Orion (US:ORN)2022-07-30 20:50Financial 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]