Orion Group Holdings, Inc. · NYSE:ORN
Orion — NobleCon 2020
23 slides from Orion's conference presentation, Feb 17, 2020
Slide 1: NobleCon 2020
NobleCon 2020 February 17-18, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement The matters discussed in this presentation 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 state
Slide 3: Core Values Consistent with Strategy
Core Values Consistent with Strategy We take pride in our personal We are committed to performing workmanship and that of the entire assigned tasks in the most efficient, organization; we are committed to timely and cost effective manner; ensuring that each task is properly we expect employees to sa
Slide 4: Company Overview
Company Overview Orion Group Holdings, Inc., a leading NYSE: ORN Marine Concrete specialty construction company, provides services in the Headquarters: Houston, Texas Infrastructure, Industrial, and Building sectors through its marine # of Employees: ~2,754 construction segment and its 64% 48% 52% c
Slide 5: Investment Highlights
Investment Highlights • Diverse end markets with favorable macro trends • Unique turnkey project capabilities • Specialized fleet of equipment creates barriers to entry and a competitive advantage • Positive free cash flow for over 10 consecutive years • Operational transformation underway focused o
Slide 6: Attractive Geographic Footprint
Attractive Geographic Footprint = Headquarters 6
Slide 7: Favorable Macro Drivers Across Business Segments
Favorable Macro Drivers Across Business Segments Marine Concrete • Port expansions and maintenance • Institutional developments and expansion • Downstream energy • Structural developments • Bridges and causeways • Recreational developments • Marine infrastructure • Industrial developments • Coastal
Slide 8: Marine Segment Capabilities
Marine Segment Capabilities • Port Facility • Bulkheads • Piers • Docks Marine Transportation • Wharves • Military Installations • Dry Bulk Terminals • Marinas Facility Construction • Cruise Ship Terminals • Liquid Cargo Terminals • Container Terminals • Marine Construction • Intracoastal Waterway •
Slide 9: Fleet of Specialized Marine Equipment
Fleet of Specialized Marine Equipment Over 300 Vessels & Pieces of Equipment • 45 spud and material barges • 7 cutter suction dredges • 24 tug and push boats • 2 portable dredges -200 pieces of • 49 crawler and hydraulic cranes other equipment $1.79 book value per share Estimated Replacement Spud Ba
Slide 10: Commercial Concrete Construction Overview
Commercial Concrete Construction Overview One of the largest Texas-based Concrete Contractors • Concrete construction primarily driven by population growth • Houston and Dallas/FW are two of the Top 10 growing metro MSA’s in U.S. • Significant market share in Houston • Expanded to D/FW market in 199
Slide 11: Breadth of Concrete Services and Resources
Breadth of Concrete Services and Resources Provides Services Across Three Avenues: • Light Commercial – Horizontally poured concrete, tilt-walls, trenches, rebar installation, and pumping services • Structural – Elevated concrete pouring, including columns, elevated beams, and structural walls • Ind
Slide 12: High Quality Customer Base
High Quality Customer Base Marine Segment Concrete Segment Federal Government Customers State Government Customers Local Government Customers Private Customers Federal 11% Local 18% Private State 13% 3Q19 LTM 3Q19 LTM 30% Revenue by Revenue by Customer Customer Private 82% Local 47% 12
Slide 13: Recent Project Awards
Recent Project Awards Trend Segment Location Value Start Date Port of New Orleans – Industrial Louisiana $47 million Q1’20 Nashville Terminal Houston Structural Concrete Texas $18 million Q1’20 Concrete Work Dallas Light Commercial Concrete Texas $14 million Q1’20 Concrete Work Houston Light Commerc
Slide 14: Backlog at Record Levels
Backlog at Record Levels Concrete Marine $700.00 $630.5 $600.00 $500.00 $441.0 $434.0 404.3 $400.00 $357.6 $360.6 $300.00 257.0 280.7 194.3 177.0 $200.00 $100.00 226.2 163.3 153.3 183.6 184.0 $0.00 2015 2016 2017 2018 Q3'2019 *All numbers in Millions 14
Slide 15: Expansion In Industrial Sector
Expansion In Industrial Sector Orion Capabilities Service Structural Excavations & Backfill Foundations (Drive, Piles, Pile Caps, Footings, Existing New “ Piers) Form/Concrete/Rebar The industrial sector represents a broad range of Columns/Pipe Supports/Walls opportunities for our company. B
Slide 16: Expansion in Industrial Sector
Expansion in Industrial Sector • Orion is geographically well positioned to capture Positive Industry Fundamentals share of industrial market Trend Significance • The industrial sector represents a broad range of opportunities that leverages the talent and • The rapid increase in America’s hydrocarb
Slide 17: Invest, Scale, and Grow Transformation Underway
Invest, Scale, and Grow Transformation Underway * Labor Management Equipment Management Project Execution Corporate Processes • Enhanced management • Improve management • Enhance management • Utilized outside resources reporting to improve reporting to benefit: training to review our workflow projec
Slide 18: Recent Annual Results
Recent Annual Results ($ in thousands) 2016 2017 2018 Contract Revenues $578,236 $578,553 $ 520,894 Operating Income $4,074 $1,538* ($39,811)** Adjusted EBITDA $38,295 $31,070 $24,036 Adjusted EPS $0.19 ($0.14) ($0.37) Operating Cash Flows $23,149 $34,133 $21,931 * Harvey impacts ** Weather, project
Slide 19: Recent Quarterly Results
Recent Quarterly Results ($ in thousands) FY19 Q3 FY18 Q3 Variance Contract Revenues $199,507 $125,073 59.5% Operating Income $6,092 ($7,405) 182% Adjusted EBITDA $14,291 $660 2,065% Adjusted EBITDA Margin (%) 7.2% 0.5% 1,340% Contract Revenues were up due to: Operating income increased due to: • Ex
Slide 20: Liquidity to Fund Operations and ISG Plan
Liquidity to Fund Operations and ISG Plan As of September 30, 2019 ($ in mm) Cash and equivalents $1.4 Current Assets $190.2 Working Capital $55.7 Total Assets $377.1 • Conservative Balance Sheet • Low Leverage Current Liabilities $134.5 • Strong Liquidity Position Total Debt $68.4 • Access to Capit
Slide 21: 2019 Full Year Financial Outlook
2019 Full Year Financial Outlook 2019 vs 2018 Revenues SG&A Adj. EBITDA Margin Double digit growth rate Down as % of Revenue Improved margins reflecting reflecting improving results increased utilization and improved related to ISG program execution 21
Slide 22: Appendix
Appendix EBITDA/Adjusted EBITDA reconciliation 22
Slide 23: Adj. EBITDA and Adj. EBITDA Margin Reconciliation
Adj. EBITDA and Adj. EBITDA Margin Reconciliation 2011 2012 2013 2014 2015 2016 2017 2018 9m 2019 Net income (loss) $(13,114) $(11,866) $331 $6,877 $(8,060) $(3,620) $400 $(94,422) $(5,518) Income tax $(6,347) $(4,640) $(937) $3,175 $(2,519) $1,581 $(4,541) $(12,233) $920 Interest expense, net $318