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July 10, 2014
05:39 EDTORNOrion Marine remains encouraged about 2H14
Orion Marine remains encouraged about 2H14 and beyond, as positive developments in its various end markets continue. As expected, utilization of some of the company's assets declined sequentially in the second quarter due to the accelerated completion of projects in the first quarter, as well as project starts that pushed out into Q3. The company also experienced slightly more than expected idle labor and idle equipment costs due to delays in project start dates. However, these jobs have now begun and, as previously discussed, the company expects to see a strong second half leading to positive results for FY14. During Q2, the company bid on approximately $429M worth of opportunities and was successful on approximately $113M, representing a win rate of approximately 26%. Additionally, the company currently has approximately $110M worth of bids outstanding, of which it is the apparent low bidder on approximately $10M. The company reminds investors that the timing and size of awards can and does affect the win rate in any particular quarter. The company has begun work on its $68M project with the Port of Houston Authority to widen and deepen the entrance channels leading to two container terminals in the Port of Houston. This project represents an important step taken by the Port of Houston to expand its facilities for larger ships eventually transiting through an expanded Panama Canal. The Port's ability to entirely self-fund the project also demonstrates that ports throughout our operating areas may be able to pursue alternative methods of funding capital improvements, rather than relying on an inconsistent federal budgeting process to provide the necessary funds. The private sector continues to drive sustained increases in equipment utilization for the company. As mentioned in the past, the demand for expanded waterside infrastructure from the private sector has largely been driven by energy related customers, private terminal developments and recreational dock infrastructure developments. Bid opportunities remain strong in this sector and are expected to continue for the foreseeable future.
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