Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 1-33891 ORION GROUP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Del ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 1-33891 ORION GROUP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part provides the unaudited condensed consolidated financial statements and related notes for Orion Group Holdings, Inc. for Q1 2023 and 2022 [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section details the unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, cash flows, and comprehensive notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific quarter-end dates | Metric | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :----------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Total Assets | $344,187 | $367,155 | $(22,968) | | Total Liabilities | $218,630 | $229,355 | $(10,725) | | Total Stockholders' Equity | $125,557 | $137,800 | $(12,243) | | Cash and Cash Equivalents | $2,845 | $3,784 | $(939) | | Total Current Assets | $202,156 | $220,337 | $(18,181) | | Total Current Liabilities | $180,387 | $189,236 | $(8,849) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, including revenues, costs, and net loss for the reported periods | Metric | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------- | :--------- | | Contract Revenues | $159,174 | $174,931 | $(15,757) | -9.0% | | Costs of Contract Revenues | $153,334 | $162,115 | $(8,781) | -5.4% | | Gross Profit | $5,840 | $12,816 | $(6,976) | -54.4% | | Selling, General and Administrative Expenses | $17,017 | $16,170 | $847 | 5.2% | | Operating Loss | $(10,643) | $(2,855) | $(7,788) | 272.8% | | Net Loss | $(12,595) | $(4,856) | $(7,739) | 159.4% | | Basic Loss Per Share | $(0.39) | $(0.16) | $(0.23) | 143.8% | | Diluted Loss Per Share | $(0.39) | $(0.16) | $(0.23) | 143.8% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in stockholders' equity, including retained earnings and additional paid-in capital, over the reporting period | Metric | December 31, 2022 (Thousands) | March 31, 2023 (Thousands) | Change (Thousands) | | :-------------------------- | :-------------------------- | :------------------------- | :----------------- | | Total Stockholders' Equity | $137,800 | $125,557 | $(12,243) | | Retained Loss | $(44,172) | $(56,767) | $(12,595) | | Additional Paid-In Capital | $188,184 | $188,535 | $351 | - Stock-based compensation for the three months ended March 31, 2023, was **$524 thousand**[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports cash inflows and outflows from operating, investing, and financing activities for the specified periods | Metric | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | Change (Thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :----------------- | | Net Cash (Used in) Provided by Operating Activities | $(3,033) | $10,060 | $(13,093) | | Net Cash Used in Investing Activities | $(1,300) | $(2,810) | $1,510 | | Net Cash Provided by (Used in) Financing Activities | $3,394 | $(12,817) | $16,211 | | Net Change in Cash, Cash Equivalents and Restricted Cash | $(939) | $(5,567) | $4,628 | | Cash, Cash Equivalents and Restricted Cash at End of Period | $2,845 | $6,726 | $(3,881) | - Cash paid for interest increased significantly from **$154 thousand in Q1 2022 to $1,576 thousand in Q1 2023**[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Description of Business and Basis of Presentation](index=8&type=section&id=1.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes the company's business operations and the accounting principles used in preparing the financial statements - Orion Group Holdings, Inc. provides specialty construction services in infrastructure, industrial, and building sectors across the continental U.S., Alaska, Canada, and the Caribbean Basin[14](index=14&type=chunk) - The Company operates through two reportable segments: Marine (under the Orion brand) and Concrete (under the TAS Commercial Concrete brand)[15](index=15&type=chunk) - Management concluded that conditions previously raising substantial doubt about the Company's ability to continue as a going concern have been resolved due to a new **$103.0 million senior secured credit facility** entered into on May 15, 2023[25](index=25&type=chunk)[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting policies and methods applied in the preparation of the condensed consolidated financial statements - Revenue is primarily derived from construction contracts, recognized over time based on the percentage of actual contract costs incurred to total estimated costs[28](index=28&type=chunk)[30](index=30&type=chunk) - The Company records an allowance for credit losses against accounts receivable, which was **$0.5 million at March 31, 2023**, and **$0.6 million at December 31, 2022**[39](index=39&type=chunk) - Property and equipment are depreciated using the straight-line method over estimated useful lives ranging from 3 to 40 years, with dry-docking costs capitalized and amortized over three to seven years[52](index=52&type=chunk)[53](index=53&type=chunk) - The Company maintains various insurance coverages, including excess loss insurance for both marine and concrete segments, totaling **$200 million** in excess of primary coverage[70](index=70&type=chunk)[71](index=71&type=chunk) [3. Revenue](index=26&type=section&id=3.%20Revenue) This note provides a detailed breakdown of contract revenues by segment and service line for the reporting periods | Segment/Service Line | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | Change (Thousands) | Change (%) | | :------------------- | :------------------------------------ | :------------------------------------ | :----------------- | :--------- | | **Marine Segment** | | | | | | Construction | $54,012 | $59,152 | $(5,140) | -8.7% | | Dredging | $20,730 | $22,166 | $(1,436) | -6.5% | | Specialty Services | $4,556 | $3,162 | $1,394 | 44.1% | | **Marine segment total** | **$79,298** | **$84,480** | **$(5,182)** | **-6.1%** | | **Concrete Segment** | | | | | | Structural | $15,744 | $13,676 | $2,068 | 15.1% | | Light Commercial | $64,132 | $76,775 | $(12,643) | -16.5% | | Other | $0 | $0 | $0 | 0.0% | | **Concrete segment total** | **$79,876** | **$90,451** | **$(10,575)** | **-11.7%** | | **Total contract revenues** | **$159,174** | **$174,931** | **$(15,757)** | **-9.0%** | - Total contract revenues decreased by **9.0% year-over-year**, primarily driven by a decline in the Concrete segment's Light Commercial services and the Marine segment's Construction and Dredging services[77](index=77&type=chunk) [4. Concentration of Risk and Enterprise-Wide Disclosures](index=28&type=section&id=4.%20Concentration%20of%20Risk%20and%20Enterprise-Wide%20Disclosures) This note discloses significant concentrations of risk, including customer and geographic revenue concentrations | Customer Type | March 31, 2023 (Gross Receivables) | % of Total | December 31, 2022 (Gross Receivables) | % of Total | | :---------------- | :--------------------------------- | :--------- | :--------------------------------- | :--------- | | Federal Government | $11,006 | 7% | $4,612 | 3% | | State Governments | $3,862 | 2% | $3,111 | 2% | | Local Governments | $11,721 | 8% | $16,197 | 10% | | Private Companies | $126,408 | 83% | $134,317 | 85% | | **Total Gross Receivables** | **$152,997** | **100%** | **$158,237** | **100%** | | Customer Type | Three months ended March 31, 2023 (Contract Revenues) | % of Total | Three months ended March 31, 2022 (Contract Revenues) | % of Total | | :---------------- | :------------------------------------------ | :--------- | :------------------------------------------ | :--------- | | Federal Government | $23,056 | 14% | $22,695 | 13% | | State Governments | $18,328 | 12% | $7,704 | 4% | | Local Governments | $20,688 | 13% | $32,402 | 19% | | Private Companies | $97,102 | 61% | $112,130 | 64% | | **Total Contract Revenues** | **$159,174** | **100%** | **$174,931** | **100%** | - One private customer accounted for **10.9% of total current receivables** and **10.9% of total contract revenues** for the three months ended March 31, 2023[81](index=81&type=chunk)[82](index=82&type=chunk) - Foreign revenues, primarily from the Caribbean Basin, increased from **0.4% of total revenues in Q1 2022 to 1.7% in Q1 2023**[84](index=84&type=chunk) [5. Contracts in Progress](index=30&type=section&id=5.