ORN Disappointed with Tampa
Orion Marine Group (ORN) today announced preliminary results for the quarter ended September 30, 2015.
During the quarter, the company bid on approximately $682 million worth of opportunities and was successful on approximately $161 million, representing an overall win rate of 24%.
Also during the third quarter of 2015, five projects in the company’s Heavy Civil Marine Construction segment, specifically managed out of the company’s Tampa, Florida office, experienced significant increases to their respective forecasted costs as a result of changes in management’s estimate to complete the projects and/or actual costs incurred when performing and finalizing the projects.
“Our efforts in Tampa are focused around completing the projects in question as cost effectively as possible. We expect two of these projects to be completed during the fourth quarter 2015 and the remaining three to be completed by the end of the first quarter of 2016,” said Mark Stauffer, Orion Marine Group’s President and Chief Executive Officer.
“The performance on these projects is unacceptable, but Orion is a strong Company with a solid legacy and strong future and we have the capacity to rectify this situation. I have, and will continue, to take aggressive actions to ensure this situation is corrected and does not recur.”
Additionally during the quarter, the company completed its previously discussed asset review and it has identified several non-essential or underutilized assets, both equipment and property, that will be disposed of and will result in a one-time, non-cash charge of approximately $2.6 million.
The disposal of these assets will not have a material impact on ongoing operations, but will result in an annual expense reduction of approximately $1.2 million.
The impacts from the five Tampa projects, along with one-time, non-cash expenses related to the disposition of under-utilized equipment and facilities, and the valuation allowance on a portion of the company’s Florida deferred tax asset, will significantly affect the company’s third quarter results.