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Orion Marine Group, Inc (ORN)
Q1 2013 Earnings Call
May 02, 2013 10:00 am ET
Chris DeAlmeida – Vice President, Finance & Accounting
Mike Pearson – President, Chief Executive Officer
Mark Stauffer – Executive Vice President, Chief Financial Officer.
Trey Grooms – Stephens
Min Cho – FBR
Rich Wesolowski – Sidoti & Company
Arnie Ursaner – CJS Securities
Jack Kasprzak – BB&T
Previous Statements by ORN
» Orion Marine Group Inc. Q1 2009 Earnings Call Transcript
» Orion Marine Group, Inc. Q4 2008 Earnings Call Transcript
» Orion Marine Group, Inc. Q3 2008 Earnings Call Transcript
» Orion Marine Group, Inc. Q2 2008 Earnings Call Transcript
I would now like to turn the call over to Mr. Chris DeAlmeida, Vice President, Finance and Accounting. Please proceed, sir.
Good morning and welcome to the Orion Marine Group first quarter 2013 earnings conference call. Joining me today are Mike Pearson, Orion Marine Group’s President and Chief Executive Officer, and Mark Stauffer, our Executive Vice President and Chief Financial Officer.
Regarding the format of the call, we’ve allocated about 15 minutes for prepared remarks in which Mike and Mark will highlight our results for the quarter and update our outlook. We will then open up the call for sell-side analyst questions for the remainder of the time. We would ask that you limit your questions to one question and one follow-up before getting back in the queue.
During the course of this conference call, we will make projections and other forward-looking statements regarding, among other things, our end markets, revenues, gross profit, gross margin, EBITDA, EBITDA margin, backlog, projects and negotiation and pending awards, as well as our estimates and assumptions regarding our future growth, EBITDA, EBITDA margin, gross margin, administrative expenses and capital expenditures.
These statements are predictions that are subject to risks and uncertainties, including those described in our 10-K for 2012, that may cause actual results to differ materially from those statements. Moreover, past performance is not necessarily an indicator of future results. By providing this information, we undertake no obligation to update or revise any projections or forward-looking statements, whether as a result of new developments or otherwise.
Also, please note that EBITDA and EBITDA margin are non-GAAP financial measures under the rules of the Securities and Exchange Commission, including Regulation G. Please refer to the reconciliation accompanying this earnings call available on our website, at www.orionmarinegroup.com, for comments on the use of non-GAAP financial measures as well as applicable reconciliations to the most comparable GAAP measures.
Also, please refer to our earnings release issued this morning, May 2, 2013 and our quarterly and annual filings with the SEC, which are available on our website, for additional discussions of risk factors that could cause actual results to differ materially from our current expectations.
With that I’ll turn the call over to Mike Pearson, President and CEO. Mike?
Thank you, Chris, and thanks for joining us this morning. I would like take a moment to thank our nearly 1200 co-workers for their hard work and commitment to the company. Because of their talent and dedication we continue to see solid results in challenging market conditions.
Now our first quarter results reflect a solid year-over-year increase in revenue and EBITDA and we are pleased with year-over-year improvement. As expected, we had gaps between certain projects that resulted in decrease in utilization of dredging assets during the first quarter. However, we continue to see strong utilization of our non- dredging assets, which we expect will continue throughout 2013. This factor combined with solid project execution, resulted in sustained improvement in gross margins and positive EBITDA margins for the third consecutive quarter.
As we look ahead, we remain encouraged with our long-term end-market drivers, we are confident in our long-term outlook. Today we are tracking $6.5 billion worth of opportunities over the next years, of which, 17% are federal projects, 34% are state, 23% are local and 26% are in the private sector.
As we have seen over the past several quarters, strong demand from private sectors continues for infrastructure improvement, replacements in new bills from multiple types of clients including the energy-related companies and private terminal operators. Additionally we expect to continue to see multiple opportunities from state governments related to transportation spending and environmental restoration and repairs. Now today we’re working and bidding on several bridge projects and we remain optimistic about bridge related opportunities in 2013 and beyond.
Also, we expect to see an increase in environmental restoration and repair related to the RESTORE Act over the long-term. Fines related to this RESTORE Act should be set by the end of 2013 and we expect to begin to see bid opportunities at some point in 2014. Supplement Hurricane Sandy funding may also indirectly benefit the company, as industry capacity is deployed to the regions that are hard hit by the storm and as projects are identified and let for bid. We anticipate restoration work related to Sandy could be a multi-year event.
With Army Corps of Engineers’ funding now secured for the remainder of the federal fiscal year we are hopeful for more predictable pace of lettings from the core. If the core districts are able to fully execute their published letting plans for the current fiscal year, we should see an improvement in the amount of bid opportunities over the coming months.