Drew Swerdlow - IR Mike Pearson - Director Mark Stauffer - President and CEO Chris DeAlmeida - VP and CFO

Veny Aleksandrov - FIG Partners Trey Grooms - Stephens Jack Kasprzak - BB&T Scott Levine - Imperial Capital Jon Tanwanteng - CJS Securities Alex Rygiel - FBR Capital Markets

Good day, ladies and gentlemen, and welcome to the Orion Marine Group, Inc. Third Quarter 2014 Earnings Conference Call. My name is Jasmine, and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). I would now like to turn the conference over to your host for today, Mr. Drew Swerdlow, Investor Relations Manager. Please proceed.

Good morning and welcome to the Orion Marine Group third quarter 2014 earnings conference call. Joining me today are Mike Pearson, Orion Marine Group’s Chief Executive Officer; Mark Stauffer, our President and Chris DeAlmeida, our Chief Financial Officer. Regarding the format of the call, we have allocated about 15 minutes for prepared remarks in which Mark and Chris will highlight our results and update our market outlook. We will then open the call for sell-side analyst questions for the remainder of the time. We would ask that you limit your questions to one question and one follow-up before getting back in the queue. During the course of this conference call, we will make projections and other forward-looking statements regarding, among other things, our end markets, revenues, gross profit, gross margin, EBITDA, EBITDA margin, backlog, projects and negotiation and pending award, as well as our estimates and assumptions regarding our future growth, EBITDA, EBITDA margin, gross margins, administrative expenses and capital expenditures. These statements are predictions that are subject to risks and uncertainties, including those described in our 10-K for 2013, that may cause actual results to differ materially from those statements. Moreover, past performance is not necessarily an indicator of future results. By providing this information, we undertake no obligation to update or revise any projections or forward-looking statements, whether as a result of new developments or otherwise. Also, please note that EBITDA and EBITDA margins are non-GAAP financial measures under the rules of the Securities and Exchange Commission, including Regulation G. Please refer to the reconciliation accompanying this earnings call available on our Web site, at www.orionmarinegroup.com, for comments on the use of non-GAAP financial measures as well as applicable reconciliations to the most comparable GAAP measures. Also, please refer to the press release issued this morning, October 30, 2014, and our quarterly and annual filings with the SEC, which are available on our Web site, for additional discussions of risk factors that could cause actual results to differ materially from our current expectations. Before I turn the call over to Mark and Chris to discuss our results, Mike Pearson would like to say a few words regarding his retirement. Mike?

Thank you, Drew. I wanted to take a moment just to thank the entire Orion team for all they've done over the past nine years during my tenure at Orion. We’ve had solid growth in our operational assets and capabilities, broadened our talented workforce, expanded our permanent presence in new markets and managed through a significant downturn in the economy. It's been an honor to be part of a Company that provides such central services to a variety of clients to maintain and improve our nation’s waterways infrastructure and I look forward to my continued involvement with Orion Marine Group as a Board Member. Additionally, it's been a pleasure working with and getting to know our many shareholders. Orion Marine Group is a strong company with a solid team who do a tremendous job every day. I’m confident Orion is well positioned for the future and I believe we’re on the right path for continued growth in the future. With that I’ll turn the call over to Mark and Chris to discuss our market outlook and financial results in more detail. Mark?

