Orion Reports Increased Earnings For Fourth Quarter, Year
Orion Group Holdings Inc. reported net income of $3.7 million, or 12 cents diluted earnings per share, for the fourth quarter of 2020. That compares to $0.2 million, or 1 cent per share, for the same quarter a year ago. Operating income was $5.1 million for the fourth quarter of 2020, compared to operating income of $2.7 million for the fourth quarter of 2019.
The fourth quarter 2020 net income included $0.6 million of non-recurring items and $0.7 million of tax benefit associated with the movement of certain valuation allowances, the company said in the February 24 announcement. Fourth quarter 2020 adjusted net income was $3.5 million, or 12 cents diluted earnings per share.
For the full year 2020, Orion reported net income of $20.2 million, as opposed to a loss of $5.3 million for 2019.
The company’s backlog at the end of 2020 was $439.5 million. Orion also had approximately $1.6 billion worth of bids outstanding on December 31, including approximately $96 million on which it is the apparent low bidder or has been awarded contracts since that date.
“We delivered strong growth in profitability and cash flow for the full year 2020,” stated Mark Stauffer, Orion’s CEO. “Despite the headwinds to the U.S. economy and our business resulting from the COVID-19 pandemic, our adjusted EBITDA (earnings before interest, taxes depreciation and amortization) increased more than 35 percent 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.
“Fourth-quarter results were in-line with our expectations,” Stauffer continued. “Gross profit improved year over year in both dollars and margin, with gross profit margin improving by 320 basis points. 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 percent year over year.
“Our team’s focus remains on continued performance efficiency despite any macroeconomic challenges. We view our ability to generate improved profitability in a difficult market as a testament to Orion’s processes, procedures and focus on bottom line results. We believe that this profitability improvement will be sustainable and scalable moving forward as bidding opportunities begin to normalize,” he said.
“While bidding opportunities have been affected in some of our end markets, we still see bidding activity in both of our segments, largely driven by end markets that are continuing operations through the COVID-19 pandemic,” Stauffer continued. “As we have said previously, our efforts are focused on targeting the end markets in which we expect to have the best opportunities and on projects that we expect to be the most profitable projects. One of the key strengths of our company is the wide array of potential users of our broad range of services, enabling us to pursue the most attractive bid opportunities in the end markets that are providing opportunities at any given point in time. This strategy has served us well, and we believe it will continue to do so.”
“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. We continue to focus on our liquidity position, which remains strong and provides us with more than sufficient financial flexibility to continue to pursue new awards and execute on existing projects in backlog. Our diverse end markets, broad range of construction capabilities and assets, and our highly experienced and professional personnel make us confident in our ability to deliver increasing levels of profitability and free cash flow, particularly in a post-pandemic environment.”
Headquartered in Houston, Texas, Orion Group Holdings is a specialty construction company serving the infrastructure, industrial and building sectors. 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 pour and finish, dirt work, layout, forming, rebar and mesh across the light commercial, structural and other associated business areas.