Orion Group Holdings, Inc.

Good morning and welcome to Orion Group Holdings fourth quarter and full year 2023 earnings conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please email a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks and then we'll open the call for your questions. To ask a question, analysts may press star and then one on your touchtone telephones You are using a speakerphone. We do ask that you please pick up your handsets prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Margaret Boyce, Investor Relations for Orion. Please go ahead, ma'am.

Thank you, Operator, and thank you all for joining us today to discuss Orion Group Holdings' fourth quarter and full year 2023 financial results. We issued our earnings release after market last night. It's available in the investor relations section of our website at oriangroupholdingsinc.com. I'm here today with Travis Boone, Chief Executive Officer, and Scott Banish, Chief Financial Officer. On today's call, management will provide prepared remarks, and then we'll open up the call for your questions. Before we begin, I'd like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts are forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10Q and 10K. With that, I'd now like to turn the call over to Travis. Travis, please go ahead.

Thank you, Margaret. and welcome to our fourth quarter and year-end 2023 call. Good morning. I'll start by saying that I am pleased with our progress on transforming the business throughout 2023. We did what we said we would do, and the business is much healthier. To summarize our fourth quarter and four-year results, we made the profitability of our business a priority over revenue. Our Q4 revenues grew 3% to $202 million And year-end revenues declined slightly to $712 million versus $748 million in 2022. On the surface, that's not impressive. But as I communicated to you throughout the year, driving the top line for the sake of revenue growth was not our objective. In construction, if you don't have discipline, you can win bids to grow revenue without making money until you put yourself out of business. That was the situation when Scott and I joined Orion in late 2022. And our top priority was to transform the business into a company that can deliver profitable and sustainable growth. We now have strong backlog to support revenue growth in 2024 and be profitable at the same time. A year ago, we laid out a three-point strategic plan to work toward long-term sustainable growth, which included improving the profitability of the concrete business, strengthening business development to drive growth, and investment and resources to realize Orion's full potential. We worked that plan throughout 2023 and accomplished our goals for the year. Concrete is now profitable, but we will continue to drive higher margins in that business. We have invested in strategic growth and have vastly improved our business development team and processes, which is driving growth. Lastly, we significantly improved our balance sheet and liquidity, We made significant progress optimizing our business and we strategically invested in our fleet to better prepare for the future. We still have work to do, but today our business is much healthier as measured by a significant improvement in profitability metrics. Gross profit margin increased 620 basis points to 11.4% versus 5.2% fourth quarter last year. Adjusted EBITDA for the quarter was 14.8 million or a 7.3 adjusted EBITDA margin, a significant improvement over 3.2 million, or a 1.6% adjusted EBITDA margin in Q4 2022. As we communicated from the beginning, reversing the margin decline in our concrete business was a top priority, and in March it turned the corner. On an adjusted EBITDA margin basis, concrete delivered 5.3% versus a negative 1.8% year over year. Don't get me wrong. Growing the top line is important, and in 2023, we made significant progress in strengthening our business development efforts, which I'll cover more later. What's important is winning the right projects for Orion, high-value, long-term projects like Pearl Harbor and the Grand Bahamas Dry Dock. Awards like these demonstrate our ability to win large, complex projects that are reputation builders in our markets. And while we are pursuing large projects, we are also applying a disciplined approach to projects of all sizes. The go forward story is how Orion is now set up to unlock its full potential. First, winning projects with the right pricing is critical to driving profitability. That required us to implement guardrails such as minimum bid margins and pursuing work where we have strong value proposition that differentiates Orion from competition, as well as bolstering our management oversight with experienced leaders. However, You can't just establish and enforce new rules. The organization must understand and embrace them, and that required us to reset Orion's culture. While having a strong and engaging culture is always an ongoing process, in 2023, we accomplished a great deal to strengthen our organization and its identity in the marketplace. We put disciplines, processes, and procedures in place, so expectations are crystal clear, and everyone is focused on the same mission. delivering predictable excellence through outstanding execution. To achieve this, we tore down the silos that had existed for far too many years throughout the business. It was a classic case of what happens when acquisitions are not fully integrated. There are duplicate platforms, business unit autonomy, friction over resources, overlooked talent, and other challenges. And since these disciplines are all interrelated, we were missing many opportunities to collaborate and cross-sell. Fast forward one year later, Orion is now one company pulling in the same direction. We rebranded all of our operations under the Orion banner, including the rebranding of TAS Concrete Construction as Orion. We are also rebuilding an IT infrastructure that will give us a better line of sight across the entire business, as well as the capability of scale. Scott will give more detail in his remarks. Above all, I am especially thrilled with the caliber of leaders that we attracted to Orion this year. Alan Ekman, formerly with AECOM, joined us as a senior vice president of strategy and growth. This was a new role that we critically needed to drive strategy, business development, sales training, and future M&A. We also hired Chip Earl as our new in-house counsel. Chip has an impressive legal compliance and risk management background. Louisiana is an important market for Orion, and we now have a new office in New Orleans to expand our presence in the state where we began working in 1906. Since Scott and I came on board, our culture and our senior leadership is strikingly different than a year ago. We are fostering a winning mindset, celebrating our achievements, and pushing ourselves to higher performance. By unifying under the Orion brand, we will develop a more recognizable presence in the national market unlock new potential for growth, leverage collaboration across teams, and support our mission to deliver high quality solutions with predictable excellence. To reflect our One Orion brand, we are launching our new website on March 4th, and we'd be happy for you to go check it out when it goes live next week. With these critical building blocks in place, we're turning our full attention to building momentum in the business. In 2024, we expect our performance to improve with a gradual build throughout the year. However, we believe 2025 will be the year when our transformation starts to really kick in for several key reasons. In a little over a year, we almost quadrupled our pipeline of opportunity from $3 billion to over $11 billion. This reflects not only the measures we've taken to transform Orion, but also an improving market outlook. We're expecting to see increased RFP activity from our marine clients this year in the public and private sector. The Corps is undertaking a number of capital construction projects that we're preparing to bid on, including the pent-up demand for maintenance dredging of waterways, which would benefit Orion. Based on our Pearl Harbor work, Marine is also well-positioned to participate from naval defense spending in the Pacific. Add to that $10 billion that is earmarked for coastal restoration in Louisiana in the coming years. as well as the port expansion capital projects necessary to accommodate larger ships and more warehousing capacity. Orion Concrete might also benefit from public funding for infrastructure projects. This would be a new opportunity for Orion, since our work in Dallas and Houston core markets is mostly in the private sector. With any interest rate relief, we believe several private sector construction projects would be green-lighted to support the outside's growth in these two markets. We also see an opportunity to expand our concrete business presence in Florida. Bottom line, there are strong tailwinds and a ton of opportunity in our space that requires the special skills and experience that limits competition. We have the best people in the industry who are laser focused on execution, growing revenues and driving margins. I'm very optimistic that Orion is set up for success in 2024, 2025 and beyond. Now I'll turn this call over to Scott to discuss our operations and financials.