%20Contracts%20in%20Progress) This note details the status of uncompleted contracts, including costs incurred, estimated earnings, and billings to date | Metric | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | | :------------------------------------ | :-------------------------- | :-------------------------- | | Costs incurred on uncompleted contracts | $1,317,066 | $1,251,853 | | Estimated earnings | $187,445 | $180,705 | | Billings to date | $(1,511,064) | $(1,426,375) | | **Net Contracts in Progress** | **$(6,553)** | **$6,183** | - Remaining performance obligations totaled approximately **$467.4 million** as of March 31, 2023, with **94% expected to be recognized in the next 12 months**[86](index=86&type=chunk) - Contract assets include **$12.6 million** related to claims and unapproved change orders at March 31, 2023[85](index=85&type=chunk) [6. Property and Equipment](index=31&type=section&id=6.%20Property%20and%20Equipment) This note provides a breakdown of property and equipment, net of accumulated depreciation, by asset category | Asset Category | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :----------------------- | :-------------------------- | :-------------------------- | :----------------- | | Automobiles and trucks | $2,243 | $2,232 | $11 | | Building and improvements | $36,953 | $36,952 | $1 | | Construction equipment | $129,883 | $130,660 | $(777) | | Vessels and other equipment | $89,946 | $91,495 | $(1,549) | | Office equipment | $6,885 | $6,885 | $0 | | **Total Gross Property and Equipment** | **$265,910** | **$268,224** | **$(2,314)** | | Less: Accumulated depreciation | $(198,058) | $(195,948) | $(2,110) | | **Net Book Value of Depreciable Assets** | **$67,852** | **$72,276** | **$(4,424)** | | Construction in progress | $1,570 | $816 | $754 | | Land | $27,885 | $27,885 | $0 | | **Total Property and Equipment, Net** | **$97,307** | **$100,977** | **$(3,670)** | - Depreciation expense for the three months ended March 31, 2023, was **$4.6 million**, down from **$5.2 million** in the prior year[87](index=87&type=chunk) [7. Other Current Accounts Receivable](index=31&type=section&id=7.%20Other%20Current%20Accounts%20Receivable) This note details various other current accounts receivable, including accident loss, vendor, and purchase incentive receivables | Category | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Accident loss receivables | $1,296 | $1,328 | $(32) | | Vendor receivables | $729 | $807 | $(78) | | Purchase incentive receivable | $965 | $695 | $270 | | Bond premium dividend receivable | $431 | $391 | $40 | | Other current accounts receivable | $409 | $305 | $104 | | **Total other current accounts receivable** | **$3,830** | **$3,526** | **$304** | [8. Fair Value](index=31&type=section&id=8.%20Fair%20Value) This note discusses the fair value measurements of the company's financial instruments and assets - The Company's financial instruments like accounts receivable, other current assets, accounts payable, and other current liabilities approximate their fair values due to their short-term nature[90](index=90&type=chunk) | Asset | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | | :------------------------------------ | :-------------------------- | :-------------------------- | | Cash surrender value of life insurance policy | $1,895 | $1,811 | - The fair value of the Company's debt approximated its carrying value of **$40.0 million at March 31, 2023**, and **$35.7 million at December 31, 2022**, classified as Level 2 in the fair value hierarchy[95](index=95&type=chunk) [9. Intangible Assets](index=35&type=section&id=9.%20Intangible%20Assets) This note provides information on the company's finite-lived and indefinite-lived intangible assets and their amortization | Metric | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :------------------------------ | :-------------------------- | :-------------------------- | :----------------- | | Finite-lived intangible assets, end of period | $35,240 | $35,240 | $0 | | Total accumulated amortization | $(34,977) | $(34,815) | $(162) | | Net finite-lived intangible assets, end of period | $263 | $425 | $(162) | | Infinite-lived intangible assets | $6,892 | $6,892 | $0 | | **Total net intangible assets** | **$7,155** | **$7,317** | **$(162)** | - Amortization expense for finite-lived intangible assets was **$0.2 million** for the three months ended March 31, 2023, down from **$0.3 million** in the prior year[96](index=96&type=chunk) - The most recent annual impairment test of the indefinite-lived intangible asset (trade name) concluded no impairment was recorded[97](index=97&type=chunk) [10. Accrued Liabilities](index=36&type=section&id=10.%20Accrued%20Liabilities) This note details the various accrued liabilities, including salaries, insurance-covered liabilities, and taxes | Category | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :------------------------------------ | :-------------------------- | :-------------------------- | :----------------- | | Accrued salaries, wages and benefits | $9,718 | $7,605 | $2,113 | | Accrued liabilities expected to be covered by insurance | $4,968 | $5,757 | $(789) | | Sales taxes | $2,155 | $1,737 | $418 | | Property taxes | $561 | $522 | $39 | | Sale-leaseback arrangement | $830 | $813 | $17 | | Accounting and audit fees | $547 | $222 | $325 | | Interest | $93 | $60 | $33 | | Other accrued expenses | $1,967 | $1,750 | $217 | | **Total accrued liabilities** | **$20,839** | **$18,466** | **$2,373** | [11. Debt](index=36&type=section&id=11.%20Debt) This note provides a breakdown of the company's debt, including revolving credit facilities and other current and long-term obligations | Debt Type | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :---------------------- | :-------------------------- | :-------------------------- | :----------------- | | Revolving line of credit | $39,836 | $34,673 | $5,163 | | Other current debt | $286 | $283 | $3 | | **Total Current Debt** | **$40,122** | **$34,956** | **$5,166** | | Long-term debt | $(93) | $716 | $(809) | | **Total Debt** | **$40,029** | **$35,672** | **$4,357** | - The Credit Facility had a maturity date of July 31, 2023, and the Company had **$40.0 million outstanding** under the revolving line of credit as of March 31, 2023[100](index=100&type=chunk)[110](index=110&type=chunk) - The quarterly weighted average interest rate for the Credit Facility was **10.22%** as of March 31, 2023[104](index=104&type=chunk) - Post-quarter end, on May 15, 2023, the Company entered into a new three-year **$103.0 million senior secured credit facility** with White Oak, replacing the previous facility[115](index=115&type=chunk)[141](index=141&type=chunk) [12. Other Long-Term Liabilities](index=40&type=section&id=12.%20Other%20Long-Term%20Liabilities) This note details other long-term liabilities, such as sale-leaseback arrangements and deferred compensation | Category | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :------------------------------------ | :-------------------------- | :-------------------------- | :----------------- | | Sale-leaseback arrangement | $14,941 | $15,156 | $(215) | | Deferred compensation | $1,325 | $1,639 | $(314) | | Accrued liabilities expected to be covered by insurance | $311 | $277 | $34 | | **Total other long-term liabilities** | **$16,577** | **$17,072** | **$(495)** | - The sale-leaseback arrangement for the Channelview, Texas property, recorded as a failed sale-leaseback, had a liability of **$14.9 million** at March 31, 2023[117](index=117&type=chunk) [13. Income Taxes](index=40&type=section&id=13.%20Income%20Taxes) This note explains the company's income tax expense, effective tax rate, and valuation allowance on deferred tax assets | Metric | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | | :----------------- | :------------------------------------ | :------------------------------------ | | Income tax expense | $640 | $1,324 | | Effective tax rate | (5.4)% | (37.5)% | - The effective tax rate for Q1 2023 was **(5.4)%**, differing from the statutory federal rate of **21%** primarily due to the tax impact from the valuation allowance for current year activity, state income taxes, and non-deductibility of permanent items[119](index=119&type=chunk) - The Company maintains a valuation allowance on net deferred tax assets, believing it is more likely than not that some portion or all deferred tax assets will not be realized[120](index=120&type=chunk) [14. Earnings Per Share](index=42&type=section&id=14.