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What changed in Orion Group Holdings Inc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Orion Group Holdings Inc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+238 added−229 removedSource: 10-K (2024-03-01) vs 10-K (2023-03-16)

Top changes in Orion Group Holdings Inc's 2023 10-K

238 paragraphs added · 229 removed · 170 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+5 added−18 removed65 unchanged
Biggest changeOur customer base shifts from time to time depending on the types of projects we bid, and ultimately are successful on obtaining. ​ The following table represents contract revenue and concentrations of contract revenue by type of customer for the years ended December 31, 2022, 2021 and 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 % 2021 % 2020 % Federal Government ​ $ 80,116 11 % $ 54,480 9 % $ 51,793 7 % State Governments ​ 62,516 8 % 4,790 1 % 27,574 4 % Local Governments ​ 125,015 17 % 120,311 20 % 202,839 29 % Private Companies ​ 480,675 64 % 421,779 70 % 427,736 60 % Total contract revenues ​ $ 748,322 100 % $ 601,360 100 % $ 709,942 100 % ​ We do not believe that the loss of any one customer would have a material adverse effect on our operations since no single customer sustains a large portion of our contract revenue over time.
Biggest changeOur customer base shifts from time to time depending on the types of projects we bid, and are ultimately successful on obtaining. ​ The following table represents contract revenue (in thousands) and concentrations of contract revenue by type of customer for the years ended December 31, 2023, 2022 and 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 % 2022 % 2021 % Federal Government ​ $ 153,410 22 % $ 80,116 11 % $ 54,480 9 % State Governments ​ 59,354 8 % 62,516 8 % 4,790 1 % Local Governments ​ 99,621 14 % 125,015 17 % 120,311 20 % Private Companies ​ 399,393 56 % 480,675 64 % 421,779 70 % Total contract revenues ​ $ 711,778 100 % $ 748,322 100 % $ 601,360 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We do not believe that the loss of any one customer would have a material adverse effect on our operations since no single customer sustains a large portion of our contract revenue over time.
The ABS is an independent classification society which certifies that certain of our larger, seagoing vessels are “in-class,” signifying that the vessels have been built and maintained in accordance with ABS standards and applicable U.S. Coast Guard rules and regulations.
The ABS is an independent classification society that certifies that certain of our larger, seagoing vessels are “in-class,” signifying that the vessels have been built and maintained in accordance with ABS standards and applicable U.S. Coast Guard rules and regulations.
The following includes an overview of our diverse markets in the marine construction industry: Port Expansion and Maintenance Expected increases in cargo volume and future demands from larger ships transiting the expanded Panama Canal will require ports, especially along the Gulf Coast and Atlantic Seaboard, to expand their dock capacity and port infrastructure to accommodate larger container ships and increased cargo volumes, as well as perform additional dredging services to deepen and maintain their channels.
The following includes an overview of our diverse markets in the marine construction industry: Port Expansion and Maintenance Expected increases in cargo volume and future demands from larger ships transiting the expanded Panama Canal will require ports, especially along the Gulf Coast and Atlantic Seaboard, to expand dock capacity and port infrastructure to accommodate larger container ships and increased cargo volumes, as well as additional dredging services to deepen and maintain channels.
Item 1. BUSINESS General background Orion Group Holdings, Inc., is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Canada and the Caribbean Basin through its marine segment and its concrete segment.
Item 1. BUSINESS General background Orion Group Holdings, Inc. and subsidiaries, is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through its marine segment and its concrete segment.
These projects typically require the positioning and installation of steel or 4 Table of Contents concrete fabrication dock or mooring structures designed for durability and longevity, and involve driving piles of concrete, pipe or sheet pile to provide a foundation for the port facility structure that we subsequently construct on the piles.
These projects typically require the positioning and installation of steel or concrete fabrication dock or mooring structures designed for durability and longevity, and involve driving piles of concrete, pipe or sheet pile to provide a foundation for the port facility structure that we subsequently construct on the 3 Table of Contents piles.
We believe that compliance with existing federal, state and local environmental laws and regulations will not have a material adverse effect on our business, results of operations, or financial condition. In addition, we could be affected by future laws or regulations.
We believe that compliance with existing federal, state and local environmental laws and regulations will not have a material adverse effect on our business, results of operations, or financial condition. We could be affected by future laws or regulations.
We believe that our turnkey capability, expertise, experience and reputation for providing safe and timely quality services, safety record and programs, versatile equipment fleet, financial strength, surety bonding capacity, knowledge of local markets and conditions, and project management and estimating abilities allow us to compete effectively.
We believe that our turnkey capability, expertise, experience and reputation for providing safe and timely quality services, safety record and programs, versatile equipment fleet, financial strength, surety bonding capacity, knowledge of local markets and conditions, and project management and estimating abilities are competitive strengths that allow us to compete effectively.
We maintain multiple specialty dredges of various sizes and specifications to meet customer needs. Our dredging services are typically combined with our marine construction services to provide a turn-key solution for our customers. Our specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair.
We maintain multiple specialty dredges of various sizes and specifications to meet customer needs. Our dredging services are typically combined with our marine construction services to provide a turnkey solution for our customers. Our specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair.
Financial Information About Geographic Areas We are a project-driven marine and concrete contractor, and our operations represent two reportable segments for financial reporting. Our business is primarily conducted along the coastal regions of the United States for our marine segment and in the metropolitan areas of Texas for our concrete segment.
Financial Information About Geographic Areas We are a project-driven marine and concrete contractor, and our operations represent two reportable segments for financial reporting. Our business is primarily conducted along the coastal regions of the United States, including Alaska and Hawaii, for our marine segment and in the metropolitan areas of Texas for our concrete segment.
The following includes an overview of our diverse markets in the concrete industry: 7 Table of Contents Industrial developments Our industrial markets include manufacturing plants, industrial warehousing, distribution centers, wastewater treatment facilities and facilities supporting the petrochemical industry. An expected increase in distribution has generated a need for substantial industrial park developments.
The following includes an overview of our diverse markets in the concrete industry: Industrial developments Our industrial markets include manufacturing plants, industrial warehousing, distribution centers, wastewater treatment facilities and facilities supporting the petrochemical industry. An expected increase in distribution has generated a need for substantial industrial park developments.
Navy has the responsibility for the maintenance of 40 facilities in the United States, which includes a significant amount of marine infrastructure. We believe the U.S. Navy will continue to maintain strategic facilities, including required maintenance and upgrades to its marine facility infrastructure. The U.S.
Navy has the responsibility for the maintenance of 40 facilities in the United States, which includes a significant amount of marine infrastructure. We believe the U.S. Navy will continue to maintain strategic facilities, including required maintenance and upgrades to its marine facility infrastructure. 5 Table of Contents The U.S.
Further, restrictions on work during the Whooping Crane nesting period in the Aransas Pass National Wildlife Refuge from October 1 through April 15 each year and during the non-dormant grass season for sea grass in the Laguna Madre from March 1 through November 30 each year impact our construction operations in the Texas Gulf Coast area.
Further, restrictions on work during the Whooping 10 Table of Contents Crane nesting period in the Aransas Pass National Wildlife Refuge from October 1 through April 15 each year and during the non-dormant grass season for sea grass in the Laguna Madre from March 1 through November 30 each year impact our construction operations in the Texas Gulf Coast area.
If these efforts are ever successful, it could result in significantly increased competition and have a material adverse effect on our marine segment business, results of operations, cash flows or financial condition. From time to time, we compete with certain national land-based heavy civil contractors.
If these efforts were to be successful, it could result in significantly increased competition and have a material adverse effect on our marine segment business, results of operations, cash flows or financial condition. From time to time, we compete with certain national land-based heavy civil contractors.
The U.S. citizenship ownership and control standards require the vessel-owning entity to be at least 75% U.S. citizen owned and prohibit the demise or bareboat 10 Table of Contents chartering of the vessel to any entity that does not meet the 75% U.S. citizen ownership test.
The U.S. citizenship ownership and control standards require the vessel-owning entity to be at least 75% U.S. citizen owned and prohibit the demise or bareboat chartering of the vessel to any entity that does not meet the 75% U.S. citizen ownership test.
At December 31, 2022, the capacity under our current bonding arrangement was at least $750 million, with approximately $175 million of projects being bonded. We believe our strong balance sheet and working capital position will allow us to continue to access our bonding capacity. Trade Names We operate under a number of trade names.
At December 31, 2023, the capacity under our current bonding arrangement was at least $750 million, with approximately $575 million of projects being bonded. We believe our strong balance sheet and working capital position will allow us to continue to access our bonding capacity. Trade Names We operate under a number of trade names.
CERCLA authorizes the EPA, and in some cases third parties, to take actions in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur.
CERCLA authorizes the EPA, and in some cases third parties, to take actions in response to threats to the public health or the 9 Table of Contents environment and to seek to recover from the responsible classes of persons the costs they incur.
We apply our concrete experience to a variety of office building project types, including low, mid-rise and high-rise concrete structures, whether in downtown metropolitan cities or in business districts serving neighboring communities. We utilize different technologies for elevated concrete structures, such as high-rise concrete structures.
We also apply our concrete experience to a variety of office building project types, including low, mid-rise and high-rise concrete structures, whether in downtown metropolitan cities or in business districts serving neighboring communities. 4 Table of Contents We utilize different technologies for elevated concrete structures, such as high-rise concrete structures.
These piles can exceed four feet in diameter, can range up to 170 feet in overall length, and are often driven 90 feet into the sea or river floor. We do not control the funding of bridge and causeway work, which has not been consistently available.
These piles can exceed four feet in diameter, can range up to 170 feet in overall length, and are often driven 90 feet into the sea or river floor. We do not control the funding of bridge and causeway work, which has not been consistently available to fund maintenance and projects in the marine infrastructure industry.
We do not generally register our trademarks with the U.S. Patent & Trademark Office, but instead rely on state and common law protections. While we consider our trade names to be valuable assets, we do not consider any single trademark or trade name to be of such material importance that its absence would cause a material disruption of our business.
Patent & Trademark Office, but instead rely on state and common law protections. While we consider our trade names to be valuable assets, we do not consider any single trademark or trade name to be of such material importance that its absence would cause a material disruption of our business.
In addition, channels 6 Table of Contents and waterways must maintain certain depths to accommodate ship and barge traffic. Natural sedimentation in these channels and waterways require routine maintenance dredging to maintain navigability.
In addition, channels and waterways must maintain certain depths to accommodate ship and barge traffic. Natural sedimentation in these channels and waterways require routine maintenance dredging to maintain navigability.
Congress may consider legislation to reduce emissions of greenhouse gases in response to climate change concerns. In addition, several states have declined to wait on Congress to develop and implement climate control legislation and have already taken legal measures to reduce emissions of greenhouse gases.
In addition, several states have declined to wait on Congress to develop and implement climate control legislation and have already taken legal measures to reduce emissions of greenhouse gases.
Our employees are not currently represented by labor unions, except certain employees in our marine segment located in the Pacific Northwest and Alaska and certain employees operating specialized equipment for our concrete segment, in respect of which collective bargaining agreements are in place. Employees represented by collective bargaining agreements represent approximately 4.3% of our total workforce.
Our employees are not currently represented by labor unions, except certain employees in our marine segment located in the Pacific, including Washington, Alaska, and Hawaii, as well as certain employees operating specialized equipment for our concrete segment, in respect of which collective bargaining agreements are in place. Employees represented by collective bargaining agreements represent approximately 4.8% of our total workforce.
We consolidate our operations under the brand name “Orion Group Holdings, Inc.” We may be known as Orion Marine Group, Orion Marine Construction, Orion Marine Contractors, Orion Construction, East and West Jones Placement Area, Schneider E&C, Orion Industrial Construction, Orion Concrete Construction, T.A.S. Commercial Concrete Construction, T.A.S. Commercial Concrete Solutions, T.A.S. Proco, or Houston Industrial Tool Services.
We consolidate our operations under the brand name “Orion Group Holdings, Inc.” We may be known as Orion Marine Group, Orion Marine Construction, Orion Marine Contractors, Orion Construction, East and West Jones Placement Area, Schneider E&C, Orion Industrial Construction, Orion Concrete Construction, Proco, or Houston Industrial Tool Services. We do not generally register our trademarks with the U.S.
Revenues generated from our marine segment outside the United States, primarily in the Caribbean Basin and Mexico, totaled 0.9%, 0.5%, and 1.8% of total revenues for the years ended December 31, 2022, 2021 and 2020, respectively. Our long-lived assets are substantially located in the United States.
Revenues generated from our marine segment outside the United States, primarily in the Caribbean Basin and Mexico, totaled 5.1%, 0.9% and 0.5% of total revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
In the past, interest groups have unsuccessfully lobbied Congress to modify or 8 Table of Contents repeal the Jones Act to facilitate foreign flag competition for trades and cargos currently reserved for U.S. flag vessels under the Jones Act.
In the past, interest groups have unsuccessfully lobbied Congress to modify or repeal the Merchant Marine Act of 1920 (the “Jones Act”) to facilitate foreign flag competition for trades and cargos currently reserved for U.S. flagged vessels under the Jones Act.
All equipment which requires certification has obtained such certification and is maintained in good standing thereunder. In addition, where required, our vessels’ permissible loading capacities require certification by the American Bureau of Shipping (“ABS”).
Equipment Certification In our marine segment, some of our equipment requires certification by the U.S. Coast Guard. All equipment that requires certification has obtained such certification and is maintained in good standing thereunder. In addition, where required, our vessels’ permissible loading capacities require certification by the American Bureau of Shipping (“ABS”).
In addition, while 12 Table of Contents we believe that we are in material compliance with the ESA, the discovery of previously unidentified endangered species could cause us to incur additional costs or become subject to operating restrictions or bans in the affected area. Climate Change The U.S.
