"We are pleased with our solid level of backlog and bid opportunities as we head into 2014," said
Financial highlights of the Company's third quarter 2013 include:
Third Quarter 2013
-
Third quarter 2013 contract revenue was
$89.0 million , an increase of 18%, as compared with third quarter 2012 revenue of$75.4 million .
-
The Company self-performed approximately 85% of its work as measured by cost during the third quarter 2013, which compares to 84% in the prior year period.
-
Gross profit for the quarter was
$5.6 million , which represents an increase of$0.7 million as compared with the third quarter of 2012. Gross profit margin for the quarter was 6.3%, which was lower than the prior year period of 6.5%. During the third quarter of 2013, gross profit margin declined as a result of the timing of certain jobs shifting to future periods.
-
Selling, General, and Administrative expenses for the third quarter 2013 were
$8.0 million as compared to$7.2 million in the prior year period.
-
The Company's third quarter 2013 EBITDA was
$3.1 million , representing a 3.5% EBITDA margin, which compares to third quarter 2012 EBITDA of$3.1 million , or a 4.1% 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
"Our outlook for 2014 and beyond continues to improve," said Mr. Pearson. "Demand from the private sector continues to be strong and we expect this trend to continue for the foreseeable future. Activity by local port authorities also gives us additional reasons for optimism. While the temporary shutdown of the federal government this month was a disappointing development, we experienced little impact on our existing federal contracts. Although we are encouraged that an agreement was reached to end the shutdown, the temporary spending bill only extends federal funding into the first month of 2014 and will likely lead to further uncertainty as to the pace and frequency of lettings by the
"We are pleased with the amount of work we won during the third quarter as well as the significant amount of work on which we are the apparent low bidder," said
"Currently, we have over
We believe we can see improved results in 2014 as the volume of work increases fleet utilization resulting in some improvement in gross margin. This should lead to positive results in 2014. However, until we see some improvement in federal spending, we anticipate the utilization of our dredging assets will continue to be choppy and therefore could limit the amount of gross margin improvement in 2014. That said, if federal spending picks up, we could see greater improvement in gross margin during 2014. Catalyst for increases in federal spending include completion of the
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 September 30, |
Nine months ended September 30, |
|||
2013 | 2012 | 2013 | 2012 | |
Contract revenues | 88,992 | 75,386 | 248,131 | 193,408 |
Costs of contract revenues | 83,381 | 70,493 | 228,859 | 191,560 |
Gross profit | 5,611 | 4,893 | 19,272 | 1,848 |
Selling, general and administrative expenses | 7,974 | 7,185 | 23,491 | 21,754 |
Loss from operations | (2,363) | (2,292) | (4,219) | (19,906) |
Other income (expense) | ||||
Other Income | — | 44 | 614 | 228 |
Interest income | — | 4 | 13 | 23 |
Interest expense | (111) | (235) | (427) | (638) |
Other (income) expense, net | (111) | (187) | 200 | (387) |
Loss before income taxes | (2,474) | (2,479) | (4,019) | (20,293) |
Income tax benefit | (1,500) | (885) | (2,161) | (6,941) |
Net loss | (974) | (1,594) | (1,858) | (13,352) |
Net loss attributable to noncontrolling interest | (31) | — | (56) | — |
Net loss attributable to Orion common stockholders | $ (943) | $ (1,594) | $ (1,802) | $ (13,352) |
Basic loss per share | $ (0.03) | $ (0.06) | $ (0.07) | $ (0.49) |
Diluted loss per share | $ (0.03) | $ (0.06) | $ (0.07) | $ (0.49) |
Shares used to compute loss per share | ||||
Basic | 27,318,180 | 27,138,310 | 27,273,176 | 27,126,440 |
Diluted | 27,318,180 | 27,138,310 | 27,273,176 | 27,126,440 |
Orion Marine Group, Inc. and Subsidiaries | ||||
EBITDA and EBITDA Margin Reconciliations | ||||
(In Thousands, except margin data) |
||||
Three Months Ended | Nine Months Ended | |||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
Net loss | (974) | (1,594) | (1,858) | (13,352) |
Income tax benefit | (1,500) | (885) | (2,161) | (6,941) |
Interest expense, net | 111 | 231 | 414 | 615 |
Depreciation and amortization | $ 5,459 | $ 5,347 | $ 16,187 | $ 16,038 |