%20Earnings%20Per%20Share) This note presents the basic and diluted loss per share calculations and the weighted average shares outstanding | Metric | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Basic Loss Per Share | $(0.39) | $(0.16) | | Diluted Loss Per Share | $(0.39) | $(0.16) | | Weighted average shares outstanding (Basic) | 32,180,274 | 30,971,379 | | Weighted average shares outstanding (Diluted) | 32,180,274 | 30,971,379 | - The Company had **280,644 potentially dilutive securities** in Q1 2023, but these were anti-dilutive and not included in EPS computation due to the net loss[122](index=122&type=chunk)[123](index=123&type=chunk) [15. Stock-Based Compensation](index=43&type=section&id=15.%20Stock-Based%20Compensation) This note details the compensation expense related to stock-based awards and the terms of recent grants - Compensation expense related to stock-based awards was **$0.5 million** for the three months ended March 31, 2023, up from **$0.4 million** in the prior year[126](index=126&type=chunk) - In January 2023, **180,333 shares of restricted common stock** were awarded to officers and executives, vesting over three years with a fair value of **$3.00 per share**[127](index=127&type=chunk) - In March 2023, **335,851 performance-based units** were granted to executives, vesting based on a three-year return on invested capital target, with a fair value of **$2.65 per unit**[128](index=128&type=chunk) - Total unrecognized compensation expense related to unvested stock was approximately **$3.1 million** at March 31, 2023, expected to be recognized over approximately **2.4 years**[129](index=129&type=chunk)[130](index=130&type=chunk) [16. Commitments and Contingencies](index=45&type=section&id=16.%20Commitments%20and%20Contingencies) This note discusses the company's involvement in legal proceedings and other commitments and contingencies - The Company is involved in various legal and other proceedings, but management believes none will have a material effect on financial condition, results of operations, or cash flows, having recorded adequate accrued liabilities and insurance coverage[132](index=132&type=chunk) [17. Segment Information](index=45&type=section&id=17.%20Segment%20Information) This note provides financial data broken down by the company's Marine and Concrete operating segments | Segment | Metric | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------- | :-------------------------- | :------------------------------------ | :------------------------------------ | :----------------- | :--------- | | **Marine** | Contract revenues | $79,298 | $84,480 | $(5,182) | -6.1% | | | Operating (loss) income | $(6,080) | $1,840 | $(7,920) | -430.4% | | | Depreciation and amortization expense | $(3,835) | $(4,323) | $488 | -11.3% | | | Total assets | $231,851 | $173,577 | $58,274 | 33.6% | | | Property and equipment, net | $88,957 | $92,725 | $(3,768) | -4.1% | | **Concrete** | Contract revenues | $79,876 | $90,451 | $(10,575) | -11.7% | | | Operating loss | $(4,563) | $(4,695) | $132 | -2.8% | | | Depreciation and amortization expense | $(1,611) | $(1,940) | $329 | -17.0% | | | Total assets | $112,336 | $167,299 | $(54,963) | -32.8% | | | Property and equipment, net | $8,350 | $12,249 | $(3,899) | -31.8% | - The Marine segment's operating income decreased significantly by **$7.9 million**, moving from a profit to a loss, primarily due to decreased revenue, write-downs on low-margin projects, and lower utilization[133](index=133&type=chunk)[167](index=167&type=chunk) - The Concrete segment's operating loss slightly decreased by **$0.1 million**, attributed to lower indirect costs from winding down the central Texas region, partially offset by project write-downs[133](index=133&type=chunk)[169](index=169&type=chunk) [18. Leases](index=46&type=section&id=18.%20Leases) This note details the company's operating and financing lease assets and liabilities, along with lease costs and cash flows | Lease Type | March 31, 2023 (Thousands) | December 31, 2022 (Thousands) | Change (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Operating lease right-of-use assets, net | $14,765 | $14,978 | $(213) | | Financing lease right-of-use assets, net | $15,202 | $15,839 | $(637) | | **Total Lease Assets** | **$29,967** | **$30,817** | **$(850)** | | Current Operating Lease Liabilities | $4,936 | $4,738 | $198 | | Current Financing Lease Liabilities | $3,486 | $4,031 | $(545) | | Noncurrent Operating Lease Liabilities | $10,609 | $11,018 | $(409) | | Noncurrent Financing Lease Liabilities | $10,882 | $11,102 | $(220) | | **Total Lease Liabilities** | **$29,913** | **$30,889** | **$(976)** | | Metric | Three Months Ended March 31, 2023 (Thousands) | Three Months Ended March 31, 2022 (Thousands) | Change (Thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :----------------- | | Total lease cost | $2,951 | $2,560 | $391 | | Operating cash flows for operating leases | $1,391 | $1,325 | $66 | | Financing cash flows for finance leases | $779 | $637 | $142 | - The weighted average remaining lease term for operating leases was **3.70 years** (down from 3.90 years) and for financing leases was **4.02 years** (down from 4.36 years) as of March 31, 2023[136](index=136&type=chunk) [19. Subsequent Events](index=48&type=section&id=19.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date, including land sales and new credit facilities - On April 26, 2023, the Company entered into a Land Sale Contract to sell two parcels of land in Harris County, Texas, for approximately **$36.0 million**, with closing anticipated by September 29, 2023[139](index=139&type=chunk) - On May 15, 2023, the Company secured a new three-year **$103.0 million senior secured credit facility** with White Oak, comprising a **$65.0 million asset-based revolving credit facility** and a **$38.0 million fixed asset term loan**, replacing the previous facility[141](index=141&type=chunk)[142](index=142&type=chunk) - Concurrently with the new credit facility, the Company entered into a **$13.0 million sale-leaseback** of certain concrete segment equipment with Gordon Brothers[141](index=141&type=chunk)[142](index=142&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=49&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial condition and operational results for Q1 2023, highlighting revenue declines, increased losses, and liquidity management [Overview](index=49&type=section&id=Overview) This section provides a general description of the company's business, contract types, and factors influencing performance - Orion Group Holdings, Inc. provides specialty construction services in infrastructure, industrial, and building sectors across the continental U.S., Alaska, and the Caribbean Basin, operating through marine and concrete segments[148](index=148&type=chunk)[150](index=150&type=chunk) - The Company's contracts are primarily obtained through competitive bidding and negotiation, with most revenue derived from fixed-price contracts recognized over time based on the percentage of costs incurred[151](index=151&type=chunk)[152](index=152&type=chunk) - Factors like bid accuracy, commodity price increases, customer delays, weather, labor availability, and equipment/material proximity can impact contract performance and profitability[152](index=152&type=chunk) [Consolidated Results of Operations](index=51&type=section&id=Consolidated%20Results%20of%20Operations) This section analyzes the company's overall financial performance, including revenue, gross profit, operating loss, and SG&A expenses | Metric | March 31, 2023 (Millions) | December 31, 2022 (Millions) | September 30, 2022 (Millions) | June 30, 2022 (Millions) | March 31, 2022 (Millions) | | :-------------- | :------------------------ | :--------------------------- | :---------------------------- | :----------------------- | :------------------------ | | Marine segment | $187.0 | $216.7 | $280.2 | $281.0 | $317.4 | | Concrete segment | $280.4 | $232.1 | $268.4 | $322.2 | $286.7 | | **Consolidated** | **$467.4** | **$448.8** | **$548.6** | **$603.2** | **$604.1** | - Consolidated backlog increased to **$467.4 million** at March 31, 2023, from **$448.8 million** at December 31, 2022, but was lower than previous quarters in 2022[154](index=154&type=chunk) - Contract revenues decreased by **9.0% to $159.2 million**, and gross profit decreased by **54.4% to $5.8 million**, with gross profit margin falling from **7.3% to 3.7%** year-over-year[156](index=156&type=chunk)[157](index=157&type=chunk) - Operating