In addition, while we believe that we are in material compliance with the ESA, the discovery of previously unidentified endangered species could cause us to incur additional costs or become subject to operating restrictions or bans in the affected area. Climate Change The U.S. Congress may consider legislation to reduce emissions of greenhouse gases in response to climate change concerns.
We provide customers in this sector turnkey services to meet all their port expansion and maintenance work. Bridges and Causeways According to the American Society of Civil Engineers, as of their most recent report, one in thirteen of the nation’s bridges are structurally deficient, and the average age of the nation’s bridges is 45 years old.
We provide customers in this sector turnkey services to meet all their port expansion and maintenance work. Bridges and Causeways According to the 2021 report of the American Society of Civil Engineers, one in thirteen of the nation’s bridges are structurally deficient, and 42% of all bridges in the nation are at least 50 years old.
In addition, neighboring landowners and other third parties often file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. 11 Table of Contents We currently own or lease properties that have been used by other industries for a number of years.
In addition, neighboring landowners and other third parties often file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. We currently own or lease properties that have been used by others prior to our ownership.
Government Regulations We are required to comply with the macro regulatory requirements of federal, state and local governmental agencies and authorities including the following: ● regulations concerning workplace safety, labor relations and disadvantaged businesses; ● licensing requirements applicable to shipping and dredging; and ● permitting and inspection requirements applicable to marine construction projects.
Government Regulations We are required to comply with the macro regulatory requirements of federal, state and local governmental agencies and authorities including the following: ● regulations concerning workplace safety, labor relations and disadvantaged businesses; ● licensing requirements applicable to shipping and dredging; and ● permitting and inspection requirements applicable to marine construction projects. 8 Table of Contents In our marine segment, we are also subject to government regulations pursuant to the Foreign Dredge Act, the Jones Act, the Shipping Act and the Vessel Documentation Act.
These statutes, together with similar requirements for other sectors of the maritime industry, are collectively referred to as “cabotage” laws. In both our marine and concrete segments, we are subject to the requirements of OSHA and certain regulations for the EPA.
These statutes, together with similar requirements for other sectors of the maritime industry, are collectively referred to as “cabotage” laws. In both our marine and concrete segments, we are subject to the requirements of the U.S. Occupational Safety and Health Administration (“OSHA”) and certain regulations for the Environmental Protection Agency (“EPA”).
Human Capital Management As of December 31, 2022, our marine segment had 868 employees, 286 of whom were full-time salaried personnel and most of the remainder of whom were hourly personnel. Our concrete segment had 1,348 employees, 197 of whom were full-time salaried personnel and most of the remainder were hourly personnel.
Human Capital Management As of December 31, 2023, our marine segment had 802 employees, 285 of whom were full-time salaried personnel and most of the remainder of whom were hourly personnel. Our concrete segment had 994 employees, 178 of whom were full-time salaried personnel and most of the remainder were hourly personnel.
Department of Defense, the energy industry, coastal protection and reclamation, along with hurricane restoration and repair and environmental remediation. We believe that this broad customer base enables us to lessen the negative effects during a downturn in a specific end market and respond quickly to the needs of expanding end markets.
We believe that this broad customer base enables us to lessen the negative effects during a downturn in a specific end market and respond quickly to the needs of expanding end markets.
Since then, we have expanded our reach both through organic growth and acquisitions. Strategic acquisitions have enhanced our operational capabilities, provided us with a larger geographic base, and added to our equipment fleet.
History and growth Orion Group Holdings, Inc. was founded in 1994 as a marine construction project management business. Since then, we have expanded our reach both through organic growth and acquisitions. Strategic acquisitions have enhanced our operational capabilities, provided us with a larger geographic base, and added to our equipment fleet.
We have the capability of providing design-build services and typically serve as the prime contractor for these types of projects. Marine transportation facility projects include building or rehabilitating public port facilities for container ship loading and unloading; cruise ship port facilities; private terminals; special-use Navy terminals; recreational use marinas and docks; and other marine-based facilities.
Marine transportation facility projects include building or rehabilitating public port facilities for container ship loading and unloading; cruise ship port facilities; private terminals; special-use Navy terminals; recreational use marinas and docks; and other marine-based facilities.
We have the abundant knowledge of the extensive formwork systems, cranes and equipment needed to successfully deliver multi-family projects – typically in tight spaces, whether it be podium structures, mid-rise, high-rise and luxury projects. We have earned the reputation for successfully managing and delivering multi-family projects with aggressive schedules.
We have the abundant knowledge of the extensive formwork systems, cranes and equipment needed to successfully deliver multi-family projects – typically in tight spaces, whether it be podium structures, mid-rise, high-rise and luxury projects. Our medical/healthcare projects range from hospitals to laboratories, including high rises and their garages.
We believe significant barriers to entry exist in the markets in which we operate, including the ability to bond large projects, maritime law constraints, specialized marine equipment and technical experience; however, a U.S. company that has adequate financial resources, access to technical expertise, and specialized equipment may become a competitor.
We believe significant barriers to entry exist in the markets in which we operate, including the ability to bond large projects, maritime law constraints, specialized marine equipment and technical experience; however, a U.S. company that has adequate financial resources, access to technical expertise, and specialized equipment may become a competitor. 7 Table of Contents Insurance and Bonding We maintain general and excess liability, construction equipment, workers’ compensation and other forms of insurance; all in amounts adequate for our operating needs and consistent with industry practice.
The commercial construction arena has been our focus and we have completed thousands of successful commercial projects – both simple and complex in the broader Texas market including Houston, Dallas, Fort Worth, Austin and San Antonio.
Concrete Construction Services Our concrete construction services have been involved in thousands of successful commercial projects – both simple and complex – in the broader Texas market, including Houston, Dallas and Fort Worth where we continue to operate, as well as Austin and San Antonio where we are in the process of winding down our operations.
Equipment We operate and maintain a large and diverse equipment fleet in our marine and concrete segments, substantially all of which we own, that includes the following: ● Barges - spud barges, material barges, deck barges, anchor barges, hopper barges, and fuel barges.
Equipment We operate and maintain a large and diverse equipment fleet in our marine and concrete segments, substantially all of which we own, that includes barges, dayboats, tugs, dredges, cranes, pump trucks and laser screeds.
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
None of the information on our website is incorporated into this Annual Report on Form 10-K by reference. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. ​
We believe that ownership of certain equipment is generally preferable to leased or rented equipment in some cases because it ensures the equipment is available as needed and normally results in lower costs. We continually monitor and adjust our fleet size so that it is consistent with the size of the business, considering both existing backlog and expected future work.
We believe that ownership of certain equipment is generally preferable to spot leasing or rental of equipment in some cases because it ensures the equipment is available as needed and normally results in lower costs.
Structural developments Our structural markets include mid- and high-rise multi-family living, single and multi-story office buildings, parking garages, shopping malls, and other multi-story buildings. Continued growth in business expansions and relocations to Texas are driving an increase in the need for office space and apartment complexes.
Structural developments Our structural markets include mid- and high-rise multi-family living, single and multi-story office buildings, parking garages, shopping malls, and other multi-story buildings.
We believe that our equipment is well maintained and suitable for our current operations. We have the ability to extend the useful life of our equipment through capital refurbishment at periodic intervals. Most of our fleet is serviced by our own mechanics who work at various maintenance sites and facilities.
We continually monitor and adjust our fleet size so that it is consistent with the size of the business, considering both existing backlog and expected future work. We believe that our equipment is well maintained and suitable for our current operations. We have the ability to extend the useful life of our equipment through capital refurbishment at periodic intervals.
The increase in new businesses and new educational facilities has sparked the need for additional hotels and stadiums across the metropolitan areas of Texas. Customers Our customers in the marine segment include federal, state and local governmental agencies as well as private commercial and industrial enterprises in the United States and the Caribbean Basin.
Customers Our customers in the marine segment include federal, state and local governmental agencies as well as private commercial and industrial enterprises in the Caribbean Basin and the United States, including Alaska and Hawaii.
We are also capable of building, and have built, much of our highly specialized equipment. Our strategy is to deploy our fleet from project to project as required. Equipment Certification In our marine segment, some of our equipment requires certification by the U.S. Coast Guard.
Most of our fleet is serviced by our own mechanics who work at various maintenance sites and facilities. We are also capable of building, and have built, much of our highly specialized equipment. Our strategy is to deploy our fleet from project to project as required.
Our marine segment provides construction and dredging services relating to marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design, and specialty services. Our concrete segment provides turnkey concrete construction services including place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.
Our marine segment provides construction and dredging services including marine transportation facility construction, marine pipeline construction, marine environmental structures construction, dredging of waterways, channels and ports, environmental dredging, design, and specialty services related to marine construction, fabrication, and dredging.
Typically, the developer and builders construction method of choice for these projects are concrete tilt-wall structures ranging in size from a few thousand square feet to over one million square feet. 5 Table of Contents Speed, efficiency and quality are keys to meeting our clients’ needs to deliver projects on or ahead of schedule.
Our warehouse and distribution projects include large, intermediate and small facilities that are involved in nearly every commercial, private and public industry. Typically, the developer and builder’s construction method of choice for these projects are concrete tilt-wall structures ranging in size from a few thousand square feet to over one million square feet.
Retail developments As population continues to grow, so does the need for retail developments, such as grocery stores, shopping malls, restaurants, free standing retail outlets, and other entertainment venues. Recreational developments Our recreational markets include a wide range of hotels, sports venues, and stadiums.
Continued growth in business expansions and relocations to Texas are driving an increase in the need for office space and apartment complexes. 6 Table of Contents Retail developments As population continues to grow, so does the need for retail developments, such as grocery stores, shopping malls, restaurants, free standing retail outlets, and other entertainment venues.
Access to the Company’s Filings We maintain a website at www.oriongroupholdingsinc.com where we make available, free of charge, access to the various reports we file with, or furnish to, the SEC. None of the information on our website is incorporated into this Annual Report on Form 10-K by reference.
Chipman Earle 51 Executive Vice President, Chief Administrative Officer, Chief Compliance Officer, General Counsel and Secretary 2023 ​ Access to the Company’s Filings We maintain a website at www.oriongroupholdingsinc.com where we make available, free of charge, access to the various reports we file with, or furnish to, the SEC.
Industry and Market Overview Marine Segment We provide our services to similar customers, or in some cases, the same customers, across the markets served by our business. Our marine segment customers may be in diverse end markets, including port expansion and maintenance, bridges, causeways and other marine infrastructure, the recreational waterside industry, the U.S.
Our marine segment customers are from time to time in diverse end markets, including port expansion and maintenance, bridges, causeways and other marine infrastructure, the recreational waterside industry, the U.S. Department of Defense, the energy industry, coastal protection and reclamation, along with hurricane restoration and repair and environmental remediation.
We also have had the great privilege of teaming with church leaders and church builders to create worship areas for people from all walks of life. With more than 5 million square feet of worship and fellowship facilities, our religious portfolio includes projects ranging from 2,000 square feet to more than 200,000 square feet.
We also have had the great privilege of teaming with church leaders and church builders to create worship areas for people from all walks of life. Industry and Market Overview Marine Segment We provide our services to similar customers, or in some cases, the same customers, across the markets served by our business.
We are headquartered in Houston, Texas with regional offices throughout our operating areas. Orion Group Holdings, Inc. is a Delaware corporation. The common stock of Orion Group Holdings, Inc. is listed on the New York Stock Exchange under the symbol ORN.
Our concrete segment provides turnkey concrete construction services including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas. We are headquartered in Houston, Texas with regional offices throughout our operating areas. Orion Group Holdings, Inc. is a Delaware corporation.
Unless the context otherwise requires, all references herein to “Orion”, the “Company”, the “Registrant”, “we”, “us” or “our” refer to Orion Group Holdings, Inc. and its consolidated subsidiaries and affiliates. History and growth Orion Group Holdings, Inc. was founded in 1994 as a marine construction project management business.
The common stock of Orion Group Holdings, Inc. is listed on the New York Stock Exchange under the symbol ORN. Unless the context otherwise requires, all references herein to “Orion,” the “Company,” the “Registrant,” “we,” “us,” or “our” refer to Orion Group Holdings, Inc. and its consolidated subsidiaries and affiliates.
Our teams are now working together across divisions and have a shared sense of mission and purpose. ● Continue to enhance and build our “Target Zero” safety culture, practices, and systems. Services Provided Marine Construction Services Marine construction services include construction, restoration, dredging, maintenance and repair of marine transportation facilities, marine pipelines, bridges and causeways, and marine environmental structures.
Services Provided Marine Construction Services Marine construction services include construction, restoration, dredging, maintenance and repair of marine transportation facilities, marine pipelines, bridges and causeways, and marine environmental structures. We have the capability of providing design-build services and typically serve as the prime contractor for these types of projects.
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Our operating principles and guiding beliefs include: ● Safety - We believe workplace safety and accident prevention is our moral obligation as well as a good business practice.
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Most of these specialty services support our other services or provide an introductory opportunity to other customers.
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By identifying and concentrating resources to address job site hazards, we continually strive to reduce our incident rates and the severity of the incidents. ● Quality - We believe in the importance of performing high quality work. ● Delivery - We believe in the importance of performing tasks safely, efficiently, and timely with industry-leading execution. ● Teamwork - We relentlessly pursue success together across the business as a team. ● Integrity - We believe that integrity is the foundation upon which all other operating principles and guiding beliefs rest and it is achieved through maintaining high ethical standards through an established code of conduct and an effective company-wide compliance program. 3 Table of Contents ● Sustainability - We are committed to sustainability throughout our operations and throughout our corporate functions and we advance initiatives that support a more sustainable world.
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Recreational developments Our recreational markets include a wide range of hotels, sports venues, and stadiums. The increase in new businesses and new educational facilities has sparked the need for additional hotels and stadiums across the metropolitan areas of Texas.
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We do business in a way that meets the needs of the present while contributing to an environmentally, socially, and economically sustainable future .
