UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 5,
2009
ORION
MARINE GROUP, INC.
(Exact
name of Registrant as specified in its charter)
|
Delaware
|
1-33891
|
26-0097459
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification Number)
|
12000
Aerospace Suite 300
Houston,
Texas 77034
(Address
of principal executive offices)
(713)
852-6500
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
|
|
TABLE
OF CONTENTS
|
|
|
SIGNATURES
|
|
Item
2.02
|
Results of Operations and Financial
Condition
|
On November
5 2009, Orion Marine Group, Inc. (the “Company”) issued a press
release announcing operating results for its third quarter
ended September 30, 2009.
In
accordance with General Instruction B.2 of Form 8-K, the press release shall not
be deemed “filed” for the purposes of Section 18 of the Exchange Act of 1934 or
otherwise subject to the liabilities of that section, nor shall such information
and exhibit be deemed incorporated by reference into any filing under the
Securities Act or the Securities Exchange Act except as shall be expressly set
forth by specific reference in such a filing.
Item
9.01 Financial Statements and Exhibits
Exhibit
No. Description
|
99.1
|
Press
Release issued November 5, 2009
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
ORION MARINE GROUP, INC.
|
Date: November
5, 2009
|
By:
|
/s/ Mark R. Stauffer | |
| Mark R. Stauffer | |||
| Executive Vice President and Chief Financial Officer | |||
EXHIBIT
INDEX
Exhibit
No. Description
|
99.1
|
Press
Release issued November 5,
2009
|
Orion
Marine Group, Inc. Reports Third Quarter 2009 Results; Record
Backlog
Houston,
Texas, November 5, 2009 -- Orion Marine Group, Inc. (NYSE: ORN) (the “Company”),
a leading heavy civil marine contractor, today reported net income for the three
months ended September 30, 2009, of $5.4 million ($0.22 diluted earnings per
share). These results compare to net income of $3.8 million ($0.17
diluted earnings per share) for the same period a year ago.
“We are
pleased with our results for the quarter including better than expected
revenue,” said Mike Pearson, Orion Marine Group’s President and Chief Executive
Officer. “During the quarter we continued to see a good pace of bid
activity while continuing our solid project execution.”
Financial
highlights of the Company’s third quarter 2009 include:
|
·
|
Third
quarter 2009 contract revenues increased to $81.5 million, up 29.5% as
compared with the third quarter of 2008. Revenue growth for the quarter
exceeded the Company’s third quarter revenue growth goal of 16% to 21% as
a result of favorable conditions including the acceleration of project
schedules.
|
|
·
|
Gross
profit for the quarter was $16.0 million which represents an increase of
$3.4 million or 27.0% as compared with the third quarter of
2008. Gross profit margin for the quarter was 19.6%, which was
essentially flat compared to the prior year
period.
|
|
·
|
Selling,
General, and Administrative expenses for the third quarter 2009 were $7.7
million, a slight increase
year-over-year.
|
|
·
|
The
Company’s third quarter 2009 EBITDA was $13.2 million, representing a
16.2% EBITDA margin, which compares to third quarter 2008 EBITDA of $10.3
million, or a 16.5% EBITDA margin. EBITDA margin for the
quarter was within the Company’s third quarter goal range of 15% to
17%.
|
|
·
|
The
Company self-performed approximately 83% of its work as measured by cost
during the third quarter 2009 as compared with 87% in the prior year
period. Self performance for the third quarter 2009 was lower
due to the timing and mix of
projects.
|
Backlog
of work under contract as of September 30, 2009 was a record $224.3 million
which compares with backlog under contract at September 30, 2008 of $160.5
million. In addition, the recently announced large project award
involving dredging services adds approximately $10 million to
backlog. 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.
“Overall
we are pleased with the results of the third quarter and are optimistic about
the road ahead,” said Mark Stauffer, Orion Marine Group’s Executive Vice
President and Chief Financial Officer. “We will continue to execute our growth
plan while working to maintain our industry leading EBITDA
margins”.
2009
Outlook
The
Company remains comfortable with its previously stated full year 2009
year-over-year revenue growth goal of 12% to 16% and its full year 2009 EBITDA
margin goal of 14% to 18%. Given the timing shifts of revenue during
the second quarter and expected low material pricing which could reduce overall
contract values, the Company believes its revenue growth for the full year 2009
will be at the lower end of the stated full year 2009 revenue growth goal
range. However, the Company believes the favorable EBITDA margins
experienced in the first half of the year will boost its full year EBITDA margin
towards the middle to upper end of its full year 2009 EBITDA margin goal
range.
2010
Outlook
The
Company expects the positive trends in port expansion, U.S. infrastructure
updates, coastal and wetland restoration projects, expansion in the cruise
industry and projects involving dredging services to continue to provide good
bid opportunities long term.
"2010 is
shaping up to be another record year for Orion Marine Group with the highest
level of booked work we have seen at this point headed into the next year," said
Mr. Pearson. "Additionally, we continue to see multiple end markets with good
funding and drivers for continued growth for 2010 and beyond."
Looking
at 2010 in detail, the Company is tracking $4.0 to $4.5 billion of bid
opportunities of which it expects approximately $1.8 billion could liquidate in
2010. As a result of the current backlog and current expected bid opportunities,
the Company's initial full year 2010 revenue goal range is between $350 million
and $360 million. The Company's initial full year 2010 EBITDA margin goal is 14%
- - 18%.