loss significantly widened to **$(10.6) million** from **$(2.9) million** in the prior year, primarily due to lower revenues, weather impacts in Texas, and write-downs on low-margin projects[156](index=156&type=chunk)[158](index=158&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **5.2% to $17.0 million**, and as a percentage of revenues, rose from **9.1% to 10.8%** due to lower revenues[159](index=159&type=chunk) [Segment Results](index=54&type=section&id=Segment%20Results) This section provides a detailed analysis of the financial performance for the Marine and Concrete operating segments | Segment | Metric | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | Change (Thousands) | Change (%) | | :-------- | :-------------------------- | :------------------------------------ | :------------------------------------ | :----------------- | :--------- | | **Marine** | Contract revenues | $79,298 | $84,480 | $(5,182) | -6.1% | | | Operating (loss) income | $(6,080) | $1,840 | $(7,920) | -430.4% | | **Concrete** | Contract revenues | $79,876 | $90,451 | $(10,575) | -11.7% | | | Operating loss | $(4,563) | $(4,695) | $132 | -2.8% | - Marine segment revenues decreased by **6.1%** due to weather and customer delays, leading to an operating loss of **$6.1 million** compared to an operating income of **$1.8 million** in the prior year[166](index=166&type=chunk)[167](index=167&type=chunk) - Concrete segment revenues decreased by **11.7%** due to weather, customer delays, and a reduction in central Texas revenue, resulting in a slight decrease in operating loss from **$4.7 million to $4.6 million**[168](index=168&type=chunk)[169](index=169&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's working capital, cash flows, and capital expenditures, and their impact on liquidity | Metric | Three months ended March 31, 2023 (Thousands) | Three months ended March 31, 2022 (Thousands) | Change (Thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :----------------- | | Working Capital | $21,800 | N/A | N/A | | Unrestricted Cash on Hand | $2,800 | N/A | N/A | | Borrowing Capacity (Revolving Credit Facility) | $1,000 | N/A | N/A | | Net Cash (Used in) Provided by Operating Activities | $(3,033) | $10,060 | $(13,093) | | Net Cash Used in Investing Activities | $(1,300) | $(2,810) | $1,510 | | Net Cash Provided by (Used in) Financing Activities | $3,394 | $(12,817) | $16,211 | | Capital Expenditures | $(1,876) | $(3,523) | $1,647 | - Working capital decreased from **$31.1 million** at December 31, 2022, to **$21.8 million** at March 31, 2023[171](index=171&type=chunk) - The Company used **$3.0 million in cash from operating activities** in Q1 2023, a significant shift from **$10.1 million provided in Q1 2022**, primarily due to cash outflows from net income and changes in working capital[173](index=173&type=chunk) - Capital expenditures decreased to **$1.9 million** in Q1 2023 from **$3.5 million** in Q1 2022[174](index=174&type=chunk) [Sources of Capital](index=59&type=section&id=Sources%20of%20Capital) This section outlines the company's capital sources, including credit facilities and recent financing activities - The Company obtained an extension of consent from Credit Facility lenders regarding its annual financial statements and certain leverage and fixed charge coverage ratios for Q1 2023[176](index=176&type=chunk) - On May 15, 2023, the Company secured a new three-year **$103.0 million senior secured credit facility** with White Oak, including a **$65.0 million asset-based revolving credit facility** and a **$38.0 million fixed asset term loan**[176](index=176&type=chunk) [Bonding Capacity](index=59&type=section&id=Bonding%20Capacity) This section details the company's available bonding capacity and its current utilization for projects - As of March 31, 2023, the Company had a bonding capacity of at least **$750 million**, with approximately **$210 million of projects currently bonded**[178](index=178&type=chunk) - Management believes its balance sheet and working capital position will allow continued access to its bonding capacity[178](index=178&type=chunk) [Effect of Inflation](index=59&type=section&id=Effect%20of%20Inflation) This section addresses the impact of inflation on the company's costs and its strategies for mitigation - The Company is subject to inflation risks from increases in raw material costs (e.g., fuel, concrete, steel) but generally mitigates this by including anticipated price increases in bids due to the short-term duration of projects[179](index=179&type=chunk)[181](index=181&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=59&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's exposure to market risks, including commodity price fluctuations and interest rate changes on variable-rate debt - The Company is exposed to commodity price risk for concrete, steel products, and fuel, but generally includes anticipated price increases in bids due to the short-term nature of its fixed-price contracts[181](index=181&type=chunk) - As of March 31, 2023, with **$40.0 million** in outstanding borrowings under its credit facility at a **10.20% weighted average interest rate**, a **100 basis-point increase in LIBOR** (or successor rate) would increase annual interest expense by approximately **$0.4 million**[182](index=182&type=chunk) - Foreign currency fluctuation exposure has been immaterial and limited to temporary field accounts[180](index=180&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=61&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management assessed the effectiveness of disclosure controls and procedures as of March 31, 2023, finding them effective with no material changes - The Company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2023[183](index=183&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2023[184](index=184&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, and other required information [ITEM 1. LEGAL PROCEEDINGS](index=61&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal proceedings information is incorporated by reference from Note 16, indicating no material adverse effect on the company is expected - Information on legal proceedings is incorporated by reference from Note 16, which indicates no material effect on the Company's financial condition, results of operations, or cash flows is expected[185](index=185&type=chunk)[132](index=132&type=chunk) [ITEM 1A. RISK FACTORS](index=61&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to the risk factors previously disclosed in the Company's 2022 Form 10-K were reported - No material changes to the risk factors previously disclosed in the 2022 Form 10-K were reported[186](index=186&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=61&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No sales of equity securities occurred in the period ended March 31, 2023 - No sales of equity securities occurred in the period ended March 31, 2023[187](index=187&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=61&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported - No defaults upon senior securities were reported[188](index=188&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=61&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine Safety Disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[189](index=189&type=chunk) [ITEM 5. OTHER INFORMATION](index=61&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other information was reported - No other information was reported[190](index=190&type=chunk) [ITEM 6. EXHIBITS](index=63&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, recent contracts, and required certifications - Exhibits include the Amended and Restated Certificate of Incorporation and Bylaws[192](index=192&type=chunk) - Recent contracts filed as exhibits include a Land Sale Contract (April 26, 2023), a Consent Letter (May 5, 2023), and a Loan Agreement (May 15, 2023) for the new credit facility[192](index=192&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are included[192](index=192&type=chunk) [SIGNATURES](index=65&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers, certifying the report - The report was signed by Travis J. Boone, President and Chief Executive Officer, and Scott Thanisch, Executive Vice President and Chief Financial Officer, on May 15, 2023[198](index=198&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 1-33891 ORION GROUP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware S ...