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Our long-lived assets are substantially located in the United States. ​ 11 Table of Contents Information about our Executive Officers Certain information concerning our executive officers and directors as of March 1, 2024 is set forth below. ​ ​ ​ ​ ​ ​ ​ ​ Name Age Position with the Company Year Joined the Registrant Austin J.
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Our Business Strategy ​ Following a comprehensive review of our operations, assets and talent, we have developed a three point strategic plan to unlock Orion’s full potential for long-term, sustainable growth to the benefit of all of our stakeholders. ​ Three Point Strategic Plan ​ 1.) Improve the profitability of the concrete business. ● Appointed new leadership for the concrete segment, tapping one of our senior leaders from the Marine business with many years of experience successfully and profitably delivering complex projects. ● Refocus our concrete business in core Texas markets of Dallas and Houston, robust markets where we have a track record of success and a runway to improve profitability. ● Invest in additional experienced project managers, and give our project teams the training and tools to drive efficiency and improved business outcomes. ​ 2.) Strengthen business development to drive growth. ● Build on our successful sales efforts and capitalize on favorable industry dynamics including the $1.2 trillion infrastructure bill; the U.S.
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Shanfelter 66 Chairman of the Board 2007 Thomas N. Amonett 80 Director 2007 Michael J. Caliel 64 Director 2019 Richard L. Daerr, Jr. 79 Director 2007 Margaret M. Foran 69 Director 2019 Quentin P. Smith, Jr. ​ 72 ​ Director ​ 2022 Mary E. Sullivan 67 Director 2019 Travis J.
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Navy investments in the Pacific; port expansions and maintenance resulting from the Panama Canal Expansion, and strong construction demand in both private and public sectors of the rapidly growing Texas market. ● Sharpen our business development focus, putting our efforts into pursuing those opportunities where our capabilities and expertise differentiate us.
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Boone 50 President and Chief Executive Officer 2022 Scott Thanisch 53 ​ Executive Vice President and Chief Financial Officer 2022 E.
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Our aim is to win quality projects at improved margins. ● Leverage our experience in the public infrastructure construction market from other parts of our business to assist our concrete segment in penetrating this more predictably funded sector. ● Build and deepen our client relationships to gain actionable insight into their future pursuits by investing in additional business development resources. ​ 3.) Investment and resources to realize Orion’s full potential. ● Strengthen our balance sheet for future growth.
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Complete the refinancing of our current credit facility to extend our debt maturities and provide us with the capital to take advantage of our market opportunities. ● Optimize our return on assets. The completion of our Central Texas concrete jobs in 2023 will present opportunities to sell or redeploy underutilized equipment.
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In addition, we will continue our efforts to monetize non-core real estate assets this year. ● Invest in our dredging fleet to better service our growth.
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Supporting our commitment to the environment, Orion’s fleet upgrades will also include investing in more efficient engines to achieve lower carbon emissions. ● Collaborate between our concrete and marine operations to drive synergies and leverage best practices.
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Most of these specialty services support our other services or provide an introductory opportunity to other customers. Concrete Construction Services The concrete segment has earned a reputation as one of the most recognizable and reputable concrete contractors where we operate. Our success has been achieved by maintaining a focus on our clients and addressing their problems.
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Warehouse and distribution projects include large, intermediate and small facilities serving needs in nearly every commercial, private and public industry.
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We have received awards for many of these projects. Medical/healthcare projects always come with stringent requirements. We have the knowledge and experience to meet these high expectations. From hospitals to laboratories, including high rises and their garages, we know how to carry out construction activities in densely occupied areas with minimal disturbance to critical facilities daily operations.
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We bring a breadth of knowledge and a diverse portfolio of education projects. We have completed over 20 million square feet of education projects including libraries, higher education, research facilities, athletic facilities, stadiums, elementary, middle and high schools. We have also applied our skills to state of the art performing arts facilities and studios.
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Retail centers play an important role for serving our neighborhoods. They address a variety of community needs and we have had the opportunity to build large regional shopping malls, national chain stores, power centers, small strip centers and corner retail shops.
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Insurance and Bonding We maintain general and excess liability, construction equipment, workers’ compensation and other forms of insurance; all in amounts adequate for our operating needs and consistent with industry practice.
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These vessels are used to provide work platforms for cranes and other equipment, to transport materials to the project site and to provide support for the project at the project site. ● Dayboats - small pushboats, dredge tenders and skiffs are used to shift barges at the project site, to move personnel and to provide general support to the project site. 9 Table of Contents ● Tugs - larger pushboats and tug boats are used to transport barges and other support equipment to and from the project site. ● Dredges - 24” cutter head suction dredges (diesel), 20” cutter head suction dredge (diesel/electric), 20” cutter head suction dredges (diesel), 16” cutter head suction dredges, and 12” portable cutter head suction dredges are used to provide dredging services at project sites. ● Cranes - crawler lattice boom cranes with lift capability from 50 tons to 400 tons and hydraulic rough terrain cranes with lift capability from 15 tons to 60 tons are used to provide lifting and pile driving capabilities on project sites, and to provide bucket work, including mechanical dredging and dragline work, to project sites. ● Tower Cranes - Capable of being assembled to reach heights of 600 feet and have a capacity of 44,000 pounds with a maximum of 242 foot working radius. ● Pump Trucks - concrete pump trucks are large, diesel-powered trucks mounted with a powerful pump, and an extendable, sectioned hose or cylinder to help facilitate the placement of concrete for construction projects. ● Laser Screeds - laser screeds are self-propelled four wheel drive, four wheel steer units that encompass a 20’ telescoping boom with a 12’ wide placement head.
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The screed head itself consists of 3 parts: the plow, the auger, and the vibrator. The plow disperses the concrete evenly, the auger removes the excess material to finished grade, and the vibrator smooths the surface. The screed has an on board computer system able to determine the correct elevation height and provide commands for elevation control.
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In our marine segment, we are also subject to government regulations pursuant to the Foreign Dredge Act, the Merchant Marine Act of 1920, commonly referred to as the "Jones Act", the Shipping Act and the Vessel Documentation Act.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, we sometimes bear the risk of delays caused by unexpected conditions or events. We could suffer penalties on our contracts for late completion. In many instances, including in our fixed-price contracts, we guarantee that we will complete a project by a scheduled date.
Biggest changeThese risks may increase if the project is of a long-term duration because of the elevated risk that the circumstances that we based our original bid will change in a manner that increases costs. In addition, we sometimes bear the risk of delays caused by unexpected conditions or events. We could suffer penalties on our contracts for late completion.
Among other things, our requirements under out debt instruments could potentially limit our ability to: ● incur additional indebtedness or liens; ● make payments in respect of or redeem or acquire any debt or equity issued by us; ● sell assets; ● make loans or investments; ● make guarantees; ● enter into any hedging agreement for speculative purposes; ● acquire or be acquired by other companies; or ● amend some of our contracts.
Among other things, our requirements under our debt instruments could potentially limit our ability to: ● incur additional indebtedness or liens; ● make payments in respect of or redeem or acquire any debt or equity issued by us; ● sell assets; ● make loans or investments; ● make guarantees; ● enter into any hedging agreement for speculative purposes; ● acquire or be acquired by other companies; or ● amend some of our contracts.
If we are not able to locate qualified third-party subcontractors or the amount we are required to pay for subcontractors or equipment and supplies exceeds what we have estimated, especially in a lump-sum or a fixed-price contract, we may suffer losses on these contracts.
If we are not able to locate or engage qualified third-party subcontractors or the amount we are required to pay for subcontractors or equipment and supplies exceeds what we have estimated, especially in a lump-sum or a fixed-price contract, we may suffer losses on these contracts.
Due to the significant competition in the marketplace and the level of regulations on government contracts, we could suffer reductions in new projects and see lower revenues and profit margins on those projects, which could have a material adverse effect on the business, operating results and financial condition.
Due to the significant competition in the marketplace and the level of regulations on government contracts, we could suffer reductions in new projects and see lower revenues and profit margins on those projects, which could have a material adverse effect on our business, operating results and financial condition.
Backlog consists of awarded projects which have either (a) not yet been started or (b) are in progress but are not yet complete. In the latter case, the revenue value reported in backlog is the remaining value related to work that has not yet been completed.
Backlog consists of awarded projects that have either (a) not yet been started or (b) are in progress but are not yet complete. In the latter case, the revenue value reported in backlog is the remaining value related to work that has not yet been completed.
The restrictions under our indebtedness may prevent us from engaging in certain transactions which might otherwise be considered beneficial to us, for example, they could: ● increase our vulnerability to general adverse economic and industry conditions; ● limit our ability to fund future working capital and capital expenditures, to engage in future acquisitions, to enter into new construction or development activities, or to otherwise fully realize the value of our assets and opportunities because of the need to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness or to comply with any restrictive terms of our indebtedness; 21 Table of Contents ● limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate; and ● place us at a competitive disadvantage as compared to our competitors that have less debt.
The restrictions under our indebtedness may prevent us from engaging in certain transactions which might otherwise be considered beneficial to us, for example, they could: ● increase our vulnerability to general adverse economic and industry conditions; ● limit our ability to fund future working capital and capital expenditures, to engage in future acquisitions, to enter into new construction or development activities, or to otherwise fully realize the value of our assets and opportunities because of the need to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness or to comply with any restrictive terms of our indebtedness; ● limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate; and ● place us at a competitive disadvantage as compared to our competitors that have less debt.
These risks could result in damage to or destruction of, dredges, transportation vessels, other maritime structures and buildings, and could also result in personal injury or death, environmental damage, performance delays, monetary losses or legal liability.
These risks could result in damage to , destruction or loss of, dredges, transportation vessels, other maritime structures and buildings, and could also result in personal injury or death, environmental damage, performance delays, monetary losses or legal liability.
To the extent commodity prices decline or fluctuate and our customers defer new investments or cancel or delay existing projects, the demand for our services decreases, which may have a material adverse impact on the business, financial condition, and results of operations. Additionally, rising interest rates may affect the cost of financing for our customers’ capital projects and investments.
To the extent commodity prices decline or fluctuate and our customers defer new investments or cancel or delay existing projects, the demand for our services decreases, which may have a material adverse impact on the business, financial condition, and results of operations. Interest rates may affect the cost of financing for our customers’ capital projects and investments.
Moreover, construction projects for which our services are contracted may require significant expenditures by us prior to receipt of relevant payments by a customer and may expose us to potential credit risk if such customer should encounter financial difficulties. Such expenditures could reduce our cash flows and necessitate increased borrowings under our credit facility.
Moreover, construction projects for which our services are contracted may require significant expenditures by us prior to receipt of relevant payments by a customer and may expose us to potential credit risk if such customer should encounter financial difficulties. Such expenditures could reduce our cash flows and necessitate increased borrowings under our Credit Agreement.
A number of other factors, including the financial condition of the shipping industry, could adversely affect our customers and their ability or willingness to fund capital expenditures in the future. During downturns in the U.S. or world economies, the anticipated port usage in our geographic markets may decline, resulting in less port construction, upgrading and maintenance.
A number of other factors, including the financial condition of the shipping industry, could adversely affect our customers and their ability or willingness to fund capital expenditures in the future. During downturns in the U.S. or world economies, the 18 Table of Contents anticipated port usage in our geographic markets may decline, resulting in less port construction, upgrading and maintenance.
The short-term nature of the majority of our projects typically protects us from these potential price increases, however, if we are unable to procure commodities for completion of our projects at estimated prices due to rising commodity prices, our margins may erode on certain in progress or future projects.
The short-term nature of the majority of our projects typically 14 Table of Contents protects us from these potential price increases, however, if we are unable to procure commodities for completion of our projects at estimated prices due to rising commodity prices, our margins may erode on certain in progress or future projects.
Our marine infrastructure construction, salvage, demolition, dredging and dredge material disposal activities are subject to stringent and complex federal, state and local environmental laws and regulations, including those concerning air 18 Table of Contents emissions, water quality, solid waste management, and protection of certain marine and bird species, their habitats, and wetlands.
Our marine infrastructure construction, salvage, demolition, dredging and dredge material disposal activities are subject to stringent and complex federal, state and local environmental laws and regulations, including those concerning air emissions, water quality, solid waste management, and protection of certain marine and bird species, their habitats, and wetlands.
Such arrest or seizure could preclude the vessel from working, thereby causing delays in marine segment projects. 17 Table of Contents Our business is subject to significant operating risks and hazards that could result in damage or destruction to property, injuries or loss of life, which could result in losses or liabilities to us.
Such arrest or seizure could preclude the vessel from working, thereby causing delays in marine segment projects. Our business is subject to significant operating risks and hazards that could result in damage or destruction to property, injuries or loss of life, which could result in losses or liabilities to us.
As a result, demand for our services could substantially decline for extended periods. 19 Table of Contents Restrictions on foreign ownership of our vessels could limit our ability to sell off any portion of our marine construction segment or result in the forfeiture of our vessels or in our inability to continue our operations in United States navigable waters.
As a result, demand for our services could substantially decline for extended periods. Restrictions on foreign ownership of our vessels could limit our ability to sell off any portion of our marine construction segment or result in the forfeiture of our vessels or in our inability to continue our operations in United States navigable waters.
Any violations of these regulations could bring about litigation, 13 Table of Contents including the possibility of qui tam (“whistleblower”) litigation brought by private individuals on behalf of the government under the Federal Civil False Claims Act, and could cause termination of other existing government contracts and result in the loss of future government contracts.
Any violations of these regulations could bring about litigation, including the possibility of qui tam (“whistleblower”) litigation brought by private individuals on behalf of the government under the Federal Civil False Claims Act, and could cause termination of other existing government contracts and result in the loss of future government contracts.
Our business, operating results and financial condition could be materially and adversely affected if a public health epidemic or pandemic or other contagious outbreak, such as the recent coronavirus (“COVID-19”) pandemic (as discussed in greater detail below), interferes with our ability, or that of our employees, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business. ​ Terrorist attacks, targeted at ports, marine facilities, shipping or metropolitan areas could affect the markets in which we operate our business and our expectations.
