Orion (US:ORN)2023-05-09 19:17Financial Data and Key Metrics Changes - Revenue for the first quarter decreased by 9% to $159.2 million from $174.9 million in the prior year, primarily due to exiting the Central Texas construction market and weather-related delays [2][76] - Gross profit for the first quarter was $5.8 million, representing 3.7% of revenue, compared to $12.8 million or 7.3% in the prior year, with half of the decrease attributed to weather impacts and project write-downs [3][76] - Net loss for the quarter was $12.6 million, or a loss of $0.39 per diluted share, compared to a net loss of $4.9 million, or a loss of $0.16 per diluted share in the same quarter last year [7] Business Line Data and Key Metrics Changes - The Marine segment reported first quarter revenues of $79.3 million, down from $84.5 million in the prior year, with adjusted EBITDA of negative $1.3 million, compared to $7.3 million in the previous year [4] - Concrete revenue for the first quarter was $79.9 million, a decline from $90.5 million in the prior year, with adjusted EBITDA of negative $2.8 million, compared to negative $2 million last year [5] Market Data and Key Metrics Changes - As of March 31, 2023, the backlog was $467.4 million, up from $448.8 million at the end of the previous year, with $382.6 million expected to be recognized during the year [9] - The company was awarded over $624 million in new project work not included in the backlog, with approximately $522 million related to the Marine segment [10] Company Strategy and Development Direction - The company aims to return to historical margin levels and improve profitability through disciplined bidding and operational improvements, targeting high-margin projects [12][13] - A new Director of Operational Excellence has been recruited to enhance project profitability and financial performance [1] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the year despite disappointing first-quarter results, indicating that the first quarter is not indicative of full-year performance [15][76] - The company expects significant improvement in the second quarter and anticipates major acceleration in the latter half of the year [12][78] Other Important Information - The company has reached an agreement for a new credit facility, which includes a term loan of $38 million and a revolving credit facility of up to $65 million [96] - A contract for the sale of East and West Jones properties for $36 million is expected to close in the third quarter, with proceeds aimed at reducing debt and funding working capital [89][97] Q&A Session Summary Question: Impact of weather and customer delays on marine revenue - Management confirmed that a specific project nearing completion did not significantly contribute to the first quarter's underperformance [20] Question: Drivers of profitability in the concrete segment - Management indicated that improved bidding practices and better execution contributed to the concrete segment's first profitable month in two years [21][23] Question: Expectations for bid volumes in 2023 and 2024 - Management noted steady bidding volume in the concrete segment but indicated potential slowing later in the year, while dredging bids are currently slow [43][46] Question: Details on the credit facility - Management provided information on the terms of the new credit facility, including a three-year tenure and competitive rates [50] Question: Breakdown of recent contract awards - Management clarified that the $624 million in new awards includes various projects across both marine and concrete segments [55]