Q4 2022 Orion Group Holdings Inc Earnings Call

March 15, 2023

Good day and welcome to the Orion Group Holdings fourth quarter and full year 2022 earnings conference call and webcast. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by the <unk>.

Rob.

On today's call management will provide prepared remarks, and then we will open up the call for your questions to ask a question Analyst May Press Star then one on your Touchtone phone.

If you are using a speaker phone please pick up your headset before pressing the key and to withdraw your question. Please.

Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Margaret Voice Investor Relations for Orion. Please go ahead ma'am.

Thank you operator, and thank you all for joining us today to discuss Orion Group Holdings fourth quarter and full year 2022 financial results. We issued our earnings release after market last night. It is available on the Investor Relations section of our website at Orion Group Holdings, Inc. Dotcom.

I'm here today with Travis Boone, Chief Executive Officer of Orion, and Scott <unk>, Chief Financial Officer.

On today's call management will provide prepared remarks, and then we'll open up the call for your questions.

Before we begin I would like to remind you that today's comments will include forward looking statements under the federal Securities laws.

<unk> looking statements are identified by words, such as will be intend believe expect anticipate or other comparable words and phrases statements that are not historical facts such as statements regarding the current and expected status of our negotiations regarding a replacement credit facility.

And our expectations regarding the filing of our audited financial statements tomorrow with a going concern or forward looking statements our actual financial condition and results of operations may vary materially from those contemplated by such forward looking statements.

Discussion of the factors that could cause our results to differ materially from those forward looking statements are contained in our SEC filings, including our reports on Form 10-Q with that I would now like to turn the call over to Travis Travis. Please go ahead.

Thank you Margaret and thank you all for joining our fourth quarter and year end 2022 conference call.

Here with me today is Scott <unk>, our Chief Financial Officer.

I have a lot of ground to cover today, so let's get started.

I'll begin with our strategic plan the total Ryan on the right course for improved performance and then Scott will discuss operations and financials.

And the six months since Scott joined Orion, We formed a great partnership and have been busy dividing and conquering and our workload.

We both continue to be impressed by the talent and energy of our team.

And are excited about the enormous opportunity ahead of US today, we have a much deeper understanding of our company's strengths and our opportunities for improvement.

We believe our recent financial results barely scratched the surface of Orion's potential and we are confident our business will continue to improve in 2023.

In fact 2023 is off to a great start.

We are building great momentum.

Since the beginning of the year, we announced contract wins totaling over $582 million, including on Friday afternoon. When we were awarded a $448 million contract with the United States Navy to build a dry dock at Pearl Harbor as part of a joint venture they will be.

We're all contract for the JV is $2 8 billion.

We've secured concrete wins in our Dallas and Houston market of around 100 million I want our largest diving services contract in our history at $20 million project.

Our year end backlog combined with our recent wins comprises almost $1 billion of work to complete in the next few years.

You may recall on our November earnings call I mentioned that we were bidding on our largest project ever in both concrete and marine and with the win on Friday. We won both of those projects. We are very proud of the focus of our teams to secure higher margin wins over the past few months.

Since assuming the role as CEO I've been able to validate the potential of that first Jimmy to Orion.

We are a vital provider of services to mission critical infrastructure projects within the marine and building sectors and some of our nation's fastest growing areas.

We have long tenured relationships with blue chip clients across the government and private sectors in both our marine and concrete segments, including the U S. Navy and Army Corps of engineers, many of the largest ports in the U S and the Caribbean Metro petrochemical honors and in our concrete division significant general contractors in the Dallas and Houston markets.

The talent pool, we have is especially impressive Scott and me.

And the willingness of our people to adapt and learn to achieve greater growth and success, both for Orion and professionally as essential to executing our strategy.

Lastly, we have a highly engaged and supportive board of independent directors with diverse backgrounds and complementary expertise to guide us.

We are confident that Orion has all the elements for success and the right team to unlock the value of our assets and deliver improved financial performance.

That said, we have a big ship to turnaround it won't happen overnight, but.

But we know what needs to be done to maximize the profitability and potential of this business.

As announced in yesterday's press release, we have a three point strategic plan, which we believe will unlock orion's potential for long term sustainable growth.

So the benefit of all of our stakeholders.

Now, let's take a few minutes to break it down for you.

The first step of our plan is to improve the profitability of the concrete business.

We have appointed new leadership for our concrete segment shopping one of our senior leaders from the marine business with many years of experience successfully and profitably delivering complex projects.

We are refocusing on our core markets of Dallas, and Houston, where.

We have robust markets and track records of success and a runway to improve profitability.

And finally, we are investing in additional experienced project managers and giving our project teams the training and tools to drive efficiency and improve business outcomes.

The second point of our plan is to strengthen business development to drive growth.

We will build on our successful sales efforts and capitalize on industry dynamics, such as the one two trillion infrastructure Bill the U S Navy investments in the Pacific Port.

Port expansions and maintenance, resulting in the expansion of the Panama Canal and strong construction demand in both private and public sector of the rapidly growing Texas markets.

We are continuing to sharpen our business development focus putting our efforts into pursuing those opportunities where our capabilities and expertise differentiate us. Our aim is to win quality projects with improved margins.

Our marine business has been very successful working on both public and private projects.

By leveraging our experience elsewhere in the business and the public infrastructure construction market will be able to penetrate those more predictably funded sector with our concrete segment as well.

We are building and deepening our client relationships to gain actionable insight into their future pursuits by investing in additional business development resources.

And the third step in our strategic plans investment and resources to realize orion's potential.

We're strengthening the balance sheet and improving liquidity to fund future growth. We are working to complete the refinancing of our credit facility to extend our debt maturities and provide us with the capital to take advantage of our market opportunities.

We're optimizing to improve our return on assets with.

With the completion of our central Texas concrete jobs in 2023, we can dispose of some underutilized equipment and we will continue our efforts to monetize noncore real estate assets this year.

We're investing in our dredging fleet to better service our growth.

Supporting our commitment to the environment Orion suite upgrades will also include investing in more efficient engines to achieve lower carbon emissions.

We're fostering collaboration between our concrete and marine operations.

We have the opportunity to drive synergies leverage best practices and cross sell work. Finally, we will continue to enhance and build our target zero safety culture practices and systems.

While we believe it is premature to provide annual guidance, there's a number of ways to measure our progress, including additional project wins in Dallas, and Houston, New project wins with public sector concrete clients in our concrete business.

In Marine we expect to see larger sized projects. This very recent win in Hawaii is a good example, and.

And in both segments will begin to see incremental margin improvement as we execute our business improvement strategy and deliver our projects successfully.

Turning to the market, we've seen a bit of slowing due to the macroeconomic environment.

Capital is more expensive, which can lead to project delays and cancellations where were working for private sector clients.

