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): August 7,
2008
ORION
MARINE GROUP, INC.
(Exact
name of Registrant as specified in its charter)
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Delaware
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333-145588
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26-0097459
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
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12550
Fuqua St.
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)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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TABLE
OF CONTENTS
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SIGNATURES
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Item
2.02
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Results of Operations and Financial
Condition
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On August
7, 2008, Orion Marine Group, Inc. (the “Company”) issued a press
release announcing operating results for its second quarter ended June 30,
2008.
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
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99.1
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Press
Release issued August 7, 2008
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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.
/s/ Mark R.
Stauffer
By: Mark
R. Stauffer
Title: Chief
Financial Officer
EXHIBIT
INDEX
Exhibit
No. Description
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99.1
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Press
Release issued August 7,
2008
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Orion
Marine Group, Inc. Reports Second Quarter 2008 Results
Houston,
Texas, August 7, 2008 -- Orion Marine Group, Inc. (the “Company”) (NASDAQ:
OMGI), a leading heavy civil marine contractor, today reported net income of
$2.4 million ($0.11 diluted earnings per share) for the three months ended June
30, 2008, which compares to net income available to common shareholders of $2.0
million ($0.11 diluted earnings per share) for the same period a year
ago.
“Despite
some challenges in the second quarter, we achieved good overall results and
improved EBITDA margins over 2007 second quarter results,” said Mike Pearson,
Orion Marine Group’s President and Chief Executive Officer. “We are
very pleased with our performance on projects involving bridge construction,
marine docks, outfall pipeline construction, and maintenance of port facilities
during the quarter. Additionally we continue to be pleased with the
integration of Subaqueous Services and its contribution to our
results.”
Financial
highlights of the Company’s second quarter 2008 include:
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·
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Second
quarter 2008 contract revenues increased to $67.1 million, up 30.3% as
compared to the second quarter of
2007.
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·
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Gross
profit for the quarter was $9.8 million which represents a decrease of
$1.2 million or 11.2% compared with the second quarter of
2007. Gross profit margin for the quarter was 14.7% which is a
decrease of 6.8 points from the second quarter 2007. As
previously announced, second quarter gross profit was negatively impacted
by about $2 million as a result of two dredging projects that experienced
unforeseen production delays. As expected, these two projects
completed during the second
quarter.
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·
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General
and administrative expenses for the second quarter 2008 were $5.7 million
which represents a decrease of $1.5 million year-over-year primarily due
to one-time 144A transaction expenses in the second quarter of 2007,
partially offset by second quarter 2008 amortization of intangible assets
acquired from Subaqueous Services, as well as increased public company
expenses.
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·
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The
Company’s second quarter 2008 EBITDA was $9.3 million, representing a
13.8% EBITDA margin, which compares to second quarter 2007 EBITDA of $7.0
million, representing a 13.6% EBITDA
margin.
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·
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Backlog
of work under contract as of June 30, 2008 was up 26.1% to $152.1 million
as compared with backlog under contract at June 30, 2007 of $120.6
million. 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.
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“We
continued our revenue growth in the second quarter,” said Mark Stauffer, Orion
Marine Group’s Executive Vice President and Chief Financial Officer. “As we look
forward, our long term end market drivers remain solid and we are confident
about our long term outlook.”
Outlook
For the
remainder of 2008, the Company expects continued strength in its end markets
that should provide adequate revenue opportunities to meet its full year 2008
top line revenue growth goal of 28% - 32%. However, while the U.S.
Army Corps of Engineers has begun releasing projects in the third quarter, the
Company believes the pace of projects involving dredging services to be released
and the resulting margin pressure in the Western Gulf Coast market will limit
its ability to recover the negative margin impacts of the two dredging projects
that experienced unforeseen production challenges in the first and second
quarters. As a result, the Company now expects full year 2008 EBITDA
to be in the range of 14 to 16 percent, or 3 percentage points lower than its
initial goal of 17 to 19 percent.
“Ultimately
we believe dredging projects that are being deferred today, will become bid
opportunities in future periods for the ongoing maintenance of the Western Gulf
Coast infrastructure.” said Mr. Pearson.
Beyond
2008, the Company remains confident in its end market drivers and in its goal of
achieving long term average annual revenue growth of 15%, with annual EBITDA
margins averaging about 18% long-term.