Our business, operating results and financial condition could be materially and adversely affected if a public health epidemic or pandemic or other contagious outbreak, such as the coronavirus (“COVID-19”) pandemic, interferes with our ability, or that of our employees, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business. ​ Terrorist attacks, targeted at ports, marine facilities, shipping or metropolitan areas could affect the markets in which we operate our business and our expectations.
Failure to comply with the terms and conditions of any existing or future indebtedness, including current or prospective covenants, would constitute an event of default. If an event of default occurs, the lenders will have the right to accelerate the maturity of such indebtedness and foreclose upon the collateral, if any, securing that indebtedness.
Failure to comply with the terms and conditions of any existing or future indebtedness, including current or prospective covenants, would constitute an event of default. If an 22 Table of Contents event of default occurs, the lenders will have the right to accelerate the maturity of such indebtedness and foreclose upon the collateral, if any, securing that indebtedness.
In addition, government contracts are subject to specific procurement regulations, contract provisions and a variety of regulatory requirements relating to their formation, administration, performance and accounting. Many of these contracts include express or implied certifications of compliance with applicable laws and contract provisions.
In addition, government contracts are subject to specific procurement regulations, contract provisions and a variety of regulatory requirements relating to their formation, 12 Table of Contents administration, performance and accounting. Many of these contracts include express or implied certifications of compliance with applicable laws and contract provisions.
If we incur additional indebtedness in the future, it likely would be under arrangements that may have terms and conditions at least as restrictive as those contained in our existing Credit Agreement. At December 31, 2022, available capacity to borrow on the revolving lines of credit was $6.0 million.
If we incur additional indebtedness in the future, it likely would be under arrangements that may have terms and conditions at least as restrictive as those contained in our existing Credit Agreement. At December 31, 2023, available capacity to borrow on the revolving lines of credit was $47.7 million.
The Foreign Dredge Act of 1906, the Merchant Marine Act of 1920 (the “Jones Act”), the Shipping Act of 1984 and the Vessel Documentation Act require vessels engaged in the transport of merchandise or passengers between two points in the United States or dredging in the navigable waters of the United States to be owned and controlled by United States citizens.
The Foreign Dredge Act of 1906, the Jones Act, the Shipping Act of 1984 and the Vessel Documentation Act require vessels engaged in the transport of merchandise or passengers between two points in the United States or dredging in the navigable waters of the United States to be owned and controlled by United States citizens.
The revenue, cost and gross profit realized on such contracts can vary, sometimes substantially, from the original projections due to changes in a variety of factors, such as: ● failure to properly estimate costs of engineering, design, material, equipment or labor; ● unanticipated technical problems with the structures or services being supplied by us, which may require that we spend our own funds to remedy the problem; ● project modifications creating unanticipated costs; ● differing site conditions; ● changes in the costs of equipment, materials, labor or subcontractors; ● our suppliers’ or subcontractors’ failure to perform; ● difficulties in our customers obtaining required governmental permits or approvals; ● changes in local laws and regulations; ● changes in ad valorem and other tariffs; ● delays caused by local weather conditions; and ● exacerbation of any one or more of these factors as projects grow in size and complexity. 16 Table of Contents These risks may increase if the project is of a long-term duration because of the elevated risk that the circumstances upon which we based our original bid will change in a manner that increases costs.
The revenue, cost and gross profit realized on such contracts can vary, sometimes substantially, from the original projections due to changes in a variety of factors, such as: ● failure to properly estimate costs of engineering, design, material, equipment or labor; ● unanticipated technical problems with the structures or services being supplied by us, which may require that we spend our own funds to remedy the problem; ● project modifications creating unanticipated costs; ● differing site conditions; ● changes in the costs of equipment, materials, labor or subcontractors; ● our suppliers’ or subcontractors’ failure to perform; 15 Table of Contents ● difficulties in our customers obtaining required governmental permits or approvals; ● changes in local laws and regulations; ● changes in ad valorem and other tariffs; ● delays caused by local weather conditions; and ● exacerbation of any one or more of these factors as projects grow in size and complexity.
In addition, the conditions of the bonding market may change, increasing our costs of bonding or restricting our ability to get new bonding which could have a material adverse effect on our business, operating results and financial condition.
In addition, the conditions of the bonding market may change, increasing our costs of bonding or restricting our ability to get new bonding, which could have a material adverse effect on our business, operating results and financial condition We rely on highly competitive and highly regulated government contracts.
However, our surety is not obligated under the bonding agreement to issue bonds for us and bonding decisions are made on a case-by-case basis.
However, our sureties are not obligated under the bonding agreements to issue bonds for us, and bonding decisions are made on a case-by-case basis.
As of December 31, 2022, we had a backlog of work to be completed on contracts totaling approximately $216.7 million in our marine segment and approximately $232.1 million in our concrete segment. Backlog develops as a result of new awards, which represent the potential revenue value realizable pursuant to new project commitments received by us during a given period.
As of December 31, 2023, we had a backlog of work to be completed on contracts totaling approximately $602.5 million in our marine segment and approximately $159.7 million in our concrete segment. Backlog includes new awards, which represent the potential revenue value realizable pursuant to new project commitments received by us during a given period.
We may not be able to maintain a sufficient level of bonding capacity in the future, which could preclude us from being able to bid for certain contracts and successfully contract with certain customers, or cause us to have to increase our letter of credit utilization in lieu of bonds, thereby reducing available borrowing capacity under our credit facility.
We are currently near our bonding capacity limits and may not be able to maintain a sufficient level of bonding capacity in the future, which could preclude us from being able to bid for certain contracts and successfully contract with certain customers, or cause us to have to increase our letter of credit utilization in lieu of bonds, thereby reducing available borrowing capacity under our Credit Agreement (as defined below, in Risk Factors Relating to Our Indebtedness).
We also benefit from our reputation in the marine and concrete construction markets developed over years of successfully performing on projects. Both of these aspects of our business were developed and are maintained through our executives and key project managers.
We benefit from key customer relationships built over time and with both public and private entities. We also benefit from our reputation in the marine and concrete construction markets developed over years of successfully performing on projects. Both of these aspects of our business were developed and are maintained by our executives and key project managers.
Our concrete segment depends on continued growth in population in our geographic market areas in Texas to support residential and nonresidential construction. A growing population generates economic growth and expansion in construction for retail, office buildings, etc.
Our concrete segment depends on continued growth in population in our geographic market areas in Texas and most recently in Florida to support residential and nonresidential construction. A growing population generates economic growth and expansion.
We may also be affected by unknown risks or risks that we currently think are immaterial. If any such events actually occur, our business, financial condition, and results of operations could be materially adversely affected. Risk Factors Relating to Our Business We rely on highly competitive and highly regulated government contracts.
We may also be affected by unknown risks or risks that we currently think are immaterial. If any such events actually occur, our business, financial condition, and results of operations could be materially adversely affected.
We have entered into a bonding agreement with a large multinational surety which acts as surety, issues bid bonds, performance bonds and payment bonds, and obligates itself upon other contracts of guaranty required by us in the day-to-day operations of our business.
We have entered into bonding agreements with two large multinational surety companies, which act as surety, issue bid bonds, performance bonds and payment bonds, and obligate themselves upon other contracts of guaranty required by us in the day-to-day operations of our business.
A portion of the work performed under our contracts is performed by third-party subcontractors we hire. We also rely on third-party equipment manufacturers or suppliers to provide much of the materials used for projects. If we are unable to hire qualified subcontractors or find qualified equipment manufacturers or suppliers, our ability to successfully complete a project could be impaired.
Our projects could be hindered due to our dependence on third parties to complete many of our contracts. A portion of the work performed under our contracts is performed by third-party subcontractors we hire. We also rely on third-party equipment manufacturers or suppliers to provide much of the materials used for projects.
If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, and our net income and operating cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. 22 Table of Contents Additionally, rising interest rates may increase our cost of capital and, therefore, reduce the amount of capital available to fund our operations.
If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, and our net income and operating cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
To the extent that we experience a material increase in the frequency or severity of accidents or workers’ compensation and health claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected. Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities.
To the extent that we experience a 17 Table of Contents material increase in the frequency or severity of accidents or workers’ compensation and health claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected.
Maritime Administration. As a result, the sales price for that portion of our marine segment may not attain the amount that could be obtained in an unregulated market. The COVID-19 pandemic affected and may again adversely affect our business and results of operations and financial condition.
Maritime Administration. As a result, the sales price for that portion of our marine segment may not attain the amount that could be obtained in an unregulated market.
We maintain insurance to cover claims that arise from injuries to our workforce subject to a deductible. During 2022, we recorded $0.3 million of expense for our self-insured portion of these liabilities. We believe our recorded self-insurance reserves 20 Table of Contents represent our best estimate of the outcomes of these claims.
We maintain insurance to cover claims that arise from injuries to our workforce subject to a deductible. During 2023, we recorded $1.0 million of expense for our self-insured portion of these liabilities. We believe our recorded self-insurance reserves represent our best estimate of the outcomes of these claims. Should negative trends persist, we could be negatively impacted in the future.
Our bonding requirements may limit our ability to incur indebtedness. We generally are required to provide various types of surety bonds that provide an additional measure of security for our performance under certain government and private sector contracts. Our ability to obtain surety bonds depends upon various factors including our capitalization, working capital and amount of our indebtedness.
Additionally, rising interest rates may increase our cost of capital and, therefore, reduce the amount of capital available to fund our operations. Our bonding requirements may limit our ability to incur indebtedness. We generally are required to provide various types of surety bonds that provide an additional measure of security for our performance under certain government and private sector contracts.
We may be unable to obtain sufficient bonding capacity for our contracts and the need for performance and surety bonds may adversely affect our business. As more fully described in “Insurance and Bonding” under “Item 1. Business,” we are generally required to post bonds in connection with government and certain private sector contracts to ensure job completion.
Risk Factors Relating to Our Business We may be unable to obtain sufficient bonding capacity for our contracts and the need for performance and surety bonds may adversely affect our business. As more fully described in “Insurance and Bonding” under “Item 1.
Should negative trends persist; we could continue to be negatively impacted in the future. General Risk Factors Systems and information technology interruption or failure and data security breaches could adversely impact our ability to operate or expose us to significant financial losses and reputational harm.
These factors could adversely affect our operations and financial position. ​ General Risk Factors Systems and information technology interruption or failure and data security breaches could adversely impact our ability to operate or expose us to significant financial losses and reputational harm.
Our employees in the marine segment are covered by federal laws that provide seagoing employees remedies for job-related claims in addition to those provided by state laws. Many of our marine segment employees are covered by federal maritime law, including provisions of the Jones Act, the Longshore and Harbor Workers Act, (“USL&H”) and the Seaman’s Wage Act.
Many of our marine segment employees are covered by federal maritime law, including provisions of the Jones Act, the Longshore and Harbor Workers Act, (“USL&H”) and the Seaman’s Wage Act.
Risk Factors Relating to Our Indebtedness and Financing Plans Our indebtedness includes covenants and obligations with regard to our business activities that may restrict our ability to take certain actions which may negatively affect our financial condition. At December 31, 2022, our total indebtedness under the Credit Agreement was approximately $35.0 million.
Risk Factors Relating to Our Indebtedness Our indebtedness includes covenants and obligations with regard to our business activities that may restrict our ability to take certain actions which may negatively affect our financial condition.
Please see the Notes to the Consolidated Financial Statements beginning on page F-10 of this Annual Report on Form 10-K. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Borrowings under the Credit Facility allow for loans at variable rates of interest and expose us to interest rate risk.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Borrowings under the Credit Agreement allow for loans at variable rates of interest and expose us to interest rate risk.
If we are unable to continue to maintain the equipment in our fleet or are unable to obtain the requisite certifications, we may be forced to obtain third-party repair services, be unable to use our uncertified equipment or be unable to bid on contracts, which could have a material adverse effect on our business, operating results and financial condition.
If we are unable to continue to maintain the equipment in our fleet or are unable to obtain the requisite certifications, we may be forced to obtain third-party repair services, be unable to use our uncertified equipment or be unable to bid on contracts, which could have a material adverse effect on our business, operating results and financial condition. 16 Table of Contents In addition, our vessels in the marine segment may be subject to arrest or seizure by claimants as security for maritime torts committed by the vessel or us or the failure by us to pay for necessities, including fuel and repair services, which were furnished to the vessel.
If we subsequently fail to complete the project as scheduled, without sufficient justification, we may be liable for any customer losses resulting from such delay, generally in the form of contractually agreed-upon liquidated damages. In addition, failure to maintain a required schedule could cause us to default on our government contracts, giving rise to a variety of potential damages.
In many instances, including in our fixed-price contracts, we guarantee that we will complete a project by a scheduled date. If we subsequently fail to complete the project as scheduled, without sufficient justification, we may be liable for any customer losses resulting from such delay, generally in the form of contractually agreed-upon liquidated damages.
In order to help ensure that we can obtain required bonds, we may be limited in our ability to incur additional indebtedness that may be needed for potential acquisitions and operations. Our inability to incur additional indebtedness could have a material adverse effect on our business, operating results and financial condition. Item 1B. UNRESOLVED STAFF COMMENTS None
Our inability to incur additional indebtedness could have a material adverse effect on our business, operating results and financial condition . ​ Item 1B. UNRESOLVED STAFF COMMENTS None
To the extent that these events occur, the total costs of the project could exceed our original estimates, and we could experience reduced profits or, in some cases, a loss for that project. Our projects could be hindered due to our dependence on third parties to complete many of our contracts.
In addition, failure to maintain a required schedule could cause us to default on our government contracts, giving rise to a variety of potential damages. To the extent that these events occur, the total costs of the project could exceed our original estimates, and we could experience reduced profits or, in some cases, a loss for that project.
As a result, we may be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches. Any of these events could damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.
As a result, we may be required to expend significant 21 Table of Contents resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches.