With the passing of the infrastructure Bill agencies have been focusing on security and these funds rather than advancing near term projects in the development pipeline.

While we finished the year with lower backlog, we have started the year with a strong number of wins and expect to see improved performance as the year continues.

The funds related to the infrastructure Bill would take some time to begin flowing.

We may see a few projects funded from the <unk> in 2023, but expect to see higher volumes in projects in 2024 and 2025.

In our Marine segment, we will leverage orion's highly respected reputation and additional BD resources to identify new opportunities in the public sector at the federal state and local levels, including port expansion projects, maybe facilities and environmental and coastal resiliency projects.

The infrastructure investment and jobs Act will provided multiyear catalyst for public sector projects, such as transportation funding ports waterways water infrastructure Enbridge is among other things.

While it will take some time for these projects to start flowing we expect to see a few in the back half of 2023.

We expect to see a steep ramp up in volume in 2024, and 2025 and the investments we are making to improve fleet efficiencies our systems and our teams will give us a competitive advantage.

And our concrete business, we are seeing an increased volume of bid opportunities in our Houston market.

Projects continue to come in from a variety of end markets, such as Tech E Commerce and large retail distribution.

Demographic trends will continue to provide project opportunities in our Texas market one of the fastest growing states.

We see a long runway ahead in the public sector and we are accelerating our focus and we'll be bidding on projects such as airports.

Whose outdated aviation infrastructure cannot keep pace with growing demand. We entered 2023 with solid backlog increased quota work outstanding and a strong bid pipeline and long term tailwind is driving our markets.

Now I'll turn the call over to Scott to discuss our operational initiatives and financial results then I'll return with some closing remarks.

Thank you Travis and good morning, everyone.

We believe there is significant opportunity to generate profitable growth and create value for all of our Orion stakeholders.

To achieve that we are focused on optimizing our concrete operations fixing.

Fixing what's not working and continuously improving the things that are.

At the same time, we're employing our business development strategy designed to win good projects at attractive margins.

And finally, we are investing in our people and our assets to be ready for the growth opportunities in front of us.

As Travis mentioned, we're implementing a disciplined project bidding and delivery strategy.

We're pursuing opportunities, where our capabilities and expertise differentiate us.

By focusing on our strengths, we will be better positioned to win quality projects at strong margins.

And the enhancements we are making in our project management practices will enable us to deliver these projects with improved financial performance consistently.

We recognize the good information is critical to making strategic and timely decisions in a dynamic environment like the one we operate in.

We're making the necessary investments in systems tools and training to achieve better business outcomes.

This includes investing in upgraded project management systems that will promote visibility to project level performance and provide consistent and effective controls across our segments and our projects.

We're implementing PM training and hiring experienced individuals to run projects more effectively.

And we will leverage our vast operational and financial data repository.

Hi trends spot issues and provide business intelligence to our teams at every step in the project lifecycle from business development to final delivery.

As <unk> indicated we're acting swiftly to put the right structure and processes in place.

Many of our new initiatives are underway and we are beginning to see positive results.

One of the changes that I am, particularly excited about is the promotion of one of our senior leaders from the marine business to head up our concrete business and lead that team forward.

He has been instrumental in instilling discipline and operational rigor in the marine business.

Travis and I are confident that he will do the same for concrete.

Moving onto our financial results.

Fourth quarter revenue increased 21%.

$196 2 million, primarily driven by the progression of large jobs awarded last year in the Marine segment.

And higher volume on light commercial jobs.

Concrete segment.

Fourth quarter gross profit increased $10 2 million or five 2% of revenue compared to $6 6 million.

Or four 1% in the prior year period.

This 110 basis point improvement was due to lower indirect expenses related to better equipment and labor utilization.

Partially offset by higher project costs in the Marine segment.

Turning to our segments, our marine segment had a solid fourth quarter with revenues, increasing 32% to $96 3 million.

Adjusted EBITDA was $4 9 million.

Or five 1% adjusted EBITDA margin.

This compares with $73 1 million of revenue adjusted EBITDA of $5 2 million and an adjusted EBITDA margin of seven 1% in the fourth quarter of 2021.

This decrease in adjusted EBITDA was related to higher project costs on our marine construction project.

In the fourth quarter, we made progress improving the financial performance in our concrete segment revenues for concrete increased 21% to 99 9 million.

Adjusted EBITDA was negative $1 8 million.

Or negative one 8% of revenues compared to negative $4 $3 million.

Negative four 9% of revenue last year.

SG&A expenses for the fourth quarter.

$13 7 million or 7% of revenues compared to $16 1 million.

Or nine 9% of revenues in the prior year period.

Reflecting lower ERP implementation cost and lower expenses related to the management transition.

Net loss was $4 9 million or a loss of <unk> 15 per diluted share.

An improvement from the net loss of $8 8 million or a loss of 2009 cents per diluted share in Q4 last year.

This included <unk>.

$1 2 million of nonrecurring items, primarily related to an adjustment for the valuation allowance on taxes.

Adjusted net loss was $3 7 million or 12 loss per diluted share.

Fourth quarter, adjusted EBITDA increased to $3 2 million compared to an adjusted EBITDA of $800000 in the prior year period.

Turning to bidding metrics in the fourth quarter, we bid on approximately $840 million worth of opportunities and $196 million.

This resulted in a win rate of 11, 5% in our.

Book to Bill ratio of.

Four nine times for the quarter.

As of December 31, 2022, our backlog was $448 8 million.

From $590 million at year end 2021.

Breaking out our year end backlog of $216 $7 million was in our marine segment and $232 $1 million was in our concrete segment.

Approximately $396 million of the year end backlog will burn during 2023 with the remainder associated with longer term projects, which extend into 2024.

Additionally, we're pleased to have been awarded over $582 million of new work subsequent to the end of the fourth quarter.

Of this approximately $482 million is related to the marine segment, while $100 million is related to the concrete segment.

Moving onto the balance sheet.

We're taking several key steps to strengthen our balance sheet for future growth.

We're in productive discussions to secure a new credit facility.

The proceeds of which will be used for general corporate purposes and to retire our existing credit facility, which matures on July 31 2023.

These discussions are progressing and we are very confident in our ability to successfully complete a new financing arrangement.

However in the event that we are unable to agree upon the terms of a new credit facility by the March 16th 2023 filing deadline for our 2022 annual report on Form 10-K.

That annual report will include a going concern comment.

We have already obtained the consent from our existing lenders for the delivery of this report and we remain in compliance with the financial covenants of our credit agreement.

We've been pleased both with the support we have received from our existing lenders for a refinancing process and with the level of interest we've seen from debt capital providers.

As you know we are in discussions to sell our complete sale leaseback transactions on some of our noncore real estate assets.

