Orion Group Holdings Reports First Quarter 2025 Results

HOUSTON, April 29, 2025 (GLOBE NEWSWIRE) -- Orion Group Holdings, Inc. (NYSE: ORN) (the “Company”), a leading specialty construction company, today reported its financial results for the first quarter ended March 31, 2025. Highlights for the quarter ended March 31, 2025: Contract revenues increased 17.4% to $188.7 million versus the prior year periodGAAP net loss of $1.4 million or $0.04 per diluted share compared to a GAAP net loss of $6.1 million or $0.19 per diluted share year-over-yearAdjusted net income of $0.3 million or $0.01 per diluted share versus Adjusted net loss of $3.6 million or $0.11 per diluted share in the first quarter last yearAdjusted EBITDA increased 100.4% to $8.2 million compared to the prior year periodNew contract wins of $349 million year-to-dateContracted backlog and awards subsequent to quarter end totaled $890.9 million See definitions and reconciliation of non-GAAP measures elsewhere in this release. Management Commentary “We’re off to a strong start in 2025. On a year-over-year basis, our first quarter revenue increased 17% to $189 million and Adjusted EBITDA doubled. This performance reflects the strength of our operating model and the successful execution of our strategic priorities,” said Travis Boone, Chief Executive Officer of Orion Group Holdings. “By consistently delivering top-tier work and prioritizing safety, we have enhanced our current customer relationships while developing new ones. Year-to-date, we have secured $349 million in new contract awards--$161 million in Marine and $188 million in Concrete, which have started or are scheduled to start within the next few months. We continue to see strong demand across our markets and continue to win repeat business with our world-class partners and clients.” “The future for Orion is extremely bright and our business and operating model is well positioned for this moment. We believe that many of the new federal policy initiatives will support our long-term growth, especially around defense, shipbuilding, infrastructure, and reshoring of manufacturing. Regardless of the efforts to reduce federal spending, we are seeing no impact on domestic infrastructure projects that we are delivering or pursuing, and there has been no pull back on the U.S. government’s China deterrence policy.” “Regarding tariffs, we have been proactively managing tariff risk since last summer and do not expect material impacts to our current projects. Nor do we believe that any actions taken to downsize the federal government will have a material bearing on our business. Therefore, we are reiterating our previous full year 2025 guidance of revenue in the range of $800 million to $850 million with Adjusted EBITDA in the range of $42 million to $46 million. At the same time, we are continuing to prepare for transformational growth in 2026 and beyond,” concluded Boone. First Quarter 2025 Results Contract revenues of $188.7 million increased $28.0 million or 17.4% from $160.7 million in the first quarter last year, primarily due to an increase in revenue from large marine construction contracts and new concrete projects. Gross profit increased to $23.0 million or 12.2% of revenue, up from $15.5 million or 9.7% of revenue in the first quarter of 2024. The increases in gross profit dollars and margin were primarily driven by an improvement in indirect expenses in the marine segment as a result of a higher volume of work, partially offset by lower margins in the concrete segment which were primarily driven by seasonally lower productivity, which is normal for the first quarter. Selling, general and administrative (“SG&A”) expenses were $22.5 million, up from $19.0 million in the first quarter of 2024. As a percentage of total contract revenues, SG&A expenses increased to 12.0% from 11.8%. The increases in SG&A dollars and percentage reflect an increase in incentive compensation, legal, IT and operating lease expenses. GAAP net loss for the first quarter was $1.4 million ($0.04 per diluted share) compared to a net loss of $6.1 million ($0.19 per diluted share) in the first quarter of 2024. First quarter 2025 net loss included $1.7 million ($0.05 diluted income per share) of non-recurring items. First quarter 2025 adjusted net income was $0.3 million ($0.01 diluted income per share). EBITDA for the first quarter of 2025 was $6.3 million, resulting in a 3.3% EBITDA margin, compared to EBITDA of $3.0 million, and a 1.8% EBITDA margin for the first quarter last year. Adjusted EBITDA for the first quarter increased to $8.2 million, or a 4.3% Adjusted EBITDA margin. This compares to Adjusted EBITDA of $4.1 million, or a 2.5% Adjusted EBITDA margin for the prior year period. Backlog Total backlog at March 31, 2025 was $839.7 million, compared to $729.1 million at December 31, 2024 and $756.6 million at March 31, 2024. Backlog for the