Orion Group Holdings, Inc. (NYSE:ORN) Q4 2022 Earnings Conference Call March 15, 2023 10:00 AM ET Company Participants Margaret Boyce - IR Travis Boone - CEO Scott Thanisch - CFO Conference Call Participants Julio Romero - Sidoti & Company Joe Gomes - Noble Capital Alex Rygiel - B. Riley Securities Dave Storms - Stonegate Capital Markets Operator Good day, and welcome to Orion Group Holdings Fourth Quarter and Full Year 2022 Earnings Conference Call and Webcast. [Operator Instructions] On today's call, mana ...

Start Time: 10:00 January 1, 0000 11:01 AM ET Orion Group Holdings, Inc. (NYSE:ORN) Q3 2022 Earnings Conference Call October 27, 2022, 10:00 AM ET Company Participants Travis Boone - President and CEO Scott Thanisch - EVP and CFO Francis Okoniewski - Vice President, Investor Relations Conference Call Participants Joe Gomes - Noble Capital Min Cho - B. Riley Julio Romero - Sidoti & Company Dave Storms - Stonegate Poe Fratt - Alliance Global Partners David Wright - Henry Investment Trust Operator Thank you fo ...

Financial Data and Key Metrics Changes - Revenues for Q2 2022 were $195 million, an increase from $146 million in Q2 2021 and $175 million in Q1 2022, primarily due to higher volume in the Concrete business and the startup of large jobs in the Marine business [16] - Gross profit for Q2 2022 was $14.3 million, up from $12.3 million in the prior year, driven by efficiencies in equipment and labor utilization [17] - Net loss for Q2 2022 was $3.1 million, or $0.10 diluted loss per share, with an adjusted net loss of $0.9 million, or $0.03 loss per share [21] Business Line Data and Key Metrics Changes - Marine segment revenues were $82.3 million with adjusted EBITDA of $8.7 million and an adjusted EBITDA margin of 10.6%, compared to $63.9 million in revenue and an adjusted EBITDA margin of 12.2% in the prior year [18] - Concrete segment revenues were $112.3 million with adjusted EBITDA of a negative $3 million and an adjusted EBITDA margin of negative 2.7%, compared to $81.9 million in revenue and an adjusted EBITDA margin of negative 0.5% in the prior year [19] Market Data and Key Metrics Changes - As of June 30, 2022, backlog was $603 million, up from $394 million at the end of the prior year, with $281 million in the Marine segment and $322 million in the Concrete segment [23] - The company bid on approximately $1.8 billion worth of opportunities in Q2 2022, achieving a win rate of 10.8% [23] Company Strategy and Development Direction - The company is focused on margin improvement across all projects, capturing cost escalations, downsizing unproductive markets, and monetizing real estate [11] - A new management team is being onboarded, with expectations to enhance the company's operational foundation [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the impact of the Infrastructure Act and noted that the Marine market remains strong, with expectations for increased activity in the fourth quarter [33] - The company is cautious about revenue in the Concrete segment, focusing on improving margins rather than chasing low bids [30] Other Important Information - The company is in compliance with its credit agreement covenants, with $33 million of outstanding debt and $8.1 million of cash as of June 30, 2022 [24] - The company is working on real estate transactions that are expected to close in the second half of the year, which will enhance liquidity [13] Q&A Session Summary Question: Insights on Marine segment successful bids - Management indicated that the successful bids of $149 million in Marine are a mix of public and private projects, with margins ranging from 10% to 12.5% [28] Question: Profitability trends in Concrete - Management noted that profitability in Concrete trended down due to inefficiencies and emphasized a focus on margin improvement moving forward [30] Question: Demand trends in private markets - Management reported strong demand in both Marine and Concrete markets, with no signs of margin compression [32] Question: Utilization of fleet and equipment - Management highlighted recent improvements in equipment utilization and the introduction of new marine assets expected to enhance revenue and margins [35] Question: Update on real estate sales - Management confirmed two pending transactions in Port Lavaca valued at approximately $17.5 million, expected to close in Q3 or Q4 [37] Question: Expectations for Concrete profitability in Q3 - Management expressed optimism for profitability in the Concrete segment for the entire quarter in Q3, following recent improvements [42] Question: CapEx outlook for 2022 and 2023 - Management projected a CapEx of $16 million for 2022, with expectations for an increase in 2023 depending on new management strategies [47] Question: Cost pressures in Concrete and Marine - Management acknowledged cost pressures across various materials and emphasized the importance of including escalation clauses in contracts [69]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 1-33891 ORION GROUP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware ...