The signed agreement for the sale leaseback of our Oaxaca South yard did not close the buyers financing fell through.

While the buyer remains interested in is working to put together an all cash transaction. We are concurrently in discussions with additional interested parties.

Discussions for the sale of our east and West <unk> property are progressing well and we are encouraged by the interest we're seeing from the market.

As Travis mentioned monetizing our non core real estate assets is an important element of our strategic plan.

Our view is that real estate is nice to own but even better to sell when we can reallocate those proceeds into operational assets that will generate cash returns.

As of December 31, 2022, we had approximately $3 $8 million of cash and $6 million of availability under our revolving credit facility.

We ended the year with $35 $7 million of outstanding debt $35 million of which is related to our revolver.

As we free up capital with the sale of assets and see increased returns with strict margin controls over our bidding process. We are confident that we will increase our cash flow and realized improved returns on capital from investments in our business lines.

With that I'll turn the call back to Travis.

Thanks, Scott you can probably tell that we are excited about what is going on in our business. We are building strong momentum.

Any of our strategic initiatives are well underway and real progress is happening every day.

Our people share my enthusiasm and they are embracing change there is a whole new excitement in the business.

Our leadership team and our board are fully committed to generating greater levels of profitability and value creation for all of our stakeholders.

Want to thank our shareholders for your support and our many dedicated employees for their efforts as we work together to execute our operational transformation.

The floor is now open for your questions to ask a question at this time. Please press star one on your telephone keypad, if at any point you'd like to withdraw from the queue. Please press star one again youll be provided opportunities to ask one question one follow up question.

I'll now take a moment to render our roster.

Our first question comes from the line of Julio Romero from Sidoti <unk> Company. Please proceed.

Hey, good morning, Thanks for taking the questions.

Okay.

I guess to start off on the three point strategic plan.

Encouraging to hear can you maybe elaborate on any.

Yes hard timeline are quantifiable targets for the strategic plan either from a from a margin dollar perspective, and then <unk>.

Secondly, how do you guys think about measuring progress for our investors relating to that plan.

As far as the.

Timeline.

This is going to be an ongoing.

Process.

Yeah.

As we said a few minutes ago, there's a lot of work to do.

And it takes some time to get the ship turned around so to speak so.

Without being too specific on.

How long it can take us for but for sure in the next we'll work on it right now and we're going to continue working on it it will be a continual process lets safer.

Several months here as we as we make these.

We make these changes and how we do things.

Pork toward to work towards the goals that we've set.

Yeah.

Yes.

Yes for metrics in terms of how to track progress.

I would say that we're really trying to improve all of the metrics associated with our business. So.

This quarter, we've had some great wins that will display and increasing backlog.

Which is certainly a good sign of things to come.

Should see increases in our gross margins as we execute our plans to improve the concrete business and us.

The higher margin business that we've won recently begins to be.

Worked through our.

Results.

And then we will see increasing cash flow as we work to execute our jobs with.

With precision and with without taking on additional cost that were not included in our original plans and we will see.

Our our.

Cash improve also from the benefit of some cost.

<unk> as we grow our business and really improve the efficiency and scale of our operation.

Got it.

Okay.

Our next question comes from the line of Joe Gomes from Noble capital. Please proceed.

Good morning, Thanks for taking my question.

Good morning, Jeff Hello, Joe I wanted to talk a little bit more maybe we could drill down some into the new contract over at Pearl Harbor, maybe you could.

Give us what is the scope of work there for you guys.

Is the backlog.

Alliance total portion of the $2 8 billion award or could there be more there.

Front or back end loaded and is there potential for additional wins under this idea Iq.

Yes so.

We are first of all our piece of it as roughly $450 million.

And this the scope that we are that we're doing as part of the JV is has very specific we're working kind of early on on a large amount of temporary works to set the project up to be.

To be completed.

Generally speaking the portion that we're doing is pile driving something that we do day in and day out every day.

Pretty.

Pretty normal work for us and we're really good at it.

So it's a lot of pile driving that we're doing on the on the project.

And as far as.

The expectation of.

Yeah.

Other work in this contract absolutely, yes, there'll be there'll be other task orders that they come along if it makes sense to pursue we will.

And.

We will.

We will definitely definitely be looking for opportunities under this contract over the coming years.

Okay.

Sure.

Sorry.

Sorry, I was just going to add on that.

And another thing is that the.

The Navy plans to make a lot of investment, especially in the Pacific Theater and this is one project that starting off some of those investments executing this project well sets us up well to compete for other business.

In that overall program with the Navy. So that's another aspect of this that we're excited about.

Great and then one more if I may.

You mentioned that you are.

<unk> completed all the contracts in.

In Central Texas.

In the fourth quarter.

What could we have accumulated them yet.

Alright.

Yes.

Contracts those contracts do kind of continue.

Most are being worked in the first quarter of this year, but there is some that continue to about mid year. So over over the course of the first couple of quarters, we'll be finishing those out and then.

And then does the central Texas.

<unk> will be completely behind us at that point.

Okay, great. Thanks.

Thanks, Jeff.

Our next question comes from the line of Alex Rygiel from B Riley Securities. Please proceed.

Hey, Alex.

Your line is open Sir.

Mr. Alex.

Sure.

Sorry about that guys.

Good morning.

It relates to the higher costs on our marine construction project.

<unk> finished.

And can you be more on what the higher costs with digi.

Yeah. So that project is not quite finished but it's very near completion.

In terms of what drove the higher cost.

Our our expectations on the <unk>.

Site conditions, there were a little bit different and so.

Aspect that really drove cost but.

So some of the project controls that.

We will be investing and are designed to catch and track cost to make sure that we're on top of what we know and on that particular project. We don't have those systems, yet and there were some some bills that we had that kind of lagged our overall.

Pace of work there. So so we had some of those kind of concentrated at the end there that really pulled down the margins on that job.

Very helpful.

And then kind of as a follow up on that last comment or question as it related to the Navy dry dock.

I understand this is sort of a new market for you can you talk about.

Establishing a workforce over there and how you are talking about doing that and what kind of contract risks are there.

Yes.

So couple of things when Ueno, Ryan first started back in 1994.

Oh Ryan.

A lot of multiple of our first contracts that we completed were actually in Hawaii. So it's not necessarily a new market for us, but it's new and recent.

In recent years lets say so.

So we have worked we have worked in Hawaii.

Before now.

As far as established kind of let's say reestablishing our presence there.

We have a team going over to Hawaii. This week.

Sure.

Their sole focus is preparing preparing this job.

We're using a lot of our current.

Resources that we thought we have already in the company, but we're <unk>.

Over there right now looking for looking for additional resources to kind of bolster the team at the local level because working Hawaii is different than working in Washington or somewhere else. So.

