Q3 2022 Orion Group Holdings Inc Earnings Call

Yeah.

Okay.

Thank you for holding and welcome everyone to the Orion Group Holdings third quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

You'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad, if you'd like to withdraw your question again press Star one.

I will now turn the call over to Francis <unk>, Vice President Investor Relations. Mr. Okoniewski. Please go ahead.

Thank you Jack and good morning, everyone and welcome to Orion Group Holdings third quarter 2022 earnings conference call and webcast.

Joining me today are Travis Boone Orion Group Holdings, President and Chief Executive Officer, and Scott Sanish Executive Vice President and Chief Financial Officer.

Regarding the format of the call we've allocated about 10 minutes for prepared remarks in which Travis Scott will highlight our results and update our outlook.

We will then open up the call for questions.

During the course of this call, we will make projections and other forward looking statements regarding among other things our end markets revenues gross profits gross margin EBITDA EBITDA margin backlog projects and negotiation and pending awards as well as <unk>.

Our estimates and assumptions regarding our future growth administrative expenses and capital expenditures. These.

These statements are predictions that are subject to risks and uncertainty, including those described in our 10-K that may cause actual results to differ materially from those statements. Moreover, past performance is not necessarily an indicator of our 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 adjusted net income adjusted earnings per share EBITDA and EBITDA margin are non-GAAP financial measures under rules of the Securities and Exchange Commission, including regulation G.

Please refer to reconciliations and definitions inclusive of the most comparable GAAP measures and reconciliation tables accompanying this earnings conference call within the press release issued last evening.

The press release can be found on our website at Www Orion Group Holdings, Inc. Dot com.

Also for additional discussion of risk factors that could cause actual results to differ materially from our current expectations. Please refer to our quarterly and annual filings with the SEC, which are also available in the investors section of our website.

And with that I would like to turn the call over to Travis Boone, President and Chief Executive Officer Travis.

Good morning. Thank you all for joining I'm happy to be talking to you for the first time today from this seat.

Thanks to Austin for leading the business for the past couple of quarters and for helping me make this transition into the role he.

He did a great job of setting Scott and I up for success.

Also thanks to our people who have endured a lot of uncertainty over the past year or so and remain committed and kept working hard through the challenges.

We wouldn't have a business without them.

I am very excited to be leading this team at Orion we.

We have great people, a robust market and opportunities to build our business and grow organically in the coming years.

I came here because this company has extraordinary potential and is uniquely positioned to be so much more than we are today.

I've been in the construction and engineering industry My entire life for my start working for my dad as a teenager to leading our business with thousands of employees and billions in revenue.

I'm well suited and prepared to address the challenges we've seen as a company and refocus our business to build a strong foundation and a healthy future.

Scott and I have spent the last six weeks listening and learning the business with the teams on the ground.

We've been in most of the offices and at multiple project sites. We've also been talking to our investors and analysts.

We've been soaking in all that we can in order to build a strategy for the next year and beyond.

Our confidence in this business comes from the strong base that exists in the markets that we have and we will expand into.

We will continue executing on operational improvements and know we can deliver strong and predictable results.

My observations have been.

That we have an environment in our end markets that will lead to successful outcomes.

We are winning high quality work and we're winning more of it.

We have tremendous people, who are loyal and doing very good work everyday.

And we have opportunities to expand our business.

Some of our areas for improvement.

We will be working on our processes systems and tools, we will continue focusing on rigor and discipline in both project bidding and delivery to bring in higher margins.

We are looking at our costs and have already identified some ways to reduce our overhead burden.

Lastly, we have opportunities to grow and improve with targeted investments into the business.

We have a qualified team to transform this business.

We arent looking at short term.

This is going to take some time to get it right.

We are building something that will be successful year in and year out for the long haul.

We have been working aggressively towards a stronger business with higher returns and making the necessary investments to achieve success for our business.

I'll turn this over to Scott <unk>, our Chief Financial Officer.

To discuss our results for the quarter.

Thanks Travis.

Before turning to our financial results I'd like to introduce myself and like Travis give my first impressions from the six weeks that Travis and I had been on board.

I joined Orion, because I see a tremendous potential in this company, having served as chief financial Officer of the Texas commercial construction services company in the transport services company.

Im operationally focused and have a passion for this industry.

Over my nearly 30 years as a finance professional I have been fortunate to work in organizations that recognize the value of <unk> leadership that is deeply engaged with the operations.

Travis and I shared this view of the finance functions roll.

I am prepared to apply the same discipline and rigor to my role here at Orion.

With finance and operations working hand in hand to achieve results.

Throughout the past few weeks getting down to the team.

I'm encouraged that we have a group of talented finance professionals with the capability and the experience to effectively partner with operations to capture the transformational opportunities on the horizon.

Another thing that excites me is the opportunity to transform Orion business performance by leveraging data to provide business insight.

Orion generated a wealth of operational and financial data in day to day operations.

World Class Finance teams can turn data into business intelligence intelligence that is critical to making strategic and timely moves in a dynamic environment.

I believe our finance organization at Orion.

Has the ability to be a crucial business partner to Travis and through our operational leaders.

Throughout my career my passion has been to create high performing finance teams that help transform our business results.

Here at Orion I will be focused on developing our people retooling our processes and aligning our systems to drive value for our business.

Over the past few weeks.

And I have.

<unk> traveled to meet many of our team members customers investors and financing partners.

We've heard from our stakeholders about areas, where we can improve and we've also heard a great deal of optimism about our business.

For me one of the most impactful of these interactions with our opportunity to join the <unk> team in Dallas on a recent Saturday for our annual safety Barbecue and awards.

Carrying the passion and commitment of our frontline team members some of whom have been with the company over 40 years.

Really brought home our ability to deliver safe high quality work for our customers.

We have the right attitude and the right capabilities, our focus will be on improving our planning managing excellent execution and delivering consistent results.

Now turning to our quarter.

Revenues for the quarter were $183 million compared to $140 million in the third quarter of 2021 and $195 million in the second quarter of this year.

The year over year increase was primarily driven by the contribution of large marine projects that were awarded in the fourth quarter of 2021.

Higher volume in our concrete segment.

And the impact of claims and unapproved change orders related to work performed in previous periods.

Third quarter gross profit was $13 4 million comp.

Compared to $6 6 million in the prior year period.

This increase was the result of the claims and unapproved change orders recognized in the quarter.

Lower discretionary project bonus expense and.

And increased dredging activity compared to the prior year.

Third quarter gross profit was down six 3% as compared to the second quarter.

And year to date 2022 gross profit of $40 5 million is up 18% compared to year to date 2021.

As a percentage of revenues gross profit margin was seven 4% in the third quarter up from four 7% in the prior year period and in line with the second quarter's gross margin.

Turning to the segments in.

In the third quarter, the Marine segment had revenues of $76 million and adjusted EBITDA of $11 million equating to an adjusted EBITDA margin of 14%.

In our concrete segment had third quarter revenues of $107 million and adjusted EBITDA loss of almost $2 million and an adjusted EBITDA margin negative one 7%.

During the third quarter, we continued our focus on closing out concrete jobs in central Texas.

This region contributed less than 15% of our concrete segment revenue in the quarter.

But at significantly lower margins than we achieved in other markets we.

We expect to complete most of the remaining central Texas backlog during the fourth quarter.

SG&A expenses for the third quarter were $15 4 million or eight 5% of revenues compared to $15 7 million or 11, 2% of revenues in the prior year period.

And net income for the third quarter.

<unk> dollars 2 million or one diluted earnings per share.

Excluding <unk>.

$5 million of nonrecurring items, adjusted net income was <unk> 8 million or.

<unk> <unk> diluted earnings per share.

Third quarter, adjusted EBITDA was $8 8 million.

Representing an adjusted EBITDA margin of four 8% this.

This compares to an adjusted EBITDA loss of five.

$5 million in the prior year.

And adjusted EBITDA of $5 7 million and adjusted EBITDA margin of two 9% for the second quarter.

Turning to our bidding metrics in the third quarter. The company bid on $1 $2 billion worth of opportunities and were successful on $128 million of new work.

This resulted in a win rate of 10, 5% and a book to Bill ratio of one <unk>.

7% for the quarter.

At the end of September backlog was $549 million down.

Down from 573 at the end of the prior year period.

Of the quarter and backlog $280 million was in the marine segment and $268 million in the concrete segment.

We will burn to 83% or $456 million of the quarter ending backlog during the next 12 months.

In addition to this backlog there is $39 million of new work that has either been awarded subsequent to the end of the third quarter or for which the company is the apparent successful bidder.

Of this $36 million is related to the marine segment, while 3 million is related to the concrete segment.

As Travis mentioned, our increased bidding discipline is yielding results.

We want to win jobs on the basis of our ability to deliver quality timely projects at a good price.

Merely by being the low cost bidder.

Our recent wins in both segments are benefiting from this discipline and we will continue to focus on those opportunities, where we have higher job margin potential.

Moving to the balance sheet. The company ended the quarter with $31 $1 million of outstanding debt and $2 $7 million of cash.

<unk> and our net leverage ratio of 288 times adjusted EBITDA as measured under our credit agreement.

The company is in compliance with our credit agreement covenants and at the end of the quarter, we had almost $11 million of available capacity under our revolver.

We have initiated discussions with current and potential financing partners as we evaluate options for the extension or replacement of our existing credit facility.

With that I will turn the call back to Travis for his closing remarks.

Thanks Scott.

There are a few items about which I'd like to provide an update.

Scott comment commented, we're continuing our exit strategy in central Texas, which will enable our refocused concrete business to perform better in our Houston and Dallas markets.

