"2015 was a year filled with accomplishments, as well as challenges," said
Financial highlights of the Company's fourth quarter and full year 2015 include:
Fourth Quarter 2015
Consolidated Results
- Fourth quarter 2015 contract revenue was
$161.9 million , an increase of 50.9%, as compared with fourth quarter 2014 revenue of$107.3 million , primarily as a result of the addition of TAS. - Gross profit for the quarter was
$17.4 million , a decrease of approximately$745 thousand as compared with the fourth quarter of 2014. Gross profit margin for the fourth quarter of 2015 was 10.8%, which was lower than the prior year period of 16.9%. - Selling, General, and Administrative expense for the fourth quarter 2015 was
$15.7 million as compared to$10.7 million in the prior year period. The increase is primarily attributable to the addition of TAS. - The Company's fourth quarter 2015 EBITDA was
$12.8 million , representing a 7.9% EBITDA margin, which compares to fourth quarter 2014 EBITDA of$13.4 million , or a 12.5% EBITDA margin.
Heavy Civil Marine Construction Segment
- Fourth quarter 2015 contract revenue was
$89.5 million , a decrease of approximately 16.6%. The decrease is primarily related to the timing and mix of projects compared to the prior year period. - Fourth quarter 2015 operating loss was
$2.0 million , a decrease of approximately$9.4 million . The decrease is primarily attributable to five previously discussed projects managed out of theTampa office earning no margin during the quarter, as well as the timing and mix of projects. - Fourth quarter 2015 EBITDA was
$6.9 million , representing a 7.7% EBITDA margin, a decrease of approximately$6.6 million from the prior year period.
Commercial Concrete Construction Segment
- Fourth quarter 2015 contract revenue was
$72.4 million , an increase of approximately 10.2% over the same period last year, on a pro-forma basis. The increase is attributable to a larger volume of work being executed in both theHouston andDallas markets. - Fourth quarter 2015 operating income was
$3.8 million , a decrease of$3.1 million over the same period last year, on a pro-forma basis. The decrease is primarily driven by the amortization of intangible assets related to the acquisition and the corporate allocation of SG&A cost to theCommercial Concrete Construction segment. - Fourth quarter 2015 EBITDA was
$6.1 million , representing an 8.4% EBITDA margin
Full Year 2015
Consolidated Results
- Full year 2015 contract revenue was
$466.5 million , an increase of 21% as compared with full year 2014 revenues of$385.8 million . The increase is attributable to the addition of TAS. - Gross profit for the year was
$40.2 million , which represents a decrease of$4.4 million as compared with the full year 2014. Gross profit margin for the full year 2015 was 8.6%, as compared to 11.6% for the full year 2014. - Selling, General, and Administrative expense for the full year 2015 was
$47.7 million as compared with$34.7 million in the prior year period. The increase is primarily attributable to the addition of TAS. - The Company’s full year 2015 EBITDA was
$20.6 million , representing a 4.4% EBITDA margin, which compares to full year 2014 EBITDA of$34.2 million , or an 8.9% EBITDA margin.
Heavy Civil Marine Segment
- Full year 2015 contract revenue was
$347.1 million , a decrease of 10.0% as compared with full year 2014 revenues of$385.8 million . The decrease is primarily attributable to weather and project delays in the first half of 2015, as well as the timing and mix of projects. - Full year 2015 operating loss was
$13.6 million , a decrease of$23.6 million . The decrease is primarily related to the project execution issues experienced on five projects managed out of theTampa office. - Full year 2015 EBITDA was
$10.7 million , representing a 3.1% EBITDA margin, which compares to full year 2014 EBITDA of$34.2 million , or an 8.9% EBITDA margin.