We know we need to be there locally we're also going to be relying on our partners Hawaiian dredging as part of our part of our team there a local company so.

So it will be we'll be working with them pretty extensively.

Sure.

Kicking off the project and that sort of thing.

So it's.

It's kind of an all hands on deck at this point, there's a lot of a lot of work to do to get get the get the project kicked off and.

Working successfully.

And then just to follow up on that can you help us understand sort of the cadence of revenue recognition from that project.

Yes.

I was kind of mentioned, we're all hands on deck right now getting ready for mobilization and thinking about procurement.

And people and resources and I guess.

Percentage of completion accounting on the project and looking at that as a little further down the list, but certainly as soon as soon as we develop a better idea of the start dates and in how we are collaborating with our joint venture partners on the timing.

We'll have a better view of that but it's just a little early right now to know exactly how much of that contract will fall in 2023.

Great helpful. Thank you good luck.

Thanks.

Our next question comes from the line of Dave storms from Stonegate capital markets. Please proceed.

Morning, gentlemen, thanks for taking my call.

Just hoping we could start.

How you are bringing some marine leadership over to concrete and if you could talk a little bit more about any other synergies you see between the two segments vehicles.

The advantage of going forward.

Sure Yes.

Yes, so we.

You heard us mentioned, we recently.

Moved over R. R.

Kind of our number two person on the marine side of the business over to lead the concrete business.

And that happened actually fairly naturally.

It was.

He was already kind of leaning in and working with the concrete team.

It was going very well and so.

So.

We've decided we're going to leverage is.

As a kind of expertise and are establishing rigor and discipline on the marine side of things that he has done over the last few years.

And so the concrete side of the business and.

We had great report with the team and so we are.

Moved moved him over and and he's he's done he's off to a great start.

<unk> done a great job of.

Bob.

Working working with the team on the concrete side of the business and bringing some of the as I said, the rigor and discipline that he helped to establish on the marine side of the business into the into the concrete side of the business. So.

I think we're going to see great results there.

Some of the <unk>.

We had in concrete.

It's tweaks here and there with with how we were how we would deliver on projects. How we were doing some things and I think we're.

We're well on our way too.

Seeing seeing results.

From from Campbell in concrete.

Yeah, and I'll add just in terms of other synergies.

We see as opportunities in that business.

One of the most exciting ones is.

Revenue synergies because those businesses have historically.

Not really pursued joint projects or Ben.

Been working together a lot and certainly the marine business.

Does have projects, where a lot of concrete displayed and so more opportunity to grow our concrete business with.

With those joint exploration and pursuits.

And on the cost side there is.

There's a lot of opportunity for us to do things more efficiently.

In our corporate offices as we start to standardize and use the same systems and processes between the two segments.

Theres opportunities too.

Leverage.

A better mix of our equipment as we.

With our equipment team manage two businesses instead of just the marine business, which is where most of the attention is focused today.

And.

We see plenty of.

Opportunity for us to identify additional cost savings within our concrete and our marine business by joining up our procurement function and really driving material and input savings through better procurement practices. So.

I think it's a pretty large set of opportunities and we will be going after all of them.

That's very helpful. One follow up if I could just quick those cost savings.

There was a that helps.

Drive tends to be more competitive and secure more wins or is that.

Probably translate more to just stripping margin enhancement.

I think it will be.

Be able to contribute to both.

We're out there really pricing our bids based on market dynamics and the services that we're offering.

Not just a cost plus view so.

When we achieve cost savings in our delivery cost and there is a margin benefit that we can realize from that but it does also give us the flexibility to at the same margin.

Give a lower price to the customer and there are certainly ways, which we can leverage that ability in the marketplace in certain situations. So I think youll see some of both and there is an opportunity for us to.

Really push forward with those cost savings.

Really quickly, we've got ideas and plans to execute.

That's very helpful. Thank you.

Okay.

Again the floor is now open for your questions to ask a question at this time. Please press star one on your telephone keypad.

Okay.

Yeah.

We do have a final question from John Mcdermott from ASI. Please proceed.

Yeah.

Yes, gentlemen, thanks for the call.

Generally could you give me some feedback on the core and core of engineers letting of beds.

Presently under our administration.

Yes drew.

The environmental social push.

Effective Greg Jean.

That's helpful.

Macro events large Greg and job when we're looking at bulk water loss and all that.

All going well.

The way it was done before how do you see the whole ESG.

And what is the corporate philosophy getting involved in more.

We will push.

From the call.

Okay.

Glen.

Sure. Thanks.

Thanks, John Great.

Great question and the first part of your question was was kind of on the timing of the core getting out dredging contracts.

There hasnt.

No secret there's been a bit of a.

A bit of a lag in getting getting some of the contracts out here in the last the last few months.

I think that's been well documented by by some of our competition and as well as other other sources. So.

Things have things have been a little slow to take on the contract side of things with the corps of engineers as I think everyone knows.

We have we have been working with the core there is theres a theres contracts come and we think there is.

We should see some more regularity in the contracts starting to starting to hit here in the near future in the next few months.

We did just win a dredging contract a couple of weeks ago. So we're excited about that.

And looking forward to seeing more of those more of those contracts hopefully get a little more regular here going forward.

And then as far as the ESG side of things I think one of the things that.

On the way, it's affecting dredging is kind of a couple of things one.

Core would like to see more beneficial use of the dredge spoils and instead of just dumping it finding ways to use more of it and we're working with them on helping helping try.

Try to try to find my find more beneficial use of the of those dredged coils. So I think that's a better whether it's using that for beach replenishment or or marsh creation or are there other other kind of ways of using the dredge spoils instead of just like I said just dumping it so.

That's one way it's affecting.

Dredging and then the other the other way is on.

On our equipment as we mentioned earlier, that's something we got to be making sure that where we're trying to keep up with the.

The carbon the carbon production of our engines and making sure that we have a more keep.

Keep our engines up to date and.

As efficient as we can so that's really the two ways, we're seeing it affecting the dredging business as of as of now.

There's lots of lots of parts and pieces of the beneficial use side of it.

But it's.

I would say it's not a.

The focus on ESG is not a.

<unk>.

Hindrance to proceeding with with dredging projects or a hindrance to to this business in any way.

Yes. Thank you I think if anything its.

The environment, where we can build the Orion story.

It resonates with people that are interested in investing in ESG friendly.

Investments because of all the work that we do too.

Two two.

Maintenance on our beaches being able to point to the things that we're doing as some of those coastal restoration projects come down. So we think that down the road. It can be a good story for us as we start to do more of that work.

Okay.

And the last hurricane down in Florida.

That opening up a lot more local.

What we've described.

As far as the as far as recovery work or.

Our recovery work for it.