Marine segment was $607.4 million at March 31, 2025, compared to $582.8 million at December 31, 2024 and $569.9 million at March 31, 2024. Backlog for the Concrete segment was $232.3 million at March 31, 2025, compared to $146.3 million at December 31, 2024 and $186.7 million at March 31, 2024. Recent Contract Wins Subsequent to the end of the quarter, the Company has been awarded $51.2 million in new contract wins - $17.1 million in Marine and $34.1 million in Concrete. The Marine wins include a $6.3 million environmental project for General Recycling of Washington and a $7.5 million dredging project for the U.S. Army Corps of Engineers Galveston District. In Concrete, wins include a $24.1 million project for Phase 2 of the Costco distribution center in Florida, and a $6.6 million project for a United Airlines catering facility at Houston’s George Bush Intercontinental Airport. Balance Sheet Update As of March 31, 2025, current assets were $267.0 million, including unrestricted cash and cash equivalents of $13.0 million. Total debt outstanding as of March 31, 2025 was $23.3 million. At the end of the quarter, the Company had no outstanding borrowings under its revolving credit facility. Conference Call DetailsOrion Group Holdings will host a conference call to discuss the first quarter 2025 financial results at 9:00 a.m. Eastern Time/8:00 a.m. Central Time on Wednesday, April 30, 2025. To participate, please call (844) 481-2994 and ask for the Orion Group Holdings Conference Call. A live audio webcast of the call will also be available on the Investor Relations section of Orion’s website at https://www.oriongroupholdingsinc.com/investor/ and will be archived for replay. About Orion Group Holdings Orion Group Holdings, Inc., a leading specialty construction company serving the infrastructure, industrial and building sectors, provides services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through its marine segment and its concrete segment. The Company’s marine segment provides construction and dredging services relating to marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design and specialty services. Its concrete segment provides turnkey concrete construction services including place and finish, site prep, layout, forming, and rebar placement for large commercial, structural and other associated business areas. The Company is headquartered in Houston, Texas with regional offices throughout its operating areas. The Company’s website is located at: https://www.oriongroupholdingsinc.com. Backlog Definition Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress but are not yet complete. The Company cannot guarantee that the revenue implied by its backlog will be realized, or, if realized, will result in earnings. Backlog can fluctuate from period to period due to the timing and execution of contracts. The typical duration of the Company’s projects ranges from three to nine months on shorter projects to multiple years on larger projects. The Company's backlog at any point in time includes both revenue it expects to realize during the next twelve-month period as well as revenue it expects to realize in future years. Non-GAAP Financial Measures This press release includes the financial measures “adjusted net income/loss,” “adjusted earnings/loss per share,” “EBITDA,” "Adjusted EBITDA" and “Adjusted EBITDA margin." These measurements are “non-GAAP financial measures” under rules of the Securities and Exchange Commission, including Regulation G. The non-GAAP financial information may be determined or calculated differently by other companies that use similarly titled measures. By reporting such non-GAAP financial information, the Company does not intend to give such information greater prominence than comparable GAAP financial information. Investors are urged to consider these non-GAAP measures in addition to and not in substitute for measures prepared in accordance with GAAP. Adjusted net income/loss and adjusted earnings/loss per share should not be viewed as an equivalent financial measure to net income/loss or earnings/loss per share. Adjusted net income/loss and adjusted earnings/loss per share exclude certain items that management believes are one-time items or items whose timing or amount cannot be reasonably estimated. The Company believes these adjusted financial measures are a useful supplement to earnings/loss calculated in accordance with GAAP. Orion Group Holdings defines EBITDA as net income/loss before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is calculated by adjusting EBITDA for certain items that management believes are one-time items or items whose timing or amount cannot be reasonably estimated. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA for the period by contract revenues for the period. The GAAP financial measure that is most directly comparable to EBITDA and Adjusted EBITDA is net income, while the GAAP financial measure that is most directly comparable to Adjusted EBITDA margin is operating margin, which represents operating income divided by contract revenues. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are used internally to evaluate current operating expense, operating efficiency, and operating profitability on a variable cost basis, by excluding the depreciation and amortization expenses, primarily related to capital expenditures and acquisitions, and net interest and tax expenses. Additionally, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information regarding the Company's ability to meet future debt service and working capital requirements while providing an overall evaluation of the Company's financial condition. In addition, EBITDA is used internally for incentive compensation purposes. The Company includes EBITDA, Adjusted EBITDA and Adjusted EBITDA margin to provide transparency to investors as they are commonly used by investors and others in assessing performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have certain limitations as analytical tools and should not be used as a substitute for operating margin, net income, cash flows, or other data prepared in accordance with GAAP, or as a measure of the Company's profitability or liquidity. Forward-Looking Statements The matters discussed in this press release may constitute or include projections or other forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, of which provisions the Company is availing itself. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'seeks', 'approximately', 'intends', 'plans', 'estimates', or 'anticipates', or the negative thereof or other comparable terminology, or by discussions of strategy, plans, objectives, intentions, estimates, forecasts, guidance, outlook, assumptions, or goals. In particular, statements regarding our pipeline of opportunities, financial guidance and future operations or results, including those set forth in this press release, and any other statement, express or implied, concerning financial guidance or future operating results or the future generation of or ability to generate revenues, income, net income, gross profit, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, or cash flow, including to service debt or maintain compliance with debt covenants, and including any estimates, guidance, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward-looking statements also include project award announcements, estimated project start dates, ramp-up of contract activity and contract options, which may or may not be awarded in the future. Forward-looking statements involve risks, including those associated with the Company's fixed price contracts that impacts profits, unforeseen productivity delays that may alter the final profitability of the contract, cancellation of the contract by the customer for unforeseen reasons, delays or decreases in funding by the customer, levels and predictability of government funding or other governmental budgetary constraints, and any potential contract options which may or may not be awarded in the future, and are at the sole discretion of award by the customer. Past performance is not necessarily an indicator of future results. Considering these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that the Company's plans, estimates, forecasts, goals, intentions, or objectives will be achieved or realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update information contained in this press release whether as a result of new developments or otherwise, except as required by law. Please refer to the Company's 2024 Annual Report on Form 10-K, filed on March 5, 2025 which is available on its website at www.oriongroupholdingsinc.com or at the SEC's website at www.sec.gov, and filings and press releases subsequent to such Annual Report on Form 10-K for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts. Contacts:Financial Profiles, Inc.Margaret Boyce 310-622-8247orn@finprofiles.com Source: Orion Group Holdings, Inc. Orion Group Holdings, Inc. and SubsidiariesCondensed Consolidated Statements of Operations(In Thousands, Except Share and Per Share Information)(Unaudited) Three months ended March 31, 2025 2024Contract revenues 188,653 160,672 Costs of contract revenues 165,638 145,134 Gross profit 23,015 15,538 Selling, general and administrative expenses 22,545 18,999 Gain on disposal of assets, net (363) (337)Operating income (loss) 833 (3,124)Other (expense) income: Other income 34 72 Interest income 193 17 Interest expense (2,334) (3,374)Other expense, net (2,107) (3,285)Loss before income taxes (1,274) (6,409)Income tax expense (benefit) 140 (352)Net loss$(1,414) $(6,057) Basic loss per share$(0.04) $(0.19)Diluted loss per share$(0.04) $(0.19)Shares used to compute loss per share: Basic 39,056,396 32,553,750 Diluted 39,056,396 32,553,750 