USA: Orion Marine Group Inc. Reports First Quarter 2010 Results
Orion Marine Group, Inc. a leading heavy civil marine contractor, today reported net income for the three months ended March 31, 2010, of $4.8 million or $0.18 diluted earnings per share. These results compare to net income of $4.3 million or $0.20 diluted earnings per share for the same period a year ago. “During the quarter we continued to execute our growth plan by growing revenues, acquiring T.W. LaQuay Dredging, and expanding into the Pacific Northwest,” said Mike Pearson, Orion Marine Group’s President and Chief Executive Officer. “Looking forward, we have a record backlog, continue to see solid end markets with good funding drivers, and remain optimistic about 2010 and beyond.”
Financial highlights of the Company’s first quarter 2010 include:
First Quarter 2010
— First quarter 2010 contract revenues were $75.6 million, as compared with the first quarter of 2009 revenues of $70.0 million.
— Gross profit for the quarter was $15.6 million which represents an increase of $1.3 million as compared with the first quarter of 2009.Gross profit margin for the quarter was 20.6%, which was in-line with the prior year period.
— The Company self-performed approximately 85% of its work as measured by cost during the first quarter 2010 as compared with 95% in the prior year period.
— Selling, General, and Administrative expenses for the first quarter 2010 were $10.2 million as compared to $7.2 million in the prior year period.
— During the first quarter 2010, Selling, General, and Administrative expenses included a one-time pre-tax expense of $1.7 million related to the acquisitions made during the quarter, offset by a one-time pre-tax $2.2 million gain included in Other Income associated with the bargain purchase of equipment in the Pacific Northwest. As a result, Net Income for the first quarter included a one-time post-tax net gain of approximately $0.3 million.
— The Company’s first quarter 2010 EBITDA was $12.2 million, representing a 16.2% EBITDA margin, which compares to first quarter 2009 EBITDA of $12.1 million, or a 17.2% EBITDA margin.
Backlog of work under contract as of March 31, 2010 was a record $255.0 million which compares with backlog under contract at March 31, 2009 of $134.1 million. 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. “Backlog remains solid as we continue to see good demand for our services,” said Mark Stauffer, Orion Marine Group’s Executive Vice President and Chief Financial Officer. “As we look at the remainder of the year, our backlog indicates revenue continuing to build into the back half of the year with full year EBITDA margins in the 16% to 18% range.”
The Company expects to continue to see positive long-term trends in port expansion, U.S. infrastructure updates, coastal and wetland restoration projects, expansion in the cruise industry and projects involving dredging services. The Company is currently tracking $4.5 to $5.0 billion of bid opportunities of which it expects approximately $1 billion could liquidate in the balance of 2010. As a result of the current backlog and current expected bid opportunities the Company remains comfortable with its full year 2010 revenue goal range of between $390 million and $410 million. The Company’s full year 2010 EBITDA margin goal remains 16% – 18%. For the second quarter 2010, the Company expects revenue will be in the $90 to $95 million range with second quarter 2010 EBITDA margin in the 16% to 18% range.
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, the West Coast, Canada 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 an almost 80-year legacy of successful operations.
Source: Orion Marine Group, May 6, 2010