Yes, the storm that went through Florida, one of the worst shareholders taking off.

Yes.

Definitely.

Anticipating seeing some opportunities.

Later this year.

The recovery recovery money starts flowing in and work starts where it starts happening there.

There was the immediate response with emergency response, and now it's working into more of the more recovery stage.

And as that as that goes on we'll see we'll see some opportunities to pursue down there.

Yeah.

The margins look like that would be helpful in the future and a great generic.

We believe so.

Yes, I think that we've seen we've seen that slow down that we've talked about in some of the dredging opportunities coming out of the Army Corps, but.

As that starts to break loose and.

We get back to work and our competitors are getting back to work from a lot of those delayed maintenance projects.

We expect to be able to realize those and consistent margins as are our past experience.

Okay.

Yeah.

I would now like to turn the call over to Travis Boon for closing remarks.

Thank you all for joining we appreciate everyone being here.

Just kind of in closing I'll say.

We're excited about the momentum we're building on the on the wind side of the business. We're excited about getting our getting our.

Banking arrangements sorted out here in the near future and we've got and we're well on our path here to get get our projects to.

Delivering our projects as we expect so.

Where we're excited we have the great momentum and we're looking forward to.

Two.

Working through 2023 and have been having a successful year. So.

Everyone have a have a great day and appreciate your time.

Thank you ladies and gentlemen, this does conclude today's call. Thank you for your participation you may now disconnect.

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Good day and welcome to the Orion Group Holdings fourth quarter and full year 2022 earnings conference call and webcast all participants will be in a listen only mode.

You need assistance. Please signal a conference specialist by pressing the star key followed by zero.

On today's call management will provide prepared remarks, and then we will open up the call for your questions.

Asked good question Analyst May Press Star then one on your Touchtone phone.

If you are using a speakerphone please pick up your handset before pressing the key and to withdraw your question.

Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Margaret voice.

Investor Relations for Orion. Please go ahead ma'am.

I'm here today with Travis Chief Executive Officer of Hawaiian and Scott <unk>, Chief Financial Officer on today's call management will provide prepared remarks, and then we'll open up the call for your questions.

<unk>, we begin I would like to remind you that today's comments will include forward looking statements under the federal Securities laws.

Looking statements are identified by words, such as well.

Intend believe expect anticipate or other comparable words and phrases statement.

Statements that are not historical facts, such as statements regarding the current and expected status of our negotiations regarding a replacement credit facility and that.

Statements regarding the filing of our audited financial statements Tomorrow with a going concern for forward looking statements.

Actual financial condition and results of operations may vary materially from those contemplated by such forward looking statements.

Some of the factors that could cause our results to differ materially from those forward looking statements.

And in our SEC filings, including our report on Form 10-Q with that.

I would now like to turn the call over to Travis Travis. Please go ahead.

Thank you Margaret and thank you all for joining our fourth quarter and year end 2022 conference call.

Here with me today is Scott <unk>, our Chief Financial Officer.

We have a lot of ground to cover today, so let's get started.

I'll begin with our strategic plan to Cuddle, Ryan on the right course for improved performance and then Scott will discuss operations and financials.

And the six months since Scott and I joined Orion, We formed a great partnership and have been busy dividing and conquering and our workload.

We both continue to be impressed by the talent and energy of our team.

And are excited about the enormous opportunity ahead of US today, we have a much deeper understanding of our company's strengths and our opportunities for improvement.

We believe our recent financial results barely scratched the surface of Orion's potential and we are confident in our business will continue to improve in 2023.

In fact 2023 is off to a great start.

We are building great momentum.

Our contract for the JV is $2 8 billion.

We've secured concrete wins in our Dallas and Houston market of around 100 million in one of our largest diving services contract in our history, a $20 million project.

Our year end backlog combined with our recent wins comprises almost $1 billion of work to complete in the next few years.

You may recall on our November earnings call I mentioned that we were bidding on our largest projects ever in both concrete and marine.

And with the win on Friday, we won both of those projects. We are very proud of the focus of our teams to secure higher margin wins over the past few months.

Since assuming the role as CEO I've been able to validate the potential of that first streaming to Orion.

We are a vital provider of services to mission critical infrastructure projects within the marine and building sectors and some of our nation's fastest growing areas.

Petro Chem honors and in our concrete division significant general contractors in the Dallas and Houston markets.

The talent pool, we have is especially impressive Scott and me.

And the willingness of our people to adapt and learn to achieve greater growth and success, both for Orion and professionally as essential to executing our strategy.

Lastly, we have a highly engaged and supportive board of independent directors with diverse backgrounds and complementary expertise to guide us.

We are confident that Orion has all the elements for success and the right team to unlock the value of our assets and deliver improved financial performance.

That said, we have a big ship to turnaround it won't happen overnight.

But we know what needs to be done to maximize the profitability and potential of this business.

As announced in yesterday's press release, we have a three point strategic plan, which we believe will unlock orion's potential for long term sustainable growth.

So the benefit of all of our stakeholders.

Now, let's take a few minutes to break it down for you.

The first step of our plan is to improve the profitability of the concrete business.

We are refocusing on our core markets of Dallas, and Houston, where we have robust markets and track records of success and a runway to improve profitability.

And finally, we are investing in additional experienced project managers and giving our project teams the training and tools to drive efficiency and improve business outcomes.

The second point of our plan is to strengthen business development to drive growth.

We will build on our successful sales efforts and capitalize on industry dynamics, such as the one two trillion infrastructure Bill the U S Navy investments in the Pacific Port.

Port expansions and maintenance, resulting in the expansion of the Panama Canal and strong construction demand in both private and public sector of the rapidly growing Texas markets.

Our marine business had been very successful working on both public and private projects.

We are building and deepening our client relationships to gain actionable insight into their future pursuits by investing in additional business development resources.

And the third step in our strategic plans investment and resources to realize orion's potential.

We're optimizing to improve our return on assets.

With the completion of our central Texas concrete jobs in 2023, we can dispose of some underutilized equipment and we will continue our efforts to monetize noncore real estate assets this year.

We're investing in our dredging fleet to better service our growth.

Supporting our commitment to the environment Orion suite upgrades will also include investing in more efficient engine to achieve lower carbon emissions.

We're fostering collaboration between our concrete and marine operations.

We have the opportunity to drive synergies leverage best practices and cross sell work. Finally, we will continue to enhance and build our target zero safety culture practices and systems.

While we believe it's premature to provide annual guidance. There is a number of ways to measure our progress, including additional project wins in Dallas, and Houston, New project wins with public sector concrete clients in our concrete business.

In Marine we expect to see larger sized projects. This very recent win in Hawaii is a good example, and.

And in both segments will begin to see incremental margin improvement as we execute our business improvement strategy and deliver our projects successfully.