Our new dredge the Lavaka will be operational and working in the next couple of weeks. This was a major investment for us over the past year or so.

We have a signed purchase agreement for sale leaseback of one of our Portland market properties, which will close in December .

We are continuing to make progress with interested parties on east West Jones property on the Houston shipping channel.

We're also looking at ways to monetize some of our other assets to further reduce our debt.

As we turn our attention to delivering fourth quarter and planning for next year.

And I and the team will be developing a strategy for this business to facilitate growth deliver better returns more efficiently and diversify our portfolio to help safeguard our business.

We will be focusing on strong project delivery.

Disciplined decisions on pursuits to make the best use of our BD dollars.

Continuing to bid with strong margins expanding our client base.

Identifying overhead efficiencies.

Streamlining our systems tools and reporting.

Evaluating opportunities to assist assist with hurricane Ian recovery and capitalize on the <unk>, which is the infrastructure Act as it comes online.

And finally building contingency plans for supply chain issues and inflationary in recession concerns.

I'd like to say, thank you to our longstanding customers suppliers and vendors here support of our business and our relationship with you are crucial to our success.

In closing I'd like to reiterate my excitement about joining Orion and leading his team to reach the huge potential that we have as a company.

We have a lot of hard work ahead of US we have investments to make and we have some things we need to do better but.

But I'm very confident in our ability to maximize the potential that we have.

I'll turn it back over to the operator for your questions.

Certainly as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

Joe Gomes with noble capital your line is open.

Good morning, Travis and Scott congratulations on the quarter.

Thanks, Thanks, Joe.

So first question in the press release, you mentioned a couple of times.

About the impact from claims and unapproved change orders I was wondering if you can kind of maybe give us a little more color or detail how much impact those have on revenues and gross profit in the quarter and maybe kind of as a follow on to that one you also had about <unk> <unk>.

$3 4 million gain on disposal of assets, maybe you could just give a little more color on what assets that came from.

Sure.

In terms of our customer contracts.

We're not going to comment on details of some.

<unk> of those but yes.

These were change orders and in some claims that we have related to some large projects on the marine side.

Were.

Costs that were recognized in previous quarters. So these are essentially the impact of those claims.

The margin from those claims flowing through on the on the quarter in terms of the the gain on sale is recognized in the quarter we.

We sold a couple of assets one was a spud barge I believe and the other was.

Rigor crane, which.

Yes.

Were assets that were not being utilized in our operations and it was a great opportunity for us to turn those assets into cash.

Okay. Thank you for that.

The concrete segment last quarter I know you guys have.

<unk> charged <unk>, but.

You also talked about how the concrete segment in June .

It turned profitable and expectations were that in the third quarter.

We could see profitability on the concrete segment.

Looking again at the press release and it wasn't on an operating income.

Level profitable.

Reported about a $4 1 billion losses wondering what kind of changed between the second quarter call.

And the rest of the quarter.

And that that segment was.

Not able to show profitability.

Yes, so Joe I think part of that pertains to our business in central Texas that we've continued to kind of.

Work on as we said.

Getting out of that market.

We are trying to wrap up some projects and and get those get those completed as quickly as we can as profitably as we can.

But that's continued to be a drag on our on our concrete business.

So that's the general domain.

Contributor to to that I would say also that there is some some projects that we bid it.

A while back.

In the last year or so that we're still wrapping up that.

They werent quite at the margins that we had.

Where we have guidelines now and I would say there we're trying to get those get those wrapped up as well so I think it's.

Just continued drag from from previous.

The work that we're trying to get out of the pipeline here and as we continue our efforts to exit that business.

There are costs that are associated with the equipment and the people that are central Texas, and Central Texas business right there.

We'll need to reallocate to other parts of our business or planned.

Some other way to shed those costs, so that will be in a continuing impact.

As we continue to view exit but.

Our plans are essentially to reallocate, where we can those assets to a much more profitable years.

Okay.

Now obviously.

At the end of the quarter.

We had the hurricane Ian come through Florida.

I know you guys had a number of projects scheduled to start.

In the fourth quarter were started in the third quarter, just maybe you can give us.

High level detail, what kind of impact the hurricane.

Had on your business either positively or negatively.

So it was.

I would say neither positive nor negative we didn't.

For the the impacts during the storm we were prepared embraced for for the Hurricane.

We did hit the Tampa area, where we had quite a bit of work going on.

Unfortunately for Fort Myers that took an abrupt turn in and didn't head Tampa as as expected and we didn't have a ton going on in the Fort Myers area. So we were we were braced for braced for it but were relatively on impacted and we're back to work pretty quick after the storm went through.

We are we are looking to.

Obviously.

Assist with hurricane in recovery in the coming months and probably years. So we are doing and doing a lot of work at preparing for assisting in a recovery down there and theres a number of.

Governmental organizations and private organizations that we've been in contact with that we see positive developments coming out of those conversations.

Okay and one more for me if I may and then I'll step back in queue.

And I know again you guys have it's early early days in your tenure, but I'm sure you guys.

Are familiar with.

Kiewit purchase.

A week strategy.

Let's call it a month six weeks ago.

Just wondering how do you see that impacting the competitive environment.

For you guys.

So we're still evaluating that we're not.

<unk> is a.

It.

As a.

Jamie partner, as well and as well as well as competition in some cases in.

We're still evaluating whether or not that's.

Yes.

What the impacts to us will be.

Obviously weeks as a competitor as well so.

We've been talking about it we don't we don't see any drastic change anything anytime soon I know theres been very public statements. The keyword in the weeks is not planning on changing how they operate for the foreseeable future. So at this point not anticipating major impacts to anything at this point.

Thanks, guys I appreciate the answers to the questions I'll pass it along.

Thanks, Joe.

Alex Rygiel with B.

Riley Your line is open.

Hey, Good morning. This is min Cho for Alex Welcome Travis Scott look forward senior leadership and turning in growing this business going forward.

I just wanted to get your general thoughts on that.

Hey, Travis maybe your general thoughts on the concrete business longer term I know you talked about more disciplined bidding.

But.

Are you thinking about new geographies or just focusing on the two and Texas right now any new industry is different type of contracts if any thoughts there would be helpful.

Sure first of all let's say we are.

Sure.

Have a lot of <unk>.

Confidence in our concrete business going forward I think theirs.

<unk> opportunities that we.

We have.

As far as the markets go where we will continue to focus primarily on Houston and Dallas.

We will be opportunistic in other locations as it as it comes along if there's opportunities in other locations that make sense for us.

Got some great teaming partners in that business that.

If they ask us to come helping up in another location, where we're ready to go.

I'll also say that.

That business, we have historically.

<unk> always worked with private developed on private developer driven projects.

My background is as heavy.

Public sector experience.

Anticipate that we will start working on.

On.

Expanding more into some public sector work to help supplement the private sector work that we do already.

And I think that's a big opportunity for us to grow that business.

That we have historically not worked.

So I think there's great opportunity there for us and look forward to helping drive that business.

And additional direction.

Okay.

And then this is for Scott kind of staying with the concrete business.

As we get through these problem projects and some of the legacy projects that had some lower margins are you, suggesting that fourth quarter contract margins should see sequential improvement or could it be worse as smbs projects wrap up any guidance for the fourth quarter would have to be helpful.

Yes.

Good question.

I think it's probably too early for me to say that there is a significant change in our expectations for the fourth quarter from what you've heard before.

I do think that as we roll forward and start to bring on some of the newer work.

That's been bid at higher margin that will help where also as Travis mentioned in his remarks looking at ways in which we can lower our overhead costs across the board and that includes in the concrete segment.

Those are those are going to be positive tailwind help us of course.

The thing I mentioned earlier of making sure that we reallocate assets that we shed expenses, that's going to be key for our execution.

<unk> improves the margins of that business as quickly as we can.

Alright, and then also.

I mean, the prior questions about the claims.

Are you expecting any more in claims settlement in the fourth quarter and without them.

I'm, assuming margins could be a little bit softer in the fourth quarter and just overall.

I don't have any specific expectations for claims in the fourth quarter of course, its always a part of our business and it can arise at any time.

So we continue to work with our customers in as just as in the concrete business. We're very focused on making sure that we're bidding and executing at the right margins. So those are going to be the factors I think are driving our performance going forward change orders and claims those just kind of.

Go in and out.

With the flow of the business.

Okay.

And you talked about supply chain I mean, obviously there've been some headwinds can you give us kind of an update on <unk>.

Where the headwinds are just what the supply chain situation is on the concrete and steel a green bar.

And how you can mitigate some of this going forward, if youre seeing increased increase headwinds with.

Increased infrastructure projects coming forward.

I guess I'll say.

We don't have any.

Other than the general concerns that everyone has globally about supply chain issues.

We don't have any specific.

Instances of something Thats impacting us currently.

Theres been some talk in the last few days about diesel shortages and things like that that's concerning.

Specifically, because it's kind of fresh and <unk>.

And new and we do we do.

Burnt a lot of a lot of fuel in our in our fleet and across our company. So that's probably the one that's fresh us on our mind at the moment, we are looking at ways of teaming with some of our.

Partners and vendors about being kind of supporting the supply chain and helping helping them find ways to alleviate these concerns but we're not.

Other than that general general concerns that people have globally about supply chain issues theres not theres not not a lot of.

Newer.

Anything we haven't talked about in the past you have.

Another thing that we're obviously going to be focused on unlike everybody is making sure that we have appropriate escalation clauses in all of our contracts. So that's.

That's an important part of our discussions with future and existing customers.

Okay.

And then I think you.

And a little bit about the east west.