Conference
Call Details
Orion
Marine Group will conduct a telephone briefing to discuss its results for the
third quarter 2009 at 10:00 a.m. Eastern Time/9:00 a.m. Central Time on
Thursday, November 5, 2009. To listen to a live broadcast of this
briefing, visit the Investor Relations section of the Company’s website at www.orionmarinegroup.com.
To participate in the call, please call the Orion Marine Group Third Quarter
2009 Earnings Conference Call at 866-788-0542; participant code
13874464.
A replay
of this briefing will be available on the Web site within 24 hours and will be
archived for at least two weeks.
About
Orion Marine Group
Orion
Marine Group, Inc. provides a broad range of marine construction and specialty
services on, over and under the water along the Gulf Coast, the Atlantic
Seaboard and the Caribbean Basin and acts as a single source turn-key solution
for its customers’ marine contracting needs. Its heavy civil marine construction
services include marine transportation facility construction, marine pipeline
construction, marine environmental structures, dredging, and specialty services.
Its specialty services include salvage, demolition, diving, surveying, towing
and underwater inspection, excavation and repair. The Company is headquartered
in Houston, Texas and has a 75-year legacy of successful
operations.
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 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 and other GAAP financial information, which
information is of equal or greater importance.
Orion
Marine Group defines EBITDA as net income before net interest expense, income
taxes, depreciation and amortization. EBITDA margin is calculated by
dividing EBITDA for the period by contract revenues for the
period. The GAAP financial measure that is most directly comparable
to EBITDA margin is operating margin, which represents operating income divided
by contract revenues. EBITDA and 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
and EBITDA margin provide useful information regarding the Company’s ability to
meet future debt repayment requirements 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 and EBITDA margin
to provide transparency to investors as they are commonly used by investors and
others in assessing performance. EBITDA and 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 generally accepted accounting principles in the United States,
or as a measure of the Company’s profitability or liquidity.
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 Securities and Exchange
Commission.
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, 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 March 19, 2008,
which is available on its website at www.orionmarinegroup.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.
Orion
Marine Group, Inc. and Subsidiaries
Consolidated
Statements of Income
(In
thousands, except share and per share information)
|
Three Months Ended
|
||||||||
|
September
30,
2009
|
September
30,
2008
|
|||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
Contract
revenues
|
$ | 81,466 | $ | 62,897 | ||||
|
Costs
of contract revenues
|
65,468 | 50,297 | ||||||
|
Gross
profit
|
15,998 | 12,600 | ||||||
|
Selling,
general and administrative expenses
|
7,699 | 7,357 | ||||||
|
Operating
income
|
8,299 | 5,243 | ||||||
|
Interest
income
|
(78 | ) | (107 | ) | ||||
|
Interest
expense
|
88 | 365 | ||||||
|
Interest
(income) expense, net
|
10 | 258 | ||||||
|
Income
before income taxes
|
8,289 | 4,985 | ||||||
|
Income
tax expense
|
2,892 | 1,221 | ||||||
|
Net
income
|
$ | 5,397 | $ | 3,764 | ||||
|
Basic
earnings per share—Common
|
$ | 0.22 | $ | 0.18 | ||||
|
Diluted
earnings per share—Common
|
$ | 0.22 | $ | 0.17 | ||||
|
Shares
used to compute earnings per share:
|
||||||||
|
Basic—Common
|
24,241,749 | 21,557,601 | ||||||
|
Diluted—Common
|
24,678,251 | 21,833,327 | ||||||
Orion
Marine Group, Inc. and Subsidiaries
EBITDA
and EBITDA Margin Reconciliations
(In
Thousands, except margin data)
|
Three Months Ended
|
||||||||
|
|
September
30,
2009
|
September
30,
2008
|
||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
Net
income
|
$ | 5,397 | $ | 3,764 | ||||
|
Income
tax expense
|
2,892 | 1,221 | ||||||
|
Interest
(income) expense, net
|
10 | 258 | ||||||
|
Depreciation
and amortization
|
4,866 | 5,104 | ||||||
|
EBITDA1
|
$ | 13,165 | $ | 10,347 | ||||
|
Operating
Income Margin2
|
10.2 | % | 8.3 | % | ||||
|
Impact
of Depreciation and Amortization
|
6.0 | % | 8.2 | % | ||||
|
EBITDA
margin1
|
16.2 | % | 16.5 | % | ||||
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.
Orion
Marine Group, Inc. and Subsidiaries
Supplementary
Financial Information
(In
Thousands)
|
Balance as of
|
||||||||
|
September
30,
2009
|
September
30,
2008
|
|||||||
|
Net
cash flow from operating activities
|
$ | 30,760 | $ | 16,379 | ||||
|
Cash
and cash equivalents
|
$ | 108,984 | $ | 18,985 | ||||
|
Term
debt outstanding
|
$ | -- | $ | 35,000 | ||||
|
Capital
Expenditures
|
$ | 8,389 | $ | 11,715 | ||||
SOURCE: Orion
Marine Group, Inc.
Orion
Marine Group, Inc.
Mark
Stauffer, Executive Vice President & CFO
Chris
DeAlmeida, Director of Investor Relations
713-852-6506