Turning to the market, we've seen a bit of slowing due to the macroeconomic environment.

Capital is more expensive, which can lead to project delays and cancellations where were working for private sector clients.

With the passing of the infrastructure Bill agencies had been focusing on security and these funds rather than advancing near term projects in the development pipeline.

While we finished the year with lower backlog, we have started the year with a strong number of wins and expect to see improved performance as the year continues.

The funds related to the infrastructure Bill would take some time to begin flowing.

We may see a few projects funded from the IHA in 2023, but expect to see higher volumes of projects in 2024 and 2025.

While it will take some time for these projects to start flowing we expect to see a few in the back half of 2023.

We expect to see a steep ramp up in volume in 2024, and 2025 and the investments we are making to improve fleet efficiencies our systems and our teams will give us a competitive advantage.

And our concrete business, we are seeing an increased volume of bid opportunities in our Houston market.

Projects continue to come in from a variety of end markets, such as Tech E Commerce and large retail distribution.

Demographic trends will continue to provide project opportunities in our Texas market one of the fastest growing states.

We see a long runway ahead in the public sector and we are accelerating our focus and we'll be bidding on projects such as airports.

Now I will turn this call over to Scott to discuss our operational initiatives and financial results then I'll return with some closing remarks.

Thank you Travis and good morning, everyone.

We believe there is significant opportunity to generate profitable growth and create value for all of our Orion stakeholders.

To achieve that we are focused on optimizing our concrete operations.

Fixing what's not working and continuously improving the things that are.

At the same time, we're employing our business development strategy designed to win good projects at attractive margins.

And finally.

We are investing in our people and our assets to be ready for the growth opportunities in front of us.

As Travis mentioned, we're implementing a disciplined project bidding and delivery strategy.

We are pursuing opportunities, where our capabilities and expertise differentiate us.

By focusing on our strengths, we will be better positioned to win quality projects at strong margins.

And the enhancements we are making in our project management practices will enable us to deliver these projects with improved financial performance consistently.

We recognize the good information is critical to making strategic and timely decisions in a dynamic environment like the one we operate in.

We're making the necessary investments in systems tools and training to achieve better business outcomes.

We're implementing PM training and hiring experienced individuals to run projects more effectively.

And we will leverage our vast operational and financial data repository.

Hi trends spot issues and provide business intelligence to our teams at every step in the project lifecycle from business development to final delivery.

As <unk> indicated we are acting swiftly to put the right structure and processes in place.

Many of our new initiatives are underway and we are beginning to see positive results.

One of the changes that I am, particularly excited about is the promotion of one of our senior leaders from the marine business to head up our concrete business and lead that team forward.

He has been instrumental in instilling discipline and operational rigor in the marine business.

Travis and I are confident that he will do the same for concrete.

Moving onto our financial results.

Fourth quarter revenue increased 21%.

$196 2 million, primarily driven by the progression of large jobs awarded last year in the Marine segment.

And higher volume on light commercial jobs.

Concrete segment.

Fourth quarter gross profit increased $10 2 million or five 2% of revenue compared to $6 6 million.

Or four 1% in the prior year period.

This 110 basis point improvement was due to lower indirect expenses related to better equipment and labor utilization.

Partially offset by higher project costs in the Marine segment.

Turning to our segments, our marine segment had a solid fourth quarter with revenues, increasing 32% to $96 3 million.

Adjusted EBITDA was $4 9 million or.

Or five 1% adjusted EBITDA margin.

This compares with $73 1 million of revenue adjusted EBITDA of $5 2 million and an adjusted EBITDA margin of seven 1% in the fourth quarter of 2021.

This decrease in adjusted EBITDA was related to higher project costs on our marine construction projects.

In the fourth quarter, we made progress improving the financial performance in our concrete segment revenues for concrete increased 21% to 99 9 million.

Adjusted EBITDA was negative $1 8 million.

Or negative one 8% of revenues compared to negative $4 $3 million.

<unk> four 9% of revenue last year.

SG&A expenses for the fourth quarter.

$13 7 million or 7% of revenues compared to $16 1 million.

Or nine 9% of revenues in the prior year period.

Reflecting lower ERP implementation costs and lower expenses related to the management transition.

Net loss was $4 9 million or a loss of <unk> 15 per diluted share.

An improvement from the net loss of $8 8 million or a loss of 2009 cents per diluted share in Q4 last year.

This included <unk>.

$1 2 million of nonrecurring items, primarily related to an adjustment for the valuation allowance on taxes.

Adjusted net loss was $3 $7 million.

Or a <unk> 12 loss per diluted share.

Fourth quarter, adjusted EBITDA increased to $3 2 million compared to an adjusted EBITDA of $800000 in the prior year period.

Turning to bidding metrics in the fourth quarter, we bid on approximately $840 million worth of opportunities and $196 million.

This resulted in a win rate of 11, 5%.

Book to Bill ratio.

Four nine times for the quarter.

As of December 31, 2022, our backlog was $448 8 million.

Down from $590 million at year end 2021.

Breaking out our year end backlog of.

$216 $7 million was in our marine segment and $232 $1 million was in our concrete segment.

Approximately $396 million of the year end backlog will burn during 2023 with the remainder associated with longer term projects, which extend into 2024.

Additionally, we are pleased to have been awarded over $582 million of new work subsequent to the end of the fourth quarter.

Of this approximately $482 million is related to the marine segment, while $100 million is related to the concrete segment.

Moving onto the balance sheet.

We are taking several key steps to strengthen our balance sheet for future growth.

We're in productive discussions to secure a new credit facility.

Proceeds of which will be used for general corporate purposes and to retire our existing credit facility, which matures on July 31 2023.

These discussions are progressing and we are very confident in our ability to successfully complete a new financing arrangement.

However in the event that we are unable to agree upon the terms of a new credit facility by the March 16th 2023 filing deadline from our 2022 annual report on Form 10-K.

Net annual report will include a going concern comment.

We have already obtained the consent from our existing lenders for the delivery of this report and we remain in compliance with the financial covenants of our credit agreement.

We've been pleased both with the support we have received from our existing lenders for a refinancing process.

And with the level of interest we've seen from debt capital providers.

As you know we are in discussions to sell our complete sale leaseback transactions on some of our noncore real estate assets.

The signed agreement for the sale leaseback of our Oaxaca South yard did not close.

The buyers financing fell through.

While the buyer remains interested in is working to put together an all cash transaction. We are concurrently in discussions with additional interested parties.

Discussions for the sale of our east and West Jones property are progressing well and we are encouraged by the interest we're seeing from the market.

As Travis mentioned monetizing our non core real estate assets is an important element of our strategic plan.

Our view is that real estate is nice, but even better to sell when we can reallocate those proceeds into operational assets that will generate cash returns.

