"We are pleased with our results for the fourth quarter and full year 2013, which are due to the hard work and dedication of the entire
Financial highlights of the Company's fourth quarter and full year 2013 include:
Fourth Quarter 2013
-
Fourth quarter 2013 contract revenue was
$106.4 million , an increase of 7.9%, as compared with fourth quarter 2012 revenue of$98.6 million .
-
The Company self-performed approximately 84% of its work as measured by cost during the fourth quarter 2013, as compared with 83% in the prior year period.
-
Gross profit for the quarter was
$12.8 million , an increase of approximately$0.3 million as compared with the fourth quarter of 2012. Gross profit margin for the fourth quarter of 2013 was 12.0%, which was slightly lower than the prior year period of 12.7%.
-
Selling, General, and Administrative expense for the fourth quarter 2013 was
$8.9 million as compared to$6.8 million in the prior year period. The increase in Selling, General and Administrative expense is primarily due to bonuses payable to non-executives, an increase in group medical costs, and an increase in bad debt related to a single job for a small private customer. The fourth quarter of 2012 also had a benefit from a reduction of professional fees related to a favorable outcome of litigation.
-
The Company's fourth quarter 2013 EBITDA was
$8.9 million , representing a 8.3% EBITDA margin, which compares to fourth quarter 2012 EBITDA of$9.4 million , or a 9.5% EBITDA margin.
Full Year 2013
-
Full year 2013 contract revenue was
$354.5 million , the highest in the Company's history, and an increase of 21.4% as compared with full year 2012 revenues of$292.0 million .
-
Gross profit for the year was
$32.0 million , which represents an increase of$17.6 million as compared with the full year 2012. Gross profit margin for the full year 2013 was 9.0%, which is up from 4.9% for the full year 2012. The year over year increase in gross profit margin was primarily attributable to solid project execution, as well as sustained increases in some of the Company's equipment utilization throughout 2013.
-
The Company self-performed approximately 84% of its work as measured by cost during 2013 as compared with 83% during the prior year period.
-
Selling, General, and Administrative expense for the full year 2013 was
$32.1 million as compared with$28.6 million in the prior year period. The increase in Selling, General and Administrative expense is primarily due to increased staffing and overhead costs resulting from the expansion intoAlaska in 2012, bonuses payable to non-executives, and an increase in bad debt related to a single job for a small private customer. The fourth quarter of 2012 also had a benefit from a reduction of professional fees related to a favorable outcome on litigation. As a percentage of revenues, Selling General & Administrative expense declined as compared with the prior year, from 9.8% in 2012 to 9.1% in 2013.
-
The Company's full year 2013 EBITDA was
$21.4 million , representing a 6.0% EBITDA margin, which compares to full year 2012 EBITDA of$5.8 million , or a 1.9% EBITDA margin.
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 generally 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 be pleased with our bid market opportunities," said Mr. Pearson. "Demand from private sector clients has been an excellent source of bid opportunities and we expect this trend to continue. We are hopeful the federal budget deal approved in January will lead to normalized bid lettings from the
"Our bid activity and success rate in the fourth quarter is also an encouraging sign as we begin the new year," said
We are still confident that we can achieve positive results in 2014, as sustained improvement in fleet utilization will lead to some gross margin improvement. However, as mentioned previously, the stronger than expected fourth quarter was partly a result of the acceleration of project schedules, which will result in less production in the first quarter. As a reminder, many of the large projects we recently announced will not begin until the second quarter of 2014. Additionally, we must closely monitor how the recent budget agreement impacts the choppiness of Corps lettings. However, we still expect a healthy amount of bid opportunities from the private sector, state agencies, and local port authorities. Overall, we are comfortable with the level of potential bid activity from all of our end markets and are excited to build upon the accomplishments of 2013."
