Q4 2023 Orion Group Holdings Inc Earnings Call
Operator: Good morning and welcome to Orion Group Holdings' fourth quarter and full year 2023. This is our next conference call, and all participants will be in a listen-only mode.
Good morning, and welcome to Orion Group Holdings fourth quarter, and full year 2023 earnings conference call and webcast.
All participants will be in a listen only mode.
Operator: Should you need assistance, please contact a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks, and then we'll open the call for your questions. Let's ask a question, and please press the star and then 1 on your touch-tone telephone if you are using a speakerphone.
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On today's call management will provide prepared remarks, and then we'll open the call for your questions.
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Operator: We do ask that you please pick up your handsets prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star 2. Please also note today's event. Recording. At this time, I'd like to turn the floor over to Margaret Boyce, Investor Relations for Orion. Please go ahead, ma'am.
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Please also note today's event is being recorded.
At this time I'd like to turn the floor over to Margaret voice, that's the 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 2023 financial result, we issued our earnings release after market last night. It is available in the Investor Relations section of our website at Orion Group Holdings, Inc.
Margaret Boyce: Thank you, operator. And thank you all for joining us today to discuss Orion Group Holdings' fourth quarter and full year 2023 financial results. We issued our earnings release after the market last night. It's available in the investor relations section of our website at oriongroupholdingsinc.com.
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Margaret Boyce: I'm here today with Travis Boone, Chief Executive Officer, and Scott Thanisch, Chief Financial Officer. On today's call, management will provide prepared remarks, and then we'll open up the call to your questions. Before we begin, I'd like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases.
I'm here today, with Travis Byrne, Chief Executive Officer, and Scott Vanish, 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'd like to remind you that today's comments will include forward looking statements under the federal Securities laws forward looking statements are identified by words, such as well be intend believe expect anticipate or other comparable words and phrases statements that are not historical facts.
Margaret Boyce: Statements that are not historical facts are 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 these forward-looking statements is contained in our SEC filings, including our reports on Form 10-Q and 10-Q-1. With that, I'd now like to turn the call over to Travis. Travis, please go ahead.
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 these forward looking statements are contained in our SEC filings, including our report.
On Form 10-Q, and 10-K with that I'd now like to turn the call over to Travis Travis. Please go ahead.
Travis Boone: Thank you, Margaret, and welcome to our fourth quarter and year-end 2023 call. Good morning. I'll start by saying that I am pleased with our progress in transforming the business throughout 2023. We did what we said we would do, and the business is much healthier. To summarize our fourth quarter and four-year results, we made the profitability of our business a priority over revenue. Our Q4 revenues grew 3% to $202 million, and year-end revenues declined slightly to $712 million versus $748 million in 2022. On the surface, that's not impressive.
Thank you Margaret and welcome to our fourth quarter and year end 2023 call.
Good morning.
I'll start by saying that I am pleased with our progress on transforming the business throughout 2023.
We did what we said we would do.
And the business is much healthier.
To summarize our fourth quarter and full year results, we made the profitability of our business our priority over revenue.
Our Q4 revenues grew 3% to $202 million and year end revenues declined slightly to $712 million versus $748 million in 2022.
On the surface that's not impressive.
Travis Boone: But, as I communicated to you throughout the year, driving the top line for the sake of revenue growth was not our objective. In construction, if you don't have discipline, you can win bids to grow revenue without making money until you put yourself out of business. That was the situation when Scott and I joined Orion in late 2022, and our top priority was to transform the business into a company that could deliver profitable and sustainable growth. We now have a strong backlog to support revenue growth in 2024 and be profitable at the same time. A year ago, we laid out a three-point strategic plan to work toward long-term sustainable growth, which included improving the profitability of the concrete business. Strengthening business development to drive growth and investing in and resources to Realize Orion's Full Potential. We worked that plan throughout 2023 and accomplished our goals for the year. Concrete is now profitable, but we will continue to drive higher margins in that business.
But as I communicated to you throughout the year driving the topline for the sake of revenue growth was not our objective.
And construction if you don't have discipline, you can win bids to grow revenue without making money until you put yourself out of business.
That was the situation when Scott and I joined Orion in late 2022.
And our top priority was to transform the business into a company that can deliver profitable and sustainable growth.
We now have strong backlog to support revenue growth in 2024 and be profitable at the same time.
A year ago, we laid out a three point strategic plan to work toward long term sustainable growth, which included improving the profitability of the concrete business strengthening business development to drive growth.
And investment in resources to realize orion's full potential.
We worked that plan throughout 2023 and accomplished our goals for the year.
Concrete is now profitable, but we will continue to drive higher margins in that business.
Travis Boone: We have invested in strategic growth and have vastly improved our business development team and processes, which is driving growth. Lastly, we have significantly improved our balance sheet and liquidity. We made significant progress optimizing our business, and we strategically invested in our fleet to better prepare for the future. But we still have work to do. But today our business is much healthier as measured by a significant improvement in profitability metrics. Gross profit margin increased 620 basis points to 11.4% versus 5.2% in the fourth quarter last year. Adjusted EBITDA for the quarter was $14.8 million, or a $7.3 adjusted EBITDA margin, a significant improvement over 3.2 million or 1.6% adjusted even on margin in Q4 2022. As we communicated from the beginning, reversing the margin decline in our concrete business was a top priority, and in March, it turned the corner. On an adjusted EBITDA margin basis, concrete delivered 5.3% versus a negative 1.8% year-over-year.
We have invested in strategic growth and have vastly improved our business development team and processes, which is driving growth.
Lastly, we significantly improved our balance sheet and liquidity, we made significant progress optimizing our business and we strategically invested in our fleet to better prepare for the future.
We still have work to do.
But today, our business is much healthier as measured by a significant improvement in profitability metrics.
Gross profit margin increased 620 basis points to 11, 4% versus five 2% fourth quarter last year.
Adjusted EBITDA for the quarter was $14 8 million or seven three adjusted EBITDA margin.
A significant improvement over $3 2 million or one 6% adjusted EBITDA margin in Q4 2022.
As we communicated from the beginning reversing the margin decline in our concrete business was a top priority and in March it turned the corner.
On an adjusted EBITDA margin basis concrete delivered five 3% versus a negative one 8% year over year.
Travis Boone: Don't get me wrong, growing the top line is important, and in 2023, we made significant progress in strengthening our business development efforts, which I'll cover more later. What's important is winning the right projects for Orion, high-value, long-term projects like Pearl Harbor and the Grand Bahamas Dry Dock. Awards like these demonstrate our ability to win large, complex projects that are reputation builders in our markets. And while we are pursuing large projects, we are also applying a disciplined approach to projects of all sizes. The go forward story is how Orion is now set up to unlock its full potential.
