Orion (ORN) - 2024 Q4 - Annual Report

Revenue and Financial Performance - In 2024, Orion Group Holdings, Inc. recorded revenues of $796.4 million, an increase of 11.9$711.8 million in 2023[207]. - The marine segment contributed $521.3 million to total revenue, while the concrete segment accounted for$275.1 million[207]. - The net loss for 2024 was $1.6 million, a significant improvement from a net loss of$17.9 million in the previous year[207]. - Gross profit for 2024 was $91.2 million, representing 11.4$82.5 million in 2024, up 18.9% from $69.4 million in 2023[220]. - Total revenues for the marine segment in 2023 were$395.9 million, an increase of $56.7 million or 16.7$93.2 million or 22.8% in 2023, totaling $315.9 million, mainly due to winding down operations in Central Texas[240]. Backlog and Future Prospects - The consolidated backlog at the end of 2024 was$729.1 million, up from $690.5 million at the end of the previous quarter[215]. - The marine segment backlog as of December 31, 2024, was$582.8 million, while the concrete segment backlog was $146.3 million[215]. - The company has$1.2 billion of quoted bids outstanding, with approximately $248 million awarded and pending contract after December 31, 2024[215]. - Long-term demand for services is expected to be driven by infrastructure investments, including the$1.2 trillion Infrastructure Investment and Jobs Act[209]. Operational Challenges - The concrete segment is facing potential delays in new project releases due to inflation, interest rates, and supply chain issues[210]. - The company recorded a $6.9 million intangible asset impairment loss in 2023 due to the rebranding of the concrete segment under the Orion banner, which had previously operated as TAS Concrete Construction since 2015[228]. - Interest expense for the year ended December 31, 2023, was$11.7 million, an increase of $7.2 million from$4.5 million in the prior year, primarily due to an increase in the weighted average interest rate from 6.23% to 12.00%[229]. - The company is subject to inflation effects through increases in the cost of raw materials, including fuel, concrete, and steel[257]. - The company does not hedge against increases in prices for commodity products, which may impact results due to fixed-price contracts[273]. Cash Flow and Capital Management - As of December 31, 2024, the company's working capital was $78.2 million, up from$55.9 million at the end of 2023, with unrestricted cash on hand of $28.3 million[242]. - The company generated approximately$12.7 million from cash in operating activities in 2024, with cash inflows from net income amounting to $34.4 million after adjusting for non-cash items[246]. - Capital asset additions in 2024 were$14.1 million, compared to $8.9 million in 2023 and$14.6 million in 2022[249]. - The company completed a public offering on September 12, 2024, raising net proceeds of approximately $26.4 million, which were used for working capital and repayment of borrowings[244]. - At December 31, 2024, the company had$23.0 million in outstanding borrowings under its Credit Agreement, with a weighted average ending interest rate of 11.65%[277]. - A 100 basis-point increase in SOFR would increase the company's annual interest expense by approximately $0.2 million[277]. Asset Management and Tax Considerations - The company evaluates long-lived assets for impairment based on future cash flows and physical condition[267]. - The company assesses uncertain tax positions based on the likelihood of sustaining them upon settlement with tax authorities[271]. - Revenue is recognized over time for contracts, with progress measured by the percentage of actual contract costs incurred to date[262].