012 contract revenues were
Backlog of work under contract as of
The Company reminds investors that backlog can fluctuate from period to period due to the timing and execution of contracts. Given the typical duration of the Company's projects, which range from three to nine months, the Company's backlog at any point in time usually represents only a portion of the revenue it expects to realize during a twelve-month period. Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress and not yet complete, and the Company cannot guarantee that the revenue projected in its backlog will be realized, or, if realized, will result in earnings.
Outlook
"We continue to see improving market conditions," said Mr. Pearson. "We believe that pricing has stabilized, albeit at levels lower than historical norms, and that irrational bidding seen in prior periods has begun to subside. We believe we have found the appropriate price points in our markets and we are pleased with our progress of building backlog, controlling costs, and positioning ourselves for improved pricing conditions. It is also encouraging to see the return of private sector opportunities.
As we have said before, we do not expect the commencement of recently awarded large jobs to materially contribute to our results until the second half of 2012. Therefore, as we mentioned in our March update, we expect to see significantly pressured margins during at least the first half of the 2012, as a result of the timing of the start of our recent awards as well as underutilized dredging assets. More specifically, we expect tough results to continue into the second quarter, which will be exacerbated by a lack of projects involving dredging services, leading to idle dredge equipment. Therefore, it is not unreasonable to expect to see the bottom line second quarter results to be pressured as compared to the first quarter. However, we expect our results will begin to improve later in the year as recently awarded projects get underway, and the Corps returns to more normal job letting levels. In fact, we are now beginning to see project lettings from the Corps and we are cautiously optimistic that the Corps will begin liquidating their budget at a more normalized pace."
"The need for our services has not gone away," said
As we begin 2012, we continue to effectively manage our balance sheet and the Company's cash position. Looking ahead, we must be patient while focusing on project execution and returning to and maintaining profitability. Despite the current competitive environment, we still believe the market for which we provide services can support future growth of the Company through geographic expansion, strategic acquisitions, and new service lines to complement our core capabilities. We remain committed to increasing shareholder value."
Conference Call Details
About
The
EBITDA and EBITDA Margin
This press release includes the financial measures "EBITDA" and "EBITDA margin". These measurements may be deemed "non-GAAP financial measures" under rules of the
A reconciliation of the Company's future EBITDA margin to the corresponding GAAP measure is not available as these are estimated goals for the performance of the overall operations over the planning period. These estimated goals are based on assumptions that may be affected by actual outcomes, including but not limited to the factors noted in the "forward looking statements" herein, in other releases, and in filings with the
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 Private Securities Litigation Reform Act of 1995, the provisions of which 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, assumptions, or goals. In particular, statements regarding future operations or results, including those set forth in this press release (including those under "Outlook" above), and any other statement, express or implied, concerning future operating results or the future generation of or ability to generate revenues, income, net income, profit, EBITDA, 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 estimated project start date, 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, 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 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.
Please refer to the Company's Annual Report on Form 10-K, filed on
Orion Marine Group, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except share and per share information) Three Months Ended March 31, 2012 March 31, 2011 (Unaudited) (Unaudited) Contract revenues $ 50,890 $ 79,057 Costs of contract revenues 53,718 68,739 Gross profit (2,828) 10,318 Selling, general and administrative expenses 7,091 7,898 Operating (loss) income (9,919) 2,420 Other income 181 104 Interest income 11 9 Interest expense (168) (85) Other income (expense), net 24 28 (Loss) Income before income taxes (9,895) 2,448 Income tax (benefit) expense (3,559) 909 Net (loss) income $ (6,336) $ 1,539 Basic (loss) earnings per share—Common $ (0.23) $ 0.06 Diluted (loss) earnings per share—Common $ (0.23) $ 0.06 Shares used to compute earnings per share: Basic—Common 27,119,760 27,004,933 Diluted—Common 27,119,760 27,180,094
EBITDA and EBITDA Margin Reconciliations
(In Thousands, except margin data)
Three Months Ended
March 31,
2012 March 31,
2011
(Unaudited) (Unaudited)