Orion Group Holdings, Inc. (NYSE:ORN) Q1 2022 Earnings Conference Call April 28, 2022 10:00 AM ET Company Participants Francis Okoniewski - Vice President, Investor Relations Austin Shanfelter - Interim Chief Executive Officer Craig Owen - Chief Financial Officer Advisor Conference Call Participants Joe Gomes - NOBLE Capital Julio Romero - Sidoti Alex Rygiel - B. Riley Marco Rodriguez - Stonegate Capital Markets Poe Fratt - Alliance Global Partners Operator Greetings and welcome to Orion Group Holdings, Inc ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and comprehensive notes for the period ended March 31, 2022 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $6,726 | $12,293 | | Total current assets | $186,040 | $197,934 | | Total assets | $340,876 | $351,750 | | Total current liabilities | $153,319 | $161,737 | | Total liabilities | $197,279 | $203,652 | | Total stockholders' equity | $143,597 | $148,098 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) **Condensed Consolidated Statements of Operations (in thousands):** | Item | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Contract revenues | $174,931 | $153,309 | | Gross profit | $12,816 | $15,455 | | Operating (loss) income | $(2,855) | $2,055 | | Net (loss) income | $(4,856) | $928 | | Basic (loss) earnings per share | $(0.16) | $0.03 | | Diluted (loss) earnings per share | $(0.16) | $0.03 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) **Condensed Consolidated Statements of Comprehensive (Loss) Income (in thousands):** | Item | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net (loss) income | $(4,856) | $928 | | Total comprehensive (loss) income | $(4,856) | $1,105 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) **Condensed Consolidated Statements of Stockholders' Equity (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Total stockholders' equity | $143,597 | $148,098 | | Net loss | $(4,856) | N/A | | Stock-based compensation | $370 | N/A | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows (in thousands):** | Item | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $10,060 | $9,118 | | Net cash (used in) provided by investing activities | $(2,810) | $772 | | Net cash used in financing activities | $(12,817) | $(6,837) | | Net change in cash, cash equivalents and restricted cash | $(5,567) | $3,053 | | Cash, cash equivalents and restricted cash at end of period | $6,726 | $4,642 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Description of Business and Basis of Presentation](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes Orion Group Holdings' specialty construction services across various sectors and its operating segments, affirming adequate liquidity for continued operations - Orion Group Holdings, Inc. provides specialty construction services in infrastructure, industrial, and building sectors across the continental United States, Alaska, Canada, and the Caribbean Basin[17](index=17&type=chunk) - The company operates in two reportable segments: Marine (under the Orion brand) and Concrete (under the TAS Commercial Concrete brand)[18](index=18&type=chunk) - Management believes the company will have adequate liquidity for its operations for at least the next 12 months, concluding that substantial doubt about its ability to continue as a going concern is not raised[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's key accounting policies, including revenue recognition, credit loss allowances, and insurance claims liabilities - Revenue from construction contracts is generally recognized over time, measured by the percentage of actual contract costs incurred to total estimated costs[30](index=30&type=chunk) - The allowance for credit losses for trade accounts receivable remained at **$0.3 million** for both March 31, 2022, and December 31, 2021[43](index=43&type=chunk) - Total accrual for insurance claims liabilities decreased significantly from **$19.8 million** at December 31, 2021, to **$5.2 million** at March 31, 2022[74](index=74&type=chunk) [3. Revenue](index=28&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%203.%20Revenue) This note details contract revenues by segment, highlighting increases in both Marine and Concrete segments for the period **Contract Revenues by Segment (in thousands):** | Segment | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :---------------- | :-------------------------------- | :-------------------------------- | | Marine Segment | $84,480 | $72,146 | | Concrete Segment | $90,451 | $81,163 | | **Total** | **$174,931** | **$153,309** | - Marine segment construction revenues increased from **$43.94 million** in 2021 to **$59.15 million** in 2022[75](index=75&type=chunk) - Concrete segment light commercial revenues increased from **$64.50 million** in 2021 to **$76.78 million** in 2022[75](index=75&type=chunk) [4. Concentration of Risk and Enterprise-Wide Disclosures](index=30&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%204.%20Concentration%20of%20Risk%20and%20Enterprise-Wide%20Disclosures) This note outlines the company's concentrations of current receivables and contract revenues by customer type, identifying significant private sector and federal government contributions **Concentrations of Current Receivables (Trade and Retainage) at March 31, 2022 (in thousands):** | Customer Type | Amount | Percentage | | :---------------- | :----- | :--------- | | Federal Government | $8,380 | 6 % | | State Governments | $571 | - % | | Local Governments | $19,929 | 14 % | | Private Companies | $114,690 | 80 % | | **Gross receivables** | **$143,570** | **100 %** | **Concentrations of Contract Revenue for Three Months Ended March 31, 2022 (in thousands):** | Customer Type | Amount | Percentage | | :---------------- | :----- | :--------- | | Federal Government | $22,695 | 13 % | | State Governments | $7,704 | 4 % | | Local Governments | $32,402 | 19 % | | Private Companies | $112,130 | 64 % | | **Total contract revenues** | **$174,931** | **100 %** | - One customer in the Federal Government category accounted for **10.4%** of total contract revenues for the three months ended March 31, 2022[80](index=80&type=chunk) [5. Contracts in Progress](index=32&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%205.%20Contracts%20in%20Progress) This note details the company's contract assets and liabilities, including remaining performance obligations and their expected recognition timeline **Contracts in Progress (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Costs incurred on uncompleted contracts | $1,150,314 | $1,138,298 | | Estimated earnings | $164,867 | $168,861 | | Less: Billings to date | $(1,323,300) | $(1,305,628) | | **Net contract position** | **$(8,119)** | **$1,531** | | Contract assets | $24,474 | $28,529 | | Contract liabilities | $(32,593) | $(26,998) | - Remaining performance obligations totaled approximately **$604.1 million** as of March 31, 2022, with **82% ($495.8 million)** expected to be recognized in the next 12 months[84](index=84&type=chunk) [6. Property and Equipment](index=34&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%206.%20Property%20and%20Equipment) This note presents the net book value of property and equipment, including depreciation expense and collateral pledges **Property and Equipment, Net (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Net book value of depreciable assets | $68,256 | $72,262 | | Construction in progress | $8,833 | $6,507 | | Land | $27,885 | $27,885 | | **Total property and equipment, net** | **$104,974** | **$106,654** | - Depreciation expense was **$5.2 million** for the three months ended March 31, 2022, compared to **$5.3 million** in the prior year period[86](index=86&type=chunk) - Substantially all of the company's assets are pledged as collateral under its Credit Agreement[86](index=86&type=chunk) [7. Other Current Accounts Receivable](index=34&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%207.%20Other%20Current%20Accounts%20Receivable) This note details other current accounts receivable, including insurance claims and accident loss receivables **Other Current Accounts Receivable (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Insurance claims receivable | $1,580 | $13,273 | | Accident loss receivables | $1,032 | $3,760 | | Other current receivables | $1,101 | $552 | | **Total other current accounts receivable** | **$3,713** | **$17,585** | [8. Fair Value](index=34&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%208.