Orion Group Holdings, Inc. (ORN) yesterday reported net income of $3.7 million ($0.12 diluted earnings per share) for the fourth quarter ended December 31, 2020.
According to Mark Stauffer, Orion’s Chief Executive Officer, the company delivered strong growth in profitability and cash flow for the full year 2020.
“Despite the headwinds to the U.S. economy and our business resulting from the COVID-19 pandemic, our adjusted EBITDA increased more than 35% over 2019 and we improved our adjusted EBITDA margin by 210 basis points. This was the direct result of the commitment and resolve of our employees, coupled with the benefits of our Invest, Scale and Grow program, which we initiated in 2019,” said Stauffer.
“Fourth quarter results were in-line with our expectations. Gross profit improved year over year in both dollars and margin. The improvement was driven by production efficiency gains at the project level in both segments. Consolidated adjusted EBITDA for the fourth quarter also increased by 9.2% year over year,” added Stauffer.
“We continue to be confident in our ability to profitably execute our projects in backlog, and in our ability to maintain and grow our backlog level by targeting and winning new bid opportunities. We believe chances for a new infrastructure bill have improved, and if enacted, will be a further catalyst for continued strength in our end-market opportunities,” continued Stauffer.
Consolidated Results for Fourth Quarter 2020 Compared to Fourth Quarter 2019
- Contract revenues were $170.2 million, down 14.8% as compared to $199.8 million. The decrease was primarily driven by the timing of projects for the marine and concrete segments.
- Gross profit was $21.7 million, as compared to $19.1 million. Gross profit margin was 12.8%, as compared to 9.6%. The increase in gross profit dollars and percentage was primarily driven by production efficiency gains in both segments.
- Selling, General, and Administrative expenses were $17.4 million, as compared to $16.3 million. As a percentage of total contract revenues, SG&A expenses increased to 10.2% from 8.2%. The increase in SG&A dollars was primarily attributable to the increased accrual of the annual incentive compensation plan during the current year period as compared to the prior year period.
- Operating income was $5.1 million as compared to $2.7 million. The operating income in the fourth quarter of 2020 reflects the aforementioned factors that improved gross profit.
- EBITDA was $11.7 million, representing a 6.9% EBITDA margin, as compared to EBITDA of $10.0 million, or a 5.0% EBITDA margin. When adjusted for non-recurring items, adjusted EBITDA for the fourth quarter of 2020 was $12.6 million, representing a 7.4% EBITDA margin. (Please see page 10 of this release for an explanation of EBITDA, Adjusted EBITDA and a reconciliation to the nearest GAAP measure).
For full year results please click here.