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Orion Marine Group, Inc. Reports First Quarter 2010 Results

HOUSTON, May 6, 2010 (GLOBE NEWSWIRE) -- Orion Marine Group, Inc. (NYSE:ORN) (the "Company"), a leading heavy civil marine contractor, today reported net income for the three months ended March 31, 2010, of $4.8 million or $0.18 diluted earnings per share. These results compare to net income of $4.3 million or $0.20 diluted earnings per share for the same period a year ago. 

"During the quarter we continued to execute our growth plan by growing revenues, acquiring T.W. LaQuay Dredging, and expanding into the Pacific Northwest," said Mike Pearson, Orion Marine Group's President and Chief Executive Officer. "Looking forward, we have a record backlog, continue to see solid end markets with good funding drivers, and remain optimistic about 2010 and beyond."

Financial highlights of the Company's first quarter 2010 include:

First Quarter 2010

  • First quarter 2010 contract revenues were $75.6 million, as compared with the first quarter of 2009 revenues of $70.0 million. 
  • Gross profit for the quarter was $15.6 million which represents an increase of $1.3 million as compared with the first quarter of 2009. Gross profit margin for the quarter was 20.6%, which was in-line with the prior year period.
  • The Company self-performed approximately 85% of its work as measured by cost during the first quarter 2010 as compared with 95% in the prior year period.
  • Selling, General, and Administrative expenses for the first quarter 2010 were $10.2 million as compared to $7.2 million in the prior year period.
  • During the first quarter 2010, Selling, General, and Administrative expenses included a one-time pre-tax expense of $1.7 million related to the acquisitions made during the quarter, offset by a one-time pre-tax $2.2 million gain included in Other Income associated with the bargain purchase of equipment in the Pacific Northwest. As a result, Net Income for the first quarter included a one-time post-tax net gain of approximately $0.3 million. 
  • The Company's first quarter 2010 EBITDA was $12.2 million, representing a 16.2% EBITDA margin, which compares to first quarter 2009 EBITDA of $12.1 million, or a 17.2% EBITDA margin.

Backlog of work under contract as of March 31, 2010 was a record $255.0 million which compares with backlog under contract at March 31, 2009 of $134.1 million. The Company reminds investors that backlog can fluctuate from period to period due to the timing and execution of contracts. Given the typical duration of the Company's projects, which range from three to nine months, the Company's backlog at any point in time usually represents only a portion of the revenue it expects to realize during a twelve month period. Backlog consists of projects under contract that have either (a) not been started, or (b) are in progress and not yet complete, and the Company cannot guarantee that the revenue projected in its backlog will be realized, or, if realized will result in earnings.

"Backlog remains solid as we continue to see good demand for our services," said Mark Stauffer, Orion Marine Group's Executive Vice President and Chief Financial Officer. "As we look at the remainder of the year, our backlog indicates revenue continuing to build into the back half of the year with full year EBITDA margins in the 16% to 18% range."

2010 Outlook

The Company expects to continue to see positive long-term trends in port expansion, U.S. infrastructure updates, coastal and wetland restoration projects, expansion in the cruise industry and projects involving dredging services.

The Company is currently tracking $4.5 to $5.0 billion of bid opportunities of which it expects approximately $1 billion could liquidate in the balance of 2010. As a result of the current backlog and current expected bid opportunities the Company remains comfortable with its full year 2010 revenue goal range of between $390 million and $410 million. The Company's full year 2010 EBITDA margin goal remains 16% - 18%.

For the second quarter 2010, the Company expects revenue will be in the $90 to $95 million range with second quarter 2010 EBITDA margin in the 16% to 18% range.

Conference Call Details

Orion Marine Group will conduct a telephone briefing to discuss its results for the first quarter 2010 at 10:00 a.m. Eastern Time/9:00 a.m. Central Time on Thursday, May 6, 2010. To listen to a live broadcast of this briefing, visit the Investor Relations section of the Company's website at www.orionmarinegroup.com. To participate in the call, please call the Orion Marine Group First Quarter 2010 Earnings Conference Call at 800-299-6183; participant code 24483729.

A replay of this briefing will be available on the Web site within 24 hours and will be archived for at least two weeks.

About Orion Marine Group

Orion Marine Group, Inc. provides a broad range of marine construction and specialty services on, over and under the water along the Gulf Coast, the Atlantic Seaboard, the West Coast, Canada and the Caribbean Basin and acts as a single source turn-key solution for its customers' marine contracting needs. Its heavy civil marine construction services include marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging, and specialty services. Its specialty services include salvage, demolition, diving, surveying, towing and underwater inspection, excavation and repair. The Company is headquartered in Houston, Texas and has an almost 80-year legacy of successful operations.

The Orion Marine Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4539

EBITDA and EBITDA Margin

This press release includes the financial measures "EBITDA" and "EBITDA margin". These measurements may be deemed "non-GAAP financial measures" under rules of the Securities and Exchange Commission, including Regulation G. The non-GAAP financial information may be determined or calculated differently by other companies. By reporting such non-GAAP financial information, the Company does not intend to give such information greater prominence than comparable and other GAAP financial information, which information is of equal or greater importance.

