Orion Group Holdings Inc (ORN, Financial), a leading specialty construction company, released its financial results for the third quarter ended September 30, 2023, on October 25, 2023. The company reported contract revenues of $168.5 million, a GAAP net loss of $0.7 million or $0.02 per diluted share, and an adjusted net income of $0.8 million or $0.02 per diluted share. ORN also reported an adjusted EBITDA of $9.4 million.
Company Performance and Financial Achievements
ORN's contract revenues of $168.5 million decreased 7.7% from $182.6 million in the third quarter last year, primarily due to the company's decision to exit the unprofitable concrete business in central Texas. However, this was partially offset by an increase in marine segment revenue related to the Pearl Harbor, Hawaii drydock project.
The company's gross profit was $19.1 million or 11.3% of revenue, up from $13.4 million or 7.4% of revenue in the third quarter of 2022. The increase in gross profit dollars and margin was primarily driven by margin improvements in both segments stemming from higher quality projects and improved execution.
Management Commentary
“As CFO Scott Thanisch and I marked our first anniversary with Orion, we are incredibly proud of how our people have worked collaboratively to embrace change and deliver positive results,” said Travis Boone, Chief Executive Officer of Orion Group Holdings. “Backlog is a key metric and indicator of the health of the business. As of September 30, backlog stood at $878 million compared with backlog of $549 million in the prior year period. We have won several prestigious projects including the $435 million contract to build a dry dock at Pearl Harbor for the US Navy and a contract valued over $100 million with the Grand Bahama Shipyard Limited (GBSL) for the turnkey design-build of the Grand Bahama Shipyard Dry Dock Replacement Project.”
Financial Tables Summary
The company's total backlog at September 30, 2023, was $877.5 million, compared to $818.7 million at June 30, 2023, and $548.6 million at September 30, 2022. The Marine segment's backlog was $699.9 million, compared to $614.9 million at June 30, 2023, and $280.2 million at September 30, 2022. The Concrete segment's backlog was $177.6 million, compared to $203.8 million at June 30, 2023, and $268.4 million at September 30, 2022.
As of September 30, 2023, current assets were $228.5 million, including unrestricted cash and cash equivalents of $3.9 million. Total debt outstanding as of September 30, 2023, was $50.3 million.
Analysis on Company's Performance
Despite the decrease in contract revenues, Orion Group Holdings Inc (ORN, Financial) has shown resilience in its financial performance. The company's decision to exit the unprofitable concrete business in central Texas has led to an increase in gross profit dollars and margin. The company's backlog also indicates a healthy business, with several prestigious projects contributing to its growth. However, the company's net loss for the third quarter indicates areas for improvement.
Explore the complete 8-K earnings release (here) from Orion Group Holdings Inc for further details.
