Orion Group Holdings Inc. reported financial results for the first quarter ended March 31, 2019.
“Revenues for our marine segment were down slightly relative to the first quarter of 2018 reflecting the timing of the start-up of projects in backlog. Marine margins were lower year-over-year as a result of the timing and mix of projects, which resulted in an increase in unabsorbed labor and equipment costs during the first quarter of 2019 and work on certain higher margin projects in the first quarter of 2018,” Mark Stauffer, president and CEO of Orion Group Holdings, said.
Backlog of work under contract at the end of the first quarter was $411 million, an increase of 15.8 percent. The first quarter 2019 end backlog was comprised of $219 million of marine segment projects, and $192 million of work for the concrete segment. The company has $1.1 billion worth of bids outstanding, including approximately $86 million on which it is the apparent low bidder, or have been awarded contracts subsequent to the end of the first quarter of 2019, of which approximately $74 million pertains to the marine segment and approximately $12 million to the concrete segment.
Highlights from the first quarter include:
- Contract revenues were $143.1 million, up nearly 5 percent from $136.8 million for the first quarter of 2018.
- Operating loss was $6.2 million for the first quarter of 2019 compared to operating income of $7.1 million for the first quarter of 2018.
- Net loss was $7.9 million ($0.27 diluted loss per share) for the first quarter of 2019 compared to net income of $4.1 million ($0.14 diluted earnings per share) for the first quarter of 2018.
- The first quarter 2019 operating loss and net loss included $1.5 million ($0.04 per diluted share) of non-recurring costs related to professional and other fees as part of the company’s business process review and process improvement planning. Results also include increased tax valuation allowances. First quarter 2019 adjusted net loss was $6.0 million ($0.21 diluted loss per share).
- EBITDA, adjusted to exclude the impact of non-recurring costs, was $2.4 million in the first quarter of 2019, which compares to adjusted EBITDA of $8.4 million for the first quarter of 2018.
- Gross profit was $10.2 million, as compared to $15.8 million. Gross profit margin was 7.1 percent, as compared to 11.6 percent. The decrease reflects the impact of a less favorable project mix and an increase in unabsorbed labor and equipment costs in the marine segment, along with margin deterioration on a number of concrete segment projects resulting from weather-related delays in prior periods.
- Selling, general and administrative expenses were $16.8 million, as compared to $15.0 million. The increase predominantly reflects $1.5 million of non-recurring professional and other fees related to the company’s business process review and the development of ISG performance improvement initiatives.
- Operating loss was $6.1 million as compared to operating income of $7.1 million. The operating loss in the first quarter of 2019 reflects the aforementioned factors that reduced gross margins, the business process review and ISG-related professional and other fees of $1.5 million, and by a $5.4 million non-recurring gain resulting from a legal settlement in the first quarter of 2018.
“During the first quarter, we bid on approximately $1.1 billion of work and were successful on approximately $114 million of these bids,” Robert Tabb, Orion Group Holding’s vice president and chief financial officer, said. “This resulted in a 0.80 times book-to-bill ratio and a win rate of 10.6 percent. In the marine segment, we bid on approximately $500 million during the first quarter 2019 and were successful on $24 million, representing a win rate of 4.8 percent and a book-to-bill ratio of 0.39 times.”