Don't get me wrong growing the topline is important and in 2023, we made significant progress in strengthening our business development efforts, which I'll cover more later.
What's important is winning the right projects for Orion high value long term projects like Pearl Harbor, and the Grand Bahamas dry dock.
The words like these demonstrate our ability to win large complex projects that our reputation builders in our markets.
While we are pursuing large projects. We are also applying a disciplined approach to projects of all sizes.
The go forward story. So Orion is now set up to unlock its full potential.
Travis Boone: First, winning projects with the right pricing is critical to driving profitability. That required us to implement guardrails, such as minimum bid margins and pursuing work where we have a strong value proposition that differentiates Orion from competition, as well as bolstering our management oversight with experienced leaders. However, you can't just establish and enforce new rules.
First winning projects with the right pricing is critical to driving profitability.
That required us to implement guardrails, such as minimum bid margins and pursuing work, where we have strong value proposition that differentiates Orion from competition as well as bolstering our management oversight with experienced leaders.
However, you can just establish and enforce new rules.
Travis Boone: The organization must understand and embrace them, and that required us to reset Orion's culture. While having a strong and engaging culture is always an ongoing process, In 2023, we accomplished a great deal to strengthen our organization and its identity in the marketplace. We put disciplines, processes, and procedures in place so expectations are crystal clear. And everyone is focused on the same mission, delivering predictable, excellent results through outstanding execution. To achieve this, we tore down the silos that had existed for far too many years throughout the business.
The organization must understand and embrace them and that required us to reset orion's culture.
While having a strong an engaging culture is always an ongoing process.
In 2023, we accomplished a great deal to strengthen our organization and its identity in the marketplace.
We put disciplines processes and procedures in place so extra patients are crystal clear.
And everyone is focused on the same mission delivering predictable excellence through outstanding execution.
To achieve this we tore down the silos that existed for far too many years throughout the business.
Travis Boone: It was a classic case of what happens when acquisitions are not fully integrated. There are duplicate platforms, business unit autonomy, friction over resources, overlooked talent, and other challenges. And since these disciplines are all interrelated, we were missing many opportunities to collaborate and cross-sell.
It was a classic case of what happens with acquisitions are not fully integrated.
Duplicate platforms business unit autonomy friction over resources overlook talent and other challenges.
And since these disciplines are all interrelated, we were missing many opportunities to collaborate and cross sell.
Travis Boone: Fast forward one year later, Orion is now one company pulling in the same direction. We rebranded all of our operations under the Orion banner, including the rebranding of TAS Concrete Construction as Orion. We are also rebuilding an IT infrastructure that will give us a better line of sight across the entire business, as well as the capability for scale. Scott will give more detail on this in his remarks. Above all, I am especially thrilled with the caliber of leaders that we attracted to Orion this year. Allen Eckman, formerly with AECOM, joined us as a senior vice president of strategy and growth.
Fast forward one year later, what Ryan is now one company pulling in the same direction.
We rebranded all of our operations under the Orion banner, including the rebranding of Gis concrete construction as Orion.
We're also rebuilding an it infrastructure that will give us a better line of sight across the entire business as well as the capability of scale.
Scott will give more detail in this in his remarks.
Above all I'm, especially thrilled with the caliber of leaders that we attracted to Orion This year al.
<unk>, formerly with E com joined Us as senior Vice President of strategy and growth.
Travis Boone: This was a new role that we critically needed to drive strategy, business development, sales training, and future M&A. We also hired Chip Earl as our new in-house counsel. Chip has an impressive legal compliance and risk management background. Louisiana is an important market for Orion, and we now have a new office in New Orleans to expand our presence in the state where we began working in 1906.
This was a new role that we critically needed to drive strategy business development sales training and future M&A.
We also hired chip Earl as our new in House Counsel Chip has an impressive legal compliance and risk management background.
Louisiana is an important market for Orion and we now have a new office in New Orleans to expand our presence in the state where we began working at $19 six <unk>.
Travis Boone: Since Scott and I came on board, our culture and our senior leadership are strikingly different than a year ago. We are fostering a winning mindset, celebrating our achievements, and pushing ourselves to higher performance. By unifying under the Orion brand, we will develop a more recognizable presence in the national market, unlock new potential for growth, leverage collaboration across teams, and support our mission to deliver high-quality solutions with predictable excellence. To reflect our One Orion brand, we are launching our new website on March 4, and we'd be happy for you to check it out when it goes live next week.
Scott and I came on board, our culture, and our senior leadership is strikingly different than a year ago. We.
We are fostering a winning mindset celebrating our achievements and pushing ourselves to higher performance.
By unifying under the Orion brands, we will develop a more recognizable presence in the national market unlock new potential for growth leverage collaboration across teams and support our mission to deliver high quality solutions with predictable excellence.
To reflect our one O'brien brands, we are launching our new website on March 4th and we'd be happy for you to go check it out when it goes live next week.
Travis Boone: With these critical building blocks in place, we're turning our full attention to building momentum in the business. In 2024, we expect our performance to improve with a gradual build throughout the year. However, we believe 2025 will be the year when our transformation starts to really kick in for several key reasons.
With these critical building blocks in place we are turning our full attention to building momentum in the business.
In 2024, we expect our performance to improve with a gradual build throughout the year.
However, we believe 2025 will be the year when our transformation starts to really kick in for several key reasons.
Travis Boone: In a little over a year, we almost quadrupled our pipeline of opportunity from $3 billion to over $11 billion. This reflects not only the measures we've taken to transform Orion but also an improving market outlet. We're expecting to see increased RFP activity from our marine clients this year in the public and private sectors. The Corps is undertaking a number of capital construction projects that we're preparing to bid on, including the pent-up demand for maintenance dredging of waterways, which would benefit Orion. Based on our Pearl Harbor work, Marina is also well positioned to participate in naval defense spending in the Pacific.
And a little over a year, we almost quadrupled our pipeline of opportunity from $3 billion to over $11 billion.
This reflects not only the measures we've taken to transform Orion, but also in an improving market outlook.
We're expecting to see increased RFP activity from our marine clients. This year in the public and private sector.
The core is undertaking a number of capital construction projects that were preparing to bid on including the pent up demand for maintenance dredging of waterways, which would benefit Orion.
Based on our Pearl Harbor word Marine is also well positioned to participate from naval defense spending in the Pacific.
Travis Boone: Add to that the $10 billion that is earmarked for coastal restoration in Louisiana in the coming years, as well as the port expansion capital projects necessary to accommodate larger ships and more warehousing capacity, and Orion Concrete might also benefit from public funding for infrastructure projects. This would be a new opportunity for Orion since our work in Dallas and Houston's core markets is mostly in the private sector. With any interest rate relief, we believe several private sector construction projects would be greenlighted to support the outsized growth in these two markets.
