USA: Orion Marine Group Announces Third Quarter 2011 Results
Orion Marine Group, Inc., a leading heavy civil marine contractor, today reported a net loss for the three months ended September 30, 2011, of $6.2 million ($0.23 diluted loss per share). These results compare to net income of $7.1 million ($0.26 diluted earnings per share) for the same period a year ago.
“We continue to witness pressure on our margins as we weather the current economic storm,” said Mike Pearson, Orion Marine Group’s President and Chief Executive Officer. “Funding inaction by the federal government has continued through the end of the third quarter. As a result, the Army Corps of Engineers, US Department of Transportation, and all other federal government entities are operating under a short-term continuing resolution until mid November. This type of inaction led to a slow pace of project lettings by the Corps for the majority of 2011, which resulted in underutilized equipment, reaching the lowest levels of the year during the third quarter. However, the Corps did let some dredging projects during the third quarter, several of which we were the successful bidder. Additionally, we are finding the appropriate price points on projects involving marine construction services, which resulted in a strong book-to-bill ratio for the third quarter.”
Financial highlights of the Company’s third quarter 2011 include:
Third Quarter 2011
– Third quarter 2011 contract revenues were $54.6 million, a decrease of 45.4%, as compared with third quarter of 2010 revenues of $100.0 million. Revenue for the quarter was impacted by gaps between projects as a result of delays in project lettings by the Army Corps of Engineers, as well as delays in start dates on two major jobs.
– The Company self-performed approximately 81% of its work as measured by cost during the third quarter 2011 as compared with 79% in the prior year period.
– Gross profit for the quarter was negative $2.4 million, which represents a decrease of $20.9 million as compared with the third quarter of 2010. Gross profit margin for the quarter was negative 4.5%, which was lower than the prior year period of positive 18.4%. During the third quarter 2011, gross profit margin continued to be impacted by underutilized equipment and crews as a result of gaps between projects caused in part by delays in federal lettings during most of 2011.
– Selling, General, and Administrative expenses for the third quarter 2011 were $6.6 million as compared to $7.0 in the prior year period.
– The Company’s third quarter 2011 EBITDA was a negative $3.4 million, representing a negative 6.3% EBITDA margin, which compares to third quarter 2010 EBITDA of $16.4 million, or a 16.4% EBITDA margin. EBITDA margins during the third quarter 2011 were significantly impacted by underutilization of higher margin assets such as large dredges as a result of gaps between projects caused by delays in federal lettings during most of 2011.
Backlog of work under contract as of September 30, 2011 was $146.1 million, which compares with backlog under contract at September 30, 2010 of $217.3 million. Ending third quarter backlog represents a sequential increase of $26.3 million as compared to the second quarter 2011 and a book-to-bill ratio of 1.48 times.
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.
About Orion Marine Group
Orion Marine Group, Inc. provides a broad range of heavy civil marine construction and specialty services on, over and under the water in 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 of marine waterways, channels and ports, environmental dredging, offshore construction, abandonment, 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 near 100-year legacy of successful operations.
More info: orionmarinegroup
Source: orionmarinegroup, November 3, 2011