Orion Group Holdings Inc. reported April 29 that its revenues and net income were up sharply in the first quarter of 2020 compared with the same period a year earlier.
Contract revenues were $166.6 million for the first quarter, up 16.4 percent from $143.1 million for the first quarter of 2019, the company said. Operating income was $4.4 million compared to operating loss of $6.2 million for the first quarter a year ago. And net income was $2.7 million ($0.09 diluted earnings per share) for the first quarter of 2020 compared to net loss of $7.9 million ($0.27 diluted loss per share) for the first quarter of 2019.
Orion Group Holdings, based in Houston, Texas, offers construction and dredging services both on and off the water in the continental United States, Alaska, Canada and the Caribbean Basin. The company’s marine segment is engaged in marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design and specialty services.
“I want to sincerely thank our team members who are safely working at our project sites, yards, field support offices and remote locations around the nation and outside the country,” said Mark Stauffer, president and CEO. “Our focus has been to ensure the health and safety of all our people.
“The current global healthcare crisis resulting from the COVID-19 virus has created significant uncertainty and disruption throughout the U.S. economy; however, Orion’s operations have been determined to be a critical infrastructure service, and we continue to execute on our projects in backlog with only minor disruptions. As we move toward the ‘reopening’ of the economy, it is unclear whether we may experience some delays in the timing and execution of new project awards later in the year or the impacts if we see a second wave of virus spread. We will continue to monitor the latest developments and focus on the health and safety of our employees and executing the work in our backlog.
“We posted a strong year-over-year improvement in both revenues and profitability in the first quarter, and we also had a strong book-to-bill, leading to a healthy expansion of our backlog,” Stauffer continued. “With respect to our segment performance, our concrete business generated year-over-year and sequential profitability improvement due to improved man hours per cubic yard. Marine revenues and operating profit were up significantly in the first quarter of 2020, driven by execution related margin gains on several projects in backlog. Also contributing to marine’s year-over-year improvement was increased equipment utilization, which led to higher absorption of fixed costs.
“… As part of maintaining the continuity of our operations, not only have we been acutely focused on the efficiency of our project execution, but more importantly, our top priority has been to protect the health and safety of our employees. In this regard, we have implemented a number of policies and procedures at all of our job sites and offices, including: pre-shift temperature testing, social distancing, sanitation and disinfection practices, use of face coverings, COVID-19 specific safety meetings, leadership training, distribution of educational information, remote working when possible and travel restrictions.”
Orion reported that its backlog of work under contract as of March 31 was $609.5 million, which compares with backlog under contract at March 31, 2019, of $411.4 million, an increase of 48.2 percent. The first quarter 2020 ending backlog was composed of $362.2 million for the marine segment, and a record $247.3 million for the concrete segment. Currently, the company has approximately $848 million worth of bids outstanding, including approximately $57 million on which it is the apparent low bidder or has been awarded contracts subsequent to the end of the first quarter of 2020.
“During the first quarter, we bid on approximately $1 billion of work and were successful on approximately $204 million of these bids,” said Robert Tabb, Orion Group Holding’s vice president and chief financial officer. “This resulted in a 1.22 times book-to-bill ratio and a win rate of 20.1 percent. In the marine segment, we bid on approximately $412 million during the first quarter 2020 and were successful on approximately $108 million, representing a win rate of 26.1 percent and a book-to-bill ratio of 1.25 times.”