Add to that $10 billion that is earmarked for coastal restoration in Louisiana in the coming years as well as the port expansion capital projects necessary to accommodate larger ships and more warehousing capacity.
So Ryan concrete might also benefit from public funding for infrastructure projects. This.
This would be a new opportunity for Orion since our work in Dallas and Houston core markets is mostly in the private sector.
With any interest rate relief, we believe several private sector construction projects would be greenlighted to support the outsized growth in these two markets.
Travis Boone: We also see an opportunity to expand our concrete business presence in Florida. Bottom line, there are strong tailwinds and a ton of opportunity in our space that requires the special skills and experience that limit competition. We have the best people in the industry who are laser focused on execution, growing revenues, and driving margins. I'm very optimistic that Orion is set up for success in 2024, 2025, and beyond.
We also see an opportunity to expand our concrete business presence in Florida.
Bottom line, there are a strong tailwind and a ton of opportunity in our space that requires the special skills and experience that limits competition.
We have the best people in the industry, who are laser focused on execution growing revenues and driving margins I'm very optimistic that Orion is set up for success in 2020 for 2025 and beyond.
Now I will turn this call over to Scott to discuss our operations and financials.
Thanks, Travis and good morning, everyone.
During 2023, we were hard at work implementing changes to position Orion for future success.
Scott Thanisch: Now I'll turn this call over to Scott to discuss our operations and finances. Thanks, Travis, and good morning, everyone. During 2023, we were hard at work implementing changes to position Orion for future success. As Travis outlined, we invested in critical areas of the business to prepare for the growth and opportunities in front of us. A big focus this year was investing in technology, replacing the outdated infrastructure that we inherited. We redesigned and rebuilt our IT infrastructure, moving from housing our servers in our offices to hosting our IT systems in state-of-the-art data centers in Austin and Las Vegas. With this move, our systems are now more secure and reliable, with greater flexibility and adaptability. We completed the implementation of a CRM system to improve our business development capability.
As Travis outlined we invested in critical areas of the business to prepare for the growth opportunities in front of us.
A big focus this year was investing in technology, replacing the outdated infrastructure that we inherited.
We redesigned and rebuilt our it infrastructure moving from housing our servers in our offices to hosting our it systems and state of the art data centers in Austin and Las Vegas.
With this move our systems are now more secure and reliable with greater flexibility and adaptability.
We completed the implementation of the CRM system to improve our business development capabilities.
We've also implemented the first phase of the project management system and a P to P tool that will improve our overall project and expense management capabilities.
In 2024, we will continue to enhance our it systems migrating the concrete business over to the same financial platform as the Marine segment.
Scott Thanisch: We've also implemented the first phase of a project management system and a P2P tool that will improve our overall project and expense management capability. In 2024, we will continue to enhance our IT systems, migrating the concrete business over to the same financial platform as the marine segment, which will deliver efficiencies and greatly improve the line of sight across our entire business. With these changes, we can deliver our projects with improved financial performance. As mentioned previously,
Which will deliver efficiencies and greatly improve the line of sight across our entire business.
With these changes we can deliver our projects with improved financial performance.
As mentioned previously.
We need to consistently invest in modernizing and refurbishing our fleet to better service, our customers and prepare for growth.
In 2023, our maintenance capital expenditures were lower than historical averages.
This year, we expect maintenance capex to return to historical levels.
Additionally, we will be investing in growth capital to be ready to execute more work for our customers.
Scott Thanisch: We need to consistently invest in modernizing and refurbishing our fleet to better serve our customers and prepare for growth. In 2023, our maintenance capital expenditures were lower than historical averages. This year, we expect maintenance CapEx to return to historical levels.
To expand our fleet in a cost effective way, we recently purchased a dredge under construction and will be investing over the next two years to build it out.
We expect it to be fully operational in 2025.
Scott Thanisch: Additionally, we will be investing in growth capital to be ready to execute more work for our customers. To expand our fleet in a cost-effective way, we recently purchased a dredge under construction and will be investing over the next two years to build it out. We expect it to be fully operational in 2025. We were successful in strengthening the balance sheet and monetizing our non-core real estate assets in 2023. Securing our ABL credit facility was key to strengthening our financial flexibility.
We were successful in strengthening the balance sheet and monetizing our non core real estate assets in 2023.
Securing our ABL credit facility was key to strengthening our financial flexibility.
We closed over $25 million in equipment and real estate sale leaseback transactions last year.
And last week, we announced that we entered into a $34 million land sale contract for our East West Jones property with an expected closing date in June.
Scott Thanisch: We closed over $25 million in equipment and real estate sale leaseback transactions last year. And lastly, we announced that we entered into a $34 million land sale contract for our East West Jones property, with an expected closing date in June, with the completion of this transaction. We will have unlocked almost $60 million of value from our balance sheet to reduce debt and invest in growing our business in 2025. To wrap up on the balance sheet, as of December 31st, we had $30.9 million in cash and a total outstanding of $37.2 million. At the end of the quarter, we had no outstanding borrowings under our revolving credit facility.
With the completion of this transaction.
We will have them unlocked almost $60 million of value from our balance sheet to reduce debt and invest in growing our business in 2024.
To wrap up on the balance sheet as of December 31, we had $39 million cash.
Total debt outstanding of $37 $2 million.
At the end of the quarter, we had no outstanding borrowings under our revolving credit facility.
Moving onto our financial results.
Fourth quarter revenue increased two 8% to $201 $6 million, primarily due to an increase in marine revenue related to the Pearl Harbor dry dock project.
Scott Thanisch: Moving on to our financial results, fourth-quarter revenue increased 2.8% to $201.6 million, primarily due to an increase in marine revenue related to the Pearl Harbor Dry Dock Project, partially offset by lower concrete revenue following our decision to exit the unprofitable Central Texas concrete business. Fourth quarter gross profit increased to $23 million, or 11.4% of revenue compared to $10.2 million, or 5.2% last year. This 620 basis point increase was primarily driven by margin improvements in both sections reflecting higher quality projects and improved execution, partially offset by a lower margin and mix of dredging revenue. SG&A expenses for the fourth quarter were $17.2 million, or 8.5% of revenue, up from $13.7 million, or 7% of revenue, in the fourth quarter of last year.
Partially offset by lower concrete revenue following our decision to exit the unprofitable central Texas concrete business.
Fourth quarter gross profit increased to $23 million or 11, 4% of revenue compared to $10 2 million or five 2% last year.
The 620 basis point increase was primarily driven by margin improvements in both sections, reflecting higher quality projects and improved execution.
Partially offset by a lower margin mix of dredging revenue.
SG&A expenses for the fourth quarter were $17 2 million or.
Or eight 5% of revenue.
From $13 7 million or 7% of revenue in the fourth quarter of last year.
