Orion Group Holdings Reports Net Loss But Larger Backlog
Orion Group Holdings Inc. reported a net loss of $10.2 million ($0.33 diluted loss per share) for the third quarter. The operating loss was $8.7 million for the quarter, compared to operating income of $13.1 million for the third quarter of 2020, the company said in the October 27 announcement.
The net loss figure included $1.1 million of non-recurring items and $0.7 million of tax expense associated with the movement of certain valuation allowances, Orion said. Taking those factors into account, the third-quarter adjusted loss was $8.4 million.
Contract revenues were $139.9 million, down 26.1 percent from a year ago. The decrease was primarily driven by the timing and mix of several large marine projects that had driven activity in the prior year, which were not replicated or replaced in the current year quarter, the company said, adding that the decrease was partially offset by increased production volumes in the concrete segment due to an increase in activity during 2021.
On the bright side, the company reported its backlog at the end of the third quarter was $572.8 million on a third quarter book-to-bill ratio of 2.28. A year ago, the backlog was $428.8 million.
“Our third quarter results were impacted by lower than anticipated revenue due to the phasing of project work, project win rates and timing, tropical weather and COVID-19 related items,” said Mark Stauffer, CEO. “This also resulted in an increase in unabsorbed labor and equipment, which further pressured margins.
“When we reported our second quarter results three months ago, we noted our optimism regarding the activity level in our end markets and amount of active project bids. We also noted our intention to remain disciplined in our approach to bidding. That discipline has paid off as we closed the third quarter with several project award announcements, resulting in period-ending backlog of $572.8 million, up 45 percent from the end of the second quarter. Our bidding activity remains healthy, with approximately $2 billion currently outstanding. We continue to see demand for our services in for both of our segments, and we will remain disciplined in our approach to bidding on these opportunities.
“Despite weather and COVID-19-related impacts, our concrete segment was able to grow revenues 11.3 percent compared with the prior year period as production volumes increased. Larger, light-commercial jobs were the primary component of our work in the quarter as volumes improved 19 percent from the prior year period.
Stauffer said the company was continuing to track progress on infrastructure spending negotiations in Congress.
“While passage of a large bill would provide a significant catalyst for our end markets and drive absorption of industry capacity, we also believe the clarity resulting from a failed bill would also be a modest positive as many state and local entities are currently in a ‘wait and see’ mode regarding possible funding. As they gain certainty regarding their funding outlook, we expect project award activity to gain momentum.”
The third quarter 2021 ending backlog included $379.9 million for the marine segment and $192.9 million for the concrete segment. At the end of the quarter, the company had approximately $2 billion worth of bids outstanding, including approximately $103 million on which it is the apparent low bidder or has been awarded contracts subsequent to the end of the third quarter of 2021. Of that amount, about $47 million is for the marine segment and about $56 million for the concrete segment.
“During the third quarter, we bid on approximately $1.3 billion of work and were successful on approximately $318 million of these bids,” Stauffer said. “This resulted in a 2.28 times book-to-bill ratio and a win rate of 24.3 percent. In the marine segment, we bid on approximately $495 million during the third quarter 2021 and were successful on approximately $264 million, representing a win rate of 53.4 percent and a book-to-bill ratio of 4.83 times. In the concrete segment we bid on approximately $815 million of work and were awarded approximately $54 million, representing a win rate of 6.6 percent and a book-to-bill ratio of 0.63 times.”
Orion Group Holdings is headquartered in Houston, Texas.v