<unk>.

Can you just give us any timing on that and just talk about how it's progressing.

As far as timing I think it would be it would be pure speculation at this point, but we have made some good progress with some interested parties.

Yes.

We're hopeful on I know you guys have been here in this.

Fourth quarter in quarter out, but it is something that I think we've made continued to make progress on here in the recent in the last last few months that one.

It's.

We're in a we're in a time that.

Selling property is as uncertain for anybody with <unk>.

Recession and things like that Fortunately, we have some some interest from some parties that that would be.

In a position to move forward, even even at a time of recession, but we're we're probably won't comment on that too much more but.

We're hopeful that we'll be moving towards something here.

In the coming months.

And we are actively engaged they conduct their due diligence and answering questions.

We're prioritizing debt that process as much as we can.

Okay.

Great. Thank you that's it for me and good luck gentlemen.

Thanks.

Again, if you'd like to ask a question. Please press star one on your telephone keypad Julio Romero with Sidoti <unk> Company. Your line is open.

Thanks, Hey, good morning, Travis Scott <unk>.

But hulu.

Hey, good morning, I'd like to start by taking more into your thoughts on strategy you identified some items in your prepared remarks.

Process systems, better discipline on bidding and delivery.

If you could just speak more to what Orion needs to change from an operational perspective, and if you could give us a rank order of sorts.

Yes, I mean, you've been you've heard from from Austin for the last couple of quarters about disciplined bidding I think that's something that we're going to be.

Continuing to focus heavily on to make sure that we're.

Capturing the appropriate margins when we did this when we bid work we'd rather.

We're focusing on quality not quantity.

So that will that will continue.

Going forward.

I think from the.

From the perspective of.

<unk>.

The.

Overhead costs and things like that that's part of.

Part of running a business in.

Every company that should be should be evaluating costs and how we're how we're delivering our business to make sure we're doing it as efficiently and as profitably as we can so it will be.

Looking looking at that pretty heavily here in the coming.

The weeks and months to find ways to do to do our business more efficiently.

And then as far as processes systems and tools.

That's something that we have been working on for for some time in our company and got a good head start on it but we need to get some things.

Finished up too.

Over the next next year or so some some internal projects on how we how we do our processes and systems.

So we're working on getting those fully executed.

Now with that.

One of the things that's going to be a critical success factor for us is our ability to execute well and so our project controls process and the way in which we manage projects and thats something that Travis inherent digging into deeply to to see how we can improve that and really deliver our projects in a way that can delight our.

<unk>.

Got it that's very helpful. Thank you.

On the concrete side, you talked about increasing the mix of public sector projects going forward I guess, how do you weigh the benefit of taking on more public sector work for the greater funding certainty I assume versus.

The downside of potentially lower bid margins on the public side.

Yes, I think theres a couple of aspects of it.

Julio I think there is.

Not only.

In times of recession, and things like that win win.

<unk> tend to be a little more constrained on what they are able to do.

Public sector tends to continue forward through some of that so it will help us kind of.

Now some storm so to speak with the with the economy.

And I think.

Additionally, it will help kind of again it is not in lieu of the <unk>.

Private sector work. It's in addition to and that will that will give us another.

Another section of business.

To help help grow our concrete business in a profitable way without distracting us too much from our some of our core markets.

Okay got it and.

You mentioned in the quarter Central Texas made up 15% of the concrete sales, but would you happen to have what that percentage looks like either on the prior year quarter or maybe two.

2021 in general.

It was less than 15% and I don't have the number handy, but certainly we can get back to you on that but.

The emphasis.

Emphasis that we have on the concrete business is going to be.

To continue that process.

Like I said it is less than 15% of the current revenue quarter.

Less than 8% of the remaining backlog. So we will continue to decline.

And then we'll push forward in markets, where we've been more successful.

Okay.

So it made up so last year it made up less than 15% is what you're saying.

Yes.

We don't have the number handy with me, but I'll.

I'll, let you know on the next quarter, we can give you more detail there.

Okay No no all good.

And then maybe just last one is just.

You might have touched on it but on the asset sale is just if you could reiterate maybe the expected use of funds there.

Yes, we use the proceeds from those asset sales to reduce our revolver balances and.

So it's now sitting in revolver availability and available to us as general corporate uses might dictate but our strategy really is to delever the business over time through some of these asset sales. So as we proceed with additional opportunities.

That's going to be reflected on our balance sheet in that way.

Appreciate the color and thanks very much for taking the questions.

You bet.

Dave storms with Stonegate Your line is open.

Morning, gentlemen, thank you for taking my call.

Salt sales question as progression or are you, perhaps and Scott you have your back on the construction industry is there anything that you're seeing given your background pleasure going out doing I mean in Greece.

Hi, low hanging fruit for you guys to improve on call. It in your first 100 days.

Yes.

Thanks, Dave I think one of the one of the things that I.

But that I've seen is we're a company that is built on numerous acquisitions and.

I will say, we haven't been as integrated as I would like us to be in that respect.

Sharing best.

Best practices and how we deliver our projects we have a lot of great people doing great work in multiple markets and there hasnt been a lot of sharing of resources or or or processes between the different groups and I think that's something that will be will be focused in on doing doing.

More going forward.

Just.

I think thats. The first thing that comes to mind I know Scott has something to add to that yeah. No I agree with that and I think that there is there is low hanging fruit that we've seen in some of our overhead expenses as Travis mentioned earlier.

Things were just some renegotiations with vendors some opportunities maybe.

Holiday locations would be.

To recognize in a pretty rapid way.

Real benefits for the business.

And that's something that I've told the.

Until travel is one of my favorite meetings of the week.

Invoice review session that I do with our ITT and because it's a it's a great opportunity to see how the business has been spending its money in and I see ways in which we can spend it better so.

There are low hanging fruit opportunities and we're going to get out there and execute them quickly.

That's perfect.

And then kind of in that regard.

What I'll add one more thing if that's okay.

I would say kind of one of the things that we're looking at pretty hard is how we procure materials Inc.

Historically, we have procured materials by project by project basis.

I think there is there is there are some economy of scale opportunities here, where we could.

For example, whether it's rebar or.

Concrete carrying compound or whatever it might be I think there is some opportunities for us to get some get some good efficiencies by buying more in bulk than we have historically instead of buying a project by project.

<unk>.

I've done so and that would also help.

Time, when we are concerned about supply chain delivery to derisk some of our operations as well.

Perfect. Thank you so would it be fair to say that.

A lot of opportunity for purpose more organic and external at this point.

Yes.

Okay.

Organic growth.

Potential of the business, which we think is tremendous.

Perfect. Thank you.

And then Scott this might be a little more as we think about the infrastructure Bill.

The hurricane and potential for more beds coming up.

What do we have an expectation on timing for that how are we going to start seeing that coming through in the fourth quarter or are we already sienna.

That bell curve kind of work.

No. Unfortunately, I don't think we have a <unk>.

Strong view on timing certainly there are a lot of elements of hurricane recovery that are going to be more urgent urgently needed than others.

And as Travis and I mentioned earlier, we are engaged in conversations with.

Potential customers that need those services in and I think that there is an opportunity to realize some of those quicker than others on the infrastructure.

That's going to be a long tail is there.

It's just a tremendous amount of money that needs to be spent is going to take some time. So I think that that's going to be more of the.

Lift of our business over a period of time that it extends out fairly.

Into the medium to long term range. So so they are both going to be able to deliver value for our business short and long term and we just need to kind of execute and prioritize appropriately.

Perfect and one more for me if you don't mind.

When you talk about your leverage ratio and your asset dispositions are you thinking of that from a more <unk>.

Where you want to get Great Oaks foreign assets or are you thinking about from you want to get your revolver down to a certain spot are you thinking about the problem.

Assets located in certain geographies they are more inclined to get rid of.

How are you thinking about that and Colbert.

Yes, so in terms of our existing debt I don't think that were highly levered right now we have.

I think a comfortable level of debt, but it is more about making the best use of our assets and so we have items were.

It can be used across both of our segments, where we might be able to.

Sure things better and drive utilization higher.

And that May free up assets that no longer have have use for it. We also have some assets, where we mentioned moving out of the central Texas business.

There may be things that we don't need as we as we continue to do that so it's going to be more focused on getting the right asset base to drive the growth of our company forward then to hit.

He has a particular leverage point and the balance sheet.

That's perfect. Thank you very much.

You bet.

Oh Frac with Alliance Global Partners. Your line is open.

Great. Good morning, Travis Good morning, Scott morning plant.

Just a couple quick ones, if you wouldn't mind.

I know that.

It seems you seem hesitant to offer an actual number for the change order impact during the quarter can you just give us a ballpark number of what kind of impact from that.

Our dollar value standpoint that had.

What I can tell you is it was a significant contribution to our earnings and our revenue in the quarter.

We will have that from time to time as we work with our customers around changes that happen on work that we're working on so.

That's about as much as I can give you but certainly.

Happy to answer any other questions you've got.

Yeah.

Yes, yes.

Okay. So when youre looking at.

You had 100 days or so you've identified potentially from a cost standpoint. Some improvements there can you just maybe give us.

Yes.

A ballpark number that you think as far as what you could squeeze costs down by and then I noticed the ERP spending was down does that imply that the timing of the ERP.

Project is.

Is he there.

Is it either put on hold or youre going to see less emphasis there which seem to be integral to integrating the.

The different parts of it.

Concrete business to improve the bidding process there, but can you just give us an idea of sort of what you're looking at from a cost standpoint squeezing costs.

Yes, so in terms of what kind of potential there may be.