Orion Marine Group defines EBITDA as net income before net interest expense, income taxes, depreciation and amortization. EBITDA margin is calculated by dividing EBITDA for the period by contract revenues for the period. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by contract revenues. EBITDA and EBITDA margin are used internally to evaluate current operating expense, operating efficiency, and operating profitability on a variable cost basis, by excluding the depreciation and amortization expenses, primarily related to capital expenditures and acquisitions, and net interest and tax expenses. Additionally, EBITDA and EBITDA margin provide useful information regarding the Company's ability to meet future debt repayment requirements and working capital requirements while providing an overall evaluation of the Company's financial condition. In addition, EBITDA is used internally for incentive compensation purposes. The Company includes EBITDA and EBITDA margin to provide transparency to investors as they are commonly used by investors and others in assessing performance. EBITDA and EBITDA margin have certain limitations as analytical tools and should not be used as a substitute for operating margin, net income, cash flows, or other data prepared in accordance with generally accepted accounting principles in the United States, or as a measure of the Company's profitability or liquidity.

A reconciliation of the Company's future EBITDA margin to the corresponding GAAP measure is not available as these are estimated goals for the performance of the overall operations over the planning period. These estimated goals are based on assumptions that may be affected by actual outcomes, including but not limited to the factors noted in the "forward looking statements" herein, in other releases, and in filings with the Securities and Exchange Commission.

Forward-Looking Statements

The matters discussed in this press release may constitute or include projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of which the Company is availing itself. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'seeks', 'approximately', 'intends', 'plans', 'estimates', or 'anticipates', or the negative thereof or other comparable terminology, or by discussions of strategy, plans, objectives, intentions, estimates, forecasts, assumptions, or goals. In particular, statements regarding future operations or results, including those set forth in this press release (including those under "Outlook" above), and any other statement, express or implied, concerning future operating results or the future generation of or ability to generate revenues, income, net income, profit, EBITDA, EBITDA margin, or cash flow, including to service debt, and including any estimates, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward looking statements also include estimated project start date, anticipated revenues, and contract options which may or may not be awarded in the future. Forward looking statements involve risks, including those associated with the Company's fixed price contracts, unforeseen productivity delays that may alter the final profitability of the contract, cancellation of the contract by the customer for unforeseen reasons, delays or decreases in funding by the customer, and any potential contract options which may or may not be awarded in the future, and are the sole discretion of award by the customer. Past performance is not necessarily an indicator of future results. In light of these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that the Company's plans, estimates, forecasts, goals, intentions, or objectives will be achieved or realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update information contained in this press release whether as a result of new developments or otherwise.

Please refer to the Company's Annual Report on Form 10-K, filed on March 9, 2010, which is available on its website at www.orionmarinegroup.com or at the SEC's website at www.sec.gov, for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts.

 

Orion Marine Group, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except share and per share information)
     
  Three Months Ended
  March 31,
2010
March 31,
2009
  (Unaudited) (Unaudited)
Contract revenues  $ 75,556  $ 70,040
Costs of contract revenues   59,960   55,766
Gross profit  15,596  14,274
Selling, general and administrative expenses   10,188   7,200
Operating income   5,408   7,074
     
Gain from bargain purchase of equipment  (2,176)  ----
Interest income  (24)  (103)
Interest expense   6   206
Other (income) expense, net   (2,194)   103
Income before income taxes  7,602  6,971
Income tax expense   2,821   2,630
Net income  $ 4,781  $ 4,341
     
Basic earnings per share—Common  $ 0.18  $ 0.20
Diluted earnings per share—Common  $ 0.18  $ 0.20
Shares used to compute earnings per share:    
Basic—Common  26,862,933  21,565,720
Diluted—Common  27,217,659  21,900,164
 
Orion Marine Group, Inc. and Subsidiaries
EBITDA and EBITDA Margin Reconciliations
(In Thousands, except margin data)
     
  Three Months Ended
  March 31,
2010
March 31,
2009
  (Unaudited) (Unaudited)
     
Net income  $ 4,781  $ 4,341
Income tax expense  2,821  2,630
Interest (income) expense, net  (18)  103
Depreciation and amortization   4,633   5,006
EBITDA(1)  $ 12,217  $ 12,080
 
Operating Income Margin(2)
 10.0%  10.1%
 
Impact of Depreciation and Amortization
 6.2%  7.1%
 
EBITDA margin(1)
 16.2%  17.2%

_____________________________

 (1) EBITDA is a non-GAAP measure that represents earnings before interest, taxes, depreciation and amortization. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by contract revenues.

 (2) Operating income margin is calculated by dividing operating income plus gain from bargain purchase of equipment by contract revenues. 

Orion Marine Group, Inc. and Subsidiaries
Supplementary Financial Information
(In Thousands)
   
  Three Months Ended
  March 31,
2010
  (Unaudited)
   
Net cash flow from operating activities $ (4,608)
   
Capital Expenditures $    7,139
   
   
Balance as of
  March 31,
2010
   
Cash and cash equivalents $ 22,771 
   
Term debt outstanding  $ --
CONTACT:  Orion Marine Group, Inc.
          Mark Stauffer, Executive Vice President & CFO
          Chris DeAlmeida, Director of Investor Relations
          713-852-6506

Orion Marine Group, Inc. Logo

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