%20Fair%20Value) This note discusses the fair value measurements of financial assets and liabilities, including life insurance policies and debt **Recurring Financial Assets at Fair Value (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Cash surrender value of life insurance policy | $2,622 | $2,813 | - The cash surrender value of life insurance policies is measured using Level 2 inputs within the fair value hierarchy[91](index=91&type=chunk) - The fair value of the company's debt approximated its carrying value of **$28.6 million** at March 31, 2022, and **$39.4 million** at December 31, 2021, and would be classified as Level 2[93](index=93&type=chunk) [9. Goodwill and Intangible Assets](index=37&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%209.%20Goodwill%20and%20Intangible%20Assets) This note provides details on the company's goodwill and intangible assets, including amortization expense and impairment testing **Goodwill and Intangible Assets (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Net finite-lived intangible assets | $1,354 | $1,664 | | Infinite-lived intangible assets | $6,892 | $6,892 | | **Total net intangible assets** | **$8,246** | **$8,556** | - Amortization expense for finite-lived intangible assets was **$0.3 million** for the three months ended March 31, 2022[95](index=95&type=chunk) - The most recent annual impairment test of the indefinite-lived intangible asset (trade name) concluded no impairment was recorded[96](index=96&type=chunk) [10. Accrued Liabilities](index=38&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2010.%20Accrued%20Liabilities) This note details various accrued liabilities, including salaries, insurance-covered liabilities, and sales taxes **Accrued Liabilities (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Accrued salaries, wages and benefits | $9,240 | $9,879 | | Accrued liabilities expected to be covered by insurance | $5,169 | $19,818 | | Sales taxes | $3,495 | $5,113 | | **Total accrued liabilities** | **$21,141** | **$38,594** | - The company has a remaining **$3.8 million** of CARES Act deferred Social Security taxes due in December 2022[99](index=99&type=chunk) [11. Long-term Debt and Line of Credit](index=38&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2011.%20Long-term%20Debt%20and%20Line%20of%20Credit) This note details the company's total debt, including revolving line of credit and compliance with financial covenants **Total Debt (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Revolving line of credit (principal) | $27,400 | $39,000 | | Other debt (current) | $272 | $141 | | Other debt (long-term) | $929 | $259 | | **Total debt** | **$28,601** | **$39,400** | - Effective March 1, 2022, the Ninth Amendment to the Credit Agreement reduced the commitment on the revolving line of credit to **$42.5 million** and waived certain covenant defaults[102](index=102&type=chunk) - The company was in compliance with all financial covenants as of March 31, 2022[114](index=114&type=chunk) [12. Other Long-Term Liabilities](index=42&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2012.%20Other%20Long-Term%20Liabilities) This note outlines other long-term liabilities, including sale-leaseback arrangements, deferred compensation, and insurance-covered accruals **Other Long-Term Liabilities (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Sale-leaseback arrangement | $15,773 | $15,969 | | Deferred compensation | $2,508 | $2,759 | | Accrued liabilities expected to be covered by insurance | $249 | $214 | | **Total other long-term liabilities** | **$18,530** | **$18,942** | [13. Income Taxes](index=44&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2013.%20Income%20Taxes) This note details income tax expense and the effective tax rate, explaining the impact of valuation allowances and permanent items **Income Tax Expense and Effective Tax Rate (in thousands):** | Item | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Income tax expense | $1,324 | $150 | | Effective tax rate | (37.5)% | 13.9 % | - The effective tax rate for the three months ended March 31, 2022, was **(37.5%)**, primarily due to the movement in the valuation allowance for current year activity, state income taxes, and non-deductibility of other permanent items[120](index=120&type=chunk) - Management believes that a valuation allowance on the net deferred tax assets at March 31, 2022, remains appropriate[121](index=121&type=chunk) [14. Earnings Per Share](index=44&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2014.%20Earnings%20Per%20Share) This note presents basic and diluted earnings per share calculations, noting the impact of net loss on potentially dilutive securities **Shares Used to Compute (Loss) Income Per Share:** | Item | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Basic weighted average shares outstanding | 30,971,379 | 30,465,475 | | Diluted weighted average shares outstanding | 30,971,379 | 30,499,978 | - Basic and diluted loss per share for the three months ended March 31, 2022, was **$(0.16)**, compared to earnings per share of **$0.03** in the prior year[11](index=11&type=chunk) - Potentially dilutive securities were antidilutive in the current period due to the net loss[125](index=125&type=chunk) [15. Stock-Based Compensation](index=46&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2015.%20Stock-Based%20Compensation) This note details stock-based compensation expense and the unrecognized compensation related to unvested stock - Stock-based compensation expense was **$0.4 million** for both the three months ended March 31, 2022, and 2021[128](index=128&type=chunk) - Total unrecognized compensation expense related to unvested stock was approximately **$2.7 million** at March 31, 2022, expected to be recognized over approximately **2.0 years**[130](index=130&type=chunk) [16. Commitments and Contingencies](index=46&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2016.%20Commitments%20and%20Contingencies) This note discusses liabilities and reimbursements related to the August 2020 dredge fire incident, confirming settlement within insurance limits - The company recognized **$206.5 million** in total liabilities related to the August 2020 dredge fire incident, including **$206.0 million** paid to date for settlements and wreck removal costs[133](index=133&type=chunk) - Insurance carriers have reimbursed the company **$203.9 million** to date, and all claims arising from the incident have been settled within insurance coverage limits[133](index=133&type=chunk) [17. Segment Information](index=50&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2017.%20Segment%20Information) This note provides segment-level performance data, highlighting revenue growth and operating income changes for Marine and Concrete segments **Segment Performance (in thousands):** | Segment | Contract Revenues (3M 2022) | Operating Income (Loss) (3M 2022) | Contract Revenues (3M 2021) | Operating Income (Loss) (3M 2021) | | :---------------- | :-------------------------- | :-------------------------------- | :-------------------------- | :-------------------------------- | | Marine | $84,480 | $1,840 | $72,146 | $2,848 | | Concrete | $90,451 | $(4,695) | $81,163 | $(793) | - Marine segment contract revenues increased by **17.1%**, but operating income decreased by **$1.0 million**[136](index=136&type=chunk) - Concrete segment contract revenues increased by **11.4%**, but operating loss widened by **$3.9 million** due to project write-downs and unabsorbed indirect expenses[136](index=136&type=chunk) [18. Leases](index=51&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2018.%20Leases) This note details the company's lease assets and liabilities, along with the components of lease expense for operating and financing leases **Lease Assets and Liabilities (in thousands):** | Item | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Operating lease right-of-use assets, net | $15,006 | $14,686 | | Financing lease right-of-use assets, net | $17,472 | $14,561 | | Total assets | $32,478 | $29,247 | | Total current lease liabilities | $8,675 | $7,263 | | Total noncurrent lease liabilities | $24,314 | $22,545 | | **Total liabilities** | **$32,989** | **$29,808** | **Components of Lease Expense (in thousands):** | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $1,317 | $1,654 | | Short-term lease cost | $316 | $690 | | Interest on lease liabilities (financing) | $167 | $126 | | Amortization of right-of-use assets (financing) | $760 | $781 | | **Total lease cost** | **$2,560** | **$3,251** | [19. Subsequent Events](index=52&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20-%2019.