We must comply with various affirmative and negative covenants contained in our Credit Agreement, some of which may restrict the way in which we would like to conduct our business.
At December 31, 2023, our total indebtedness under our three-year $103.0 million senior secured credit facility (the “Credit Agreement”), dated May 15, 2023, as amended, was approximately $38.0 million. We must comply with various affirmative and negative covenants contained in our Credit Agreement, some of which may restrict the way in which we would like to conduct our business.
Delays by our customers in obtaining 14 Table of Contents required approvals and permits for their infrastructure projects may delay their awarding contracts for those projects and, once awarded, the ability to commence construction under those contracts.
If an expected contract award or the related notice to proceed is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues. Delays by our customers in obtaining required approvals and permits for their infrastructure projects may delay their awarding contracts for those projects and, once awarded, the ability to commence construction under those contracts.
There is a risk that, if the Federal Reserve Board continues to increase interest rates to respond to inflation concerns, our concrete business could see a reduction in demand. The timing of new contracts may result in volatility in our cash flow and profitability.
If the Federal Reserve Board resumes increasing interest rates to respond to re-emerging inflation concerns, our concrete business could see a reduction in demand.
Our contracts are typically entered into on a project-by-project basis, so we generally do not have continuing contractual commitments with our customers beyond the terms of the current contract. We benefit from key customer relationships 15 Table of Contents built over time and with both public and private entities.
Although we have master service agreements with numerous customers that generally define the contractual terms under which we would perform awarded work, contractual commitments are typically entered into on a project-by-project basis, so we generally do not have continuing contractual commitments with our customers beyond the terms of the current contract.
In addition, we may be subject to disruptions by organized labor groups protesting our non-union status. Any of these events would be disruptive to our operations and could have a material adverse effect on the business, operating results and financial condition.
Any of these events would be disruptive to our operations and could have a material adverse effect on our business, operating results and financial condition. 20 Table of Contents Our employees in the marine segment are covered by federal laws that provide seagoing employees remedies for job-related claims in addition to those provided by state laws.
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If an expected contract award or the related notice to proceed is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues.
Added
Business,” we are generally required to post bonds in connection with government and certain private sector contracts to ensure job completion.
Removed
In addition, our vessels in the marine segment may be subject to arrest or seizure by claimants as security for maritime torts committed by the vessel or us or the failure by us to pay for necessities, including fuel and repair services, which were furnished to the vessel.
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Our marine segment depends on continued investment in and scheduled funding of port and marine infrastructure by federal, state, and local governmental authorities, as well as privately owned companies, which in turn may depend upon demand for marine vessels, including cruise ships and cargo ships, and other port-related activities.
Removed
The COVID-19 pandemic and related governmental and business responses had and may again have an adverse effect on the markets we derive project opportunities from, our customers, and our operations.
Added
If funding is diverted from port and marine infrastructure, including due to a reduced demand in the vessels to be serviced at those facilities, the demand for services within our marine segment may decrease. ​ 13 Table of Contents A significant portion of our revenues may be concentrated among a small number of projects. ​ Due to the nature and timing of large projects, a significant percentage of our revenues in a given period may result from one or two specific contracts, customers or projects.
Removed
The extent to which the COVID-19 pandemic could again impact us will depend on numerous evolving factors and future developments that are uncertain and that we are not able to predict, including: the timing, extent, trajectory and duration of the pandemic; the emergence of new variants; the development, availability, distribution and effectiveness of vaccines and treatments; the imposition of protective public safety measures; and the impact of the pandemic on the global economy and demand for our products and services.
Added
A reduction or delay in scheduled work or the termination of a contract for a particular project or the loss of a major customer could negatively impact our reputation and could have an adverse effect on our business, our revenue and results of operations.
Removed
Although the COVID-19 pandemic has subsided, we could again experience adverse impacts to our business as a result of any related economic recession that occurred or may occur in the future from COVID-19 or other similar global pandemics. Risk Factors Relating to Our Employees We may be subject to unionization, work stoppages, slowdowns or increased labor costs.
Added
For example, our portion of work as a dedicated subcontractor for the Pearl Harbor Project for the United States Navy totals $435.4 million, of which approximately $90.5 million was reported as revenue for the year ended December 31, 2023. The timing and funding of new contracts may result in volatility in our cash flow and profitability.
Removed
Our current Credit Agreement expires on July 31, 2023. The Company’s ability to continue as a going concern is dependent upon obtaining sufficient liquidity to repay its existing credit facility through a combination of proceeds from new debt, proceeds from the sale of underutilized assets, and operating cash flow.
Added
If we are unable to hire qualified subcontractors or find qualified equipment manufacturers or suppliers, our ability to successfully complete a project could be impaired.
Removed
As the Company’s refinancing activities are ongoing, there can be no assurances that the Company will be able to secure financing on terms that are acceptable to the Company or at all.
Added
Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities.
Removed
An explanatory paragraph is included in the report of our independent registered public accounting firm contained in this Annual Report describing an uncertainty about our ability to continue as a going concern. The inclusion of this explanatory paragraph related to going concern is considered an event of noncompliance with the Credit Agreement.
Added
Our marine segment operates in jurisdictions outside of the U.S. and we intend to expand our operations to more jurisdictions outside of the U.S. ​ Our marine segment, which accounted for 55.6%, 45.3% and 43.9% of our contract revenues for the years ended December 31, 2023, 2022 and 2021, respectively, has a significant portion of those operations performed outside of the U.S.
Removed
We have received a consent for this noncompliance with the Credit Agreement from our lenders. We are negotiating with new financing sources to refinance the indebtedness under our Credit Agreement, which is due on July 31, 2023, but we cannot assure we will complete the refinancing before the maturity date or the expiration date of the lenders’ consent.
Added
For the years ended December 31, 2023, 2022 and 2021, our international operations generated approximately 5.1%, 0.9% and 0.5% of our contract revenues, respectively.
Removed
Our current Credit Agreement expires on July 31, 2023, and all amounts there under are due on such date. The consent from our lenders expires on May 1, 2023. The Company does not presently have sufficient cash or other sources of liquidity to repay the debt under Credit Agreement at maturity or the expiration date of the consent.
Added
The Bahamas represented our largest international market outside of the U.S., with our Bahamian operations representing 5.1% of our contract revenues for the year ended December 31, 2023, including 11.0% of our total cash balance at December 31, 2023. In addition, we intend to expand our operations to other areas outside the U.S. in the future.
Removed
We are presently negotiating with financing sources to refinance the indebtedness under the Credit Agreement, but there is no assurance we will complete the financing before the maturity date, the expiration of the consent or at all. Our negotiation with financing sources is a rapidly evolving situation.
Added
International operations are subject to a number of risks and uncertainties that could negatively impact our results from operations, including: ​ ● difficulties and cost associated with complying with a wide variety of complex foreign laws, treaties, and regulations; ● uncertainties in or unexpected changes in regulatory environments or tax laws, including with respect to climate change; ● legal uncertainties, timing delays, and expenses associated with tariffs, export licenses, and other trade barriers; ● difficulties enforcing agreements and collecting receivables through foreign legal systems; ● risks associated with failing to comply with the U.S.
Removed
Failure to secure a new credit facility before the maturity date of the Credit Agreement or expiration of the consent from the lenders could restrict our access to capital which could prevent us from repaying amounts borrowed under our existing credit facility, from funding our operations, or from engaging in certain transactions which might otherwise be considered beneficial to us.
Added
Foreign Corrupt Practices Act, as amended, various export laws, and other similar laws applicable to our operations in international markets; ● exchange controls or other limitations on international currency movements, including restrictions on the repatriation of funds to the U.S. from certain countries; ● sanctions imposed by the U.S. government that prevent us from engaging in business in certain countries or with certain counter-parties; ● expropriation or nationalization of assets; ● inability to obtain or preserve certain intellectual property rights in the foreign countries in which we operate; ● our inexperience in certain international markets; ● health emergencies or pandemics; ● fluctuations in foreign currency exchange rates; ● political and economic instability; and ● wars, rebellions and acts of terrorism. ​ ​ 19 Table of Contents Our concrete segment is geographically concentrated in Texas. ​ Our concrete segment, which accounted for 44.4%, 54.7% and 56.1% of our contract revenues for the years ended December 31, 2023, 2022 and 2021, respectively, is concentrated in the metropolitan areas of the State of Texas, particularly Houston and Dallas.
Removed
In this event, we may be required to delay, limit, reduce, or terminate certain commercial efforts or strategies, may need to accelerate or add to planned disposals of certain equipment, real estate, or other assets, and may be prevented, or hindered from pursuing or performing contracts, all of which could adversely affect our business and stockholders.
Added
Given this concentration, general economic conditions, regulatory changes, changes in demographics, material costs, labor conditions, competition and other conditions that affect those metropolitan areas or the State of Texas may have a disproportionate impact on the performance of our concrete segment.
Removed
As described in Note 11 of the Notes to the Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K, we had $35.0 million of outstanding indebtedness under our Credit Facility as of December 31, 2022.
Added
In addition, our operations in Texas may make us more susceptible to natural disasters, including hurricanes, tornadoes and flooding. ​ Risk Factors Relating to Our Employees If we fail to attract, retain and engage appropriately qualified employees, including employees in key positions, our operations and profitability may be harmed.
Removed
Because that Credit Agreement matures on July 31, 2023, and we have not yet completed the work necessary to refinance the outstanding indebtedness under the Credit Agreement, our independent registered public accounting firm included in its report covering our audited financial statements for the period ended December 31, 2022, an explanatory paragraph describing the uncertainty about our ability to continue as a going concern.
Added
In addition, changes in market compensation rates may adversely affect our profitability. ​ Our performance is highly dependent on attracting, retaining and engaging appropriately qualified employees in our field and corporate offices. Our strategy of offering high-quality services and products for our customers requires a highly trained and engaged workforce.

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Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−1 removed1 unchanged
Biggest changeWe do not believe that any single facility is material to our operations and, if necessary, we could readily obtain a replacement facility. Some of our real estate assets are pledged to secure our credit facility.
Biggest changeWe do not believe that any single facility is material to our operations and, if necessary, we could readily obtain a replacement facility. Some of our real estate assets are pledged to secure our Credit Agreement. Item 3. LEGAL PROCEEDINGS Please refer to Note 16 of the Notes to the Financial Statements for a discussion of legal proceedings. Item 4.
We also own approximately 340 acres of land in the upper Houston Ship Channel used as a Dredge Material Placement Area ("DMPA"). We may lease smaller project related offices throughout our operating areas when the need arises. We believe that our existing facilities are adequate for our operations.
We lease office space in Alaska, Louisiana, Florida, Texas and Washington for our operations, including office and yard space for our concrete segment. We may lease smaller project-related offices throughout our operating areas when the need arises. We believe that our existing facilities are adequate for our operations.
Removed
We lease office space in Alaska, Louisiana, Florida, Texas and Washington for our operations, including office and yard space for our concrete segment. We own property for our waterfront maintenance and dock facilities, including an equipment yard in Texas, which totals approximately 35.3 acres.
Added
MINE SAFETY DISCLOSURES Not applicable. ​ ​ ​ 25 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosure (not applicable) 23 PART II ​ 23 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 36 Item 8.
Biggest changeItem 4. Mine Safety Disclosure (not applicable) 25 PART II ​ 26 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 38 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed1 unchanged
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information required by Item 201(d) of Regulation S-K is hereby incorporated by reference from our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A no later than April 30, 2023. ​ ​ 24 Table of Contents
Biggest changeSuch information will not be deemed to be soliciting material or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that it is specifically incorporated by reference. 26 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 201(d) of Regulation S-K is hereby incorporated by reference from our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A no later than April 29, 2024.
Issuer Repurchase of Equity Securities None 23 Table of Contents Performance Graph* The following graph shows the changes in the value of $100 invested in (1) the common stock of Orion Group Holdings, Inc., (2) the Standard & Poor’s 500 Stock Index and (3) the Dow Jones Heavy Construction Group Index.
Issuer Repurchase of Equity Securities None Performance Graph* The following graph shows the changes in the value of $100 invested in (1) the common stock of Orion Group Holdings, Inc., (2) the Standard & Poor’s 500 Stock Index and (3) the Dow Jones Heavy Construction Group Index.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange (“NYSE”) and trades under the symbol “ORN”. Holders As of March 9, 2023, we had approximately 4,848 stockholders of record including beneficial holders.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange (“NYSE”) and trades under the symbol “ORN.” Holders As of February 23, 2024, we had approximately 4,815 stockholders of record including beneficial holders.
For each graph, the investments are assumed to have occurred at the beginning of each period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2018 2019 2020 2021 2022 Orion Group Holdings, Inc. 54.79 ​ 66.28 ​ 63.35 48.15 ​ 30.40 S&P 500 93.76 ​ 120.84 ​ 140.49 178.27 ​ 143.61 Dow Jones US Heavy Civil Construction 73.37 ​ 97.71 ​ 117.94 176.12 ​ 201.30 * This table and the information therein is being furnished but not filed.
For each graph, the investments are assumed to have occurred at the beginning of each period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 2020 2021 2022 2023 Orion Group Holdings, Inc. 120.98 ​ 115.62 ​ 87.88 55.48 ​ 115.15 S&P 500 128.88 ​ 149.83 ​ 190.13 153.16 ​ 190.27 Dow Jones US Heavy Civil Construction 133.18 ​ 160.75 ​ 240.05 274.37 ​ 328.52 * This table and the information therein are being furnished but not filed.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+25 added−25 removed52 unchanged
Biggest changeWe are optimistic in our end-markets and in the opportunities that are emerging across our various marketplaces as evidenced by the $2.4 billion of quoted bids outstanding at quarter end, of which over $582 million we are the apparent low bidder on or have been awarded contracts subsequent to the end of the fiscal year ended December 31, 2022.