SG&A expenses grew due to increased <unk> and business development spending and higher legal costs related to some lingering project claims.
Adjusted net income for the quarter was $2 $6 million or an adjusted net income of eight cents per diluted share.
Scott Thanisch: SG&A expenses grew due to increased IT and business development spend and higher legal costs related to some lingering projects. Adjusted net income for the quarter was $2.6 million, or an adjusted net income of eight cents per diluted share, compared to an adjusted net loss of $3.7 million or an adjusted loss of 12 cents per diluted share in the prior year. This result excludes $7 million or $0.21 of diluted earnings per share of non-recurring items. Our gap net loss for the fourth quarter of 2023 was $4.4 million or $0.13 loss per diluted share.
Compared to an adjusted net loss of $3 $7 million or an adjusted loss of <unk> 12 cents per diluted share in the prior year period.
This result excludes $7 million or 21 of diluted earnings per share of nonrecurring items.
Our GAAP net loss for the fourth quarter of 2023 was $4 4 million or <unk> 13 cents loss per diluted share.
EBITDA for the fourth quarter was $6 $5 million and adjusted EBITDA was $14 8 million.
Adjusted EBITDA margin was seven 3% up from one 6% in the prior year period.
Scott Thanisch: EBITDA for the fourth quarter was $6.5 million, and adjusted EBITDA was $14.8 million. The adjusted EBITDA margin was 7.3%, up from 1.6% in the prior year. Turning to bidding metrics, in the fourth quarter, we bid on approximately $1.1 billion worth of opportunities, winning $86.3 million. This resulted in a contract-evaluated win rate of 7.6% and a book-to-bill ratio of 0.43 times for the quarter. As of December 31st, our backlog was 762.2 million compared with 448.8 million at December 31st of last year. Breaking out our fourth quarter backlog, 602.5 million was in our marine segment, with 159.7 million in our concrete. In addition, we have been awarded over $120 million of new marine segment project work that was not included in our backlog at the end of the fourth quarter.
Turning to bidding metrics in the fourth quarter, we bid on approximately $1 $1 billion worth of opportunities winning $86 3 million.
This resulted in a contract value weighted win rate of seven 6% and a book to bill ratio of <unk>.
43 times for the quarter.
As of December 31, our backlog was $762 2 million compared with $448 8 million at December 31 of last year.
Breaking out our fourth quarter backlog of $602 5 million within our marine segment with $159 7 million in our concrete segment.
In addition, we have been awarded over $120 million of New Marine segment project work that was not included in our backlog at the end of the fourth quarter.
Scott Thanisch: As Travis mentioned, we are delivering on our promise to improve profitability by implementing discipline in our bidding process and winning quality work at attractive prices. During the fourth quarter, our adjusted EBITDA margins moved closer to our target of low double-digit adjusted EBITDA margins for marine and high single-digit adjusted EBITDA margins for the concrete system. Adjusted EBITDA margin in our marine segment increased to 8.4%, up from 5.1% last year
As Travis mentioned, we are delivering on our promise to improve profitability by implementing disciplined in our bidding process.
Quality work and attractive pricing.
During the fourth quarter, our adjusted EBITDA margins moved closer to our target of low double digit adjusted EBITDA margins for marine and high single digit adjusted EBITDA margins for the concrete segment.
Adjusted EBITDA margin in our Marine segment increased to eight 4% up from five 1% last year.
Scott Thanisch: And our concrete segment adjusted EBITDA margin improved to 5.3%, up from a negative 1.8% adjusted EBITDA margin last year. Looking ahead to 2024 and beyond, we're excited about our outcome. Our business development efforts are producing an expanding pipeline of attractive projects. We anticipate growing the top line substantially over 2023, and we expect revenue to ramp up throughout the year. Of course, as with any project-based business, there may be lumpiness quarter to quarter based on project milestones. In Hawaii, our Pearl Harbor project is not ramping as fast as we anticipated in the first quarter due to shipping delays of equipment and supplies related to the drought in the Panama Canal, as well as unforeseen delays on the project beyond our control.
In our concrete segment adjusted EBITDA margin improved to five 3% up from negative one 8% adjusted EBITDA margin last year.
Looking ahead to 2024 and beyond we are excited about our outlook.
Our business development efforts are producing an expanding pipeline of attractive projects.
We anticipate growing the top line substantially over 2023 and.
And we expect revenue to ramp up throughout the year.
Of course as with any project based business, there may be lumpiness quarter to quarter based on project milestones.
In Hawaii, our Pearl Harbor project is not ramping as fast as we anticipated in the first quarter due to shipping delays of equipment and supplies related to the drought in the Panama Canal as well as unforeseen delays on the project out of our control.
Scott Thanisch: We expect revenue from Hawaii to ramp throughout 2024 and build through the year, being stronger in the second. We're increasing our CapEx spend over 2023 to upgrade our fleet so that we're prepared for the industry tailwinds that are expected to accelerate through 2025 and beyond. As we grow the top line, we plan to continuously improve margins by managing our business more efficiently and productively.
We expect revenue from Hawaii to ramp throughout 2024 and build through the year being stronger in the second half.
We are increasing our capex spend over 2023 to upgrade our fleet. So that we're prepared for the industry tailwind that are expected to accelerate through 2025 and beyond.
As we grow the top line, we plan to continuously improve margins by managing our business more efficiently and productively.
We are confident in our ability to continue to improve returns on capital and deliver increasing value to our shareholders.
Operator: We are confident in our ability to continue to improve returns on capital and deliver increasing value to our shareholders. And with that, we'll open up the call to questions. Ladies and gentlemen, at this time, we'll begin that question and answer session. To ask a question, you may press the star and then one on your touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality.
With that we'll open up the call for questions.
Ladies and gentlemen at this time, we'll begin the question and answer session.
Ask a question you May press Star and then one and you touched on telephones.
You are using a speaker phone with you ask that you. Please pickup your handset acquired a pressing the keys to ensure the best sound quality.
Your questions you May press star two.
In the interest of time, we do ask you please limit yourselves to two questions.
We know that you may rejoin the question queue. So you have additional questions.
Operator: To withdraw your questions, you may press star and two. In the interest of time, we do ask that you please limit yourselves to two questions. Please know that you may rejoin the question queue if you have additional questions, and those follow-ups will be addressed as time permits. At this time, we will pause momentarily to assemble the roster. Our first question today comes from Joe Gomes from Noble Capital. Please go ahead with your question. Good morning. Thanks for taking the question. Good morning, Joe.
Follow ups will be addressed as time permits.
At this time, we will pause momentarily to assemble the roster.
Our first question today comes from Joe Gomes from Noble capital. Please go ahead with your question.
Good morning, Thanks for taking the questions.
Good morning, Joe.