Commercial Concrete Segment
- The acquisition of TAS Commercial Concrete was completed on
August 5 , 2015. The annual results for this segment represent results fromAugust 5, 2015 to December 31, 2015. - Revenue attributable to
Orion Marine Group, Inc. during 2015 was$119.4 million . On a pro-forma basis, assuming that the acquisition of TAS Commercial Concrete had been completed as ofJanuary 1, 2015 , total 2015 revenue would have been$255.4 million which represents an increase of 8.1% over 2014, on a pro-forma basis. The increase is attributable to a larger volume of work being executed in both theHouston andDallas markets. - Operating income attributable to
Orion Marine Group, Inc. during 2015 was$6.1 million . On a pro-forma basis, assuming that the acquisition of TAS Commercial Concrete had been completed as ofJanuary 1, 2015 , total 2015 operating income would have been$17.0 million which represents a decrease of 18.5% over 2014, on a pro-forma basis. The decrease is primarily related to the amortization of intangible assets related to the acquisition and the corporate allocation of SG&A cost to theCommercial Concrete Construction segment. - EBITDA attributable to
Orion Marine Group, Inc. during 2015 was$10.0 million . On a pro-forma basis, assuming that the acquisition of TAS Commercial Concrete had been completed as ofJanuary 1, 2015 , total 2015 EBITDA would have been$27.2 million , an increase of 11.7% over 2014, on a pro-forma basis.
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 see solid demand for our services that should support improved results in 2016," said Mr. Stauffer. "With the remaining three
"With an improved federal and state funding outlook, along with continued private sector demand, we remain optimistic for improved results in the
"In the
“We were pleased with our bid activity and success rate in 2015 across both our segments," said
Given our improving end markets across both our segments and robust bidding activity, we believe results for 2016 should be within the previously stated range.”
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, |
||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||
Contract revenues | 161,891 | 107,333 | 466,498 | 385,818 | |||||||||||
Costs of contract revenues | 144,468 | 89,165 | 426,316 | 341,224 | |||||||||||
Gross profit | 17,423 | 18,168 | 40,182 | 44,594 | |||||||||||
Selling, general and administrative expenses | 15,733 | 10,739 | 47,715 | 34,691 | |||||||||||
Income (loss) from operations | 1,690 | 7,429 | (7,533 | ) | 9,903 | ||||||||||
Other income (expense) | |||||||||||||||
Gain (loss) from sale of assets, net | 1,541 | 195 | (466 | ) | 359 | ||||||||||
Other income | 346 | 4 | 536 | 467 | |||||||||||
Interest income | 3 | — | 32 | 17 | |||||||||||
Interest expense | (1,715 | ) | (171 | ) | (3,148 | ) | (694 | ) | |||||||
Other income (expense), net | 175 | 28 | (3,046 | ) | 149 | ||||||||||
Income (loss) before income taxes | 1,865 | 7,457 | (10,579 | ) | 10,052 | ||||||||||
Income tax (benefit) expense | 426 | 2,169 | (2,519 | ) | 3,175 | ||||||||||
Net income (loss). | $ | 1,439 | $ | 5,288 | $ | (8,060 | ) | $ | 6,877 | ||||||
Net income attributable to noncontrolling interest | — | — | — | — | |||||||||||
Net income attributable to Orion common stockholders | $ | 1,439 | $ | 5,288 | $ | (8,060 | ) | $ | 6,877 | ||||||
Basic income (loss) per share | $ | 0.05 | $ | 0.19 | $ | (0.30 | ) | $ | 0.25 | ||||||
Diluted income per share | $ | 0.05 | $ | 0.19 | $ | (0.30 | ) | $ | 0.25 | ||||||
Shares used to compute income per share | |||||||||||||||
Basic | 27,281,359 | 27,522,884 | 27,281,359 | 27,421,441 | |||||||||||
Diluted | 27,411,580 | 27,847,102 | 27,281,359 | 27,787,613 |
Orion Marine Group, Inc. and Subsidiaries | |||||||||||||||||||
Selected Income Statement Results | |||||||||||||||||||