I could I could probably hazard, a guess, but I would almost certainly be wrong and I don't know if that would be higher low because I see that theres, a lot of potential, but quantifying and figuring out what the cost to achieve those savings might be that's going to be really the next step to figure out where our priorities are.

And as we kind of think about or.

Long term plans in the business.

And ERP and where we're spending money there certainly systems are going to be an important part of how we leverage the data to drive better decisions.

And execute.

More <unk>.

Profitably on our contracts and so I would expect that we'll continue to see some investment there.

I think that what Travis and I are going to be focused on initially on where we can get some quick wins and that may be through.

Relatively small investments that can drive the benefits of the business quickly so.

ERP and other spending to drive cost improvements I think will be.

Metered to where we kind of have the have the ideas and are able to deliver things in the short time that can really benefit the business.

And that low hanging fruit that we've talked about we want to start getting a few wins under our belt. So the team gets that experience of.

Of winning that kind of carries forward into performance and looking for all kinds of opportunities that we can improve.

So we've been here just right.

Right at six weeks or so in the business and we've been focusing on.

Our arms around.

What all of US here and I think the next step for us will be identifying more.

More specifically, what those what those savings might be able to be achieved and.

So we will probably be better positioned here in a few months to give you a better more direct answers on.

On how much we think we can save but we have.

Yes.

In the short amount of time, we've been here, we've learned a lot, but we've got we've got some more to go before we could speculate on how much we can safe.

Yeah got you just seem to imply that.

Further down the road on that.

So if you look at sort of.

One of the.

Kelly skills have been bidding discipline.

Is there one business or is it both that you think need improvement from a bidding standpoint.

I think both have already improved significantly I think.

Austin instituted some guidance a while back that has been has been followed and will continue to be followed so.

Both both businesses.

We have made improvements over the past past couple of quarters on on how we bid our work will continue focusing on that and finding ways to be even more disciplined.

About how much we pursue what we pursue the quality of the work that we're that we're going after.

Can you give us an idea in sort of the margin targets that you have for both businesses and then.

I'm not sure you have this detail but.

But for central taxes would concrete has been profitable during the quarter either from an operating standpoint from an EBITDA standpoint.

I'll answer the first part and let Scott answer the second part I think.

From the perspective of competitive advantage I think it would be foolish of us to start advertising too much about margins and things like that so.

Hold back on that I'll say it's.

We're confident that we're bidding projects with healthy margins.

And then in terms of.

The concrete business and our exit of Central Texas, Yes.

That's been a drag on the business in the quarter and in the absence of that drag that would have been profitable segment.

Great. That's helpful. And then you put in your press release, we've been hearing about port lavage for the last I'm going to say five or six quarters.

My recollection was that that targeted the targeted proceeds from cortlandt market, we're sort of in the $5 million range.

Did the scope of that transaction change at all and does it go from an outright sale to sale leaseback can you just give us sort of play around that and then also what's your confidence interval on that closing.

Considering the history there.

Okay.

I'm not entirely sure what.

What the previous plans were on the property what I do know is it is a sale leaseback, we do need that property to operate our dredge business.

So we will continue to work off of.

As a leaseback on that property.

As far as the scale of it.

As far as I know has always been more than $5 million.

So I'm not sure.

Honestly, what historically has been talked about quite frankly, but I think we are.

We've we're confident that we got it we got a good price on it and.

I don't know Scot, if there's more do you want to add to that I think.

<unk>.

As you said, we think that we've got a good price it's a good transaction for us.

Good deal of confidence that we can execute that in a timely way so.

So thats our focus is really getting that done and then finding those other opportunities that we can go execute I mean, we do have a signed purchase agreement that says we will close in December of this year.

Okay, Great and then on East West Jones has that target the working assumption there was it would generate.

In the mid Thirty's as far as proceeds is that still a reasonable target or is it just too early to say because yes.

Pretty much had to restart that process.

Yes.

We're looking at what we're doing in terms of the marketing of that property with our with our partner CBRE on that transaction and so.

As we kind of move forward and they are engaged with the interested parties that we're currently engaged with I don't know that we're going to make a.

Shifting in value other than in response to any kind of negotiation with them.

If it were to go longer than that and we will of course reevaluate the current economic environment and are positioned in the marketplace and determining how we should proceed at that point, but right now we're just focused on the buyer that.

We have in hand, and trying to get that transaction closed.

Great and just one last one.

And your outstanding Outstanding bid levels are I think you said $1 billion can you break that down between marine and concrete.

And then successful bids to date $36 million on the marine side 3 million on the concrete side.

Yes.

The concrete side seems a little light so far as far as successful bids.

Third of the way into the quarter.

Any cause for concern there.

I think that what youre seeing there is that more disciplined and in.

In bid margin that they were putting in there it is.

Intrinsically going to lead to.

Fewer wins when we're when we're being disciplined about about our minimum bid margins. So we're focusing on working with quality partners.

<unk>.

Where we have great relationships and moving forward with doing work that is that is at a healthy margin.

And in terms of the.

Outstanding bids and how that.

Mix looks between the segments.

It's more tilted towards concrete maybe two thirds of that outstanding bid total is concrete, but our bid activity is always ongoing and I would expect it as we report our next quarter the mix of that bid.

Our outstanding bids could change pretty significantly so the.

The current shift is towards <unk>.

Towards concrete but.

We will see how things progress going forward.

Great I appreciate it sorry.

One more one more thing I'll add just since we're talking about bids.

Our.

In the process of submitting the largest bids and our history in both concrete and marine currently.

The largest bids ever.

Can you sort of quantify that.

<unk>.

They are ongoing bids so I can't I can't talk about them, but.

Didn't want to put that out there we're being aggressive about what we're going after and finding finding projects that are good fits for us in these these are both.

Great fit projects and.

We're aggressively pursuing them so.

I prefer not to talk further about it.

Hope to have good news hopefully later in <unk>.

You bet.

Some red.

Some red made out there.

Can you just maybe give us a timeframe on when you expect that are bidding to wrap up or the bid process to wrap up and are these.

The go shaded situations or are they competitive bid.

Let's say, they're competitive bid one of them will take take a few months for us to know the other one will.

There will be a little more little more a little sooner than that so.

There may be some negotiation on one of them.

Okay.

Stay tuned well really appreciate your time, thanks for your help.

Okay.

Thanks Colin.

Again, if you'd like to ask a question. Please press star one David Wright with Henry Investment Trust. Your line is open.

Good morning, Travis and Scott and welcome to O'brien.

I'll try to be concise.

Travis in your remarks, you you've talked about wanting to deliver strong consistent results just briefly what success a year from now from your perspective.

From my perspective, a year from now.

When we started telling you what we're going to do in the next quarter.

It's having these calls with you and delivering what we told you we would do or better.

That success for me.

My focus my goal is for us to tell you, what we're going to do and deliberate or exceed your expectations every time.

And then that would.

So that would and for providing guidance.

Forward guidance is that correct.

I think that as we start to build consistent results youll be able to rely on the things that we tell you about the future.

Scott.

Just on the sale leaseback of Wonder are you happy with the company's working capital do you need more capital you talked about.

Sure.

Renegotiating. The lines are you then looking just for that capital how do you feel about working capital.

Yes, so obviously it is.

We are able to identify opportunities to grow the business that's going to require some investment in working capital.

As you ramp up new projects.

And grow revenue. So obviously working capital is a focus of ours, making sure that we manage it well is important.

And as you alluded to making sure we've got the right capital structure is important so we're really considering.

The whole picture as we think about what our needs are going forward and how we wanted to implement our strategy but.

No.

Would just say that working capital as a management effort is is always going to be a focus of our finance team because efficiency and managing our assets and resources.

It's how we can.

Our margins and be a better business.

So do you feel you have enough working capital presently.

At present, I think that we are able to.

To deliver on our commitments to our customers and we will continue to move forward like that.

Okay I wanted to ask quickly about the backlog.

<unk> got a large <unk> project with the space Center, how do you feel about the quality of the backlog with respect to margins and is the existing backlog going to be a drag over the next year.

There is some of our existing backlog that will that will.

Be a bit of a drag as we as we wrap it up.

Some of this work was one prior to.

Guidance on our on our bids that we instituted and so we'll be we'll be continuing to work through those projects.

Some of those projects have a little bit of a longer tail on it as we mentioned earlier. So it will be we'll be continuing to work through those projects and then.

Some of the better margin work that we've been winning more recently will start overcoming the drags that we have.

Okay, and then lastly.

Are you on completing the 2023 budget.

Yes. So we're actively thinking about next next year and working through with our team and developing our numbers for what we expect business can do.

And as we do that as Charles had mentioned you were looking at.

What investments are needed in the business what expenses, we need to incur as the cost of delivering improvements.

And so there's obviously a lot of inputs in that process.

We're engaged in it right now.

Hopefully when we come back to you. The next quarter. We can give you an update that is a little more down. The road you gives you a better insight into where we're headed super. Thank you for taking my questions and good luck going forward.

Thanks, Tim.

We have a follow up question from Poe <unk> with Alliance Global Partners. Your line is open.

Sorry, I should have asked this before but can you just refresh our memory as far as the largest bids or projects that have been awarded both on the concrete on the marine side.

Yes, I think $1 60 on the <unk>.

Green side.

On the concrete side I think it would be <unk>.

Double digits.

40, $40 million range and concrete.

Great. Thanks for your help.

I will now turn the call back over to the management team for closing remarks.

Okay.

Thanks, everyone for joining and your interest in our third quarter earnings Conference call.

We look forward to speaking with you again in February to discuss our fourth quarter and year end results.

Have a great day.