So Scott just talks a little bit on Hawaii I was wondering if you could give us a little bit more color on both our Hawaii and the Grand Bahama projects.
Sure is there anything specific you want to you want me to cover Joe or.
Just kind of looking for where we are you can you talk a little bit right. There on Pearl Harbor about not ramping as fast but.
Joe Gomes: So you just touched on Hawaii, but I was wondering if you could give us a little bit more color on both the Hawaii and the Grand Bahama project. Sure. Is there anything specific you want me to cover, Joe? Just kind of looking for where we are, you know, again, you talk a little bit right there at the end about Pearl Harbor about not ramping up as fast, but any additional color on that, any color you have on Grand Bahama would be great.
Any additional color on that any color you have on Grand Bahama would be great.
Sure both projects are going well.
And we still feel very confident about.
The projects in.
Margins and the ability to deliver on those projects.
There was there.
As Scott mentioned, there was a few a few hiccups with the Panama Canal that were that were.
Travis Boone: Sure, both projects are going well, and we still feel very confident about the projects and the margins and the ability to deliver on those projects. You know, there were, as Scott mentioned, there were a few hiccups with the Panama Canal that were sorting through, if you will. It's been challenging. You've probably seen it in the news.
Sorting through if you will it's been challenging you've probably seen in the news.
There's getting getting materials and goods through the Panama Canal has been challenging.
So we've had a little bit of a little little hiccups, there, but we're working through that.
And generally speaking the project as I said is going well.
Travis Boone: Getting materials and goods through the Panama Canal has been challenging, so we've had a little bit of little hiccups there, but we're working through that. And generally speaking, the project, as I said, is going well, and just a little bit slower start to revenue than we had anticipated or planned, but everything is well and on track. As far as Bahama is concerned, a similar story.
Just a little bit slower.
Start of revenue than we had anticipated or planned but it's.
Everything as well and on track as far as Bahama similar similar story.
<unk> is going very well everything is on schedule.
Travis Boone: The project's going very well. Everything is on schedule. A portion of the work got delayed. One of our subs got slightly delayed, and that slowed revenue, but the project is on schedule and on track, so everything is well there, too. Great. Thanks for that. And then the concrete segment, you know, just looking at the operating income, the loss, was higher in the fourth quarter, 23, 4.8 million versus 3.7 million in 2022. Was there, you know, was that something you were expecting?
A portion of the word got got delayed one of our subs got slightly delayed and that slowed the revenue, but the project is on schedule and on track. So everything is well there too.
Great. Thanks for that and then on the concrete segment.
Just looking at the operating income.
You know the loss.
<unk> was higher in the fourth quarter of 23, $4 8 million versus the $3 seven in 2022.
Was there.
Was that something you are expecting this segment take a little bit of a step back during the quarter you know any more clarity there would be great. Thanks.
Scott Thanisch: Did the segment take a little bit of a step back, you know, during the quarter? Any more clarity there would be great. Thanks. Yeah, so we had, you know, the rebranding of the concrete business under the Orion brand, which, as a result of looking at that intangible on the balance sheet, didn't really have a reason to support the value that was on the balance sheet. So we had $7 million intangible loss from writing that brand down in the quarter. If it were not for that, you know, concrete upping performance would have been much better.
Yeah, So we had.
The rebranding of the concrete business under the Orion brand, which as a result of looking at that intangible on the balance sheet didn't really have a reason to support the value that was on the balance sheet. So we had $7 million intangible loss from writing that brand down in the quarter.
If it were not for that.
Concrete.
Operating performance would have been much better.
Yeah.
Scott Thanisch: Okay, great. Thanks for that clarification. I'll get back in line.
Okay, great. Thanks for that clarity I'll get back in line.
Operator: Thanks, Joe. Our next question comes from... Julio Romero from Synodian Company. Please go ahead with your question. Thanks. Hey, good morning, Travis and Scott.
Thanks, Joe.
Our next question comes from.
Julio Romero from Sidoti <unk> Company. Please go ahead with your question.
Thanks, Hey, good morning, Travis and Scott.
Julio Romero: Travis, do you expect performance? Hey, good morning. You mentioned you expected performance to improve with the gradual build throughout the year. And Scott, you mentioned you expected revenue to grow substantially in 24. And I assume you, talking for Orion overall, maybe in one rather than one specific segment, but can you guys just kind of walk us through the cadence?
Travis do you expect performance Hey, Good morning, you mentioned, you expect performance to improve with the gradual build throughout the year and Scott you mentioned.
Revenue to grow substantially in 'twenty, four and I assume you were.
Looking for Orion overall, maybe then one rather than one specific segment, but can you guys just kind of walk us through the cadence expected for sales and profit across both segments in 2024.
Travis Boone: It is expected to achieve sales and profit across both segments in 2024. Yeah, I'll just kind of expand on that a bit. We, you know, kind of see a typical seasonal drop at the beginning of the year. We expect that to be true this year as well.
Yeah Al could you just kind of expand on that a bit.
You can see.
Typical seasonal drop at the beginning of the year.
We expect that to be true this year as well, but as we move through the year and Hawaii.
Scott Thanisch: But as we move through the year and Hawaii and Bahamas contribute more and more revenue as we go through the year, we expect to continually post improving results over the prior year. When I think about revenue and what it looks like in relation to 2023, you know, we've got a pretty sizable backlog going into the year. A good portion of that is expected to burn in the next 12 months.
<unk> contribute more and more revenue as we go through the year, we expect to continually post improving results over the prior year.
When I think about revenue and what it looks like in relation to 2023, we've got pretty sizeable backlog going into the year.
A good portion of that is expected burn in the next 12 months.
Scott Thanisch: We have a lot of opportunities in the pipeline that are potentially realizable within the year as well. So, we see a lot of good movement in the direction of expanding revenue. So, you know, there are always going to be ups and downs in a contracting business where we work outside and have projects that start and stop at different times during the year. But the general trend we see is up and right. Okay, that's very helpful.
We have a lot of opportunities in the pipeline.
Potentially.
Realized move within the year as well so we see a lot of good movement in the direction of expanding revenue so.
Always aren't going to be ups and downs in our contracting business, where we work outside and have projects that start and stop at different times during the year, but the general trend, we see up in right.
Okay. That's very helpful. And then it looks like as you guys said last quarter or the fourth quarter and sales were going to be up significantly due to the project timing pushing some sales into the fourth quarter and you really weren't kidding there with the strong performance on the margin sales. There is the first quarter is still expected to be stronger than <unk>.
Scott Thanisch: And then, as you guys said last quarter, the fourth quarter, and sales were going to be up significantly due to the project time and pushing some sales into the fourth quarter. And you clearly weren't kidding there with the strong performance on the margin sales there. Is the first quarter still expected to be stronger than the fourths? Or, or did some project timing maybe pull forward some one-cue sales? Yeah, we don't expect the first quarter to be any stronger than the fourth quarter.
