Orion Marine Group Updates Investors (USA)
Orion Marine Group, Inc. continues to enjoy a steady demand for its heavy civil marine construction services, and overall, has continued to see a healthy pace of bid opportunities, particularly in the private sector.
Quarter to date, the Company has bid on approximately $290 million worth of opportunities and was successful on approximately $65 million, representing a win rate of approximately 22%. Additionally, the Company currently has approximately $175 million worth of bids outstanding of which it is the apparent low bidder on approximately $85 million, the company said in a press release.
Orion Marine has seen the start date on some jobs, particularly those involving dredging services, move to future periods to meet customer demands. This is a normal occurrence in the construction industry, but can create uncertain, choppy results and cause temporary underutilization of assets, as the Company has seen in the third quarter.
Additionally, the Company has experienced an increase in certain job costs associated with differing site conditions, which should result in recovery through change orders in future periods. Given the timing of these developments, profitability in the third quarter is unlikely; however, Orion Marine expects to have positive EBITDA in the period.
Additionally, “the gaps in our schedule may continue into the fourth quarter as several large jobs begin.
However, these changes, particularly the shift in job start dates and recovery through change orders, should benefit 2014 results. Sustained increases in backlog, a steady level of identified projects in the Company’s market tracking database, and continued strong demand from the private sector demonstrates the market for the Company’s services has not diminished and should lead to full year 2014 profitable results.“, the Company added.
As the federal government enters into the final days of its 2013 fiscal year, a budget or continuing resolution fund fiscal year 2014 has yet to be passed. Additionally, Orion Marine continues to monitor the progress of The Water Resources Development Act (WRDA) of 2013 (Senate Bill 601), which passed the Senate in June and awaits action by the House of Representatives.
Regarding coastal restoration opportunities, the second portion of the two-part federal trial in New Orleans, which will determine the amount of oil released in the 2010 gulf oil spill, is set to begin within the next month. Once a quantity has been found, Clean Water Act fines will then be levied against the responsible parties, 80% of which will go towards funding the RESTORE Act, which will fund coastal restoration opportunities in the five Gulf Coast States.
As the Orion Marine has seen throughout 2013, bridge opportunities from various state Departments of Transportation remain a steady source of bid opportunities. The Company continues to execute on several bridge projects throughout its operating regions and expects this trend to continue with the current transportation bill in place. However, bid pricing remains pressured for these projects due to macro-economic conditions.
Local & Private Update
Capital improvement plans continue to be implemented in various stages by local port authorities across the Company’s geographic region in order to prepare for larger ships transiting the expanded Panama Canal, which is scheduled for completion in mid-2015. As mentioned previously, Orion Marine continues to enjoy strong demand from within the private sector as energy sector clients continue to expand and refurbish their waterside infrastructure.
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, Alaska, 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, September 20, 2013