As of December 31, 2022, we had approximately $3 $8 million of cash.

$6 million of availability under our revolving credit facility.

We ended the year with $35 $7 million of outstanding debt $35 million of which is related to our revolver.

As we free up capital with the sale of assets and see increased returns with strict margin controls over our bidding process.

We are confident that we will increase our cash flow and realized improved returns on capital from investments in our business lines.

With that ill.

I'll turn the call back to Travis.

Thanks, Scott you can probably tell that we are excited about what is going on in our business. We are building strong momentum.

Any of our strategic initiatives are well underway and real progress is happening every day.

Our people share my enthusiasm and they are embracing change there is a whole new excitement in the business.

Our leadership team and our board are fully committed to generating greater levels of profitability and value creation for all of our stakeholders.

Want to thank our shareholders for your support and our many dedicated employees for their efforts as we work together to execute our operational transformation.

Our first question comes from the line of Julio Romero from Sidoti <unk> Company. Please proceed.

Hey, good morning, Thanks for taking the questions.

Okay.

I guess to start off on the three point strategic plan very encouraging to hear can you maybe elaborate on any.

Yes hard timeline are quantifiable targets for this strategic plan either from a from a margin dollar perspective, and then secondly, how do you guys think about measuring progress for our investors relating to that plan.

As far as the.

Timeline.

This is going to be an ongoing.

Process, let's say.

As we said a few minutes ago, there's a lot of work to do it's going.

It takes some time to get the ship turned around so to speak so.

We're not being too specific on.

How long it can take us for but for sure when the next we'll work on it right now and we're going to continue working on it.

Be a continual process lets safer.

Several months here as we as we make these.

We make these changes and how we do things.

Pork towards work towards the goals that we've set.

Yes.

Yes for metrics in terms of how to track progress.

No.

I would say that we're really trying to improve all of the metrics associated with our business. So.

This quarter, we've had some great wins that will display and increasing backlog.

Which is certainly a good sign of things to come.

You should see increases in our gross margins as we execute our plans to improve the concrete business and us.

The higher margin business that we've won recently begins to be.

Worked through our results.

Results.

And then we will see increasing cash flow as we work to execute our jobs with.

With precision and with without taking on additional cost that were not included in our original plans and we will see.

Our our.

Cash improve also from the benefit of some cost.

<unk> as we grow our business.

And really improve the efficiency and scale of our operation.

Got it.

Okay.

Our next question comes from the line of Joe Gomes from Noble capital. Please proceed.

Good morning, Thanks for taking my questions.

Moving Jeff Hello, Joe I wanted to talk a little bit more maybe we could drill down some into the new contract over at Pearl Harbor, maybe you could kind of give us what is the.

Scope of work there for you guys.

Is the backlog.

Alliance total portion of the $2 8 billion award or could there be more there.

Ron or back end loaded and is there potential for additional wins under this.

IQ.

Yes so.

We are first of all our piece of it as roughly $450 million.

And this the scope that we are that we're doing as part of the JV is is very specific.

Specific we're working kind of early on on a large amount of temporary works to set the project up to be.

To be completed.

Generally speaking the portion that.

We are doing is pile driving something that we do day in and day out every day.

Pretty normal work for us and we're really good at it.

So it's a lot of pile driving that we're doing on the on the project.

<unk>.

And as far as.

No.

The expectation of.

Other work in this contract absolutely, yes, there'll be there'll be other task orders that they come along if it makes sense to pursue we will.

Uh huh.

Well, we will definitely definitely be looking for opportunities under this contract over the coming years.

Okay.

More.

Oh, sorry.

Sorry, I was just going to add on that you had another thing is that the.

In that overall program with the Navy. So that's another aspect of this that we're excited about.

Great and then one more if I may.

You mentioned that you are.

<unk> completed all the contracts in Central Texas.

In the fourth quarter.

Hello.

No we haven't isolated them yet.

Alright.

Yes.

Those contracts do kind of continue.

And then does the central Texas.

<unk> will be completely behind us at that point.

Okay, great. Thanks.

Thanks Jess.

Our next question comes from the line of Alex Rygiel from B Riley Securities. Please proceed.

Sorry about that guys good morning.

As it relates to the higher costs on our marine construction project.

Project finished.

And can you be more on what the higher costs with <unk>.

Yes, so that project is not quite finished but it's very near completion.

In terms of.

What drove the higher cost or our expectations on the <unk>.

Conditions, there were a little bit different and so.

Aspect it really drove cost, but also some of the project controls that.

Pace of work there. So so we had some of those kind of concentrated at the end there that really pulled down the margins on that job.

Very helpful.

And then kind of as a follow up on that last comment or question as it related to the Navy dry dock.

I understand this is sort of a new market for you can you talk about.

Establishing a workforce over there and how you are talking about doing that.

And what kind of contract risk.

Are there.

Yes.

So couple of things when when Orion first started back in 1994.

Oh Ryan.

A lot of multiple of our first contracts that we completed were actually in Hawaii. So it's not necessarily a new market for us, but it's new and recent.

In recent years, let's say.

So we have worked we have worked in Hawaii.

Before now.

As far as established kind of let's say reestablishing our presence there.

We have a team going over to Hawaii. This week.

Sure.

Their sole focus is preparing preparing this job.

We're using a lot of our current.

Resources that we that we have already in the company, but we're.

Over there right now looking for looking for additional resources to kind of bolster the team at the local level because work in Hawaii is different than working in Washington or somewhere else. So.

We know we need to be there locally we're also going to be relying on when our partners Hawaiian dredging as part of our part of our team there a local company so.

So it will be we'll be working with them pretty extensively.

<unk>.

Kicking off the project and that sort of thing.

So it's it will.

Just kind of an all hands on deck at this point, there's a lot of a lot of work to do to get get the get the project kicked off and.

Working successfully.

And then just to follow up on that can you help us understand sort of the cadence of revenue recognition from that project.

Yes.

I was kind of mentioned, we're all hands on deck right now getting ready for mobilization and thinking about procurement.

And people and resources and I guess.

Percentage of completion accounting on the project and looking at that as a little further down the list but.

Certainly sooner.

As soon as soon as we develop a better idea of the start dates and in how we're collaborating with our joint venture partners on the timing.

We will have a better view of that but it's just a little early right now to know exactly how much of that contract will fall in 2023.

Great helpful. Thank you good luck.

Thanks.

Our next question comes from the line of Dave storms from Stonegate capital markets. Please proceed.

Good morning, gentlemen, thanks for taking my call.

Just hoping we could start.

How you are bringing some marine leadership over to concrete and if you could talk a little bit more about any other synergies you see between the two segments they might be able to take advantage of going forward.

Sure Yes.

Yes, so we.