Orion Group Holdings, Inc. and SubsidiariesSelected Results of Operations(In Thousands)(Unaudited) Three months ended March 31, 2025 2024 Amount Percent Amount Percent (dollar amounts in thousands)Contract revenues Marine segment Public sector$100,222 78.8% $92,935 87.4%Private sector 26,941 21.2% 13,390 12.6%Marine segment total$127,163 100.0% $106,325 100.0%Concrete segment Public sector$7,661 12.5% $3,404 6.3%Private sector 53,829 87.5% 50,943 93.7%Concrete segment total$61,490 100.0% $54,347 100.0%Total$188,653 $160,672 Operating income (loss) Marine segment$4,778 3.8% $(4,866) (4.6)%Concrete segment (3,945) (6.4)% 1,742 3.2%Total$833 $(3,124) Orion Group Holdings, Inc. and SubsidiariesReconciliation of Adjusted Net Income (Loss)(In thousands except per share information)(Unaudited) Three months ended March 31, 2025 2024Net loss$(1,414) $(6,057)Adjusting items and the tax effects: Share-based compensation 1,123 358 ERP implementation 605 686 Severance 30 62 Process improvement initiatives 138 — Tax rate of 23% applied to adjusting items (1) (436) (226)Total adjusting items and the tax effects 1,460 880 Federal and state tax valuation allowances 214 1,585 Adjusted net income (loss)$260 $(3,592)Adjusted EPS$0.01 $(0.11) ________________________(1) Items are taxed discretely using the Company's blended tax rate. Orion Group Holdings, Inc. and SubsidiariesAdjusted EBITDA and Adjusted EBITDA Margin Reconciliations(In Thousands, Except Margin Data)(Unaudited) Three months ended March 31, 2025 2024Net loss$(1,414) $(6,057)Income tax expense (benefit) 140 (352)Interest expense, net 2,141 3,357 Depreciation and amortization 5,403 6,020 EBITDA (1) 6,270 2,968 Share-based compensation 1,123 358 ERP implementation 605 686 Severance 30 62 Process improvement initiatives 138 — Adjusted EBITDA(2)$8,166 $4,074 Operating income margin 0.3% (1.9)%Impact of depreciation and amortization 2.9% 3.7%Impact of share-based compensation 0.6% 0.2%Impact of ERP implementation 0.3% 0.4%Impact of severance 0.1% 0.1%Impact of process improvement initiatives 0.1% — Adjusted EBITDA margin(2) 4.3% 2.5% ________________________(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. (2) Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for share-based compensation, net gain on Port Lavaca South Yard property sale, ERP implementation, severance, intangible asset impairment loss and process improvement initiatives. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues. Orion Group Holdings, Inc. and SubsidiariesAdjusted EBITDA and Adjusted EBITDA Margin Reconciliations by Segment(In Thousands, Except Margin Data)(Unaudited) Marine Concrete Three months ended Three months ended March 31, March 31, 2025 2024 2025 2024Operating income (loss)$4,778 $(4,867) $(3,945) $1,742 Other income 24 49 10 24 Depreciation and amortization 4,531 4,931 872 1,089 EBITDA (1) 9,333 113 (3,063) 2,855 Share-based compensation 1,032 326 91 32 ERP implementation 408 454 197 232 Severance 30 62 — — Process improvement initiatives 93 — 45 — Adjusted EBITDA(2)$10,896 $955 $(2,730) $3,119 Operating income margin 3.8% (4.6)% (6.3)% 3.2%Impact of other income -% 0.1% —% —%Impact of depreciation and amortization 3.6% 4.6% 1.4% 2.0%Impact of share-based compensation 0.8% 0.3% 0.1% 0.1%Impact of ERP implementation 0.3% 0.4% 0.3% 0.4%Impact of severance —% 0.1% —% —%Impact of process improvement initiatives 0.1% — 0.1% — Adjusted EBITDA margin (2) 8.6% 0.9% (4.4)% 5.7% ________________________(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. (2) Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for share-based compensation, net gain on Port Lavaca South Yard property sale, ERP implementation, severance, intangible asset impairment loss and process improvement initiatives. Adjusted EBITDA margin is a non-GAAP measure calculated by dividing Adjusted EBITDA by contract revenues. Orion Group Holdings, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows Summarized(In Thousands)(Unaudited) Three months ended March 31, 2025 2024Net loss$(1,414) $(6,057)Adjustments to remove non-cash and non-operating items 9,256 9,006 Cash flow from net income after adjusting for non-cash and non-operating items 7,842 2,949 Change in operating assets and liabilities (working capital) (11,285) (25,774)Cash flows used in operating activities$(3,443) $(22,825)Cash flows used in investing activities$(8,692) $(1,573)Cash flows used in financing activities$(3,225) $(1,902) Capital expenditures (included in investing activities above)$(9,033) $(1,853) Orion Group Holdings, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(In Thousands)(Unaudited) Three months ended March 31, 2025 2024Cash flows from operating activities Net loss$(1,414) $(6,057)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,175 4,208 Amortization of ROU operating leases 2,477 2,419 Amortization of ROU finance leases 2,228 1,811 Amortization