Or or did some project timing maybe pull forward. Some <unk> sales if you could speak to that.
Yes, we don't expect the first quarter to be stronger than the fourth quarter. We do expect the first quarter to improve over the first quarter of last year. So.
There's ups and downs through the year, but.
Scott Thanisch: We do expect the first quarter to improve over the first quarter of last year. So, you know, there's ups and downs through the year, but the first quarter is typically a seasonable dip. Very helpful. I'll pass it on. Thanks very much. Our next question comes from David Storms from Stonegate Capital. Please go ahead with your question, www.globalonenessproject.org, for David.
First quarter is typically a seasonable depth for us.
Very helpful I'll pass it on thanks very much.
Our next question comes from David storms from Stonegate Capital. Please go ahead with your question.
Good morning.
Good morning, David.
Hoping you could just start by.
Giving us a little insight as to what the margin profile looks like on your backlog or we just about through a lot of those old legacy contracts or is there still more.
David Joseph Storms: I'm hoping you could just start by giving us a little insight as to what the margin profile looks like on your backlog. Are we just about through a lot of those old legacy contracts, or is there still more work that needs to be done? We're most of the way through those. There are a few lingering ones that we'll be finishing up this year, but generally speaking, we're through the vast majority of them. And then, just on the liquidity front, great to see that you got EastWest Jones contracted. Once that's finalized, are there any other levers that you're looking to pull in order to generate more liquidity, or do you feel like you're in a good spot? Sets, finally, probably not of that scale.
More work that needs to be done there.
We're most of the way through those Theres, a theres a few lingering ones that will be finishing up this year, but there is a generally speaking we're through we're through the vast majority of them.
Very helpful. Thank you and then just on the liquidity front, great to see that you've got a east West Jones contracted.
Once that's finalized are there any other levers that you're looking to pull in order to generate more liquidity or do you feel like you're in a good spot on.
Once that is finalized.
Probably not of that scale.
There is that when we're glad to have that thing under contract again.
Travis Boone: There's that one, you know; we're glad to have that thing under contract again and looking forward to getting that closed this year. But as far as, you know, any other big needle mover asset sales, etc., we're not anticipating anything large. We've got some equipment we'll sell and some things like that, but not big needle movers.
Looking forward to getting that getting that closed this year.
But as far as any other.
Big needle mover asset sales et cetera.
We're not anticipating anything large we've got some equipment will sell and some things like that but but not big needle movers, I think where we have.
Some improvement opportunities on cash flows.
Scott Thanisch: Yeah, I think where we have some improvement opportunities on cash flow is in working capital. As we have projects close out, and retainage to go collect, I think there will be a cycle of that coming up. Also, as you may have seen in our press release, we amended our credit agreement to lower our interest rate on our revolver and our term loan.
In working capital.
As we have projects close out and routine needs to go collect I think there'll be a cycle of not coming up also.
You may have seen in our press release.
We amended our credit agreement to lower our interest rate on our revolver and the term loan. So that will also help our cash flow coming in the next year.
Scott Thanisch: So that will also help our cash flow coming into next year or this year. That's very helpful, all set. Our next question comes from DeForest Timmon from Waldhausen & Company. Please go ahead with your question. Hey, I'm with Bomber Shoe Holdings now. That's not correct.
Sure.
That's very helpful. Thank you.
Thanks, Ed.
Our next question comes from Deforest Hinman from <unk> Company. Please go ahead with your question.
Hey.
I'm with Bumbershoot holdings, no that's not correct, but yeah.
DeForest Timmon: But yeah, thanks for taking the questions. Morning. You know, a big component of the, you know, better returns for the equity holders is related to the interest expense, you get pretty high interest carry on the debt.
Yeah, Thanks for taking the questions.
Good morning.
A big component of the you know the better returns for.
The equity holders.
No.
Is it related to the interest expense he got pretty high.
Interest carry on the debt I mean, obviously some of that's going down.
Scott Thanisch: I mean, obviously, some of that's going down with East West Jones being sold. And then, you know, you had a little bit of relief that you discussed in the press release, but You know, how should we be thinking about the state of the balance sheet as it relates to, you know, working capital, and you have some of these larger projects and how, you know, the billings and the milestone payments work out as we go through the year? I mean, is it your expectation that there'll be a fair amount of leverage on the balance sheet as 2024 progresses? Or is it are we going to be running in a net cash position? Can you just help us understand how that looks? Because it's going to have a pretty big impact on your cash flows and your earnings power. That's my first one.
With East West Challenge being sold and then you had a little bit of relief that you had discussed in the press release, but.
How should we be thinking about.
The state of the balance sheet as it relates to working capital and you have some of these larger projects and how.
You know the the billings and the milestone payments work out as we go through the year I mean is it your expectation that.
You know there'll be a fair amount of.
Leverage on the balance sheet is 2020 for progressive or is it are we going to be running in a in a net cash position can you just help us understand how that looks because it's going to have a pretty big impact on you here.
Your cash flows and your earnings power. That's my first question.
Scott Thanisch: Yeah, I appreciate it. And that is something, obviously, that when we came in last year, we needed to refinance our debt, and it wasn't the best time to hit the market. You know, we were able to successfully do that. I think the reduction in the interest rate that we just signed with White Oak is a reflection of both an improvement in the interest rate environment as well as our performance and how we're performing relative to, you know, the prior 12 months. They see us as an improving credit risk.
Yeah I appreciate it and that is something obviously that.
When we came in last year, we needed to refinance our debt and it wasn't the best time to hit the market.
We were able to successfully do that I think the reduction in the interest rate.
<unk> signed with White Oak is.
Reflection of both an improvement in.
The interest rate environment as well as our performance and how we are performing relative to.
The prior 12 months, they see us as an improving credit and and I think that they see.
Scott Thanisch: And I think that they see, as we do, that we have options to improve the interest rate on our debt going forward. With our EastWest Young Sale, we will look to reduce our debt with the proceeds from that. We have the opportunity to, with some of our cash flow initiatives, in particular, some claims that we're pursuing that we expect to be able to monetize during the year, that'd be another opportunity to reduce our debt. You know, going forward, we see a role for debt on our balance sheet.
As we do that we have options to improve the.
The interest rate on our debt going forward.
With our east West John sale, we will look to reduce our debt with proceeds from that.
We have the opportunity to win.
Some of our cash flow initiatives in particular, some claims that were pursuing that we expect to be able to monetize during the year that'd be another opportunity to reduce our debt.
Going forward, we see a role for debt on our balance sheet.