(In thousands, except share and per share information) | |||||||||||||||||||
Three months ended December 31, |
8/5 - 12/31 | Twelve months ended December 31, |
|||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Heavy Civil Marine Construction | 2015 | 2014 | 2015 | 2015 | 2014 | ||||||||||||||
Contract revenues | $ | 89,503 | $ | 107,333 | $ | 347,117 | $ | 385,818 | |||||||||||
Operating (loss) income | (1,967 | ) | 7,429 | (13,556 | ) | 10,052 | |||||||||||||
Commercial Concrete Construction | (Unaudited, Pro-forma) |
(Unaudited, Pro-forma) |
|||||||||||||||||
Contract revenues | $ | 72,388 | 65,703 | $ | 119,381 | $ | 255,420 | $ | 236,245 | ||||||||||
Operating income | 3,769 | 6,853 | 6,135 | 17,039 | 20,900 |
Orion Marine Group, Inc. and Subsidiaries | |||||||||||||||
EBITDA and EBITDA Margin Reconciliations | |||||||||||||||
(In thousands, except margin data) | |||||||||||||||
Three months ended December 31, |
Twelve months ended December 31, |
||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Net income (loss) | $ | 1,439 | $ | 5,288 | $ | (8,060 | ) | $ | 6,877 | ||||||
Income tax benefit (loss) | 426 | 2,169 | (2,519 | ) | 3,175 | ||||||||||
Interest expense, net | 1,713 | 171 | 3,116 | 677 | |||||||||||
Depreciation and amortization | 9,252 | 5,820 | 28,083 | 23,451 | |||||||||||
EBITDA1 | $ | 12,830 | $ | 13,448 | $ | 20,620 | $ | 34,180 | |||||||
Operating income (loss) margin2 |
2.3 | % | 7.1 | % | (1.6 | )% | 2.8 | % | |||||||
Impact of depreciation and amortization | 5.7 | % | 5.4 | % | 6.0 | % | 6.1 | % | |||||||
EBITDA margin1 |
8.0 | % | 12.5 | % | 4.4 | % | 8.9 | % |
Orion Marine Group, Inc. and Subsidiaries | |||||||||||||||||||
EBITDA and EBITDA Margin Reconciliations by Segment | |||||||||||||||||||
(In Thousands, except margin data) | |||||||||||||||||||
Heavy Civil Marine Construction |
Commercial Concrete Construction | ||||||||||||||||||
Three months ended December 31, |
8/5 - 12/31 | Three months ended December 31, |
|||||||||||||||||
2015 | 2014 | 2015 | 2015 | 20143 | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited, Pro-forma) | |||||||||||||||
Operating (loss) income | (1,967 | ) | $ | 7,429 | 6,135 | 3,769 | $ | 6,853 | |||||||||||
Other income (expense), net | 4,015 | 199 | (3,137 | ) | (2,129 | ) | 186 | ||||||||||||
Depreciation and amortization | 4,836 | 5,820 | 7,008 | 4,416 | 573 | ||||||||||||||
EBITDA1 | $ | 6,884 | $ | 13,448 | $ | 10,006 | $ | 6,056 | $ | 7,612 | |||||||||
Operating income margin2 |
2.3 | % | 7.1 | % | 2.5 | % | 2.3 | % | 10.4 | % | |||||||||
Impact of depreciation and amortization | 5.4 | % | 5.4 | % | 5.9 | % | 6.1 | % | 1.2 | % | |||||||||
EBITDA margin |
7.7 | % | 12.5 | % | 8.4 | % | 8.4 | % | 11.6 | % |
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 and loss from sale of assets (if any) by contract revenues.
3 This information does not contain the standard proforma adjustments.
Orion Marine Group, Inc. and Subsidiaries |
|||||||
Supplementary Financial Information | |||||||
(In thousands) | |||||||
December 31, 2015 |
December 31, 2014 |
||||||
(Unaudited) | (Audited) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,345 | $ | 38,893 | |||
Accounts receivable: | |||||||
Trade, net of allowance of $0 | 72,358 | 36,905 | |||||
Retainage | 35,433 | 15,883 | |||||
Other | 5,313 | 1,998 | |||||
Income taxes receivable | 83 | 333 | |||||
Inventory | 4,867 | 6,487 | |||||
Deferred tax asset | 3,108 | 1,755 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 59,608 | 44,581 | |||||
Asset held for sale | 6,375 | 375 | |||||
Prepaid expenses and other | 4,627 | 3,924 | |||||
Total current assets | 193,117 | 151,134 | |||||
Property and equipment, net | 165,989 | 161,773 | |||||
Accounts receivable, long-term | 222 | — | |||||
Inventory, non-current | 6,218 | 5,508 | |||||
Goodwill | 65,982 | 33,798 | |||||
Intangible assets, net of amortization | 29,540 | 87 | |||||