This concludes today's conference call. We thank you for your participation you may now disconnect.

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Thank you for holding and welcome everyone to the Orion Group Holdings third quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

You'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad, if you'd like to withdraw the question.

Press Star one.

I will now turn the call over to Francis <unk>, Vice President Investor Relations. Mr. Okoniewski. Please go ahead.

Thank you Jack and good morning, everyone and welcome to Orion Group Holdings third quarter 2022 earnings conference call and webcast.

Joining me today are Travis Boone Orion Group Holdings, President and Chief Executive Officer, and Scott Sanish Executive Vice President and Chief Financial Officer.

Regarding the format of the call we've allocated about 10 minutes for prepared remarks in which Travis Scott will highlight our results and update our outlook.

We will then open up the call for questions.

During the course of this call, we will make projections and other forward looking statements regarding among other things our end markets revenues gross profits gross margin EBITDA EBITDA margin backlog projects and negotiation and pending awards as well as.

Our estimates and assumptions regarding our future growth administrative expenses and capital expenditures. These.

These statements are predictions that are subject to risks and uncertainty, including those described in our 10-K that may cause actual results to differ materially from those statements. Moreover, past performance is not necessarily an indicator of our future results.

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.

So please note that adjusted net income adjusted earnings per share EBITDA and EBITDA margin are non-GAAP financial measures under rules of the Securities and Exchange Commission, including regulation G.

Please refer to reconciliations and definitions inclusive of the most comparable GAAP measures and reconciliation tables accompanying this earnings conference call within the press release issued last evening.

The press release can be found on our website at Www Orion Group Holdings, Inc. Dot com.

Also for additional discussion of risk factors that could cause actual results to differ materially from our current expectations. Please refer to our quarterly and annual filings with the SEC, which are also available in the investors section of our website.

And with that I would like to turn the call over to Travis Boone, President and Chief Executive Officer <unk> <unk>.

<unk>.

Good morning. Thank you all for joining I'm happy to be talking to you for the first time today from this seat.

Thanks to Austin for leading the business for the past couple of quarters and for helping me make this transition into the role.

He did a great job of setting Scott and I up for success.

Also thanks to our people who have endured a lot of uncertainty over the past year or so.

And remain committed and kept working hard through the challenges.

We wouldn't have a business without them.

I am very excited to be leading this team at Orion we.

We have great people, a robust market and opportunities to build our business and grow organically in the coming years.

I came here because this company has extraordinary potential and is uniquely positioned to be so much more than we are today.

I've been in the construction and engineering industry My entire life from my start working for my dad as a teenager to leading a business with thousands of employees and billions in revenue I.

I'm well suited and prepared to address the challenges we've seen as a company and refocus our business to build a strong foundation and a healthy future.

Scott and I have spent the last six weeks listening and learning the business with the teams on the ground.

And most of the offices and multiple project sites. We've also been talking to our investors and analysts.

We've been soaking in all that we can in order to build the strategy for the next year and beyond.

Our confidence in this business comes from the strong base that exists in the markets that we have and will expand into.

We will continue executing on operational improvements and know we can deliver strong and predictable results.

My observations have been.

So we have an environment in our end markets that will lead to successful outcomes.

We're winning high quality work and we're winning more of it.

We have tremendous people, who are loyal and doing very good work every day.

And we have opportunities to expand our business.

Some of our areas for improvement.

We'll be working on our processes systems and tools, we will continue focusing on rigor and discipline in both project bidding and delivery to bring in higher margins.

We're looking at our costs and have already identified some ways to reduce our overhead burden.

Lastly, we have opportunities to grow and improve with targeted investments into the business.

We have a qualified team to transform this business.

We aren't looking at it short term.

This is going to take some time to get it right.

We are building something that will be successful year in and year out for the long haul.

We have been working aggressively towards a stronger business with higher returns and making the necessary investments to achieve success for our business.

I will turn this over to Scott <unk>, our Chief Financial Officer.

To discuss our results for the quarter.

Thanks Travis.

Before turning to our financial results I'd like to introduce myself and like Travis give my first impressions from the six weeks that Travis and I had been on board.

I joined Orion, because I see a tremendous potential in this company, having served as Chief financial Officer of Texas commercial construction services company in the transport services company.

Im operationally focused and have a passion for this industry.

Over my nearly 30 years as a finance professional I have been fortunate to work in organizations that recognize the value of <unk> leadership that is deeply engaged with the operations.

Travis and I shared this view of the finance functions roll.

Im prepared to apply the same discipline and rigor to my role here at Orion.

Finance and operations working hand in hand to achieve results.

Throughout the past few weeks getting down to the team.

I'm encouraged that we have a group of talented finance professionals with the capability and the experience to effectively partner with operations to capture the transformational opportunities on the horizon.

Another thing that excites me is the opportunity to transform Orion business performance by leveraging data to provide business insight.

Orion generated a wealth of operational and financial data in day to day operations.

World Class Finance teams can turn data into business intelligence intelligence, which is critical to making strategic and timely moves in a dynamic environment.

I believe our finance organization at Orion has the ability to be a crucial business partner to Travis and through our operational leaders.

Throughout my career my passion has been to create high performing finance teams that help transform business results.

Here at Orion I will be focused on developing our people retooling our processes and aligning our systems to drive value for our business.

Over the past few weeks.

Travis and I have traveled to meet many of our team members customers investors and financing partners.

We've heard from our stakeholders about areas, where we can improve and we've also heard a great deal of optimism about our business.

For me one of the most impactful of these interactions with our opportunity to join the <unk> team in Dallas on a recent Saturday for our annual safety Barbecue and awards.

Carrying the passion and commitment of our frontline team members some of whom have been with the company over 40 years.

Really brought home our ability to deliver safe high quality work for our customers.

We have the right attitude and the right capabilities, our focus will be on improving our planning managing excellent execution and delivering consistent results.

Now turning to our quarter.

Revenues for the quarter were $183 million compared to $140 million in the third quarter of 2021 and $195 million in the second quarter of this year.

The year over year increase was primarily driven by the contribution of large marine projects that were awarded in the fourth quarter of 2021.

Higher volume in our concrete segment.

And the impact of claims and unapproved change orders related to work performed in previous periods.

Third quarter gross profit was $13 4 million.

Impaired to $6 6 million in the prior year period.

This increase was the result of the claims and unapproved change orders recognized in the quarter.

Lower discretionary project bonus expense.

And increased dredging activity compared to the prior year.

Third quarter gross profit was down six 3% as compared to the second quarter.

And year to date 2022 gross profit of $40 5 million is up 18% compared to year to date 2021.

As a percentage of revenues gross profit margin was seven 4% in the third quarter up from four 7% in the prior year period and in line with the second quarter's gross margin.

Turning to the segments.

In the third quarter, the Marine segment had revenues of $76 million.

And adjusted EBITDA of $11 million equating to an adjusted EBITDA margin of 14%.

In our concrete segment had third quarter revenues of $107 million and adjusted EBITDA loss of almost $2 million and an adjusted EBITDA margin negative one 7%.

During the third quarter, we continued our focus on closing out concrete jobs in central Texas.

This region contributed less than 15% of our concrete segment revenue in the quarter, but at significantly lower margins than we achieved in other markets.

We expect to complete most of the remaining central Texas backlog during the fourth quarter.

SG&A expenses for the third quarter were $15 4 million or eight 5% of revenues compared to $15 7 million or 11, 2% of revenues in the prior year period and.

Net income for the third quarter.

It was <unk> 2 million or <unk> <unk> diluted earnings per share excluding.

Excluding the.

$5 million of nonrecurring items, adjusted net income was <unk> 8 million or.

<unk> <unk> diluted earnings per share.

Third quarter, adjusted EBITDA was $8 $8 million.

Representing an adjusted EBITDA margin of four 8% this.

This compares to an adjusted EBITDA loss of <unk> five.

$5 million in the prior year.

And adjusted EBITDA of $5 7 million and adjusted EBITDA margin of two 9% for the second quarter.

Turning to our bidding metrics in the third quarter. The company bid on $1 $2 billion worth of opportunities and were successful on $128 million of new work.

This resulted in a win rate of 10, 5% and a book to Bill ratio of one <unk>.

7% for the quarter.

At the end of September backlog was $549 million.

Down from 573 at the end of the prior year period.

Quarter end backlog $280 million was in the marine segment and $268 million in the concrete segment.

We will burn at 83% or $456 million of the quarter ending backlog during the next 12 months.

In addition to this backlog there's $39 million of new work that has either been awarded subsequent to the end of the third quarter or for which the company is the apparent successful bidder.

Of this $36 million is related to the marine segment, while 3 million is related to the concrete segment.

As Travis mentioned, our increased bidding discipline is yielding results.

We want to win jobs on the basis of our ability to deliver quality timely projects at a good price not merely by being the low cost bidder.

Our recent wins in both segments are benefiting from this disciplined and we will continue to focus on those opportunities, where we have higher job margin potential.

Moving to the balance sheet. The company ended the quarter with $31 $1 million of outstanding debt and $2 $7 million of cash.

Results in our net leverage ratio of 288 times adjusted EBITDA as measured under our credit agreement.

The company is in compliance with our credit agreement covenants and at the end of the quarter, we had almost $11 million of available capacity under our revolver.

We have initiated discussions with current and potential financing partners as we evaluate options for the extension or replacement of our existing credit facility.

With that I will turn the call back to Travis for his closing remarks.

Thanks Scott.

There are a few items about which I'd like to provide an update.

Scott comment commented, we are continuing our exit strategy in central Texas, which will enable our refocused concrete business to perform better in our Houston and Dallas markets.

