Orion Group Holdings, Inc. (ORN) today reported financial results for the first quarter ended March 31, 2019.
“ While the first quarter is normally our seasonally weakest quarter, our results did not meet our expectations ,” stated Mark Stauffer, Orion Group Holding’s President and Chief Executive Officer . “ However, given the project activity we are currently engaged in across both of our segments, coupled with our backlog, which was approximately 16% higher at the end of the first quarter of 2019 than the same point last year. ”
Consolidated Results for First Quarter 2019 Compared to First Quarter 2018
Contract revenues were $143.1 million, up 4.6% as compared to $136.8 million. The increase was primarily attributable to improvement in the Concrete segment, which resumed production on a more normal basis that had been impacted due to unfavorable weather patterns during the second half of 2018.
Gross profit was $10.2 million, as compared to $15.8 million. Gross profit margin was 7.1%, as compared to 11.6%. The decrease reflects the impact of a less favorable project mix and an increase in unabsorbed labor and equipment costs in the Marine segment, along with margin deterioration on a number of Concrete segment projects resulting from weather-related delays in prior periods.
Selling, General, and Administrative expenses were $16.8 million, as compared to $15.0 million. The increase predominantly reflects $1.5 million of non-recurring professional and other fees related to the Company’s business process review and the development of ISG performance improvement initiatives.
Operating loss was $6.1 million as compared to operating income of $7.1 million. The operating loss in the first quarter of 2019 reflects the aforementioned factors that reduced gross margins, the business process review and ISG-related professional and other fees of $1.5 million, and by a $5.4 million non-recurring gain resulting from a legal settlement in the first quarter of 2018.
EBITDA was $0.9 million, representing a 0.6% EBITDA margin, as compared to EBITDA of $13.8 million, or a 10.1% EBITDA margin. When adjusted for the aforementioned charges and other non-recurring costs, adjusted EBITDA for the first quarter of 2019 was $2.4 million, representing a 1.7% EBITDA margin.
Backlog
Backlog of work under contract as of March 31, 2019 was $411 million ($219 million of Marine segment projects), which compares with backlog under contract at March 31, 2018 of $355 million, an increase of 15.8%.
Currently, the Company has $1.1 billion worth of bids outstanding, including approximately $86 million on which it is the apparent low bidder, or have been awarded contracts subsequent to the end of the first quarter of 2019, of which approximately $74 million pertains to the Marine segment and approximately $12 million to the Concrete segment.
“ During the first quarter, we bid on approximately $1.1 billion of work and were successful on approximately $114 million of these bids ,” stated Robert Tabb, Orion Group Holding’s Vice President and Chief Financial Officer . “ This resulted in a 0.80 times book-to-bill ratio and a win rate of 10.6%. In the Marine segment, we bid on approximately $500 million during the first quarter 2019 and were successful on $24 million, representing a win rate of 4.8% and a book-to-bill ratio of 0.39 times .”
Orion Group Holdings, Inc. First Quarter 2019 Results