Scott Thanisch: You know, we've got a lot of opportunities in our space. We think that we can take advantage of more of those opportunities with additional capital, and we're figuring out the best way for us to approach that, to take advantage of those opportunities in the most efficient way for our shareholders. Still thinking about those things, but certainly looking to reduce interest expense through improved cash flow, lower rates, and a reduced debt balance. Okay, just to follow up on that commentary, is that just on the debt side, or would the Board and you consider issuing equity? Go out for some of those opportunities.
We've got a lot of opportunities in our space, we think that.
We can take advantage of more of those opportunities with additional capital.
And we're figuring the west the best way for us to approach that to take advantage of those opportunities in the most efficient way for our shareholders.
Still still thinking about those things, but certainly looking to reduce interest expense through improved cash flow lower rates and reduced debt balances.
Okay, just a follow up on that commentary that.
On the on the debt side or wood.
The board and you consider issuing equity.
Glass or some of those opportunities.
DeForest Timmon: May I follow? Yeah, I would say that we're not early enough in our thinking on those elements as to where we would go with the balance sheet. But I do think that we've got plenty of room, plenty of cash flow, plenty of opportunities. So the way to use capital, the best way to get it, we'll have discussions and figure out over the course of the next 12 months. Okay, thank you. And then on the CapEx commentary, obviously, you're a, you know, basically a whole new executive team versus the prior few years. You referenced maintenance capex going to more of a historic level. How do you define that?
A follow up.
Yeah, I would say that we're not early enough in our thinking on those elements as to where we would go with the balance sheet, but I do think that we've got plenty of room plenty of cash flow plenty of opportunity. So we see it that way.
Way to use capital the best way to get it we will have discussions and figure out over the course of the next 12 months.
Okay. Thank you and then on the Capex commentary.
Obviously your AR.
Basically a whole new executive team.
Versus the prior.
Few years, you referenced a maintenance capex going to more of a historic level. How do you define that can you give us that number.
Scott Thanisch: Can you give us that number? And then the second part of that question is, you mentioned acquiring a vessel barge to do some additional spending there. I mean, you do have some pretty old barges. This is somewhat of a newer thing.
And then the second part of that question is you mentioned acquiring a vessel barge to do some.
Additional spending there I mean, you do have some pretty old.
The barges. So this is a somewhat of a.
Newer thing can you can you help us understand the outlay for the.
Scott Thanisch: Can you help us understand the outlay for the initial build slot? And then, you know, what's the total capex? And what's the cadence over the next couple of years there? A multi-part question. Thank you. That's a ballpark number, around $15 million for maintenance CapEx. And then the additional CapEx there for building out the dredge that we purchased, that'll be over a period of time, the next year or two, to get that built out. As you did point out, we've got some older dredges in our fleet, although we did rebuild one and get it operational last year. So while it might be somewhat old, it's a pretty new piece of equipment based on the rebuild.
Initial.
Build slot and then what's the total capex and what's the cadence over the next couple of years. There. So multi part question on Capex. Thank you.
Okay. So on the on the maintenance Capex just generally speaking it's <unk>.
$15 million or so is the.
When referencing historic historic levels.
That's.
A ballpark ballpark number around $15 million for maintenance Capex and then the.
Additional capex therefore for building out these.
The dredge that we purchased.
There's that'll be over over a period of time next year or two.
To get that built out.
We as you as you did.
Pointed out we've got some older dredges in our in our fleet.
Although we did we have we did rebuild one and get it get it operational last year.
So while it might be somewhat audits.
It's a pretty pretty new piece of equipment based on the rebuilds.
Scott Thanisch: That's kind of what we're doing with this other one we purchased. So we're working on getting our fleet up to standards for emissions and technology and the best equipment. Yeah, and I think over the next two years, we'll be able to build out this dredge at a much cheaper rate than it would cost us to start from scratch. So I think in the course of the 24 months, it's probably a $25 to $30 million investment.
What we're doing with this this other one we purchased.
So we're working on getting our getting our fleet up to up to standards for emissions and.
Technology and the best equipment.
Yeah, and I think over the two years, we will be able to build out this dredge at a much cheaper rate than it would cost us to start from scratch. So I think in the course of the 24 months, it's probably 25% to $30 million investment.
Scott Thanisch: Okay, just for clarity, did you buy an older vessel within the just kind of intent of just, you know, doing a, Unknown Speaker It was a dredge hole that was in the process of being rebuilt by another company that we purchased at auction for a very, very inexpensive cost. Okay, and I'll just squeeze in the last follow-up on the East West Jones transaction. I don't know if I didn't read through all the disclosures, but I'll just say, Unknown Executive, David Storms, Scott Thanisch, Unknown Executive, David Wright, Unknown Executive, hypothetical environmental liability going forward. Yeah. Yeah, it's an as is, whereas, Okay, thank you. And our next question is a follow-up from Julio Romero from Synodian Company. Please go ahead with your question. Okay, thanks for taking a couple of quick follow-ups. Maybe can we just speak about dredging for a little bit?
Okay. Just for clarity did you buy an older vessel within it just kind of an internal just doing them.
So fairly soon.
On it or something.
It was a dredge hold it.
That was in the process of being rebuilt by another another company that we that we purchased at auction for a very very.
Inexpensive cost.
Okay and I'll just squeeze in the last follow up on the East Coast Jones transaction I don't know if I didn't read through all of the disclosures, but I'll just try to squeeze it in here, but we did we negotiate environmental release on that property sale or do we have.
Hypothetical.
Our environmental liability with that.
Property going forward, yes.
Yeah, it's as is where is sale.
Okay. Thank you.
You bet.
And our next question is a follow up from Julio Romero from Sidoti <unk> Company. Please go ahead with your question.
Okay. Thanks for taking a couple of quick follow ups.
Can we just speak to dredging for a little bit.
Julio Romero: Is the level of competition you saw for dredging in the third quarter still kind of ongoing? And, you know, can you maybe speak to whether those smaller competitors that were bidding for dredging in the third quarter are a little bit closer to filling up their capacity? I'd say it's a similar story, Julio.
Is it the level of competition you saw for dredging in the third quarter still kind of ongoing.
Can you maybe speak to whether those smaller competitors that were bidding for dredging in the third quarter are a little bit closer to filling up their capacity.
I'd say, it's a similar story Julio.
Pretty.
Travis Boone: As the latter half of last year going into going into 24 here, you know, I would, you know, some of them are some are busy. There hasn't been a ton of bid activity so far this year, but it's pretty similar to what we talked about in the latter half of last year. We're optimistic that the third and fourth quarters will pick up on the dredging side of things. We've been pretty fortunate. We've picked up some good dredging work that has been keeping us going, but it's not at the kind of historic levels that it used to be.
Pretty as the latter half of last year going into going into 'twenty four here.
Some of them are some of them are busy.
Hasnt been there hasn't been a ton of.
Bid activity so far this year, but it's it's a pretty similar.
To what we talked about.
