Orion Marine Group: Investors Update (USA)
Orion Marine Group, Inc., a leading heavy civil marine contractor serving the infrastructure sector, today is providing it’s investors an update on the Company’s outlook and end markets.
The Company continues to maintain a solid backlog and increase construction equipment utilization as the projects booked in the first half of 2012 are underway. However, the Company’s dredge fleet remains underutilized as Corps lettings continue to be choppy. The Company’s strategy to rebuild backlog has proven to be successful, resulting in a larger volume of work to execute as it progresses through the back half of 2012.
The Company continues to track a high level of bid opportunities. During the third quarter, the Company bid on approximately $500 million worth of opportunities and was successful on approximately $100 million, representing a win rate of approximately 20%. Currently the Company has over $211 million worth of bids outstanding, of which it is the apparent low bidder on approximately $37 million. The Company remains comfortable with its future outlook and level of bid opportunities as indicated by its tracking database that currently has over $6.5 billion worth of opportunities over the next few years.
Hurricane Isaac delayed some of the Company’s ongoing projects during the quarter, but the Company does not expect these delays will have a material adverse impact to its results for the third quarter.
The choppiness of Corps lettings continues to effect the utilization of the Company’s dredging assets. On the legislative front, the President has signed a 6-month continuing resolution that funds the Corps, along with the entire federal government at FY2012 levels for the first six months of the new federal fiscal year.
Additionally, the Company is closely monitoring developments concerning the RESTORE Act, which will dedicate 80% of fines collected against BP relating to the oil spill of 2010 to coastal restoration in the Gulf Coast region. The Company expects this to be a significant long term driver of restoration opportunities in the Gulf Coast region once fines are collected.
The Company continues to closely monitor the market for improvements in bid margins after the 2 year, $105 billion highway bill was signed by the President in June, which could be a factor in the easing of pricing pressure in the future from non-traditional competitors. There continues to be a steady amount of bridge opportunities throughout Company’s operating regions.
The Company continues to see solid demand for the services from local port authorities. The Company believes this demand is being driven by continued increases in the levels of waterborne commerce and the expectation of further increases driven by the Panama Canal expansion; both of which will require significant capital improvements to existing port facilities. The American Association of Port Authorities (AAPA) recently estimated that both public and private sector partners have approximately $46 billion planned to invest in capital port infrastructure projects by 2017. The region with the highest level of port infrastructure projects planned; according to the AAPA is the Gulf Coast.
The Company continues to see a high level of bid opportunities from the private sector, primarily along the Gulf Coast. This has resulted in an improved level of utilization for the Company’s construction assets. In light of choppy Corps lettings, private sector demand has also helped utilize some of the Company’s dredging assets. The Company continues to be optimistic about this sector’s direction.
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 a near 100-year legacy of successful operations.
Press Release, October 4, 2012