Net (loss) income $ (6,336) $ 1,539
Income tax (benefit) expense (3,559) 909
Interest (income)expense, net 157 76
Depreciation and amortization 5,379 5,531
EBITDA1 $ (4,359) $ 8,055
Operating Margin2 (19.2)% 3.2%
Impact of Depreciation and Amortization 10.6% 7.0%
EBITDA margin1 (8.6)% 10.2%
1 EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by contract revenues.
2 Operating income margin is calculated by dividing operating income plus other income (if any) by contract revenues.
Orion Marine Group, Inc. and Subsidiaries Supplementary Financial Information (In Thousands) Balance as of Balance as of March 31, 2012 December 31, 2011 (Unaudited) (Audited) Assets Current assets Cash and cash equivalents $ 15,747 $ 38,979 Restricted cash and cash equivalents 13,952 -- Accounts receivable Trade 25,621 20,954 Retainage 5,860 5.977 Other 918 1,111 Taxes receivable 17,488 13,998 Note receivable 46 51 Inventory 3,320 3,361 Deferred tax assets 1,293 1,182 Costs and estimated earnings in excess of billings on uncompleted contracts 17,076 15,112 Prepaid expenses and other 2,346 2,470 Total current assets 103,667 103,195 Property and equipment, net 156,963 146,107 Accounts receivable, long-term 1,410 1,410 Goodwill 32,168 32,168 Intangible assets, net of amortization -- -- Other assets 404 207 Total assets $ 294,612 $ 283,087 Liabilities and Stockholders' Equity Current liabilities Current debt $ 13,000 $ -- Accounts payable Trade 11,333 11,977 Retainage 448 374 Accrued liabilities 8,258 9,339 Billings in excess of costs and estimated earnings on uncompleted contracts 11,342 5,665 Total current liabilities 44,381 27,355 Long-term debt -- -- Other long-term liabilities 656 606 Deferred income taxes 21,300 21,287 Deferred revenue 188 203 Total liabilities 66,525 49,451 Stockholders' equity Common stock 274 274 Treasury stock (3,003) (3,003) Additional paid in capital 158,347 157,560 Retained earnings 72,469 78,805 Total stockholders' equity 228,087 233,636 Total liabilities and stockholders' equity $ 294,612 $ 283,087
Orion Marine Group, Inc. and Subsidiaries Supplementary Financial Information (In Thousands) Three Months Ended March 31, 2012 Three Months Ended March 31, 2011 (Unaudited) (Unaudited) Cash flows from operating activities Net (Loss) Income $ (6,336) $ 1,539 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 5,378 5,531 Deferred financing cost amortization 33 33 Bad debt expense (1) -- Deferred income taxes (98) 606 Stock-based compensation 774 635 Gain on sale of property and equipment (14) (104) Excess tax benefit from stock option exercise -- -- Change in operating assets and liabilities, excluding effects of business acquired: Accounts receivable (4,355) 9,111 Income tax receivable (3,491) 398 Inventory 41 (647) Note receivable 5 -- Prepaid expenses and other (108) (723) Restricted Cash (13,952) -- Costs and estimated earnings in excess of billings on uncompleted contracts (1,964) (2,363) Accounts payable (570) (12,078) Accrued liabilities (1,030) 1,047 Income tax payable -- (81) Billings in excess of costs and estimated earnings on uncompleted contracts 5,677 2,653 Deferred revenue (14) (15) Net cash provided by (used in) operating activities (20,025) 5,542 Cash flows from investing activities Proceeds from sale of property and equipment 40 314 Purchase of property and equipment (16,260) (5,284) Net cash used in investing activities (16,220) (4,970) Cash flows from financing activities Borrowing on revolving line of credit 13,000 -- Exercise of stock options 13 -- Excess tax benefit from stock option exercise -- -- Issuance of restricted stock -- -- Increase in loan costs -- -- Purchase of shares into treasury -- -- Net cash (used in) provided by financing activities 13,013 -- Net change in cash and cash equivalents (23,232) 572 Cash and cash equivalents at beginning of period 38,979 23,174 Cash and cash equivalents at end of period $ 15,747 $ 23,746
CONTACT:Orion Marine Group, Inc. Mark Stauffer , Executive Vice President & CFOChris DeAlmeida , Director of Finance, 713-852-6506
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