In the latter half of last year.
We're optimistic that the.
Third and fourth quarter will pick up on the on the dredging side of things.
Pretty fortunate we've picked up some picked up some good dredging work that has been keeping us keeping us going but it's not.
Kind of historic levels that it used to be so we're not we're not dead in the water but.
Scott Thanisch: So we're not dead in the water, but we're not as busy as we'd like to be. So. Got it. And can you maybe just speak to SG&A a little bit as well and break out how much of the fourth quarter SG&A expense was related to higher legal claims?
We're not as busy as we'd like to be so.
Got it and.
Can you, maybe just speak to SG&A, a little bit as well and break out how much of the fourth quarter SG&A expense was related to higher legal claims and maybe help us think about.
Scott Thanisch: and maybe help us think about SG&A spend in 2024 excluding legal. Now, we're not probably going to break out the details of SG&A, but just to give you, I think that where we are in the fourth quarter is going to be a fairly typical number for us going forward in absolute dollars. I think with our systems investments, continuing the legal expenses that have been growing, and the investments that we've made in business development, most of those have kind of hit a sort of steady state. So I think you should continue at that level for the next 12 months. I got it. That's a good color.
Or SG&A spend in 2024, excluding legal.
No I would not probably going to break out the details of SG&A, but just to give you I think that where we are fourth quarter is going to be a fairly typical number for us going forward in absolute dollars.
I think with our systems investments continuing the legal expenses.
Have been growing.
The investments that we've made in business development.
Most of those have kind of.
Hit a sort of steady state.
I think you continue at that level for the next 12 months.
Got it.
Scott Thanisch: Thanks very much. Thanks, everyone. And, ladies and gentlemen, with that, we'll be concluding today's question. Actually, before we conclude, if anyone would like to ask additional questions, please press star and then 1 to withdraw yourself from the queue. You may press star and 1.
That's good color thanks very much.
Thanks Luke.
And ladies and gentlemen, with that we will be concluding today's question actually before we conclude if anyone would like to ask additional questions. Please press star and then one.
It all yourself on the key you May press Star two.
DeForest Timmon: And we do have a follow-up from DeForest and then from Waldhausen and Company. Please go ahead with your follow-up. Hey, it's Bumper Shoe Holdings, but can you... Give us some more color on some of these ongoing claims you referenced. Timing-wise, size, I think there was some legacy stuff out there.
Well, we do have a follow up from Deforest Hinman from Walt housing and company. Please go ahead with your follow up.
Okay, It's bumbershoot holdings, but can.
Can you.
Give us some more color on some of these ongoing claims you referenced.
Timing wise ties I think the.
There were some legacy stuff out there you guys. Some some work on some level I think it was a runway in Alaska I don't know if that ever got it resolved there was something with.
Travis Boone: You guys have some work on some, I think it was a runway in Alaska. I don't know if that ever got resolved. There was something with the Drainage Canal in Georgia.
Drainage canal in Georgia.
Travis Boone: Are those things still out there we're trying to get paint on? Are these different things? And any color there, and any color on timing? Unknown Speaker That's the employee who's doing the hiring. So those are the folks we're looking at. So thank you very much. We appreciate it. I appreciate it.
Are those things still out there we're trying to get paying on are these different things and any color there.
Color on timing and potential size of those recoveries.
Yes, we've got a couple of a couple of legal matters that are going to trial. This year in the middle middle.
Travis Boone: Bye-bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Yeah, we've got a couple of legal matters that are going to trial this year in the middle part of the year that we're, we're optimistic about. There's no downside for us on either one of those, but probably we're not going to get into details about which matters they are.
Part of the year.
We're we're optimistic about.
There there is no no downside for us on either one of those probably were not going to get into the details about which matters. They are.
But we do have we have a couple of them that again we're.
We're optimistic that there'll be some upside potential on on those two matters around the middle part of the year.
Okay. Thank you and then as another follow up you talked about some of these <unk> projects.
Scott Thanisch: But we do have, we have a couple of them that again, we're, optimistic that there'll be some upside potential on those two matters around the middle part of the year. Okay, thank you. And there's another follow-up. You talked about some of these IT projects. The previous management team is working on a lot of stuff on the IT side. I think ERP.
Previous management team is working on a lot of stuff on the IP side.
The ERP.
When are those projects complete in your mind.
And what do you think the costs are associated with those.
Yes in terms of when we expect those to complete the we've got kind of three major projects that are going on on the it front, including the PDP system The project management system.
Scott Thanisch: When are those projects complete in your mind, and what do you think the costs are associated with them? Yeah, in terms of when we expect those to complete. We've got kind of three major projects that are going on on the IT front, including the P2P system, the project management system, and the GL conversion for the concrete business. The first two of those are on an earlier timeline.
And the.
GL conversion for the concrete business.
The first two of those are on.
Earlier timeline, you expect those to be operational by mid year.
Scott Thanisch: We expect those to be fully operational by mid-year. And then the GL conversion is later in the year, so that's second half work. We anticipate that we'll complete all three of those projects in the course of the year. And in terms of the spending to do that, it's basically at the level that you've seen in our last several quarters. It should be continuing at that level for three to four quarters. Okay, thank you.
Fully and then the GL conversion that is later in the year. So that's in the second half work, we anticipate that we will complete all three of those projects.
In the course of the year.
In terms of the spending to do that it's basically at the level that you see.
Our.
Last several quarters it should be continuing at that level.
Three to four quarters.
Travis Boone: Thanks. And ladies and gentlemen, at this time, we will conclude our question and answer session. I'd like to turn that floor back over to Travis Boone for any, Thank you.
Okay. Thank you.
Thanks.
And ladies and gentlemen at this time, we will conclude our question and answer session I'd like to turn that floor back over to Travis for any closing remarks.
Thank you.
Travis Boone: First, I want to say thank you to our shareholders for your continued support of our business. We are continuing to improve our business and also want to thank our employees for their hard work that has gotten us where we are. 2023 was a challenging year for us.
First I wanted to say.
Thank you to our shareholders for your continued support of our of our business.
We are we're continuing to improve our improve our business and.
And also want to thank our employees for their hard work that have.
Gotten us where we are we 2023 was a.
Was a challenging year for us we had a lot of a lot of hard work a lot of initiatives a lot of a lot of things going on in the business and everybody leaned in and and worked hard throughout the year. So definitely appreciate our employees and all of their hard work every day.
Travis Boone: We had a lot of hard work, a lot of initiatives, a lot of things going on in the business, and everybody stepped in and worked hard throughout the year. So I definitely appreciate our employees and all their hard work every day. Um, that will close it out, and thank you all for participating today. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. Thank you for attending. You may now disconnect your lines.
That will close it out and thank you all for participating today.
Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We thank you for attending you may now disconnect your lines.