Orion Marine Group, Inc. (ORN), today reported net loss for the three months ended September 30, 2015, of $7.4 million ($0.27 diluted loss per share).
These results compare to net income of $3.0 million ($0.11 diluted earnings per share) for the same period a year ago.
“As previously discussed, significant cost increases on five projects managed out of our Tampa, Florida office, as well as one-time, non-cash charges related to the assets held for sale, along with a valuation allowance on our deferred tax asset in Florida significantly impacted our third quarter results,” said Mark Stauffer, Orion Marine Group’s President and Chief Executive Officer. “I am confident we are rectifying the issues with our Tampa operations.”
However, he emphasized that the rest of the company’s operations performed well during the quarter, including ORN recently acquired commercial concrete segment, which exceeded the expectations. During the third quarter the company had a solid success rate on new work leading to backlog of over $400 million as of September 30, 2015.
“We continue to see strong opportunities for new work throughout our market areas, which gives us confidence in the year ahead. There is no doubt the third quarter has been a disappointment, but I am confident 2016 will be a solid year for the company with significantly improved bottom line performance,” added Stauffer.
As far as the future outlook is concerned, ORN remains positive about the next year.
“With the management issues in our Tampa office being rectified, an ample bid market for both the Heavy Civil Marine Construction and Commercial Concrete Construction segments should support improved results in 2016,” said Stauffer.
”Demand for our Heavy Civil Marine Construction services remain strong. Opportunities from local port authorities also remain solid, many of which are related to the upcoming completion of the Panama Canal expansion project. Additionally, we expect to see bid opportunities related to coastal restoration through RESTORE Act funding towards the end of 2016,” continued Stauffer.
According to Orion Marine Group Vice President and Chief Financial Officer, Chris DeAlmeida, during the third quarter, ORN bid on approximately $682 million worth of opportunities and was successful on approximately $195 million. This represents a 29% win rate and a book-to-bill ratio of 1.18 times for the quarter.
The company currently has a combined $724 million worth of bids outstanding. Of this, approximately $262 million of the bids outstanding are related to the Heavy Civil Marine Construction segment with $462 million related to the Commercial Concrete Construction segment.
Consolidated Financial Results of the Third Quarter 2015:
- Third quarter 2015 contract revenue was $137.1 million;
- Gross profit for the quarter was $8.3 million or a gross profit margin of 6.0%;
- Selling, General, and Administrative expenses for the third quarter 2015 were $14.5 million as compared to $7.9 million in the prior year period. The increase is primarily related the acquisition of TAS Commercial Concrete during the quarter;
- Third quarter 2015 EBITDA was $42 thousand, representing a 0.03% EBITDA margin;
- Backlog of work under contract as of September 30, 2015, was $404.1 million.