Our new dredge the Lavaka will be operational and working in the next couple of weeks. This was a major investment for us over the past year or so.

We have a signed purchase agreement for sale leaseback of one of our Portland market properties, which will close in December .

We are continuing to make progress with interested parties on east West Jones property on the Houston shipping channel.

We're also looking at ways to monetize some of our other assets to further reduce our debt.

As we turn our attention to delivering fourth quarter and planning for next year.

Todd and I and the team will be developing a strategy for this business to facilitate growth deliver better returns more efficiently and diversify our portfolio to help safeguard our business.

We will be focusing on strong project delivery.

Disciplined decisions on pursuits to make the best use of our BD dollars.

Continuing to bid with strong margins expanding our client base.

Identifying overhead efficiencies.

Streamlining our systems tools and reporting.

Evaluating opportunities to assist assist with hurricane Ian recovery and capitalize on the <unk>, which is the infrastructure Act as it comes online.

And finally building contingency plans for supply chain issues and inflationary in recession concerns.

I'd like to say, thank you to our longstanding customers suppliers and vendors here support of our business and our relationship with you are crucial to our success.

In closing I'd like to reiterate my excitement about joining Orion and leading his team to reach the huge potential that we have as a company.

We have a lot of hard work ahead of US we have investments to make and we have some things we need to do better but.

But I'm very confident in our ability to maximize the potential that we have.

I'll turn it back over to the operator for your questions.

Certainly as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

Joe Gomes with noble capital your line is open.

Good morning, Travis and Scott congratulations on the quarter.

Thanks, Thanks, Joe.

So first question in the press release, you mentioned a couple of times.

About the impact from claims and unapproved change orders I was wondering if you can kind of maybe give us a little more color or detail how much impact those have on revenues and gross profit in the quarter and maybe kind of as a follow on to that one you also had about <unk>.

$3 4 million gain on disposal of assets, maybe you could just give a little more color on what assets that came from.

Sure.

In terms of our customer contracts.

We're not going to comment on details of some.

<unk> of those but.

These were change orders and in some claims that we have related to some large projects on the marine side.

We're.

Costs that were recognized in previous quarters. So these are essentially the impact of those claims.

Margin from those claims flowing through on the quarter in terms of the the gain on sale that is recognized in the quarter.

We sold a couple of assets one was the spud barge I believe and the other was a rigor.

Rigor cream, which.

Those were assets that were not being utilized in our operations and it was a great opportunity for us to turn those assets into cash.

Okay. Thank you for that.

The concrete segment last quarter I know you guys have.

Charge added but.

Also talk about how the concrete segment in June .

It turned profitable and expectations were that in the third quarter.

We could see profitability on the concrete segment.

Looking again at <unk>.

Press release and it wasn't on an operating income.

Level profitable status.

Reported about a $4 1 billion loss I was wondering what kind of changed between the second quarter call.

And the rest of the quarter.

And that that segment was not able to show profitability.

Yes, so Joe I think part of that pertains to our business in central Texas that we've continued to kind of.

<unk> as we said.

Getting out of that market.

We are trying to wrap up some projects and get those get those completed as quickly as we can as profitably as we can.

But that's continued to be a drag on our on our concrete business.

So that's the general domain.

Contributor to to that I would say also that there is some some projects that we bid it.

A while back.

In the last year or so that we're still wrapping up that debt.

They werent quite at the margins that we had.

Where we have guidelines now and I would say there we're trying to get those get those wrapped up as well so I think it's.

Continued drag from from previous.

The work that we're trying to get out of the pipeline here yes.

Continue our efforts to exit that business.

There are costs that are associated with the equipment and the people that are central Texas, and Central Texas business right there.

We will need to reallocate to other parts of our business or planned.

Some other way to shed those costs, so yes that will be in a continuing impact.

As we continue to view exit but.

Our plans are essentially to reallocate, where we can those assets to much more profitable years.

Okay.

Now obviously.

At the end of the quarter.

We had the hurricane Ian come through Florida and.

I know you guys had a number of projects scheduled to start.

In the fourth quarter were started in the third quarter, just maybe you can give us.

High level detail, what kind of impact the hurricane.

Had on your business either positively or negatively.

So it was.

I would say neither positive nor negative we didn't.

For the the impacts during the storm, we were prepared embraced for for the hurricane that.

We hit hit the Tampa area, where we had quite a bit of work going on.

Unfortunately for Fort Myers that took an abrupt turn in and didn't head Tampa as as expected and we didn't have a ton going into the Fort Myers area. So we were we were braced for braced for it but were relatively on impacted and we're back to work pretty quick after the storm went through.

We are we are looking to.

Obviously.

Assist with hurricane in recovery in the coming months and probably years. So we are doing and doing a lot of work preparing for assisting in a recovery down there.

There is a number of.

Governmental organizations and private organizations that we've been in contact with them, we see positive developments coming out of those conversations.

Okay and one more for me if I may and then ill step back in queue.

And I know again you guys have it's early early days in your tenure, but I'm sure you guys.

Are familiar with.

Kiewit purchase.

A week strategy.

Let's call it a month six weeks ago.

Just wondering how do you see that impacting the competitive environment.

For you guys.

So we're still evaluating that we're not.

<unk> is a.

As the.

Jamie partner, as well and as well as well as competition in some cases in.

We're still evaluating whether or not thats.

Kind of what the impacts to us will be.

Obviously weeks as a competitor as well so.

We are.

We've been talking about it we don't we don't see any drastic change anything anytime soon.

Theres been very public statements. The keyword in that weeks is not planning on changing how they operate for the foreseeable future. So at this point not anticipating major impacts to anything at this point.

Yeah.

Thanks, guys appreciate the answers to the questions I'll pass it along.

Thanks, Joe.

Alex Rygiel with B Riley your line is open.

Hey, Good morning. This is min Cho for Alex Welcome Travis Scott look forward senior leadership and turning in growing this business going forward.

I just wanted to get your general thoughts on Hey, Tavis major general thoughts on the concrete business longer term I know you talked about more disciplined bidding.

But.

Are you thinking about new geographies or just focusing on the two and Texas right now any new industry is different type of contracts if any thoughts there would be helpful.

Sure first of all let's say we are.

We are.

Have a lot of <unk>.

Confidence in our concrete business going forward I think there is.

<unk> opportunities that we did.

We have.

As far as the markets go where we will continue to focus primarily on Houston and Dallas.

We will be opportunistic in other locations as it as it comes along if there's opportunities in other locations that make sense for us.

Got some great teaming partners in that business that.

If they ask us to come helping up in another location, where we're ready to go.

I'll also say that that.

That business, we have historically.

Always worked with private developer on private developer driven projects.

My background is as.

Public sector experience.

Anticipate that we will start working on.

On.

Expanding more into some public sector work to help supplement the private sector work that we do already.

And I think that's a big opportunity for us to grow that business.

That we have historically not not worked.

So I think theres, a theres great opportunity there for us and look forward to helping drive that business.

And additional direction.

Okay.

And then this is for Scott kind of staying with the concrete business.

As we get through these problem projects and some of the legacy projects that have the lower margins are you, suggesting that fourth quarter contract margins should see sequential improvement or could it be worse as smbs projects wrap up any guidance for the fourth quarter would be helpful.

I appreciate the question.

I think it's probably too early for me to say that there is a significant change in our expectations for the fourth quarter from what you've heard before.

I do think that as we roll forward and start to bring on some of the newer work.

That's been bid higher margin that will help where also as Travis mentioned in his remarks looking at ways in which we can lower our overhead costs across the board and that includes in the concrete segment. So.

Those are those are going to be positive tailwind to help us and of course.

The thing I mentioned earlier of making sure that we reallocate assets that we shed expenses, that's going to be key for our execution to improve the margins of that business as quickly as we can.

Alright, and then also.

I mean, the prior questions about the claim.

Are you expecting any more claims settlement in the fourth quarter and without them.

Im assuming margins can be a little bit softer in the fourth quarter or just overall.

I don't have any specific expectations for claims in the fourth quarter of course, its always a part of our business and it can arise at any time.

So we continue to work with our customers in as just.

Just as in the concrete business, we're very focused on making sure that we're bidding and executing at the right margins. So those are going to be the factors I think are driving our performance going forward change orders and claims those just kind of go in and out with the flow of the business.

Okay.

And you talked about supply chain.

There have been some headwinds if you can give us kind of an update on <unk>.

Where that where the headwinds are just what the supply chain situation is on the concrete and steel a green bar.

And how you can mitigate some of this going forward.

Youre seeing increased increase headwinds with.

Increased infrastructure projects coming forward.

I guess I'll say.

We don't have any other.

Other than the general concerns that everyone has globally about supply chain issues.

I don't have any specific.

Instances of something Thats impacting us currently.

Theres been some talk in the last few days about diesel shortages and things like that that's concerning.

Specifically, because it's kind of fresh and.

And new and we do we do burn a lot of a lot of fuel.

<unk> in our fleet and across our company. So that's probably the one that's fresh is on our mind at the moment, we are looking at ways of teaming with some of our.

Partners and vendors about be in kind of supporting the supply chain and helping helping them find ways to alleviate these concerns but we're not.

Other than the general general concerns that people have globally about supply chain issues theres not theres not a lot of.

Newer.

Anything we haven't talked about in the past.

Another thing that we're obviously going to be focused on unlike everybody is making sure that we have appropriate escalation clauses in all of our contracts. So that's.

That's an important part of our discussions with future and existing customers.

Okay.

And then I think.

You mentioned, a little bit about the east west.

<unk>.

Can you just give us any timing on that and just talk about how it's progressing.