Purchase of Dredge Material Placement Area (DMPA)
Earlier this week, the Company finalized the purchase of a piece of property in the upper Houston Ship Channel to be used as a dredge material placement area. The approximately 340 acre parcel of land was purchased for approximately
Changes in Management
Today, the Company announced changes in its management structure, including the planned retirement of Mr. Pearson at the end of 2014, the naming of Mr. Stauffer as the Company's President effective immediately, and the naming of
Conference Call Details
About
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 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 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 Operations | ||||
(In thousands, except share and per share information) | ||||
Three months ended December 31, |
Twelve months ended December 31, |
|||
2013 | 2012 | 2013 | 2012 | |
Contract revenues | 106,412 | 98,634 | 354,544 | 292,042 |
Costs of contract revenues | 93,606 | 86,112 | 322,540 | 277,672 |
Gross profit | 12,806 | 12,522 | 32,004 | 14,370 |
Selling, general and administrative expenses | 8,890 | 6,819 | 32,110 | 28,573 |
Income (loss) from operations | 3,916 | 5,703 | (106) | (14,203) |
Other income (expense) | ||||
Loss from sale of assets, net | (227) | (1,822) | (153) | (1,822) |
Other income | (177) | (1) | 165 | 227 |
Interest income | 2 | 12 | 13 | 35 |
Interest expense | (98) | (105) | (525) | (743) |
Other expense, net | (500) | (1,916) | (500) | (2,303) |
Income (loss) before income taxes | 3,416 | 3,787 | (606) | (16,506) |
Income tax (benefit) expense | 1,226 | 2,301 | (937) | (4,640) |
Net income (loss) | 2,190 | 1,486 | 331 | (11,866) |
Net income attributable to noncontrolling interest | 56 | — | — | — |
Net income (loss) attributable to Orion common stockholders | $ 2,134 | $ 1,486 | $ 331 | $ (11,866) |
Basic income (loss) per share | $ 0.08 | $ 0.05 | $ 0.01 | $ (0.44) |
Diluted income (loss) per share | $ 0.08 | $ 0.05 | $ 0.01 | $ (0.44) |
Shares used to compute income (loss) per share | ||||
Basic | 27,366,783 | 27,176,449 | 27,296,732 | 27,138,927 |
Diluted | 27,761,982 | 27,617,218 | 27,613,054 | 27,138,927 |
Orion Marine Group, Inc. and Subsidiaries | ||||
EBITDA and EBITDA Margin Reconciliations | ||||
(In thousands, except margin data) | ||||
Three Months Ended | Twelve Months Ended | |||
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2012 |
|
Net income(loss) | 2,190 | 1,486 | 331 | (11,866) |
Income tax benefit (loss) | 1,226 | 2,301 | (937) | (4,640) |
Interest expense, net | 96 | 93 | 512 | 708 |
Depreciation and amortization | 5,352 | 5,532 | 21,538 | 21,570 |
EBITDA1 | $ 8,864 | $ 9,412 | $ 21,444 | $ 5,772 |
3.3% | 3.9% | (0.1)% | (5.5)% | |
Operating income (loss) margin2 | ||||
Impact of depreciation and amortization | 5.0% | 5.6% | 6.1% | 7.4% |
EBITDA margin1 | 8.3% | 9.5% | 6.0% | 1.9% |
1EBITDA 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 and loss from sale of assets (if any) by contract revenues. | ||||
Orion Marine Group, Inc. and Subsidiaries | ||
Supplementary Financial Information | ||
(In thousands) | ||
December 31, | December 31, | |
2013 | 2012 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 40,859 | $ 43,084 |
Accounts receivable: | ||
Trade, net of allowance of $0 | 39,110 | 45,072 |
Retainage | 10,427 | 8,213 |
Other | 2,040 | 1,712 |
Income taxes receivable | 333 | 3,110 |
Note receivable | — | 46 |
Inventory | 3,520 | 4,354 |
Deferred tax asset | 726 | 37 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 24,856 | 19,245 |
Asset held for sale | 417 | 920 |
Prepaid expenses and other | 2,990 | 2,857 |
