Orion (US:ORN)2020-03-01 00:23Financial Data and Key Metrics Changes - Revenues for Q4 2019 were $199.8 million, a 101% increase from $99.2 million in Q4 2018, with a 64% increase when excluding a $22.8 million charge from the prior year [15][18] - Gross profit for Q4 2019 was $19.1 million, compared to a gross loss of $22.2 million in the prior year, reflecting improved labor efficiency and equipment utilization [16] - Net income for Q4 2019 was $159,000 or $0.01 diluted earnings per share, a significant recovery from a net loss of $94.4 million or a loss of $3.32 per share in the prior year [18] - Adjusted EBITDA for Q4 2019 was $11 million, representing an adjusted EBITDA margin of 5.5%, compared to $2.5 million and a 2% margin in the prior year [19] Business Line Data and Key Metrics Changes - The Marine segment reported revenues of $111.2 million and adjusted EBITDA of $11.7 million for Q4 2019, with an adjusted EBITDA margin of 10.5%, up from revenues of $36.9 million and an adjusted EBITDA margin of 9.4% in the prior year [20] - The Concrete segment had revenues of $88.6 million, with an adjusted EBITDA loss of $632,000, improving from a loss of $3.2 million in the prior year [22] Market Data and Key Metrics Changes - The company had a backlog of $572 million as of the end of 2019, with $340 million from the Marine segment and $232 million from the Concrete segment [24] - The company was successful on $142 million worth of opportunities in Q4 2019, resulting in a book-to-bill ratio of 0.71 times and a win rate of 14.6% [24] Company Strategy and Development Direction - The company aims to be a premier specialty construction company, focusing on infrastructure, industrial, and building sectors, with a strong emphasis on operational transformation through the ISG initiative [13][40] - The ISG initiative has led to improvements in labor management, equipment management, project execution, and corporate processes, with plans to implement a new ERP platform for enhanced efficiency [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand in end markets, particularly in the Marine sector driven by government projects and the cruise industry [30][31] - The company expects adjusted EBITDA for 2020 to be in the mid to low $40 million range, indicating confidence in growth potential [27] Other Important Information - The company ended Q4 2019 with approximately $13 million in cash and a leverage ratio of 2.27 times, indicating a solid financial position to support operations in 2020 [26] - The company is tracking over $9 billion in current and future bid opportunities, highlighting significant growth potential [39] Q&A Session Summary Question: Details on the $154 million low bids - Management indicated that the low bids are a combination of both segments, with announcements expected soon [47] Question: Margin profile of the backlog - Management noted a positive margin profile in the Marine segment, while the Concrete segment faces more competitive pressures [48][49] Question: Drivers of gross margin decline - The decline was attributed to uninstalled materials affecting revenue recognition, which will adjust as materials are installed [52] Question: Opportunities in the bid market - Management highlighted ongoing opportunities in both Marine and Concrete segments, driven by government projects and structural work [55][56] Question: Industrial market win insights - Management emphasized persistence in pursuing industrial opportunities and learning from past bids to improve future outcomes [62] Question: Backlog aging and recognition - Management expects a significant portion of the backlog to be recognized in the coming year, with some larger projects extending over multiple years [67] Question: ISG process and ERP implementation - Management indicated that the ISG process is nearing completion, with a focus on implementing a new ERP system to enhance operational efficiency [71][73] Question: 2020 CapEx and working capital expectations - Management anticipates CapEx to remain in the $20 million range, with positive cash flow expected to continue [75] Question: Guidance for EBITDA in 2020 - Management expects progress in Concrete profitability, with a focus on improving margins and operational efficiency [81][79]