As far as timing I think it would be it would be pure speculation at this point, but we have made some good progress with some interested parties.

Yes.

We're hopeful on I know you guys have been here in this.

Fourth quarter in quarter out, but it is something that I think we've made continue to make progress on here in the recent in the last last few months that one.

It's.

We're in a we're in a time that.

Selling property is as uncertain for anybody with <unk>.

Recession and things like that Fortunately, we have some some interest from some parties that that would be.

And are positioned to move forward, even even at a time of recession, but we're we're probably won't comment on that too much more but.

We're hopeful that we'll be moving towards something here.

In the coming months.

And we are actively engaged they conduct their due diligence and answering questions.

We're prioritizing debt that process as much as we can.

Okay.

Great. Thank you that's it for me and good luck gentlemen.

Okay. Thanks.

Again, if you'd like to ask a question. Please press star one on your telephone keypad Julio Romero with Sidoti <unk> Company. Your line is open.

Thanks, Hey, good morning, Travis Scott Brian .

But hulu.

Yep.

Hey, good morning, I'd like to start by taking the warranty or thoughts on strategy you identified some items in your prepared remarks.

Process systems, better discipline on bidding and delivery.

If you could just speak more to what Orion needs to change from an operational perspective, and if you could give us a rank order of sorts.

Yes, I mean, you've been you've heard from from Austin for the last couple of quarters about disciplined bidding I think that's something that we're going to be.

Continuing to focus heavily on to make sure that we're.

Capturing the appropriate margins when we did this when we bid work we'd rather.

We're focusing on quality not quantity and so that will that will continue.

Going forward.

I think from the.

From the perspective of.

<unk>.

The.

Overhead costs and things like that that's part of.

Part of running a business in.

Every company that should be should be evaluating costs and how we're how we're delivering our business to make sure we're doing it as efficiently and as profitably as we can so it will be.

Looking looking at that pretty heavily here in the coming coming weeks and months to find ways to do to do our business more efficiently.

And then as far as processes systems and tools.

It's something that we have been working on for for some time in our company and got a good head start on it but we need to get some things.

End of <unk>.

Finished up to over.

Over the next year or so some some internal projects on how we how we do our processes and systems.

So we're working on getting those fully executed.

Now with that.

One of the things that's going to be a critical success factor for us is our ability to execute well and so our project controls process and the way in which we manage projects and thats something that Travis inherent digging into deeply to to see how we can improve that and really deliver our projects in a way that can delight our customers.

<unk>.

Got it that's very helpful. Thank you.

On the concrete side, you talked about increasing the mix of public sector projects going forward I guess.

Do you weigh the benefit of taking on more public sector work.

The greater funding certainty I assume versus.

The downside of potentially lower bid margins on the public side.

Yes, I think theres a couple of aspects of it.

Julio I think there is.

Not only.

No.

In times of recession, and things like that win win developers tend to be a little more constrained on what they are able to do public.

Public sector tends to continue forward through some of that so it will help us kind of.

Awesome storm, so to speak with the with the economy.

And I think.

Additionally, it will help kind of again, it's not in lieu of the <unk>.

Private sector work. It's in addition to and that'll that'll give us another.

Another section of business.

To help to help grow our concrete business in a profitable way without distracting us too much from our from our core markets.

Okay got it and.

You mentioned in the quarter Central Texas made up 15% of the concrete sales, but would you happen to have what that percentage looks like either on the prior year quarter or maybe two.

2021 in general.

It was less than 15% and I don't have the number handy, but certainly we can get back to you on that but.

The emphasis.

Emphasis that we have on the concrete business is going to be.

To continue that process.

Like it is less than 15% of the current revenue quarter.

Less than 8% of the remaining backlog. So we will continue to decline.

And then we will push forward in markets, where we've been more successful.

Okay.

So it made up so last year, it made up less than 15%.

Saying.

No.

I don't have the number handy with me but.

Ill, let you know on the next quarter, we can give you more detail there.

Okay.

Good.

And then maybe just last one is just.

You might've touched on it but on the asset sale is just if you could reiterate maybe the expected use of funds there.

Yes, we used the proceeds from those asset sales to reduce our revolver balances.

It is now sitting in revolver availability and available to us as general corporate uses might dictate but our strategy really is to delever the business over time through some of these asset sales. So as we proceed with additional opportunities I think that is.

Going to be reflected on our balance sheet in that way.

I appreciate the color and thanks very much for taking the questions.

You bet.

Dave storms with Stonegate Your line is open.

Morning, gentlemen, thank you for taking my call.

Salt score question, perhaps and Scott you have your back.

The construction industry is there anything that you're seeing given your background pleasure going out doing I mean in Greece.

Hi, low hanging fruit for you guys to improve on call. It in your first 100 days.

Yes.

Thanks, Dave I think.

One of the one of the things that I.

But I've said I've seen is we're a company that is built on numerous acquisitions and.

I will say, we haven't been as integrated as I would like us to be in that respect.

Sure. Thanks, Chris.

Practices.

How we deliver our projects.

A lot of great people doing great work in multiple markets and there hasnt been a lot of sharing of resources or or or processes between the different groups and I think thats something that will be we'll be focusing on doing doing more going forward.

Just.

That's the first thing that comes to mind I know Scott has something to add to that yes, no I agree with that and I think that there is there is low hanging fruit that we've seen in some of our overhead expenses as Travis mentioned earlier.

Things were just some renegotiations with vendors some opportunities maybe consol.

Consolidated locations would be able to recognize.

Pretty rapid way some real benefits for the business.

And that's something that I've told the.

<unk> is one of my favorite meetings of the week is the invoice review session that I did with our ITT because it's a it's a great opportunity to see how the business has been spending its money in and I see ways in which we can better. So there are low hanging fruit opportunities and we're going to get out there and execute them quickly.

That's perfect. Thank you.

In that regard.

Well I'll add one more thing if that's okay.

So I would say kind of one of the things that we're looking at pretty hard is how we procure materials I think historically, we have procured materials by project by project basis, and I think there is there is there are some economy of scale opportunities here, where we could.

For example, whether it's rebar or.

Concrete carrying compound or whatever it might be I think there is some opportunities for us to get some get some good efficiencies by buying more in bulk than we have historically instead of buying a project by project.

Have done so and that would also help.

Time, when we are concerned about supply chain delivery to derisk some of our operations as well.

Perfect. Thank you so would it be fair to say that.

A lot of opportunity for purpose more organic and external at this point.

Yes.

The organic growth potential of the business, which we think is tremendous.

Perfect. Thank you.

And then Scott this might be a little more.

As we think about the infrastructure Bill.

The hurricane and potential for more beds coming up.

What do we have an expectation on timing for that how are we going to start seeing that coming through in the fourth quarter or are we already CNS.

Would that bell curve kind of work.

No. Unfortunately, I don't think we have a.

Strong view on timing certainly there are a lot of elements of hurricane recovery that are going to be more urgent urgently needed than others.

And as Travis and I mentioned earlier, we are engaged in conversations with.

Potential customers that need those services in and I think that there is an opportunity to realize some of those quicker than others on the infrastructure.

That's going to be a long tail is there.

Just a tremendous amount of money that needs to be spent is going to take some time. So I think that that's going to be more of the.

Lift of our business over a period of time that it extends out fairly.

Into the medium to long term range. So so they are both going to be able to deliver value for our business short and long term and we just need to kind of execute and prioritize appropriately.

Perfect and one more for me if you don't mind.

When you talk about your leverage ratio and your asset dispositions are you thinking of that from a more <unk>.

Where you want to get Great Oaks foreign assets or are you thinking of it from you wanted to get your revolver down to a certain spot are you thinking about that from that.

Assets located in certain geographies they are more inclined to get rid of.

How are you thinking about the end goal there.

Yes, so in terms of our existing debt I don't think that were highly levered right now we have yes.

I think a comfortable level of debt, but it is more about making the best use of our assets and so we have items were.

It can be used across both of our segments, where we might be able to.

Sure things better and drive utilization higher.

And that May free up assets that no longer have have used for us. We also have some assets, where we mentioned moving out of the central Texas business.

There may be things that we don't need as we as we continue to do that so it's going to be more focused on getting the right asset base to drive the growth of our company forward to here.

The particular leverage point on the balance sheet.

That's perfect. Thank you very much.

You bet.

Pro Frat with Alliance Global Partners. Your line is open.

Great. Good morning, Travis Good morning, Scott Good morning Fran.

Just a couple quick ones, if you wouldn't mind.

I know that.

It seems you seem hesitant to offer an actual number for the change order impact during the quarter can you just give us a ballpark number of what kind of impact from a.

Dollar value standpoint that had.

What I can tell you is it was a significant contribution to our earnings and our revenue in the quarter.

We will have that from time to time as we work with our customers around changes that happen on work that we're working on so.

That's about as much as I can give you but certainly.

Happy to answer any other questions you've got.

Yes, yes.

Okay. So when youre looking at.

You had 100 days or so.

<unk> identified potentially from a cost standpoint, some improvements there can you just maybe give us.

On.

A ballpark number that you think as far as what you could squeeze costs down by and then I noticed the ERP spending was down does that imply that the timing of the ERP.

Project.

Is either.

Is it either put on hold or youre going to see less emphasis there which seem to be integral to integrating.

The different parts of it.

Concrete business to improve the bidding process there, but can you just give us an idea of sort of what youre looking at from a cost standpoint squeezing costs.

Yes, so in terms of what kind of potential there may be.

