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Orion Marine Group, Inc. (ORN)
Q3 2013 Earnings Call
October 31, 2013 10:00 AM ET
Chris DeAlmeida – VP, Finance and Accounting
Mike Pearson – President and CEO
Mark Stauffer – EVP and CFO
Jon Tanwanteng – CJS Securities
Veny Aleksandrov – FIG Partners
Scott Levine – Imperial
Cory Mitchell – D.A. Davidson
Previous Statements by ORN
» Orion Marine Group's CEO Discusses Q2 2013 Results - Earnings Call Transcript
» Orion Marine Group's CEO Presents at Annual Meeting of Stockholders Conference (Transcript)
» Orion Marine Group Inc's CEO Discusses Q1 2013 Earnings Results - Earnings Call Transcript
» Orion Marine Group Inc. Q1 2009 Earnings Call Transcript
I would like to turn the call over to Mr. Chris DeAlmeida, Vice President, Finance and Accounting. Please proceed sir.
Thank you. Good morning and welcome to the Orion Marine Group third 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 have allocated about 15 minutes for prepared remarks in which Mike and Mark will highlight our results for the quarter and update our market outlook. We will then open 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 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 the applicable reconciliations to the most comparable GAAP measures. Also, please refer to our earnings release issued this morning, October 31, 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 those of our current expectations.
With that, I will turn the call over to Mike Pearson, President and CEO. Mike?
Thank you, Chris and thanks for joining us this morning. Before we begin, I would like to just take a moment to thank our nearly 1,200 co-workers for all the hard work and dedication. Overall, we are pleased with the solid level of backlog and big opportunities as we head into 2014. As we said in our mid period update, our third quarter results were impacted by some jobs that shifted into future periods along with certain job cost associated with differing site conditions. However, these events should benefit 2014. Even with the impacts I just mentioned, our third quarter results once again reflect the year-over-year increases in both revenue and EBITDA and continue to demonstrate that we are on the right path.
Looking ahead to 2014, we remain encouraged with our long-term end market drivers and we are confident in our long-term outlook. Today, we are tracking $6 billion worth of bid opportunities over the next few years, of which 18% are federal projects, 32% are state, 22% are local and 28% were in the private sector. We continue to experience strong demand for our services from the private sector as we bid on projects involving infrastructure improvements, replacements and new bills for multiple types of clients, including energy-related companies and private terminal operators. And as our nation continues to import and export energy, we expect to continue to see strong demand for dockside infrastructure to support these activities. Additionally, we continue to see opportunities in the Caribbean from the private sector.
Additionally, we continue to see multiple opportunities from state government related to transportation spending and environmental restoration and repairs. Today, we are working and bidding on several bridge projects and we remain optimistic about bridge-related opportunities. Also, we expect to see an increase in environmental restoration and repair related to the RESTORE Act over the long-term. The second portion of the trial to assess fines related to the RESTORE Act is currently underway in New Orleans and is now expected to conclude in early 2014. We hope to begin to see bid opportunities funded by RESTORE Act in 2014.
With regard to federal spending, we are pleased the temporary government shutdown has ended. However, the short-term funding bill passed to fund the federal government into the first month of 2014 will likely lead to an uncertain pace of Corps lettings until the balance of the federal fiscal year is funded. Periods of unpredictable and uncertain lettings usually occur when the Corps operates under short-term funding bills. We are also tracking the recent developments related to the Water Resources Reform and Development Act of 2013. This important piece of legislation was passed in the House of Representatives last week with broad bipartisan support. It will now go into conference committee, where the differences between the House and Senate versions of the bill will be reconciled. This WRRDA legislation includes language similar to the RAMP Act to gradually correct the funding gap between the Harbor Maintenance Trust Fund, Receipts and Expenditures for dredging projects. While the HMTF legislation may or may not be additive to the Corps budget, we believe it’s an important step towards achieving self-funding of the maintenance of our nation’s waterways.