%20Subsequent%20Events) This note discloses post-period events, including the departure of the CEO and the appointment of an interim successor, along with related separation expenses - Effective April 6, 2022, Mark R. Stauffer, President, CEO, and Interim CFO, separated from the company in all capacities[143](index=143&type=chunk) - Austin J. Shanfelter, Chairman of the Board, was appointed Interim Chief Executive Officer and Interim Chief Financial Officer[144](index=144&type=chunk) - The company expects to incur approximately **$1.1 million** in expenses, primarily in Q2 2022, related to Mr. Stauffer's separation agreement[146](index=146&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operational results for the three months ended March 31, 2022, covering business overview, Q1 performance, segment results, and liquidity [Overview](index=55&type=section&id=MD%26A%20-%20Overview) This overview describes Orion Group Holdings' specialty construction services, revenue recognition methods, and factors influencing contract performance and profitability - Orion Group Holdings provides specialty construction services in infrastructure, industrial, and building sectors, primarily through competitive bidding on fixed-price contracts[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Revenue is generally recorded over time, measured by the percentage of actual contract costs incurred to total estimated costs[156](index=156&type=chunk) - Factors such as completeness of bids, commodity price increases, customer delays, labor availability, and equipment/material proximity can impact contract performance and profitability[156](index=156&type=chunk) [First Quarter 2022 Recap and 2022 Outlook](index=57&type=section&id=MD%26A%20-%20First%20Quarter%202022%20Recap%20and%202022%20Outlook) This section recaps Q1 2022 performance, noting revenue growth despite a net loss, and outlines the company's strategic focus and macroeconomic considerations - In Q1 2022, revenues increased by **14.1%** to **$174.9 million**, but the company recorded a net loss of **$4.9 million**, compared to a net income of **$0.9 million** in the prior year period[157](index=157&type=chunk) - Consolidated backlog reached **$604.1 million** at March 31, 2022, with **$2.1 billion** in quoted bids outstanding and **$112 million** awarded or apparent low bidder post-quarter[157](index=157&type=chunk)[168](index=168&type=chunk)[170](index=170&type=chunk) - The company continues to focus on organic growth, greenfield expansion, and strategic acquisition opportunities, while monitoring macroeconomic impacts like inflation, labor concerns, supply chain delays, and COVID-19[158](index=158&type=chunk)[159](index=159&type=chunk)[166](index=166&type=chunk) [Consolidated Results of Operations](index=63&type=section&id=MD%26A%20-%20Consolidated%20Results%20of%20Operations) This section presents the consolidated financial results, highlighting revenue growth, a decrease in gross profit, and a shift from operating income to loss **Consolidated Results of Operations (in thousands):** | Item | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Contract revenues | $174,931 (100.0%) | $153,309 (100.0%) | | Gross profit | $12,816 (7.3%) | $15,455 (10.1%) | | Selling, general and administrative expenses | $16,170 (9.2%) | $14,630 (9.6%) | | Operating (loss) income | $(2,855) (-1.6%) | $2,055 (1.3%) | | Net (loss) income | $(4,856) (-2.8%) | $928 (0.6%) | - Contract revenues increased by **14.1%** due to large job startups in the marine segment and increased production in the concrete segment[173](index=173&type=chunk) - Gross profit decreased by **17.1%** and gross profit margin declined from **10.1%** to **7.3%**, primarily due to concrete segment write-downs, reduced dredging volume, and a change in work mix[174](index=174&type=chunk) [Segment Results](index=65&type=section&id=MD%26A%20-%20Segment%20Results) This section analyzes the performance of the Marine and Concrete segments, detailing revenue changes and shifts in operating income or loss **Segment Performance (in thousands):** | Segment | Contract Revenues (3M 2022) | Operating Income (Loss) (3M 2022) | Contract Revenues (3M 2021) | Operating Income (Loss) (3M 2021) | | :---------------- | :-------------------------- | :-------------------------------- | :-------------------------- | :-------------------------------- | | Marine | $84,480 | $1,840 | $72,146 | $2,848 | | Concrete | $90,451 | $(4,695) | $81,163 | $(793) | - Marine segment revenues increased by **17.1%** to **$84.5 million**, but operating income decreased by **$1.0 million**[183](index=183&type=chunk)[185](index=185&type=chunk) - Concrete segment revenues increased by **11.4%** to **$90.4 million** due to increased production, but its operating loss widened to **$4.7 million** from **$0.8 million** due to project write-downs and unabsorbed indirect expenses[186](index=186&type=chunk)[187](index=187&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=MD%26A%20-%20Liquidity%20and%20Capital%20Resources) This section discusses the company's working capital, cash flow from operations, and changes to its revolving line of credit - Working capital decreased to **$32.7 million** at March 31, 2022, from **$36.2 million** at December 31, 2021[189](index=189&type=chunk) - Net cash provided by operating activities increased to **$10.1 million** for the three months ended March 31, 2022, from **$9.1 million** in the prior year[192](index=192&type=chunk) - The Ninth Amendment to the Credit Facility, effective March 1, 2022, reduced the revolving line of credit commitment to **$42.5 million**, with **$13.4 million** of borrowing capacity available at March 31, 2022[190](index=190&type=chunk)[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks primarily from fluctuations in commodity prices (concrete, steel, fuel) and interest rates. While short project durations help mitigate commodity price risk, a 100 basis-point increase in LIBOR would increase annual interest expense by approximately $0.3 million based on current outstanding debt - The company is subject to fluctuations in commodity prices for concrete, steel products, and fuel, but the short-term duration of projects generally allows for inclusion of anticipated price increases in bids[202](index=202&type=chunk) - A **100 basis-point** increase in LIBOR (or an equivalent successor rate) would increase the company's annual interest expense by approximately **$0.3 million**, based on **$27.4 million** in outstanding borrowings at March 31, 2022[203](index=203&type=chunk) [Item 4. Controls and Procedures](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2022. No material changes to internal control over financial reporting occurred during the quarter - The company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2022[204](index=204&type=chunk) - There were no material changes to internal control over financial reporting during the quarter ended March 31, 2022[205](index=205&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16 of the condensed consolidated financial statements for detailed information regarding legal proceedings, including the August 2020 dredge fire incident and its resolution - Information about litigation involving the company is incorporated by reference from Note 16 to the condensed consolidated financial statements[206](index=206&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in Part I, Item 1A of the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes to the risk factors previously disclosed in the 2021 Form 10-K[207](index=207&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period ended March 31, 2022 - No sales of equity securities were made in the period ended March 31, 2022[208](index=208&type=chunk) [Item 3. Defaults upon Senior Securities](index=74&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[209](index=209&type=chunk) [Item 4. Mine Safety Disclosures](index=74&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable[210](index=210&type=chunk) [Item 5. Other Information](index=74&type=section&id=Item%205.%20Other%20Information) Following the departure of the company's Chief Executive Officer on April 6, 2022, Austin J. Shanfelter, the Chairman of the Board, assumed the duties of Interim Chief Executive Officer and Interim Chief Financial Officer - Austin J. Shanfelter was appointed Interim Chief Executive Officer and Interim Chief Financial Officer effective April 6, 2022, following the departure of the previous CEO[211](index=211&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, amendments to the Credit Agreement, and agreements related to the former CEO's separation - Exhibits include the Ninth Amendment to the Credit Agreement, effective March 1, 2022[212](index=212&type=chunk) - Exhibits also include the Consulting Agreement and Separation and General Release Agreement for former CEO Mark R. Stauffer[212](index=212&type=chunk) SIGNATURES [Signatures](index=77&type=section&id=SIGNATURES%20-%20Signatures) The report is duly signed on behalf of Orion Group Holdings, Inc. by Austin J. Shanfelter, in his capacity as Interim Chief Executive Officer and Interim Chief Financial Officer, dated April 29, 2022 - The report was signed by Austin J. Shanfelter as Interim Chief Executive Officer and Interim Chief Financial Officer on April 29, 2022[218](index=218&type=chunk)