EBITDA | $ 3,096 | $ 3,099 | $ 12,582 | $ (3,640) |
Operating loss margin |
(2.7)% | (3.0)% | (1.5)% | (10.3)% |
Impact of depreciation and amortization | 6.2% | 7.1% | 6.5% | 8.3% |
EBITDA margin |
3.5% | 4.1% | 5.0% | (2.0)% |
Orion Marine Group, Inc. and Subsidiaries | ||
Supplementary Financial Information | ||
(In Thousands) |
||
September 30, 2013 | December 31, 2012 | |
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 31,155 | $ 43,084 |
Accounts receivable: | ||
Trade, net of allowance of $0 | 44,154 | 45,072 |
Retainage | 9,238 | 8,213 |
Other | 529 | 1,712 |
Income taxes receivable | 2,915 | 3,110 |
Note receivable | 46 | 46 |
Inventory | 5,458 | 4,354 |
Deferred tax asset | 399 | 37 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 25,146 | 19,245 |
Asset held for sale | 823 | 920 |
Prepaid expenses and other | 1,010 | 2,857 |
Total current assets | 120,873 | 128,650 |
Property and equipment, net | 146,563 | 150,671 |
Accounts receivable, long-term | 1,410 | 1,410 |
Inventory, non-current | 915 | 915 |
Goodwill | 34,817 | 34,817 |
Intangible assets, net of amortization | 265 | 627 |
Other assets | 217 | 225 |
Total assets | $ 305,060 | $ 317,315 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Current debt | $ 9,343 | $ 12,621 |
Accounts payable: | ||
Trade | 24,369 | 28,744 |
Retainage | 1,931 | 2,433 |
Accrued liabilities | 10,960 | 12,456 |
Taxes payable | 774 | 252 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 14,643 | 16,369 |
Total current liabilities | 62,020 | 72,875 |
Other long-term liabilities | 936 | 564 |
Deferred income taxes | 16,216 | 18,496 |
Deferred revenue | 103 | 146 |
Total liabilities | 79,275 | 92,081 |
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, 27,665,828 and 27,530,220 issued; 27,348,097 and 27,212,489 outstanding at September 30, 2013 and December 31, 2012, respectively | 278 | 275 |
Treasury stock, 317,731 shares, at cost | (3,003) | (3,003) |
Additional paid-in capital | 163,346 | 160,973 |
Retained earnings | 65,137 | 66,939 |
Equity attributable to common stockholders | 225,758 | 225,184 |
Noncontrolling interest | 27 | 50 |
Total stockholders' equity | 225,785 | 225,234 |
Total liabilities and stockholders' equity | $ 305,060 | $ 317,315 |
Orion Marine Group, Inc. and Subsidiaries | ||
Supplementary Financial Information | ||
(In Thousands) |
||
Nine months ended September 30, |
||
2013 | 2012 | |
Cash flows from operating activities | ||
Net loss | $ (1,858) | $ (13,352) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 16,187 | 16,038 |
Deferred financing cost amortization | 53 | 158 |
Bad debt recoveries | (2) | 1 |
Deferred income taxes | (2,639) | (4,152) |
Stock-based compensation | 1,636 | 2,372 |
Gain on sale of property and equipment | (59) | (156) |
Change in operating assets and liabilities: | ||
Accounts receivable | 1,078 | (12,165) |
Income tax receivable | 195 | 11,347 |
Inventory | (1,105) | (197) |
Note receivable | — | $ 5 |
Prepaid expenses and other | 1,803 | 668 |
Costs and estimated earnings in excess of billings on uncompleted contracts | (5,901) | 2,906 |
Accounts payable | (4,877) | 7,086 |
Accrued liabilities | (1,122) | 994 |
Income tax payable | 519 | — |
Billings in excess of costs and estimated earnings on uncompleted contracts | (1,726) | 11,046 |
Deferred revenue | (43) | (43) |
Net cash provided by operating activities | 2,139 | 22,556 |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 191 | 349 |
Purchase of property and equipment | (11,751) | (22,344) |
Net cash used in investing activities | (11,560) | (21,995) |
Cash flows from financing activities: | ||
Borrowings from Credit Facility | — | 13,000 |
Payments made on borrowings from Credit Facility | (3,278) | (2,489) |
Contributions from non-controlling interest | 33 | — |
Exercise of stock options | 737 | 176 |
Increase in loan costs | — | (14) |
Net cash (used in) provided by financing activities | (2,508) | 10,673 |
Net change in cash and cash equivalents | (11,929) | 11,234 |
Cash and cash equivalents at beginning of period | 43,084 | 38,979 |
Cash and cash equivalents at end of period | $ 31,155 | $ 50,213 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for: | ||
Interest | $ 393 | $ 675 |
Taxes (net of refunds) | $ (267) | $ (14,138) |
CONTACT:Orion Marine Group, Inc. Mark Stauffer , Executive Vice President & CFOChris DeAlmeida , Vice President, Accounting & Finance 713-852-6506 Drew Swerdlow, Sr. Analyst, Finance & Investor Relations 713-852-6582