Biggest changeBacklog as of the periods ended below are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Marine segment ​ $ 602.5 ​ $ 699.9 ​ $ 614.9 ​ $ 187.0 ​ $ 216.7 Concrete segment ​ 159.7 ​ 177.6 ​ 203.8 ​ 280.4 ​ 232.1 Consolidated ​ $ 762.2 ​ $ 877.5 ​ $ 818.7 ​ $ 467.4 ​ $ 448.8 ​ We are optimistic in our end-markets and in the opportunities that are emerging across our various marketplaces as evidenced by the $3.0 billion of quoted bids outstanding at quarter end, of which over $121 million resulted in the award of contracts subsequent to the end of the fiscal year ended December 31, 2023.
We generally record revenue on construction contracts over time, measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. There are a number of factors that can create variability in contract performance and therefore impact the results of our operations.
We record revenue on construction contracts over time, measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. There are a number of factors that can create variability in contract performance and therefore impact the results of our operations.
Our projects are typically short in duration and usually span a period of less than one year. We determine the appropriate accounting treatment for each contract before work begins and generally record revenue on contracts over time.
Our projects are typically short in duration and usually span a period of less than one year. We determine the appropriate accounting treatment for each contract before work begins and record revenue on contracts over time.
During the year ended December 31, 2022 and 2021, we realized $5.0 million and $11.4 million, respectively, of net gains on disposal of assets. Included in the prior year amount is a net gain of $6.7 million related to the sale of property in Tampa, Florida.
During the year ended December 31, 2022 and 2021, we realized $5.0 million and $11.4 million, respectively, of net gains on disposal of assets. Included in the prior year amount is a net gain of $6.7 million related to the sale of property in Tampa, Florida. Other Expense, net.
The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $2.4 million outflow pursuant to the relative timing and significance of project progression and billings during the period, a $1.3 34 Table of Contents million outflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period and a $4.9 million decrease in operating lease liabilities during the period, partially offset by $0.5 million of other cash inflows.
The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $2.4 million outflow pursuant to the relative timing and significance of project progression and billings during the period, a $1.3 million outflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period and a $4.9 million decrease in operating lease liabilities during the period, partially offset by $0.5 million of other cash inflows.
The increase in gross profit dollars was primarily driven by the impact from claims and unapproved change orders recognized related to work primarily incurred in previous periods and the release of discretionary project bonuses. ​ Selling, General and Administrative Expense.
The increase in gross profit dollars was primarily driven by the impact from claims and unapproved change orders recognized related to work primarily incurred in previous periods and the release of discretionary project bonuses. ​ Selling, General and Administrative Expenses.
Progress is measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. This method is used because management considers contract costs incurred to be the best available measure of progress on these contracts. These estimates are 31 Table of Contents subject to uncertainties and require judgment.
Progress is measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. This method is used because management considers contract costs incurred to be the best available measure of progress on these contracts. These estimates are subject to uncertainties and require judgment.
The carrying value of our long-lived assets is evaluated periodically based on utilization of the asset and physical condition of the asset, as well as the useful life of the asset to determine if adjustment to the depreciation period or the carrying value is warranted.
The carrying value of our long-lived assets is 36 Table of Contents evaluated periodically based on utilization of the asset and physical condition of the asset, as well as the useful life of the asset to determine if adjustment to the depreciation period or the carrying value is warranted.
The most significant of these include the following: ● completeness and accuracy of the original bid; ● increases in commodity prices such as concrete, steel and fuel; ● customer delays, work stoppages, and other costs due to weather and environmental restrictions; ● availability and skill level of workers; and ● a change in availability and proximity of equipment and materials.
The most significant of these include the following: ● completeness and accuracy of the original bid; ● increases in commodity prices such as concrete, steel and fuel; ● customer delays, work stoppages, and other costs due to weather and environmental restrictions; ● subcontractor performance; ● unforeseen site conditions; ● availability and skill level of workers; and ● a change in availability and proximity of equipment and materials.
The marine segment maintains five levels of excess loss insurance coverage, totaling $200 million in excess of primary coverage.
The marine segment maintains five levels of excess loss insurance coverage, totaling $300 million in excess of primary coverage.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those 32 Table of Contents temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The concrete segment maintains five levels of excess loss insurance coverage, totaling $200 million in excess of primary coverage. This excess loss coverage responds to most of its liability policies when a primary limit of $1 million has been exhausted.
The concrete segment maintains five levels of excess loss insurance coverage, 37 Table of Contents totaling $300 million in excess of primary coverage. This excess loss coverage responds to most of its liability policies when a primary limit of $1 million has been exhausted.
We believe our current equipment fleet will allow us to meet market demand for projects from both our public and private customers. ​ In the long-term, we see positive trends in demand for our services in our end markets, including: ​ ● Continuing need to repair and improve degrading U.S. marine infrastructure; ● Long-term demand from downstream energy-related companies will be driven by larger capital projects, as well as maintenance call-out work; ● Expected increases in cargo volume and future demands from larger ships transiting the Panama Canal will require ports along the Gulf Coast and Atlantic Seaboard to expand port infrastructure as well as perform additional dredging services; ● Possible work opportunities generated by the Water Resources Reform and Development Act (the “WRRDA Act”) authorizing expenditures for the conservation and development of the nation’s waterways as well as addressing funding deficiencies within the Harbor Maintenance Trust Fund; ● Renewed focus on coastal rehabilitation along the Gulf Coast, particularly through the use of RESTORE Act funds based on fines collected related to the 2010 Gulf of Mexico oil spill; ● Funding for highways and transportation under successor Acts to the Fixing America’s Surface Transportation Act; ● Nearly $7 billion of federal funding provided by the US Army Core of Engineers (“USACE”) in connection with disaster recovery in Texas; and ● Opportunities related to the Infrastructure Investment and Jobs Act (IIJA). 26 Table of Contents Concrete Segment Demand for our concrete segment’s services continues, although timing of certain new project releases could be delayed as a result of inflation, labor concerns, supply chain delays and macroeconomic impacts.
We believe our current equipment fleet will allow us to meet market demand for projects from both our public and private customers. ​ In the long-term, we see positive trends in demand for our services in our end markets, including: ​ ● Continuing need to repair and improve degrading U.S. marine infrastructure; ● Long-term demand from downstream energy-related companies will be driven by larger capital projects, as well as maintenance call-out work; ● Expected increases in cargo volume and future demands from larger ships transiting the Panama Canal will require ports along the Gulf Coast and Atlantic Seaboard to expand port infrastructure as well as perform additional dredging services; ● Possible work opportunities generated by the Water Resources Reform and Development Act (the “WRRDA Act”) authorizing expenditures for the conservation and development of the nation’s waterways as well as addressing funding deficiencies within the Harbor Maintenance Trust Fund; ● Renewed focus on coastal rehabilitation along the Gulf Coast, particularly through the use of RESTORE Act funds based on fines collected related to the 2010 Gulf of Mexico oil spill; ● Funding for highways and transportation under successor Acts to the Fixing America’s Surface Transportation Act; 28 Table of Contents ● Nearly $7 billion of federal funding provided by the US Army Core of Engineers (“USACE”) in connection with disaster recovery in Texas; and ● Opportunities related to the Infrastructure Investment and Jobs Act (“IIJA”).
The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $6.5 million outflow pursuant to the relative timing and significance of project progression and billings during the period, a $5.4 million decrease in operating lease liabilities during the period and $1.3 million of other outflows, partially offset by a $12.7 million inflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period.
The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Consolidated Statements of Cash Flows, were primarily driven by a $21.4 million inflow related to an increase in our net position of accounts receivable and accounts payable plus accrued liabilities during the period, partially offset by a $11.3 million outflow pursuant to the relative timing and significance of project progression and billings during the period, a $6.8 million decrease in operating lease liabilities during the period, and $0.9 million of other cash outflows.
Investing Activities. Capital asset additions and betterments to our fleet were $14.6 million in 2022, as compared with $17.0 million and $14.7 million in 2021 and 2020, respectively. Proceeds from the sale of property and equipment were $4.9 million in 2022, as compared with $27.1 million and $5.9 million in in 2021 and 2020, respectively.
Investing Activities. Capital asset additions and betterments to our fleet were $8.9 million in 2023, as compared with $14.6 million and $17.0 million in 2022 and 2021, respectively. Proceeds from the sale of property and equipment were $11.1 million in 2023, as compared with $4.9 million and $27.2 million in 2022 and 2021, respectively.
Our effective tax rate for the year ended December 31, 2022 was (3.5)%, which differs from the federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items. 28 Table of Contents Year ended December 31, 2021 compared with year ended December 31, 2020 Contract Revenues.
Our effective tax rate for the year ended December 31, 2023 was (1.9)%, which differs from the federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items. Year ended December 31, 2022 compared with year ended December 31, 2021 Contract Revenues.
Unless the context requires otherwise, when we refer to “we”, “us” and “our”, we are describing Orion Group Holdings, Inc. and its consolidated subsidiaries.
Unless the context requires otherwise, when we refer to “we,” “us” and “our,” we are describing Orion Group Holdings, Inc. and its consolidated subsidiaries.
We have not been adversely affected by contract cancellations or modifications in the past, however we may be in the future, especially in economically uncertain periods.
We have not been adversely affected by contract cancellations or modifications in the past, however we may be in the future, especially in periods of economic uncertainty.
During the year ended December 31, 2022, we repaid $28.0 million on our revolving line of credit, had payments of $3.0 million on finance lease liabilities and incurred $0.7 million of loan costs related to the Ninth Amendment of the Credit Facility. During the year ended December 31, 2021, we drew down $53.0 million from our revolving line of credit.
During the year ended December 31, 2022, we repaid $28.0 million on our revolving line of credit under our prior credit agreement, had payments of $3.0 million on finance lease liabilities and incurred $0.7 million of loan costs related to the ninth amendment to our prior credit agreement.
The extinguishment of the term loan reduced our exposure to variability in interest rates and eliminated future loan amortization payment commitments. Concurrent with extinguishing the term loan, we canceled the remaining open position on our interest rate swap, resulting in a $1.3 million loss on the mark to market value of the swap at the date of termination.
Concurrent with extinguishing the term loan, we canceled the remaining open position on our interest rate swap, resulting in a $1.3 million loss on the mark to market value of the swap at the date of termination.
During the year ended December 31, 2021, we repaid $19.0 million on our revolving line of credit. During the year ended December 31, 2021, we fully extinguished the term loan portion of our Credit Facility, in part using proceeds from the sale of property in Tampa, Florida.
During the year ended December 31, 2021, we fully extinguished the term loan portion of our prior credit agreement, in part using proceeds from the sale of property in Tampa, Florida.
We currently see long-term demand for our concrete construction services in the Texas building sector as Texas’ major metropolitan areas, and expanding suburbs, continuously retain their positions as leading destinations for population and business growth.
We currently see long-term demand for our concrete construction services in the Texas building sector as Texas’s major metropolitan areas, and expanding suburbs continue to be leading locations for population and business growth.
Further, the remaining $0.8 million of unamortized deferred debt issuance costs were charged to interest expense related to the early extinguishment of the term loan. There were no penalties incurred related to early payment of the term loan. During 2020, we drew down $10.0 million from our revolving line of credit.
Further, the remaining $0.8 million of unamortized deferred debt issuance costs were charged to interest expense related to the early extinguishment of the term loan. There were no penalties incurred related to early payment of the term loan.
Delays in decisions on pending awards also have a negative impact on the timing and amount by which we are able to increase backlog. 27 Table of Contents Income Statement Comparisons ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2022 2021 2020 ​ Amount Percent Amount Percent Amount Percent ​ ​ (dollar amounts in thousands) ​ Contract revenues ​ $ 748,322 100.0 % $ 601,360 100.0 % $ 709,942 100.0 % Cost of contract revenues ​ 697,580 93.2 % 560,393 93.2 % 625,239 88.1 % Gross profit ​ 50,742 6.8 % 40,967 6.8 % 84,703 11.9 % Selling, general and administrative expenses ​ 62,503 8.4 % 60,181 10.0 % 65,091 9.3 % Amortization of intangible assets ​ ​ 1,239 ​ 0.2 % ​ 1,521 ​ 0.3 % ​ 2,070 ​ 0.3 % Gain on disposal of assets, net ​ ​ (4,970) ​ (0.7) ​ ​ (11,418) ​ (2.0) ​ ​ (9,044) ​ (1.4) % Operating (loss) income ​ (8,030) (1.1) % (9,317) (1.5) % 26,586 3.7 % Other (expense) income: ​ ​ ​ ​ Other income ​ 199 — % 199 — % 347 — % Interest income ​ 104 — % 136 — % 183 — % Interest expense ​ (4,456) (0.6) % (5,076) (0.8) % (4,920) (0.6) % Other expense, net ​ (4,153) (0.6) % (4,741) (0.8) % (4,390) (0.6) % (Loss) income before income tax expense ​ (12,183) (1.6) % (14,058) (2.3) % 22,196 3.1 % Income tax expense ​ 429 0.1 % 502 0.1 % 1,976 0.3 % Net (loss) income ​ $ (12,612) (1.7) % $ (14,560) (2.4) % $ 20,220 2.8 % ​ Year ended December 31, 2022 compared with year ended December 31, 2021 Contract Revenues.