Conference
Call
Orion
Marine Group will conduct a telephone briefing to discuss its results for the
second quarter 2008 and its outlook of the future at 10:00 a.m. Eastern
Time/9:00 a.m. Central Time on Thursday, August 7, 2008. 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 Second Quarter
2008 Earnings Conference Call at 877-627-6582.
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 singlesource turnkey solution for
its customers’ marine contracting needs. Its heavy civil marine construction
services include marine transportation facility construction, dredging, repair
and maintenance, bridge building, marine pipeline construction, as well as
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.
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. 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, any
statement, express or implied, concerning future operating results or the future
generation of or ability to generate revenues, income, net income, profit 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 (i) estimates and forecasts
of and assumptions regarding gross profit, gross margin, EBITDA, EBITDA margin,
backlog, capital expenditures, and administrative expenses; and (ii) statements
regarding projects or contracts in process, in negotiation, pending award, or
being bid, including associated anticipated revenues and expected or scheduled
completion dates. Forward looking statements involve risks, including those
associated with the Company’s fixed price contracts, dependence on government
contracts and funding, bonding requirements and obligations, government
regulation, and fluctuations in quarterly and other fiscal period operations,
that can cause actual results to differ materially form current
expectations, estimates or forecasts. Moreover, 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 EDGAR site 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.
The
remainder of the page left intentionally blank
Orion
Marine Group, Inc. and Subsidiaries
Consolidated
Statements of Income
(In
thousands, except share and per share information)
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Three Months Ended
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||||||||
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June
30,
2008
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June
30,
2007
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|||||||
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(Unaudited)
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(Unaudited)
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|||||||
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Contract
revenues
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$ | 67,070 | $ | 51,479 | ||||
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Costs
of contract revenues
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57,240 | 40,414 | ||||||
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Gross
profit
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9,830 | 11,065 | ||||||
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Selling,
general and administrative expenses
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5,695 | 7,220 | ||||||
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Operating
income
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4,135 | 3,845 | ||||||
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Interest
income
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(119 | ) | (294 | ) | ||||
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Interest
expense
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364 | 393 | ||||||
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Interest
(income) expense, net
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245 | 99 | ||||||
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Income
before income taxes
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3,890 | 3,746 | ||||||
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Income
tax expense
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1,489 | 1,466 | ||||||
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Net
income
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$ | 2,401 | $ | 2,280 | ||||
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Preferred
dividends
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-- | 259 | ||||||
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Earnings
available for common shareholders
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$ | 2,401 | $ | 2,021 | ||||
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Basic
earnings per share—Common
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$ | 0.11 | $ | 0.11 | ||||
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Diluted
earnings per share—Common
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$ | 0.11 | $ | 0.11 | ||||
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Shares
used to compute earnings per share:
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||||||||
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Basic—Common
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21,478,392 | 18,676,587 | ||||||
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Diluted—Common
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21,845,795 | 19,241,989 | ||||||
Orion
Marine Group, Inc. and Subsidiaries
Supplementary
Financial Information
(In
Thousands)
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Three Months Ended
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||||||||
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June
30,
2008
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June
30,
2007
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|||||||
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(EBITDA
to Net Income reconciliation)
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(Unaudited)
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(Unaudited)
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||||||
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Net
income
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$ | 2,401 | $ | 2,280 | ||||
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Income
tax expense
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1,489 | 1,466 | ||||||
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Interest
(income) expense, net
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245 | 99 | ||||||
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Depreciation
and amortization
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5,133 | 3,158 | ||||||
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EBITDA
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$ | 9,268 | $ | 7,003 | ||||
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Six Months Ended
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||||||||
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June
30,
2008
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June
30,
2007
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|||||||
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(Unaudited)
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(Unaudited)
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|||||||
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Net
cash flow from operating activities
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$ | 12,180 | $ | 2,241 | ||||
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Cash
and cash equivalents
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$ | 14,500 | $ | 15,935 | ||||
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Term
debt outstanding
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$ | 35,000 | $ | 3,095 | ||||
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Capital
Expenditures
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$ | 8,629 | $ | 3,941 | ||||
SOURCE: Orion
Marine Group, Inc.
Orion
Marine Group, Inc.
Mark
Stauffer, Executive Vice President & CFO
Chris
DeAlmeida, Director of Investor Relations
713-852-6506