Other assets | 4,432 | — | |||||
Total assets | $ | 465,500 | $ | 352,300 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current debt | $ | 12,459 | $ | 33,527 | |||
Accounts payable: | |||||||
Trade | 52,719 | 21,889 | |||||
Retainage | 1,671 | 1,706 | |||||
Accrued liabilities | 22,633 | 15,803 | |||||
Taxes payable | 813 | 997 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 28,484 | 16,704 | |||||
Total current liabilities | 118,779 | 90,626 | |||||
Long-term debt | 98,188 | 3,480 | |||||
Other long-term liabilities | 1,329 | 566 | |||||
Deferred income taxes | 19,345 | 20,877 | |||||
Interest rate swap liability | 145 | — | |||||
Deferred revenue | — | 34 | |||||
Total liabilities | 237,786 | 115,583 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock -- $0.01 par value, 10,000,000 authorized, none issued | — | — | |||||
Other comprehensive loss | (145 | ) | — | ||||
Common stock -- $0.01 par value, 50,000,000 authorized, 27,992,589 and 27,969,783 issued; 27,525,365 and 27,525,365 outstanding at December 31, 2015 and December 31, 2014, respectively | 279 | 279 | |||||
Treasury stock, 711,231 and 361,231 shares, at cost December 31, 2015 and December 31, 2014, respectively | (6,540 | ) | (3,439 | ) | |||
Additional paid-in capital | 168,736 | 166,433 | |||||
Retained earnings | 65,384 | 73,444 | |||||
Total stockholders’ equity | 227,714 | 236,717 | |||||
Total liabilities and stockholders’ equity | $ | 465,355 | $ | 352,300 |
Orion Marine Group, Inc. and Subsidiaries |
|||||||
Supplementary Financial Information |
|||||||
(In thousands) | |||||||
Twelve months ended December 31, |
|||||||
2015 | 2014 | ||||||
(Unaudited) | (Audited) | ||||||
Cash flows from operating activities | |||||||
Net income (loss) | $ | (8,060 | ) | $ | 6,877 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 28,083 | 23,451 | |||||
Bad debt expense | 22 | 993 | |||||
Deferred income taxes | (2,885 | ) | 1,869 | ||||
Stock-based compensation | 2,275 | 1,594 | |||||
Loss (gain) on sale of property and equipment | 466 | (359 | ) | ||||
Change in operating assets and liabilities, net of effects of acquisitions: | |||||||
Accounts receivable | (3,080 | ) | (4,202 | ) | |||
Income tax receivable | 250 | — | |||||
Inventory | 1,150 | (3,702 | ) | ||||
Prepaid expenses and other | (4,726 | ) | (695 | ) | |||
Costs and estimated earnings in excess of billings on uncompleted contracts | (10,655 | ) | (19,725 | ) | |||
Accounts payable | 12,245 | (1,178 | ) | ||||
Accrued liabilities | 2,608 | 4,428 | |||||
Income tax payable | (1,097 | ) | 538 | ||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 4,655 | 2,109 | |||||
Deferred revenue | (34 | ) | (53 | ) | |||
Net cash provided by operating activities | 21,217 | 11,945 | |||||
Cash flows from investing activities: | |||||||
Proceeds from sale of property and equipment | 2,172 | 1,005 | |||||
Purchase of property and equipment | (20,802 | ) | (18,711 | ) | |||
Acquisition of TAS | (110,344 | ) | — | ||||
Acquisition of HITS, net | (357 | ) | — | ||||
Acquisition of land | — | (25,081 | ) | ||||
Net cash used in investing activities | (129,331 | ) | (42,787 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings from Credit Facility | 149,021 | 30,000 | |||||
Payments made on borrowings from Credit Facility | (42,955 | ) | (1,557 | ) | |||
Extinguishment of debt | (32,427 | ) | — | ||||
Exercise of stock options | 28 | 869 | |||||
Purchase of shares into treasury | (3,101 | ) | (436 | ) | |||
Net cash provided by provided by financing activities | 70,566 | 28,876 | |||||
Net change in cash and cash equivalents | (37,548 | ) | (1,966 | ) | |||
Cash and cash equivalents at beginning of period | 38,893 | 40,859 | |||||
Cash and cash equivalents at end of period | $ | 1,345 | $ | 38,893 |
Orion Marine Group, Inc. Drew Swerdlow , Investor Relations Manager, 713-852-6582