You heard us mentioned, we recently.

Moved over R. R.

Kind of our number two person on the marine side of the business over to lead the concrete business.

And that happened actually fairly naturally.

It was.

He was already kind of leaning in and working with the concrete team and it was going very well and.

So.

We've decided we're going to leverage as is.

Expertise in establishing rigor and discipline on the marine side of things that he has done over the last few years.

And so the concrete side of the business.

We had great rapport with the team and so we.

Moved moved him over and and he is he's done he's off to a great start.

<unk> done a great job of.

Bob.

And working with the team on the concrete side of the business and bringing some of the as I said, the rigor and discipline that he.

It helped to establish on the marine side of the business into the into the concrete side of the business. So.

I think we're going to see great results there.

Some of the issues we had in concrete.

It's tweaks here and there with with how we were how we were delivering projects.

We're doing some things and I think we're well on our way to.

We're seeing results.

From from Campbell and conquer.

Great.

Yeah, and I'll add just in terms of other synergies.

We see as opportunities in that business.

Probably one of the most exciting ones as.

Revenue synergies because those businesses have historically.

Not really pursued joint projects or Ben.

Been working together a lot in <unk>.

Certainly the marine business.

Does have projects, where a lot of concrete displayed and so more opportunity to grow our concrete business with.

With those joint exploration and pursuits.

And on the cost side there is.

There's a lot of opportunity for us to do things more efficiently.

In our corporate offices as we start to standardize and use the same systems and processes between the two segments.

Theres opportunities too.

Leverage.

A better mix of our equipment as we.

With our equipment team manage two businesses instead of just the marine business, which is where most of their attention is focused today.

And.

We see plenty of.

I think it's a pretty large set of opportunities and we'll be going after all of them.

That's very helpful. One follow up if I could just put those cost savings.

There was a that helps.

<unk> tends to be more competitive and secure more wins or is that.

Probably translate more to just stripping margin enhancement.

I think it will.

Be able to contribute to both.

We're out there really pricing our bids based on market dynamics and the services that we're offering.

Not just a cost plus view so.

When we achieve cost savings in our delivery cost and there is a margin benefit that we can realize from that but it does also give us the flexibility to at the same margin.

Give a lower price to the customer and there are certainly.

<unk>, which we can leverage that ability in the marketplace in certain situations. So I think youll see some of both and there is an opportunity for us to.

Really push forward with those cost savings.

Really quickly, we've got ideas and plans to execute.

That's very helpful. Thank you.

Okay.

Again the floor is now open for your questions to ask a question at this time. Please press star one on your telephone keypad.

Okay.

We do have a final question from John Mcdermott from ASI. Please proceed.

Yes.

Yes, gentlemen, thanks for the call.

General could you give me some feedback on the core and core of engineers letting of beds.

Presently under our administration.

The push for ESG.

The environmental social push effective.

Second Greg Jean.

That's helpful.

Macro events large Gregg and job and we're looking at bulk water loss and all that.

Yes.

All going well.

The way it was done before how do you see the hole E ESP.

And what is the corporate philosophy getting involved.

We will push.

From the call.

Okay.

Great.

Sure. Thanks, John Great Great question and the first part of your question was was kind of on the timing of the core getting our dredging contracts.

No secret there's been a bit of a.

A bit of a lag in getting getting some of the contracts out here in the last the last few months.

I think that's been well documented by by some of our competition as well as other other sources. So.

Things have things have been a little slow to take on the contract side of things with the corps of engineers as I think everyone knows.

We have we have been working with the core there is theres a theres contracts come and we think there is.

We should see some more regularity in the contracts starting to starting to hit here in the near future in the next few months.

We did just win a dredging contract a couple of weeks ago. So we're excited about that.

And looking forward to seeing more of those more of those contracts hopefully get a little more regular here going forward.

And then as far as the ESG side of things I think one of the things that.

On the way, it's affecting dredging is kind of with a couple of things one.

Core would like to see more beneficial use of the dredge spoils and instead of just jumping at finding ways to use more of it and we're working with them on helping helping try.

Try to try to find my find more beneficial use of the of those trade spoils. So I think that's a better whether it's using that for beecher replenishment or or March creation or are there. Other other kind of ways of using the dredge spoils instead of just like I said just dumping it so.

That's one way it's affecting.

Dredging and then the other the other way as well.

On our equipment as we mentioned earlier, that's something we got to be making sure that where we.

We're trying to keep up with the.

<unk>.

The carbon the carbon production of our engines and making sure that we have more.

Keep our engines up to date and as efficient as we can so that's really the two ways, we're seeing it affecting the dredging business as of as of now.

There's lots of lots of parts and pieces of the beneficial use side of it.

But it's.

I would say it's not a.

The focus on ESG is not a.

Hindrance to proceeding with with dredging projects or a hindrance to to this business in any way.

Yes. Thank you I think if anything its.

Environment, where we can build the Orion story that resonates with people that are interested in investing in ESG friendly.

Investments because of all the work that we do too.

Two two.

Maintenance on our beaches being able to point to the things that we're doing.

Some of those coastal restoration projects come down so we think that.

Down the road it can be a good story for us as we start to do more of that work.

Okay.

And the last hurricane down in Florida.

With that opening up a lot more flow.

Can you describe.

As far as the as far as recovery work or.

Recovery work prior to it.

Yes, the storm that went through Florida, one of the worst sure.

Yes.

Definitely.

Dissipating seeing some opportunities.

Later this year.

As the recovery recovery money starts flowing in and work starts where it starts happening. There. There was there was the immediate response with emergency response and now it's working into more of the more recovery stage.

And as that as that goes on we'll see we'll see some opportunities to pursue down there.

Yeah.

The margins look like that would be helpful. In the future in the grid to an area.

We believe so.

Yes, I think that we've seen we've seen.

That slowed down that we've talked about in some of the dredging opportunities coming out of the Army Corps, but.

As that starts to break loose and.

And we get back to work and our competitors are getting back to work from a lot of those delayed maintenance projects.

We expect to be able to realize consistent margins as are our past experience.

Okay.

Yeah.

I would now like to turn the call over to Travis Boon for closing remarks.

Thank you all for joining we appreciate everyone being here.

Just kind of in closing I'll say.

We're excited about the momentum we're building on the on the wind side of the business. We're excited about getting our getting our.

Banking arrangement sorted out here in the near future and we've got and we're well on our path here to get get our projects to.

Delivering our projects as we expect so.

We're excited we have the great momentum and we're looking forward to.

Two.

Working through 2023 and have been having a successful year. So.

Everyone have a have a great day and appreciate your time.

Thank you ladies and gentlemen, this does conclude today's call. Thank you for your participation you may now disconnect.

Q4 2022 Orion Group Holdings Inc Earnings Call

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