Orion Group Holdings, Inc.

Good morning, and welcome to the Orion Group Holdings first quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Margaret Boyce of Investor Relations for Orion. Please go ahead.

Thank you, Operator, and thank you all for joining us today to discuss Orion Group Holdings' first quarter 2024 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 of Orion, and Scott Danish, 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 these 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 good morning, everyone. And thank you for joining our first quarter 2024 conference call. I'll start with a quick overview of our first quarter results, as well as providing more color on the tremendous opportunities before us. Then I'll turn it over to Scott to cover our financial results. We generated first quarter revenue of $160.7 million and adjusted EBITDA of $4.1 million. We are continuing to focus on increasing our margins. We expect revenue to build throughout the year with our current backlog and strong pipeline of opportunities. In addition to first quarter being our seasonally slowest period, revenue was affected by reduced activity on two major projects related to scheduling impacts outside of our control. These delays should not impact the critical completion of these large projects under contract or the total anticipated revenues or margins generated from these contracts. It is normal on construction projects for unexpected delays to occur. We have strong project teams that are nimble and able to respond quickly to get the projects back where they need to be. We expect to recover this work in the upcoming quarters with strong momentum in the back half of the year. Based on the activity level that we are seeing for our services, especially in marine construction, we are reiterating our four year 2024 expectations for revenue in the range of $860 million to $950 million and adjusted EBITDA in the range of $45 million to $50 million. We entered the first quarter with a solid foundation and a much healthier business. After our hard work transforming the business throughout 2023, We are now in a position to reap the benefits. We have put disciplines, processes, and procedures in place. Expectations are crystal clear for our teams, and everyone is aligned on the same mission, delivering predictable excellence through outstanding execution. We invested in strategic growth and have vastly improved our business development team and processes. Finally, we strengthened the balance sheet and monetized non-core assets. These changes are driving energy and momentum throughout the organization. The best way to measure opportunity is our pipeline and account of all potential projects we might pursue. In just over a year, our pipeline of opportunities has grown from $3 billion to over $11 billion. The increased volume in large part reflects the investments we have made in our business development efforts that are gaining real traction. In addition, the marine construction industry is exploding and we are intensifying our attention on that market. In the coming years, we believe demand for specialized construction could exceed supply. The diversity of both projects and funding sources overlaid with our geographic footprint and areas of expertise gives me great confidence in our ability to win new contracts and drive growth. Given the number of quality projects in this space that fit Orion's unique capabilities, Our energy and focus will mainly be on capitalizing on marine construction opportunities. We expect dredging to remain an integral part of our marine business as we grow, but it will be a smaller portion of our revenue in comparison to marine construction. Strong secular trends are driving these opportunities and here are some examples. First, the $1.2 trillion infrastructure bill will provide a multi-year catalyst for public sector projects such as transportation funding, ports, waterways, water infrastructure, and bridges, among other things. The government has planned $6 billion for ports and waterways and $174 billion for roads, bridges, and major projects. We are just beginning to see these funds start to flow and believe they will drive more projects in 2025 and beyond. Second, ships are much larger today than they were 30 or 40 years ago. The expansion of the Panama Canal allows larger ships to pass through ports. As a result, infrastructure upgrades are required all along the eastern seaboard in the Gulf to expand ports and deepen channels. The unfortunate Key Bridge incident in Baltimore shines a spotlight on the infrastructure upgrades needed throughout the country to accommodate larger vessels passing through the ports. The U.S. Navy is spending billions in the Pacific Deterrence Initiative to protect U.S. interests. Our project in Pearl Harbor, where we are a subcontractor to the $2.8 billion joint venture team, To build a dry dock for nuclear submarines is the largest construction project in U.S. Navy history, but not for long. The Navy has planned a much larger investment to revitalize the Puget Sound Naval Shipyard and other marine facilities in the Pacific. We have a well-established presence in the Pacific Northwest, and we are now established in Hawaii. We intend to leverage this presence to capitalize on the billions being invested in the Pacific. In February, I attended the Navy's anchoring ceremony at Pearl Harbor. The Orion team was honored to drive the first ceremonial pile on this critical Navy project. We are now into our core construction activities and pile driving has continued by our crews. We have been a critical part of the team on this high profile Navy project. Based on our work in Pearl Harbor, we are in a strong position to compete for additional US Navy contracts in the Pacific. Finally, there is growing construction activity in the Gulf. As I've mentioned before, coastal restoration is a critical need in many areas, and there's $10 billion planned by multiple agencies for coastal restoration in Louisiana alone. Coastal restoration work typically includes a combination of both dredging and construction. LNG, methane, and ammonia terminals are also being constructed to advance green energy initiatives. These projects are a perfect fit for Orion, which is why we have invested there and opened a new office in New Orleans. We've been engaged in these projects and expect more work in the future. Many of our long standing private sector Petrochem clients are also planning major capital projects, and we are engaged in planning and design with them, and we'll be building these projects as well. We expect to see project volume ramp up in 2024 through 2025, and the investments we are making to improve our fleet, our systems, and our teams will enhance our competitive position. Turning to our concrete business, we're also seeing strong demand drivers in this segment. Data centers are the necessary infrastructure for artificial intelligence. And the number of AI driven data centers is expected to double in the next year. North Texas now ranks second among US markets by inventory of data centers with 173% increase in the second half of last year. Orion Concrete is well established in this market. And to date, we have already built or are building 19 data centers in Texas. Beyond Texas, we're also pursuing opportunities in Utah, Arizona, and Nevada through our strong relationships with general contractors working in those states. Our competitive advantage is not only our experience and the high quality of our work, but also our unmatched safety record, which is extremely important to the owners of these data centers. For two years in a row, we have had zero lost time incidents and we have an extraordinary safety culture focused on our people going home safely every day. While the data center market is booming, we are seeing headwinds in our traditional developer-driven concrete markets due to the persistently high interest rates. With commercial construction taking a pause, we are shifting our concrete resources to the data center market while it is hot. In summary, we've now set the company up for success and are focused on driving growth for the remainder of 2024 and then in 2025 and beyond. Our leadership and platform are in place to capitalize on the immense opportunity ahead. Looking forward, we expect the business to accelerate in the second quarter with a strong growth in the back half of the year. Before I turn it over to Scott, I'd like to thank our retiring board member, Richard Dare, for his 17 years of service on our board. Richard has been with Orion since going public in 2007, serving as chairman for most of those 17 years. He has been a valuable asset to both management and the board and will officially step down next month at our annual meeting of stockholders. We wish him the very best in his well-earned retirement. I also want to encourage stockholders to cast your votes and participate in our virtual meeting on May 16th. You can find the details on the materials and on our website. I'll now turn the call over to Scott.