HOUSTON, Jan. 17, 2013 (GLOBE NEWSWIRE) -- Orion Marine Group, Inc. (NYSE:ORN) (the "Company"), a leading heavy civil marine contractor serving the infrastructure sector, today is providing its investors an update on the Company's outlook and end markets.
The Company's overall outlook remains unchanged as 2013 gets underway. Private sector bid opportunities continue to be robust with local and DOT bid opportunities continuing at reasonable levels. Bid opportunities from the Army Corps of Engineers continue to be choppy and uncertain under the current funding levels and budgetary environment. As a result, the Company remains pleased with the robust utilization of construction equipment in the second half of 2012 and into 2013. The Company experienced a temporary increase in dredge utilization in the back half of 2012 as a result of several smaller private jobs in the Gulf Coast and Atlantic regions. However, it is uncertain if this level of utilization will continue as a result of choppy bid letting from the Army Corps of Engineers.
The Company continues to maintain a solid win rate as it executes on its strategy to drive a larger volume of work to offset lower job margins. During the fourth quarter, the Company bid on approximately $253 million worth of opportunities and was successful on approximately $54 million, representing a win rate of approximately 21%. Currently the Company has over $238 million worth of bids outstanding, of which it is the apparent low bidder on approximately $22 million. While the overall amount of work bid is slightly lower than in recent quarters due to normal seasonality, the Company remains comfortable with its future outlook and level of bid opportunities as indicated by its tracking database that currently has over $6.5 billion worth of opportunities over the next few years.
Overall, the Company continues to expect to see solid levels of projects involving construction services in 2013 with uncertain levels of projects involving dredging services. Additionally, the integration of West Construction continues as expected and the Company remains excited regarding the opportunities it sees in the Alaska region as it establishes a major presence there.
Despite the uncertainty surrounding the federal budget, the Company was pleased with its recent award of a seed project by the Army Corps of Engineers under a MATOC contract. The Company will also be eligible to bid on additional projects bid under the MATOC. Up to $500 million of work may be bid under this MATOC. Additionally, the Company was recently awarded two contracts by the Corps in the Gulf Coast. These recent awards by the Corps total approximately $18 million. While these awards will somewhat help dredge utilization in the second quarter of 2013, a steadier, more predictable pace of lettings by the Corps of Engineers is needed to achieve higher dredge utilization levels. With less than 3 months left before expiration of the 6-month stop-gap spending bill passed by Congress at the end of FY2012, another supplemental bill will have to be passed before the end of March in order for the Corps to continue to execute on its mandate to maintain the navigability of the nation's waterways.
The House of Representatives has also recently passed a bill containing $50 billion in funding for the recovery from Hurricane Sandy. Included in the bill is $742 million for Operations & Maintenance budget of the Army Corps of Engineers along with $582 million for Flood Control & Coastal Emergencies. The bill is expected to be taken up for a vote by the Senate next week. This legislation is welcome news to areas in the Northeast devastated by Hurricane Sandy and will tremendously help the region begin the long road to recovery. The Company will be closely monitoring how and where these funds are spent, and any potential opportunities created as a result.
The Federal Government has also moved a step closer to funding the RESTORE Act after the settlement with Transocean for $1.4 billion related to the Deepwater Horizon disaster. The RESTORE Act will send approximately $1.1 billion of these fines towards the restoration of the Gulf Coast ecosystems and economy that were damaged by the 2010 spill. Fines have not been finalized against BP but are expected to be $5 - $20 billion.
The Company continues to execute on and see a steady stream of bridge opportunities funded primarily through states' Departments of Transportation. While the Company has not yet seen a material improvement in margins as a result of the two-year, $105 billion highway bill that was signed by the President this past June, the irrational bidding seen in 2011 has abated.
Local & Private Update
The Company continues to see a high level of bid opportunities from local port authorities and private customers, primarily along the Gulf Coast. Private dredging work in the fourth quarter was helpful in increasing dredging asset utilization; however, utilization may dip down again as these relatively short term jobs wrap up in the beginning of 2013. Construction opportunities in both these end markets remain strong in all of our operating regions. The Company continues to be optimistic about the direction of these sectors.
About Orion Marine Group
Orion Marine Group, Inc. provides a broad range of marine construction and specialty services on, over and under the water along the Gulf Coast, the Atlantic Seaboard, the West Coast, Canada, and the Caribbean Basin and acts as a single source turn-key solution for its customers' marine contracting needs. Its heavy civil marine construction services include marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging, and specialty services. Its specialty services include salvage, demolition, diving, surveying, towing and underwater inspection, excavation and repair. The Company is headquartered in Houston, Texas and has a near 100-year legacy of successful operations.
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The matters discussed in this press release 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 statements can be identified by the use of forward-looking terminology, such as 'believes', 'expects', 'may', 'will', 'could', 'should', 'seeks', 'approximately', 'intends', 'plans', 'estimates', or 'anticipates', or the negative thereof or other comparable terminology, or by discussions of strategy, plans, objectives, intentions, estimates, forecasts, assumptions, or goals. In particular, statements regarding future operations or results, including those set forth in this press release, and any other statement, express or implied, concerning future operating results or the future generation of or ability to generate revenues, income, net income, profit, EBITDA, EBITDA margin, or cash flow, including to service debt, and including any estimates, forecasts or assumptions regarding future revenues or revenue growth, are forward-looking statements. Forward-looking statements also include estimated project start dates, expected project duration, estimated project completion dates, anticipated revenues, and contract options which may or may not be awarded in the future, including the statements set forth above in this press release. Forward-looking statements involve risks, including those associated with the Company's fixed price contracts, unforeseen productivity delays that may alter the final profitability of the contract, cancellation of the contract by the customer for unforeseen reasons, delays or decreases in funding by the customer, and any potential contract options which may or may not be awarded in the future, which awards are in the sole discretion of the customer. Past performance is not necessarily an indicator of future results. In light of these and other uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as a representation by the Company that the Company's plans, estimates, forecasts, goals, intentions, or objectives will be achieved or realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update information contained in this press release whether as a result of new developments or otherwise.
Please refer to the Company's Annual Report on Form 10-K, filed on March 6, 2012, which is available on its website at www.orionmarinegroup.com or at the SEC's website at www.sec.gov, for additional and more detailed discussion of risk factors that could cause actual results to differ materially from our current expectations, estimates or forecasts.
CONTACT: Orion Marine Group, Inc. Chris DeAlmeida, Vice President Finance & Accounting, 713-852-6506 Drew Swerdlow, Sr. Analyst, Finance & Investor Relations, 713-852-6582
Source:Orion Marine Group, Inc.