Delays in decisions on pending awards also have a negative impact on the timing and amount by which we are able to increase backlog. 29 Table of Contents Income Statement Comparisons ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2023 2022 2021 ​ Amount Percent Amount Percent Amount Percent ​ ​ (dollar amounts in thousands) ​ Contract revenues ​ $ 711,778 100.0 % $ 748,322 100.0 % $ 601,360 100.0 % Cost of contract revenues ​ 650,115 91.3 % 697,580 93.2 % 560,393 93.2 % Gross profit ​ 61,663 8.7 % 50,742 6.8 % 40,967 6.8 % Selling, general and administrative expenses ​ 69,431 9.8 % 62,503 8.4 % 60,181 10.0 % Amortization of intangible assets ​ ​ 427 ​ 0.1 % ​ 1,239 ​ 0.2 % ​ 1,521 ​ 0.3 % Gain on disposal of assets, net ​ ​ (8,455) ​ (1.2) % ​ (4,970) ​ (0.7) % ​ (11,418) ​ (2.0) % Intangible asset impairment loss ​ ​ 6,890 ​ 1.0 % ​ — ​ — % ​ — ​ — % Operating loss ​ (6,630) (1.0) % (8,030) (1.1) % (9,317) (1.5) % Other (expense) income: ​ ​ ​ ​ Other income ​ 641 0.1 % 199 — % 199 — % Interest income ​ 103 — % 104 — % 136 — % Interest expense ​ (11,659) (1.6) % (4,456) (0.6) % (5,076) (0.8) % Other expense, net ​ (10,915) (1.5) % (4,153) (0.6) % (4,741) (0.8) % Loss before income tax expense ​ (17,545) (2.5) % (12,183) (1.6) % (14,058) (2.3) % Income tax expense ​ 330 — % 429 0.1 % 502 0.1 % Net loss ​ $ (17,875) (2.5) % $ (12,612) (1.7) % $ (14,560) (2.4) % ​ Year ended December 31, 2023 compared with year ended December 31, 2022 Contract Revenues.
In the long-term, we see positive trends in demands for our services in our end markets, including: ● Population growth in the state of Texas driven by corporate relocations; ​ ● Continued investment in warehouse/distribution space in our core markets; ​ ● Nearly $7 billion of federal funding provided by the USACE in connection with disaster recovery in Texas; and, ● Potential opportunities related to the Infrastructure Investment and Jobs Act (IIJA). ​ Consolidated Results of Operations Backlog Information Our contract backlog represents our estimate of the revenues we expect to realize under the portion of contracts remaining to be performed.
In the long-term, we see positive trends in demands for our services in our end markets, including: ● Population growth in the state of Texas driven by corporate relocations; ● Continued investment in warehouse/distribution space in our core markets; ● Nearly $7 billion of federal funding provided by the USACE in connection with disaster recovery in Texas; and ● Potential opportunities related to the IIJA.
Critical Accounting Estimates The consolidated financial statements contained in this report were prepared in accordance with U.S. GAAP. The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect both the Company’s carrying values of its assets and liabilities, and the reported amounts of revenues and expenses during the reporting period.
The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect both the Company’s carrying values of its assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Its concrete segment services the building sector by providing turnkey concrete construction services including place and finish, site preparation, layout, forming, and rebar placement for large commercial structural and other associated business areas. The Company is headquartered in Houston, Texas with offices throughout its operating areas.
Our concrete segment provides turnkey concrete construction services including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas. We are headquartered in Houston, Texas with regional offices throughout our operating areas.
See Note 6 in this form 10-K for a further description of the sale of property. Other Income, net of Expense. Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.
See Note 8 of the Notes to the Financial Statements in this Form 10-K for a further discussion of the intangible asset impairment loss. Other Expense, net. Other expense, net primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.
Contract revenues for the year ended December 31, 2021 of $601.4 million decreased $108.5 million or 15.3% as compared to $709.9 million in the prior year period.
Contract revenues for the year ended December 31, 2023 of $711.8 million decreased $36.5 million or 4.9% as compared to $748.3 million in the prior year period.
Our effective tax rate for the year ended December 31, 2021 was (3.6)%, which differs from the federal statutory rate of 21% primarily due to the valuation allowance related to the current year net loss. ​ 29 Table of Contents Segment Results The following table sets forth, for the periods indicated, statements of operations data by segment, segment revenues as a percentage of consolidated revenues and segment operating (loss) income as a percentage of segment revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2022 ​ 2021 ​ 2020 ​ Amount Percent Amount Percent Amount Percent ​ ​ ​ (dollar amounts in thousands) Contract revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marine segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ ​ $ 237,363 ​ 70.0 % $ 164,636 ​ 62.4 % $ 240,353 ​ 61.9 % Private sector ​ ​ ​ 101,850 ​ 30.0 % ​ 99,279 ​ 37.6 % ​ 147,820 ​ 38.1 % Marine segment total ​ ​ $ 339,213 ​ 100.0 % $ 263,915 ​ 100.0 % $ 388,173 ​ 100.0 % Concrete segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ ​ $ 30,284 ​ 7.4 % $ 14,945 ​ 4.4 % $ 41,853 ​ 13.0 % Private sector ​ ​ ​ 378,825 ​ 92.6 % ​ 322,500 ​ 95.6 % ​ 279,916 ​ 87.0 % Concrete segment total ​ ​ $ 409,109 ​ 100.0 % $ 337,445 ​ 100.0 % $ 321,769 ​ 100.0 % Total ​ ​ $ 748,322 ​ ​ $ 601,360 ​ ​ $ 709,942 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ ​ ​ ​ ​ Marine segment ​ ​ $ 9,787 2.9 % $ 5,760 2.2 % $ 29,815 7.7 % Concrete segment ​ ​ (17,817) (4.4) % (15,077) (4.5) % (3,229) (1.0) % Total ​ ​ $ (8,030) ​ ​ ​ $ (9,317) ​ ​ ​ $ 26,586 ​ ​ ​ ​ Year ended December 31, 2022 compared with year ended December 31, 2021 Marine Segment Revenues for our marine segment for the year ended December 31, 2022 were $339.2 million compared to $263.9 million for the year ended December 31, 2021, an increase of $75.3 million, or 28.5%.
Our effective tax rate for the year ended December 31, 2022 was (3.5)%, which differs from the federal statutory rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items. ​ 31 Table of Contents Segment Results The following table sets forth, for the periods indicated, statements of operations data by segment, segment revenues as a percentage of consolidated revenues and segment operating income (loss) as a percentage of segment revenues. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ Amount Percent Amount Percent Amount Percent ​ ​ ​ (dollar amounts in thousands) Contract revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marine segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ ​ $ 292,088 ​ 73.8 % $ 237,363 ​ 70.0 % $ 164,636 ​ 62.4 % Private sector ​ ​ ​ 103,829 ​ 26.2 % ​ 101,850 ​ 30.0 % ​ 99,279 ​ 37.6 % Marine segment total ​ ​ $ 395,917 ​ 100.0 % $ 339,213 ​ 100.0 % $ 263,915 ​ 100.0 % Concrete segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ ​ $ 20,297 ​ 6.4 % $ 30,284 ​ 7.4 % $ 14,945 ​ 4.4 % Private sector ​ ​ ​ 295,564 ​ 93.6 % ​ 378,825 ​ 92.6 % ​ 322,500 ​ 95.6 % Concrete segment total ​ ​ $ 315,861 ​ 100.0 % $ 409,109 ​ 100.0 % $ 337,445 ​ 100.0 % Total ​ ​ $ 711,778 ​ ​ $ 748,322 ​ ​ $ 601,360 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ ​ ​ ​ ​ Marine segment ​ ​ $ 3,670 0.9 % $ 9,787 2.9 % $ 5,760 2.2 % Concrete segment ​ ​ (10,300) (3.3) % (17,817) (4.4) % (15,077) (4.5) % Total ​ ​ $ (6,630) ​ ​ ​ $ (8,030) ​ ​ ​ $ (9,317) ​ ​ ​ ​ Year ended December 31, 2023 compared with year ended December 31, 2022 Marine Segment Revenues for our marine segment for the year ended December 31, 2023 were $395.9 million compared to $339.2 million for the year ended December 31, 2022, an increase of $56.7 million, or 16.7%.
During 2020, we generated approximately $46.0 million in cash from our operating activities. The net cash inflow is comprised of $46.5 million of cash inflows from net income, after adjusting for non-cash items, partially offset by $0.5 million of cash outflows related to changes in net working capital.
During 2023, we generated approximately $17.2 million in cash from our operating activities. The net cash inflow is comprised of $14.8 million of cash inflows from net income, after adjusting for non-cash items and $2.4 million of cash inflows related to changes in net working capital.
The assessment of the liquidity and going concern requires us to make estimates of future activity and judgments about whether we are compliant with financial covenant calculations under our debt and other agreements and have adequate liquidity to operate.
Historically, our source of liquidity has been cash provided by our operating activities, sale of underutilized assets, and borrowings under our credit facilities. The assessment of our liquidity requires us to make estimates of future activity and judgments about whether we are compliant with financial covenant calculations under our debt and other agreements and have adequate liquidity to operate.
Gross profit was $41.0 million for the year ended December 31, 2021, compared to $84.7 million in the prior year period, a decrease of $43.7 million or 51.6%. Gross profit in the period was 6.8% of total contract revenues as compared to 11.9% in the prior year period.
Gross profit was $61.7 million for the year ended December 31, 2023, compared to $50.7 million in the prior year period, an increase of $11.0 million or 21.5%. Gross profit was 8.7% of total contract revenues in the year ended December 31, 2023, compared to 6.8% in the prior year period.
The Company’s marine segment services the infrastructure sector through marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design, and specialty services.
Our marine segment provides construction and dredging services including marine transportation facility construction, marine pipeline construction, marine environmental structures construction, dredging of waterways, channels and ports, environmental dredging, design, and specialty services related to marine construction, fabrication, and dredging.
The following table provides information regarding our cash flows and our capital expenditures for the years ending December 31, 2022, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ 2020 Net (loss) income $ (12,612) $ (14,560) $ 20,220 Adjustments to remove non-cash and non-operating items ​ ​ 27,413 ​ ​ 22,726 ​ ​ 26,338 Cash flow from net income after adjusting for non-cash and non-operating items ​ ​ 14,801 ​ ​ 8,166 ​ ​ 46,558 Change in operating assets and liabilities (working capital) ​ ​ (5,236) ​ ​ (8,097) ​ ​ (526) Cash flows provided by operating activities ​ $ 9,565 ​ $ 69 ​ $ 46,032 Cash flows (used in) provided by investing activities ​ $ (9,704) ​ $ 10,629 ​ $ (3,129) Cash flows(used in) provided by financing activities ​ $ (8,370) ​ $ 6 ​ $ (42,400) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures (included in investing activities above) ​ $ (14,584) ​ $ (16,975) ​ $ (14,694) ​ Operating Activities.
Significant assumptions used in our forecasted model of liquidity include forecasted sales, costs, and capital expenditures, as well as expected timing and proceeds of planned real estate transactions. ​ ​ 33 Table of Contents The following table provides information regarding our cash flows and our capital expenditures for the years ending December 31, 2023, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ 2021 Net loss $ (17,875) $ (12,612) $ (14,560) Adjustments to remove non-cash and non-operating items ​ ​ 32,641 ​ ​ 27,413 ​ ​ 22,726 Cash flow from net income after adjusting for non-cash and non-operating items ​ ​ 14,766 ​ ​ 14,801 ​ ​ 8,166 Change in operating assets and liabilities (working capital) ​ ​ 2,412 ​ ​ (5,236) ​ ​ (8,097) Cash flows provided by operating activities ​ $ 17,178 ​ $ 9,565 ​ $ 69 Cash flows provided by (used in) investing activities ​ $ 2,170 ​ $ (9,704) ​ $ 10,629 Cash flows provided by (used in) financing activities ​ $ 7,806 ​ $ (8,370) ​ $ 6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures (included in investing activities above) ​ $ (8,909) ​ $ (14,584) ​ $ (16,975) ​ Operating Activities.
All of these factors can have a negative impact on our contract performance, which can adversely affect the timing of revenue recognition and ultimate contract profitability. We plan our operations and bidding activity with these factors in mind and they generally have not had a material adverse impact on the results of our operations in the past.
All of these factors can have a negative impact on our contract performance, which can adversely affect the timing of revenue recognition and ultimate contract profitability.
Overview Orion Group Holdings, Inc., its subsidiaries and affiliates (hereafter collectively referred to as the “Company”), provide a broad range of specialty construction services in the infrastructure, industrial and building sectors throughout the continental United States, Alaska, and the Caribbean Basin.
Overview Orion Group Holdings, Inc. and subsidiaries, (hereafter collectively referred to as the “Company”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through its marine segment and its concrete segment.
Interest expense for the prior year period included $2.1 million related to the extinguishment of our term loan and related interest rate swaps. ​ Income Tax Expense. We recorded tax expense of $0.4 million in the year ended December 31, 2022, compared to tax expense of $0.5 million in the prior year period.
We recorded tax expense of $0.4 million in the year ended December 31, 2022, compared to tax expense of $0.5 million in the prior year period.
Opportunities from local port authorities and private clients are expected to expand over the long-term due to the need to accommodate larger ships and deeper drafts because of the expanded Panama Canal. Though the pace of bidding opportunities from the U.S.
We continue to see bid opportunities to help maintain and expand the infrastructure that facilitates the movement of goods and people on or over waterways. Opportunities from local port authorities and private clients are expected to expand over the long-term due to the need to accommodate larger ships and deeper drafts because of the expanded Panama Canal.
During the year ended December 31, 2021 and 2020, we realized $11.4 million and $9.0 million, respectively, of net gains on disposal of assets. Included in the current year amount is a net gain of $6.7 million related to the sale of property in Tampa, Florida.
Gain on Disposal of Assets, net. During the year ended December 31, 2023 and 2022, we realized $8.5 million and $5.0 million, respectively, of net gains on disposal of assets. Included in the current year amount is a net gain of $5.2 million related to the sale-leaseback of our Port Lavaca South Yard property in Texas.
Included in the prior year amount is a $2.9 million net gain on insurance recoveries. Other Income, net of Expense. Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses.
Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses. Interest expense for the prior year period included $2.1 million related to the extinguishment of our term loan and related interest rate swaps. ​ Income Tax Expense.
Selling, general and administrative expenses were $60.2 million for the year ended December 31, 2021 compared to $65.1 million in the prior year period, a decrease of $4.9 million or 7.5%. As a percentage of total contract revenues, SG&A expenses increased from 9.3% to 10.0% primarily as a result of the reduced revenue noted above.
