HOUSTON, Dec. 21, 2010 (GLOBE NEWSWIRE) -- Orion Marine Group, Inc. (NYSE:ORN) (the "Company"), a leading heavy civil marine contractor, today provided an operations, market and outlook update.
In December, as part of its normal monthly review of backlog and work in progress, the Company identified changes in the anticipated timing and mix of projects as well as three jobs experiencing production issues. As a result, the Company expects to see a material change in its forecasted fourth quarter 2010 revenue and EBITDA margin. The Company is lowering its full year 2010 revenue goal from between $360 million and $370 million, to between $345 million and $355 million and is lowering its full year 2010 EBITDA margin goal from 16% - 18%, to 14% - 16%.
"We are not pleased with having to make this adjustment, but feel it is imperative to promptly update you given the changes we have seen," said Mike Pearson, Orion Marine Group's President and Chief Executive Officer. "We expect the revenue from any timing related shortfalls which occur during the quarter will be recognized in 2011. We have acted on those production issues which are within our control and have made the necessary changes to eliminate them in the future."
Factors affecting the fourth quarter:
Revenue Impacts
- Production schedule shifts
- Sub-contractor delays
EBITDA Impacts
- Revenue mix change
- Production issues
"We remind investors, that this is the construction business, and things can shift around for a variety of reasons," said Mr. Pearson. "We know these periods of unpredictability are a concern for shareholders and we are striving to continuously bring you our most up to date relevant information. We urge you to continue to focus on long term results and not short term fluctuations. Even with these changes, we continue to be an industry leader and should end 2010 with full year revenues that are double what they were in 2005, a strong stable balance sheet, positive year-over-year net income growth, positive year-over year EBITDA growth and a 17% to 21% growth in the top line. I know this is lower than we anticipated at the beginning of the year, but I can still look back on 2010 and be pleased with our growth and accomplishments, especially given the unforeseen changes we have seen in the competitive environment during the back half of the year."
Mr. Pearson continued, "There is no doubt, 2010 has seen many challenges. We cannot alter the existence of these challenges. We are working hard to meet them head on and deliver long-term value to our shareholders. For example, despite an unstable and uncertain time in the economic and political environments, work is still coming out for bid at a good pace and our end markets continue to support growth. In fact, we think we will end 2010 with a solid backlog and we are pleased with the amount of work that is stacking up across our market.
As we look ahead, we remain excited about future bid prospects and the strength of our end markets. Our goal is to double revenues again during the next five years while continuing to deliver solid bottom line results. We will accomplish this through growth opportunities, strategic acquisitions, and new services lines to complement our core capabilities. We feel there is plenty of market to support this growth and are optimistic about the road ahead."
Looking at 2011, the Company expects to continue to see positive long-term trends in port expansion, U.S. infrastructure updates, coastal and wetland restoration projects, expansion in the cruise industry and projects involving dredging services. Currently the Company is tracking approximately $5 billion of future bid opportunities and continues to see strong bidding activity across its markets and geographic areas. Given some of the uncertainties in the general economic and political environment, the Company believes it is prudent to reduce its full year 2011 revenue growth goal. The Company now believes it is reasonable to expect full year 2011 revenues will be at least flat as compared to 2010. This reduction includes the potential impacts from increased pricing pressure on larger jobs, general capital infrastructure improvement delays, reduced bridge work opportunities, and delays in port development. However, actual results could significantly exceed the Company's new full year revenue expectation if there is an easing of pricing pressures on the East Coast, passage of a new highway funding bill, better than expected lettings from the Army Corps of Engineers as a result of Harbor Maintenance Trust Fund legislation, better than expected international opportunities, or the acceleration of port expansion projects in our market areas.
With regard to EBITDA margins for 2011, the Company feels it is necessary to lower its previously stated full year 2011 EBITDA margin goal range of between 16% and 18% to between 14% and 16% as a results of the continued pricing pressure uncertainties which may result in projects with slightly lower than historical margins. As with revenue, there are several factors that could cause the actual full year 2011 EBITDA margins to exceed the Company's expectations including easing of pricing pressures on the East Coast, passage of a new highway funding bill, or better than expected lettings from the Army Corps of Engineers as a result of Harbor Maintenance Trust Fund legislation.