I could I could probably hazard, a guess, but I would almost certainly be wrong and I don't know if that would be higher low because I see that theres, a lot of potential, but quantifying and figuring out what the cost to achieve those savings might be that's going to be really the next step to figure out where our priorities are.

And as we kind of think about or.

Long term plans in the business.

And ERP and where we're spending money there.

Certainly systems are going to be an important part of how we leverage the data to drive better decisions.

And execute.

More.

Profitably on our contracts and so I would expect that we'll continue to see some investment there.

I think that what Travis and I are going to be focused on initially on where we can get some quick wins and that may be through realm.

A relatively small investments that can drive the benefits of the business quickly so.

ERP and other spending to drive cost improvements I think will be.

Metered to where we kind of have the have the ideas and are able to deliver things in the short time that can really benefit the business.

That low hanging fruit that we've talked about we want to start getting a few wins under our belt. So the team gets that experience of.

Of winning that kind of carries forward into performance and looking for all kinds of opportunities that we can improve.

So we've been here just right.

Right at six weeks or so in the business and we've been focusing on.

Our arms around what.

What all of US here and I think the next step for us will be identifying more.

More specifically, what those what those savings might be able to be achieved and.

So we will probably be better positioned here in a few months to give you a better more direct answers on.

On how much we think we can save but we have.

Yes.

In the short amount of time, we've been here, we've learned a lot, but we've got we've got some more to go before we could speculate on how much we can safe.

Yeah got you just seem to imply that.

Further down the road on that.

So if you look at.

One of the.

Kelly skills have been bidding discipline.

Is there one business or is it both that you think need improvement from a bidding standpoint.

I think both have already improved significantly I think.

Austin instituted some guidance a while back that has been has been followed and will continue to be followed so.

Both both businesses.

We have made improvements over the past past couple of quarters on on how we bid our work will continue focusing on that and finding ways to be even more disciplined.

About how much we pursue what we pursue the quality of the work that we are that we're going after.

Can you give us an idea of sort of margin targets that you have for both businesses and then.

I'm not sure you have this detail but.

But for central taxes would concrete has been profitable during the quarter either from an operating standpoint from an EBITDA standpoint.

I'll answer the first part and let Scott answer the second part I think.

From the perspective of competitive advantage I think it would be foolish of us to start advertising too much about margins and things like that so.

Hold back on that I will say it's.

We're confident that we're bidding projects with healthy margins.

And then in terms of.

The concrete business and our exit of Central Texas, Yes.

That's been a drag on the business in the quarter and in the absence of that drag that would have been profitable segment.

Great. That's helpful. And then you put in your press release, we've been hearing about port Lavage, I've heard last I'm going to say five or six quarters.

My recollection was that that targeted the targeted proceeds from cortlandt market, we're sort of in the $5 million range.

Did the scope of that transaction change at all and does it go from an outright sale to sale leaseback can you just give us sort of play around that and then also whats your confidence integral on that closing.

Considering the history there.

Yeah.

I'm not entirely sure what.

What the previous plans were on the property what I do know is it is a sale leaseback, we do need that property to operate our dredge business.

So we will continue to work off of.

As a leaseback on that property.

As far as the scale of it.

As far as I know has always been more than $5 million.

So I'm not sure.

Honestly, what historically has been talked about quite frankly, but I think we are.

We've we're confident that we got it we got a good price on it and.

I don't know Scot, if there's more do you want to add to that I think.

<unk>.

As you said, we think that we've got a good price it's a good transaction for us.

Good deal of confidence that we can execute that in a timely way so.

So thats our focus is really getting that done and then finding those other opportunities that we can go execute on and we do have a signed purchase agreement that says we will close in December of this year.

Okay, Great and then on East West John tests that target the working assumption there was it would generate.

In the mid Thirty's as forwards proceeds.

That still a reasonable target or is it just too early to say because yeah, you pretty much had to restart that process.

Yes.

We're looking at what we're doing in terms of the marketing of that property with our with our partner CBRE on that transaction and so.

As we kind of move forward and they are engaged with the interested parties that we're currently engaged with I don't know that we're going to make.

Shifting in value other than in response to any kind of negotiation with them.

If it were to go longer than that then we would of course reevaluate the current economic environment and our position in the marketplace and determined on how we should proceed at that point, but right now we're just focused on the buyer that.

We have in hand, and trying to get that transaction closed.

Great and just one last one.

And your outstanding Outstanding bid levels are I think you said $1 billion can you break that down between marine and concrete.

And then successful bids to date $36 million on the marine side $3 million on the concrete side.

Yes.

The concrete side seems a little light so far as far as successful bids.

Third of the way in the quarter.

Any cause for concern there.

I think that what youre seeing there is that more discipline in.

In bid margin that work that we're putting in there it is.

Intrinsically going to lead to.

Fewer wins when we're when we're being disciplined about about our minimum bid margins. So we're focusing on working with quality partners.

<unk>.

Where we have great relationships and moving forward with doing work that is that as health.

A healthy margin.

And in terms of the.

Outstanding bids and how that <unk>.

Mix looks between the segments.

It's more tilted towards concrete maybe two thirds of that outstanding bid total.

Us concrete but.

Our bid activity is always ongoing and I would expect it is.

We report our next quarter the mix of that bit.

Our outstanding bids could change pretty significantly so.

The current shift is towards.

Towards concrete, but we'll.

You will see how things progress going forward.

Great I appreciate sorry.

One more one more thing I'll add just since we're talking about bids.

Our.

In the process of submitting the largest bids and our history in both concrete and marine currently.

The largest bids ever.

Can you sort of quantify that.

Sure.

They are ongoing bids, but I can't I can't talk about them, but.

Didn't want to put that out there we're being aggressive about what we're going after and finding finding projects that are good fits for us in these these are both.

Great fit projects and.

We're aggressively pursuing them so.

I prefer not to talk further about it.

Hope to have good news hopefully later insulated.

You bet.

Some red sort of dangled from Red made out there.

Okay.

Can you just maybe give us a timeframe on when you expect bidding to wrap up or the bid process to wrap up and are these.

The go shaded situations or are they competitive bid.

Let's say, they're competitive bid one of them will take take a few months for us to know the other one will.

There will be a little more little more a little sooner than that so.

There may be some negotiation on one of them.

So stay tuned well really appreciate your time, thanks for your help.

Okay.

Thanks, Paul.

Again, if you'd like to ask a question. Please press star one David Wright with Henry Investment Trust. Your line is open.

Good morning, Travis and Scott and welcome to O'brien.

I'll try to be concise.

Travis in your remarks, you you've talked about wanting to deliver strong consistent results just briefly what success a year from now from your perspective.

From my perspective, a year from now is that when.

When we started telling you what we're going to do in the next quarter.

It's having these calls with you and delivering what we told you we would do or better.

That success for me. That's my focus my goal is for US to tell you, what we're going to do and deliberate or exceed your expectations every time.

Then that would.

That would and for providing guidance.

Forward guidance is that correct.

I think that as we start to build consistent results youll be able to rely on the things that we tell you about the future great.

Great.

Scott just on the sale leaseback of water are you happy with the Companys working capital do you need more capital you talked about.

Renegotiating. The lines are you then looking just for that capital how do you feel about working capital.

Yes, so obviously it is.

We are able to identify opportunities to grow the business that's going to require some investment in working capital.

As you ramp up new projects.

And grow revenue so obviously.

Working capital is a focus of ours, making sure that we manage it well is important.

And as you alluded to making sure we've got the right capital structure is important so we're really considering.

The whole picture as we think about what our needs are going forward and how we wanted to implement our strategy.

Got it.

I would just say that working capital as a management effort is is always going to be a focus of our finance team because efficiency and managing our assets and resources.

How we can improve our margins and be a better business.

So do you feel you have enough working capital presently.

At present, I think that we are able to.

Deliver on our commitments to our customers and we will continue to move forward like that.

Okay.

Wanted to ask quickly about the backlog.

You've got a large <unk> project with the space Center, how do you feel about the quality of the backlog with respect to margins and is the existing backlog going to be a drag over the next year.

There is some of our existing backlog that will that will.

Be a bit of a drag as we as we wrap it up.

Some of this work was one prior to.

Guidance on our on our bids that we instituted and so we'll be we'll be continuing to work through those projects.

Sure.

Some of those projects have a little bit of a longer tail on it as we mentioned earlier. So it will be we'll be continuing to work through those projects and then.

Some of the better margin work that we've been winning more recently will will start overcoming the drags that we have.

Okay, and then lastly, where are you on completing the 2023 budget.

Yes. So we're actively thinking about next next year and working through with our team and developing our numbers for what we expect business can do.

And as we do that as Charles had mentioned and were looking at.

What investments are needed in the business what expenses we.

Need to incur as the cost of delivering improvements.

And so there's obviously a lot of inputs in that process.

We're engaged in right now.

Hopefully when we come back to you. The next quarter. We can give you an update that is a little more.

More down the road and gives you a better insight into where we're headed super. Thank you for taking my questions and good luck going forward.

Thanks, Tim.

We have a follow up question from Poe <unk> with Alliance Global Partners. Your line is open.

Sorry, I should have asked this before but can you just refresh our memory as far as the largest bids or projects that have been awarded both on the concrete on the marine side.

Yes, I think $1 60 on the <unk>.

Green side.

On the concrete side I think it would be.

Double digits.

40, $40 million range and concrete.

Great. Thanks for your help.

Yes.

I will now turn the call back over to the management team for closing remarks.

Thanks, everyone for joining and your interest.

In our third quarter earnings conference call.

Look forward to speaking with you again in February to discuss our fourth quarter and year end results.

Have a great day.

This concludes today's conference call. We thank you for your participation you may now disconnect.