of deferred debt issuance costs 395 553 Deferred income taxes (11) (9)Share-based compensation 1,123 358 Gain on disposal of assets, net (363) (338)Allowance for credit losses 232 4 Change in operating assets and liabilities: Accounts receivable (35,266) 15,202 Income tax receivable 47 — Inventory 63 (387)Prepaid expenses and other 1,319 2,169 Contract assets 20,827 10,548 Accounts payable 13,747 (29,399)Accrued liabilities (6,174) (16,013)Operating lease liabilities (1,219) (2,238)Income tax payable (14) (196)Contract liabilities (4,615) (5,460)Net cash used in operating activities (3,443) (22,825)Cash flows from investing activities: Proceeds from sale of property and equipment 341 280 Purchase of property and equipment (9,033) (1,853)Net cash used in investing activities (8,692) (1,573)Cash flows from financing activities: Borrowings on credit 3,047 1,554 Payments made on borrowings on credit (3,148) (1,679)Payments on failed sales-leasebacks (729) — Loan costs from Credit Facility (323) (100)Payments of finance lease liabilities (2,517) (1,971)Proceeds from issuance of common stock under ESPP 337 — Exercise of stock options 108 294 Net cash used in financing activities (3,225) (1,902)Net change in cash, cash equivalents and restricted cash (15,360) (26,300)Cash, cash equivalents and restricted cash at beginning of period 28,316 30,938 Cash, cash equivalents and restricted cash at end of period$12,956 $4,638 Orion Group Holdings, Inc. and SubsidiariesCondensed Consolidated Balance Sheets(In Thousands, Except Share and Per Share Information) March 31, December 31, 2025 2024 (Unaudited) Current assets: Cash and cash equivalents$12,956 28,316 Accounts receivable: Trade, net of allowance for credit losses of $787 and $555, respectively 142,201 106,304 Retainage 35,165 35,633 Income taxes receivable 436 483 Other current 2,735 3,127 Inventory 2,130 1,974 Contract assets 63,580 84,407 Prepaid expenses and other 7,819 9,084 Total current assets 267,022 269,328 Property and equipment, net of depreciation 91,956 86,098 Operating lease right-of-use assets, net of amortization 23,984 27,101 Financing lease right-of-use assets, net of amortization 24,638 25,806 Inventory, non-current 7,421 7,640 Deferred income tax asset 17 17 Other non-current 1,272 1,327 Total assets$416,310 $417,317 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current debt, net of issuance costs$1,274 $426 Accounts payable: Trade 110,057 97,139 Retainage 1,952 1,310 Accrued liabilities 20,302 26,294 Income taxes payable 493 507 Contract liabilities 42,756 47,371 Current portion of operating lease liabilities 5,700 7,546 Current portion of financing lease liabilities 11,135 10,580 Total current liabilities 193,669 191,173 Long-term debt, net of debt issuance costs 22,042 22,751 Operating lease liabilities 20,750 20,837 Financing lease liabilities 9,324 11,346 Other long-term liabilities 19,674 20,503 Deferred income tax liability 17 28 Total liabilities 265,477 266,638 Stockholders’ equity: Preferred stock -- $0.01 par value, 10,000,000 authorized, none issued — — Common stock -- $0.01 par value, 50,000,000 authorized, 40,255,806 and 39,681,597 issued; 39,544,575 and 38,970,366 outstanding at March 31, 2025 and December 31, 2024, respectively 403 397 Treasury stock, 711,231 shares, at cost, as of March 31, 2025 and December 31, 2024, respectively (6,540) (6,540)Additional paid-in capital 222,075 220,513 Retained loss (65,105) (63,691)Total stockholders’ equity 150,833 150,679 Total liabilities and stockholders’ equity$416,310 $417,317 Orion Group Holdings, Inc. and SubsidiariesGuidance – Adjusted EBITDA Reconciliation(In Thousands)(Unaudited) Year Ending December 31, 2025 Low HighNet (loss) income$(2,226) $1,533 Income tax benefit (291) (50)Interest expense, net 9,815 9,815 Depreciation and amortization 25,613 25,613 EBITDA (1) 32,911 36,911 Share-based compensation 7,604 7,604 ERP implementation 1,485 1,485 Adjusted EBITDA(2)$42,000 $46,000 ________________________(1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. (2) Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for share-based compensation and ERP implementation. Orion Group Holdings, Inc. and SubsidiariesGuidance – Adjusted EPS Reconciliation(In thousands except per share information)(Unaudited) Year Ending December 31, 2025 Low HighNet (loss) income$(2,226) $1,533 Adjusting items and the tax effects: Share-based compensation 7,604 7,604 ERP implementation 1,485 1,485 Tax rate of 23% applied to adjusting items (1) (2,090) (2,090)Total adjusting items and the tax effects 6,999 6,999 Federal and state tax valuation allowances (471) (1,632)Adjusted net (loss) income$4,302 $6,900 Adjusted EPS$0.11 $0.17 ________________________(1) Items are taxed discretely using the Company's blended tax rate.

Orion Group Holdings Reports First Quarter 2025 Results

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