Conference Call Details
Orion Marine Group will conduct a telephone briefing to discuss this update at 10:00 a.m. Eastern Time/9:00 a.m. Central Time on Tuesday, December 21, 2010. To listen to a live broadcast of this briefing, visit the Investor Relations section of the Company's website at . To participate in the call, please call the Orion Marine Group Full Year 2010 Update Conference Call at 866-831-6267; participant code 46019073.
A replay of this briefing will be available on the Web site within 24 hours and will be archived for at least two weeks.
About Orion Marine Group
Orion Marine Group, Inc. provides a broad range of marine construction and specialty services on, over and under the water along the Gulf Coast, the Atlantic Seaboard, the West Coast, Alaska, Canada and the Caribbean Basin and acts as a single source turn-key solution for its customers' marine contracting needs. Its heavy civil marine construction services include marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging, and specialty services. Its specialty services include salvage, demolition, diving, surveying, towing and underwater inspection, excavation and repair. The Company is headquartered in Houston, Texas and has an almost 100-year legacy of successful operations.
The Orion Marine Group, Inc. logo is available at
EBITDA and EBITDA Margin
This press release includes the financial measures "EBITDA" and "EBITDA margin". These measurements may be deemed "non-GAAP financial measures" under rules of the Securities and Exchange Commission, including Regulation G. The non-GAAP financial information may be determined or calculated differently by other companies. By reporting such non-GAAP financial information, the Company does not intend to give such information greater prominence than comparable and other GAAP financial information, which information is of equal or greater importance.
Orion Marine Group defines EBITDA as net income before net interest expense, income taxes, depreciation and amortization. EBITDA margin is calculated by dividing EBITDA for the period by contract revenues for the period. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by contract revenues. EBITDA and EBITDA margin are used internally to evaluate current operating expense, operating efficiency, and operating profitability on a variable cost basis, by excluding the depreciation and amortization expenses, primarily related to capital expenditures and acquisitions, and net interest and tax expenses. Additionally, EBITDA and EBITDA margin provide useful information regarding the Company's ability to meet future debt repayment requirements and working capital requirements while providing an overall evaluation of the Company's financial condition. In addition, EBITDA is used internally for incentive compensation purposes. The Company includes EBITDA and EBITDA margin to provide transparency to investors as they are commonly used by investors and others in assessing performance. EBITDA and EBITDA margin have certain limitations as analytical tools and should not be used as a substitute for operating margin, net income, cash flows, or other data prepared in accordance with generally accepted accounting principles in the United States, or as a measure of the Company's profitability or liquidity.
A reconciliation of the Company's future EBITDA margin to the corresponding GAAP measure is not available as these are estimated goals for the performance of the overall operations over the planning period. These estimated goals are based on assumptions that may be affected by actual outcomes, including but not limited to the factors noted in the "forward looking statements" herein, in other releases, and in filings with the Securities and Exchange Commission.
Forward-Looking Statements
The matters discussed in this press release may constitute or include projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of which the Company is availing itself. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'seeks', 'approximately', 'intends', 'plans', 'estimates', or 'anticipates', or the negative thereof or other comparable terminology, or by discussions of strategy, plans, objectives, intentions, estimates, forecasts, assumptions, or goals. In particular, statements regarding future operations or results, including those set forth in this press release (including those under "Outlook" above), and any other statement, express or implied, concerning future operating results or the future generation of or ability to generate revenues, income, net income, profit, EBITDA, EBITDA margin, or cash flow, including to service debt, and including any estimates, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward looking statements also include estimated project start date, anticipated revenues, and contract options which may or may not be awarded in the future. Forward looking statements involve risks, including those associated with the Company's fixed price contracts, unforeseen productivity delays that may alter the final profitability of the contract, cancellation of the contract by the customer for unforeseen reasons, delays or decreases in funding by the customer, and any potential contract options which may or may not be awarded in the future, and are the sole discretion of award by the customer. Past performance is not necessarily an indicator of future results. In light of these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that the Company's plans, estimates, forecasts, goals, intentions, or objectives will be achieved or realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update information contained in this press release whether as a result of new developments or otherwise.
Please refer to the Company's Annual Report on Form 10-K, filed on March 9, 2010, which is available on its website at or at the SEC's website at , for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts.
CONTACT: Orion Marine Group, Inc. Chris DeAlmeida, Director of Investor Relations 713-852-6506