Selling, General and Administrative (“SG&A”) expenses were $69.4 million for the year ended December 31, 2023, compared to $62.5 million in the prior year period, an increase of $6.9 million, or 11.1%. As a percentage of total contract revenues, SG&A expenses increased from 8.4% to 9.8% for the year ended December 31, 2023 and December 31, 2022, respectively.
This increase in operating loss was primarily due to the decline in project profits due to write-downs on several projects in addition to unabsorbed indirect expenses related to additional project management labor expense, partially offset by the release of discretionary project bonuses. 30 Table of Contents Year ended December 31, 2021 compared with year ended December 31, 2020 Marine Segment Revenues for our marine segment for the year ended December 31, 2021 were $263.9 million compared to $388.2 million for the year ended December 31, 2020, a decrease of $124.3 million, or 32.0%.
This increase in operating loss was primarily due to the decline in project profits due to write-downs on several projects in addition to unabsorbed indirect expenses related to additional project management labor expense, partially offset by the release of discretionary project bonuses.
The self-funded plan is funded to the maximum exposure and, as a result, is expected to receive a partial refund after the policy expiration. Liquidity and Capital Resources Changes in working capital are normal within our business given the varying mix in size, scope and timing of delivery of our projects.
The self-funded plan is funded to the maximum exposure and, as a result, is expected to receive a partial refund after the policy expiration.
The increase in proceeds from the sale of property and equipment for the year ended December 31, 2021 is primarily related to the sale of our property in Tampa, Florida. Financing Activities. During the year ended December 31, 2022, we drew down $24.0 million from our revolving line of credit.
During the year ended December 31, 2022, we drew down $24.0 million from our revolving line of credit under our prior credit agreement.
The Coastal Protection and Restoration Authority (“CPRA”) has a $1.35 billion budget for fiscal 2023, and our capabilities are well-suited to win a portion of this spending. In addition to these, the $1.2 trillion Infrastructure Investment and Jobs Act contains billions of dollars allocated to ports and water infrastructure, bridges, and causeways.
In addition, the $1.2 trillion Infrastructure Investment and Jobs Act contains billions of dollars allocated to ports and water infrastructure, bridges, and causeways.
The decrease was primarily attributable to a reduction in project activity compared to the prior year period. Operating income for our marine segment for the year ended December 31, 2021 was $5.8 million, compared to operating income of $29.8 million for the year ended December 31, 2020, a decrease of $24.0 million.
The increase was primarily related to the Pearl Harbor Project. Operating income for our marine segment for the year ended December 31, 2023 was $3.7 million, compared to operating income of $9.8 million for the year ended December 31, 2022, a decrease of $6.1 million.
Effect of Inflation We are subject to the effects of inflation through increases in the cost of raw materials, and other items such as fuel, concrete and steel. Due to the relative short-term duration of our projects, we are generally able to include anticipated price increases in the cost of our bids.
We believe our balance sheet and working capital position will allow us to access additional bonding capacity as needed in the future. Effect of Inflation We are subject to the effects of inflation through increases in the cost of raw materials, and other items such as fuel, concrete and steel.
Off Balance Sheet Arrangements Currently our only off balance sheet arrangements are those discussed above under “Bonding Capacity” and those which arise in the normal course of business. These arrangements are not reasonably likely to have an effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
These arrangements are not reasonably likely to have an effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors. 35 Table of Contents Critical Accounting Estimates The consolidated financial statements contained in this report were prepared in accordance with U.S. GAAP.
Interest expense for the current year period included $2.1 million related to the extinguishment of our term loan and related interest rate swaps. ​ Income Tax Expense. We recorded tax expense of $0.5 million in the year ended December 31, 2021, compared to tax expense of $2.0 million in the prior year period.
We recorded tax expense of $0.3 million in the year ended December 31, 2023, compared to tax expense of $0.4 million in the prior year period.
Operating loss for our concrete segment for the year ended December 31, 2021 was $15.1 million, compared to $3.2 million for the year ended December 31, 2020, an increase in operating loss of $11.9 million. This increase in operating loss was primarily due to decreased project performance and lower margins on several projects during the 2021 period.
This decrease in operating loss was primarily due to lower indirect costs due to winding down operations in Central Texas. ​ ​ 32 Table of Contents Year ended December 31, 2022 compared with year ended December 31, 2021 Marine Segment Revenues for our marine segment for the year ended December 31, 2022 were $339.2 million compared to $263.9 million for the year ended December 31, 2021, an increase of $75.3 million, or 28.5%.
At December 31, 2022, our working capital was $31.1 million, as compared with $36.2 million at December 31, 2021. As of December 31, 2022, we had unrestricted cash on hand of $3.8 million. Our borrowing capacity under our revolving credit facility at December 31, 2022 was approximately $6.0 million.
As of December 31, 2023, we had unrestricted cash on hand of $30.9 million. Our borrowing availability under our revolving portion of our Credit Agreement at December 31, 2023 was approximately $47.7 million. Our primary liquidity needs are to finance our working capital and fund capital expenditures.
At December 31, 2022, the capacity under our current bonding arrangement was at least $750 million, with approximately $175 million of projects being bonded. We are confident that our balance sheet and working capital position are sufficient to allow us to continue to access bonding capacity necessary to pursue and deliver projects.
At December 31, 2023, the capacity under our current bonding arrangement was at least $750 million, with approximately $575 million of projects being bonded. While we believe that our current bonding capacity is sufficient to satisfy current demand for our services, any new major project opportunities may require us to seek additional bonding capacity in the future.
Marine Segment Demand for our marine construction services continues, given our differentiated capabilities and service offering within the space. We continue to see bid opportunities to help maintain and expand the infrastructure that facilitates the movement of goods and people on or over waterways.
In addition, we closed $25.8 million in equipment and real estate sale-leaseback transactions in the year. Looking to 2024, we will continue to execute our strategic plan focused on developing opportunities across the infrastructure, industrial, and building sectors. ​ Marine Segment Demand for our marine construction services continues, given our differentiated capabilities and service offering within the space.
Concrete Segment Revenues for our concrete segment for the year ended December 31, 2021 were $337.5 million compared to $321.8 million for the year ended December 31, 2020, an increase of $15.7 million, or 4.9%. This increase resulted from increased production volumes in the current year period.
Interest expense for the year ended December 31, 2023 of $11.7 million increased $7.2 million, as compared to $4.5 million in the prior year period.
Excluding the impact of the sale of property in Tampa, Florida in the current year and the net gain on insurance recoveries and the recovery on a disputed receivable in the prior year operating loss was $0.6 million for the year ended December 31, 2021, compared to operating income of $26.1 million for the year ended December 31, 2020, a decrease of $26.7 million.
Adjusted for the $5.2 million gain on the Port Lavaca South Yard property sale-leaseback in Texas, operating loss for the year ended December 31, 2023 was $1.5 million or a decrease of $11.3 million.
Removed
Our independent registered public accounting firm has included an explanatory paragraph describing the uncertainty about our ability to continue as a going concern in its report contained in this Annual Report.
Added
We plan our operations and bidding activity with these factors in mind and they generally have not had a material adverse impact on the results of our operations in the past. 27 Table of Contents 2023 Recap and 2024 Outlook ​ In 2023, we recorded revenues of $711.8 million, a decrease of 4.9% as compared with 2022. $395.9 million of total revenue was attributable to our marine segment and the remaining $315.9 million to our concrete segment.
Removed
See “Liquidity and Capital Resources” below for more information. 2022 Recap and 2023 Outlook In 2022, we recorded revenues of $748.3 million, of which $339.2 million was attributable to our marine segment and the remaining $409.1 million to our concrete segment. In addition, we ended 2022 with a consolidated backlog of $448.8 25 Table of Contents million.
Added
Our net loss was $17.9 million, as compared with net loss of $12.6 million in the prior year. In addition, we ended 2023 with a consolidated backlog of $762.2 million.
Removed
Our revenues in 2022 increased by 24.4% as compared with 2021 and we recorded a net loss of $12.6 million, as compared with net loss of $14.6 million in the prior year. Looking toward 2023, the Company continues to focus on developing opportunities across the infrastructure, industrial, and building sectors through organic growth.
Added
At the end of 2022, management outlined a strategic plan to improve the profitability of the concrete segment, strengthen business development to drive growth, and make investments in critical resources that would help realize the full potential of our business. During 2023, the concrete segment generated a profit beginning in the third quarter of 2023.
Removed
Although to date the Company hasn’t experienced materially negative impacts from COVID-19, we have had and may continue to see some disruption to our operations due to variants of the COVID-19 virus that caused temporary increases in absenteeism rates among our workforce and other impacts to supply chains and labor markets.
Added
On the business development front, we attracted experienced business development executives including a leader for the new role of corporate growth and strategy, and head of business development in Louisiana. We invested in training and tools to engage our entire staff in fully understanding our business objectives, and to embrace a growth mindset through collaboration across disciplines.
Removed
Cruise line capital expenditures have yet to recover significantly from the pullback due to COVID-19, however we anticipate that, with continued recovery of end customer demand, we will see renewed interest in capital improvements from these customers.
Added
These were important steps in strengthening our culture, leveraging best practices, driving synergies, and cross-selling capabilities. In May, we closed a $103 million asset-based lending credit facility which included a term loan of $38 million and a revolving credit facility of up to $65 million.
Removed
Army Corps of Engineers slowed towards the end of 2022, significant approved funding for USACE projects leads us to believe that we will see this translate into an increase in bid opportunities as we progress through 2023.
Added
Concrete Segment Demand for our concrete segment’s services continues, although timing of certain new project releases could be delayed as a result of inflation, interest rates, labor concerns, supply chain delays and macroeconomic impacts.
Removed
Additionally, bid opportunities related to coastal restoration funded through the Resource and Ecosystems Sustainability, opportunities under the Tourist Opportunities and Revived Economies of the Gulf Coast States Act (the “RESTORE Act”) may arise in 2023.
Added
Consolidated Results of Operations Backlog Information Our contract backlog represents our estimate of the revenues we expect to realize under the portion of contracts remaining to be performed.
Removed
Backlog as of the periods ended below are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Marine segment ​ $ 216.7 ​ $ 280.2 ​ $ 281.0 ​ $ 317.4 ​ $ 376.9 Concrete segment ​ 232.1 ​ 268.4 ​ 322.2 ​ 286.7 ​ 213.1 Consolidated ​ $ 448.8 ​ $ 548.6 ​ $ 603.2 ​ $ 604.1 ​ $ 590.0 ​ The sequential decline in backlog was due to a lower book-to-bill ratio in the concrete segment which was driven by more disciplined bidding practices and an effort to reduce exposure to under-performing projects.
Added
The decrease was primarily due to weather and customer delays in both businesses in the first quarter of 2023 and a reduction of concrete segment revenue in central Texas, partially offset by an increase in marine revenue primarily related to the Pearl Harbor Project. Gross Profit.
Removed
The decrease was primarily driven by a reduction in project activity compared to the prior year in the marine segment as a result of reduced and/or delayed bid opportunities due to the continued impacts from COVID 19 on the industries in which we serve . Gross Profit.
Added
The increase in gross profit dollars and margin was primarily due to actions to manage costs during project delays, including reallocating equipment, reducing the size of the fleet, headcount reductions, and realizing margin improvements in the concrete business that reflected our margin improvement initiatives. Selling, General and Administrative Expenses.
Removed
The decrease in gross profit dollars and percentage was driven by the decreased activity and volumes which negatively impacted revenue and contributed to an under recovery of indirect costs primarily related to decreased labor and equipment utilization. We also incurred decreased project performance in our concrete segment. ​ Selling, General and Administrative Expense.
Added
The increase in SG&A dollars and percentage was primarily due to the decrease in concrete segment revenue, an increase in bonus expense as a result of our strong performance relative to the budget and the addition of strategic new leadership positions in the year ended December 31, 2023, partially offset by lower consulting expense related to the completion of the management transition.
Removed
The decrease in SG&A dollars was driven by a decrease in the current year period related to bonus expense, business development costs pursuant to timing of project pursuits and awards and travel related costs. Gain on Disposal of Assets, net.
Added
See Note 10 of the Notes to the Financial Statements in this Form 10-K for a further description of the sale of property. Intangible Asset Impairment Loss. During the year ended December 31, 2023, we recorded a $6.9 million intangible asset impairment loss due to our strategic decision to rebrand the concrete segment under the Orion banner.
Removed
This decrease in operating income was primarily due to the decrease in revenue noted above and related under recovery of indirect costs as a result of decreased labor and equipment utilization.
Added
The segment had previously operated under its prior name, TAS Concrete Construction, since its acquisition in 2015. The rebranding reflects a strategic initiative to integrate our different service offerings under one banner to leverage Orion’s brand reputation and 30 Table of Contents to deliver greater value and seamless execution for our customers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed3 unchanged
Biggest changeInterest rate risk At December 31, 2022, we had $35.0 million in outstanding borrowings under our credit facility, with a weighted average ending interest rate of 9.91%.
Biggest changeInterest rate risk At December 31, 2023, we had $38.0 million in outstanding borrowings under our Credit Agreement, with a weighted average ending interest rate of 13.46%.
Commodity price risks may have an impact on our results of operations due to the fixed-price nature of many of our contracts, although the short-term duration of our projects may allow us to include price increases in the costs of our bids.
Commodity price risks may have an impact on our results of operations due to the fixed-price nature of many of our contracts, although the short-term duration of our projects may allow us to include cost increases to the pricing of our bids.
Based on the amounts outstanding under our credit facility as of December 31, 2022, a 100 basis-point increase in LIBOR (or an equivalent successor rate) would increase the Company’s annual interest expense by approximately $0.4 million.
Based on the amounts outstanding under our Credit Agreement as of December 31, 2023, a 100 basis-point increase in SOFR (or an equivalent successor rate) would increase the Company’s annual interest expense by approximately $0.4 million.

Other ORN 10-K year-over-year comparisons