Total current assets | 125,278 | 128,650 |
Property and equipment, net | 141,923 | 150,671 |
Accounts receivable, long-term | — | 1,410 |
Inventory, non-current | 4,772 | 915 |
Goodwill | 33,798 | 33,798 |
Intangible assets, net of amortization | 197 | 627 |
Other assets | 240 | 225 |
Total assets | $ 306,208 | $ 316,296 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Current debt | $ 8,564 | $ 12,621 |
Accounts payable: | ||
Trade | 23,105 | 28,744 |
Retainage | 1,667 | 2,433 |
Accrued liabilities | 11,415 | 12,456 |
Taxes payable | 459 | 252 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 14,595 | 16,369 |
Total current liabilities | 59,805 | 72,875 |
Other long-term liabilities | 526 | 564 |
Deferred income taxes | 17,978 | 18,180 |
Deferred revenue | 87 | 146 |
Total liabilities | 78,396 | 91,765 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock ---- $0.01 par value, 10,000,000 authorized, none issued | — | — |
Common stock ---- $0.01 par value, 50,000,000 authorized, 27,710,775 and 27,530,220 issued; 27,393,045 and 27,212,489 outstanding at December 31, 2013 and December 31, 2012, respectively | 278 | 275 |
Treasury stock, 317,731 shares, at cost | (3,003) | (3,003) |
Additional paid-in capital | 163,970 | 160,973 |
Retained earnings | 66,567 | 66,236 |
Equity attributable to common stockholders | 227,812 | 224,481 |
Noncontrolling interest | — | 50 |
Total stockholders' equity | 227,812 | 224,531 |
Total liabilities and stockholders' equity | $ 306,208 | $ 316,296 |
Orion Marine Group, Inc. and Subsidiaries | ||
Supplementary Financial Information | ||
(In thousands) | ||
Twelve months ended December 31, |
||
2013 | 2012 | |
Cash flows from operating activities | ||
Net income (loss) | $ 331 | $ (11,866) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 21,538 | 21,570 |
Deferred financing cost amortization | 52 | 103 |
Bad debt expense | 259 | 12 |
Deferred income taxes | (239) | (1,646) |
Stock-based compensation | 2,141 | 3,115 |
Loss on sale of property and equipment | 153 | 1,822 |
Change in operating assets and liabilities: | ||
Accounts receivable | 4,571 | (26,966) |
Income tax receivable | 2,125 | 10,888 |
Inventory | (3,024) | (497) |
Note receivable | 46 | 5 |
Prepaid expenses and other | (200) | (497) |
Costs and estimated earnings in excess of billings on uncompleted contracts | (5,611) | (4,133) |
Accounts payable | (6,405) | 18,826 |
Accrued liabilities | (1,079) | 2,803 |
Income tax payable | 207 | 252 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (1,774) | 10,704 |
Deferred revenue | (58) | (57) |
Net cash provided by operating activities | 13,033 | 24,438 |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 750 | 374 |
Purchase of property and equipment | (12,760) | (24,647) |
Acquisition of business in Alaska | — | (9,000) |
Net cash used in investing activities | (12,010) | (33,273) |
Cash flows from financing activities: | ||
Borrowings from Credit Facility | — | 18,000 |
Payments made on borrowings from Credit Facility | (4,057) | (5,379) |
Contributions from noncontrolling interest | (50) | 34 |
Exercise of stock options | 859 | 298 |
Excess tax benefit from stock option exercise | — | — |
Increase in loan costs | — | (13) |
Purchase of shares into treasury | — | — |
Net cash (used in) provided by financing activities | (3,248) | 12,940 |
Net change in cash and cash equivalents | (2,225) | 4,105 |
Cash and cash equivalents at beginning of period | 43,084 | 38,979 |
Cash and cash equivalents at end of period | $ 40,859 | $ 43,084 |
CONTACT:Orion Marine Group, Inc. Chris DeAlmeida , Vice President & CFO Drew Swerdlow, Sr. Analyst, Finance & Investor Relations 713-852-6582