Thanks Mike. Before I begin, I want to make a moment to publicly wish you well in your retirement and say that it's truly been an honor and privilege working with you these last nine years and I know Orion will benefit by having you continue to serve as a Board Member. Turning to my remarks, I would also like to thank our more than 1,200 co-workers for all their hard work and dedication. During the third quarter, higher asset utilization and solid project execution led to a profitable quarter and year-to-date positive bottom-line results. Additionally, we continue to see a healthy bid market, which should bode well for the fourth quarter and for 2015. Overall, we are pleased with our results for the quarter, any amount of work we bid on and won. Regarding our market outlook, as a heavy civil marine contractor, our business is rooted in facilitating the movement of goods and people along and over waterways. We believe the efficiencies of waterborne transportation will continue to drive solid demand for our services with improving industry catalysts. This should lead to continued demand for improved and expanded waterside infrastructure, as well as high levels of maintenance that is required to keep the channels, ports, locks and docks operational. This demand is being driven by several key factors. First, private sector energy related clients and recreational customers continue to be a solid driver of bid opportunities as they expand, repair and refurbish waterside infrastructure. We expect this high level of bid opportunity to remain strong for the foreseeable future. Within the private sector, we are also seeing a trend toward design build projects which in a long-term could provide us more turnkey opportunities. Earlier this year we continue to expand our turnkey service offerings, with the purchase of the dredge material replacement area. The DMPA allows us to provide a much needed service to our private sector clients in the proportion of the Houston Ship Channel, particularly those undertaking capital expansion projects. Additionally, local port authorities should also continue to provide a steady source of bid opportunities as they undertake capital expansion plans in anticipation of larger ships and increased cargo volumes, primarily due to Panama Canal expansion. Currently, there is over $10 billion of planned port expansion in our market areas over the next 10 years. This level of activity will be a driver of opportunities for deepening projects, infrastructure improvements and associated maintenance services. As discussed last quarter we are pleased that the WRRDA Bill was passed signed into law, which we believe is a positive step forward for the nation’s waterway infrastructure. Among the benefits of this Act the authorization of projects to be let in the future once funds are appropriated and the resolution on the Harbor Maintenance Trust Fund or HMTF issue, which will provide increased funding for the maintenance of the nation’s waterways. Beyond improving and maintaining waterside infrastructure, we also expect to see bid opportunities for coastal restoration projects. Specifically we continue to monitor the progress of the five day effect as a result of the 2010 oil spill in the Gulf of Mexico. Under the Restore Act, once these times are assessed, which currently is expected to occur sometime in 2015, we should see additional bid opportunities related to coastal restoration in the five gulf coast states. Additionally we expect to continue to see bridge related opportunities as a result of a continued focused on U.S infrastructure improvement. Finally with regard to the Federal Government, while uncertainty still remains in terms of the phase of U.S Army Corps of Engineer lettings for fiscal year 2015, we are pleased with the list of projects we are tracking. If this list of this project is fully and tingly let by the core, it should provide opportunity for continued asset utilization. Also we expect to continue to see opportunities from the U.S Navy and the U.S Coast Guard for additional water side infrastructure repairs and improvements. In closing we continue to see a healthy bid market with solid long term drivers. We believe we are poised to capitalize on these opportunities with our specialized workforce, fleet of equipment and geographic coverage. Additionally we continue to build backlog for 2015 and remain optimistic we will see bottom line and EBITA growth in 2015. That being said our business can be a lumpy. However we are optimistic that 2015 will be an improvement over 2014. With that said, I will turn the call over to Chris to discuss our financial results in more detail.

Thank you, Mark, and again, thanks for joining us. For the third quarter of 2014, we reported net income of approximately $3 million or $0.11 per diluted share. These results compare with a net loss of $0.9 million or $0.03 per diluted share in the prior year period. Third quarter 2014 contract revenues increased 20% year-over-year to $107 million, of which 40% was generated from federal, state and local government agencies, while 60% was generated from the private sector. This mix is comparable to the prior year period. Third quarter 2014 gross margin was 12.1% or $12.9 million which compares to gross margin in the prior period of 6.3% or $5.6 million. Looking ahead, we expect fourth quarter gross margin and revenue to remain at similar levels to the third quarter. SG&A expense for the third quarter 2014 was $7.9 million, which compares to $8 million in the prior year period. During the third quarter of 2014 we bid on approximately $237 million of opportunities and were successful on approximately $67 million. This resulted in a 28% win rate for the quarter and a book-to-bill ratio of 0.63 times. Overall we are pleased with both amount and type of work with bid on and won during the quarter. While our book-to-bill ratio fell below one times, this is a result of normal fluctuations in the timing of bids. For the year to date our book-to-bill ratio is approximately one time and we continue to have a positive market outlook as of September 30, 2014 we had backlog of work under contract of $242 million, of which 16% is for federal projects, 19% is for state projects, 21% is for local projects and 45% is in the private sector. Additionally we currently have over $159 million worth of bids outstanding, including approximately $37 million on which we are the apparent low bidder. Finally we continue to see pockets of improvement in bid pricing. This has resulted in some improvement in backlog margins. Additionally we to test margins upward when appropriate. Now turning to the balance sheet as of September 30, 2014 we had approximately $46 million of cash on hand, which compares to approximately $41 million of cash on hand at the end of the year. At the end of the quarter we had access to $7.9 million under our revolver and total debt outstanding of $33.4 million. During the third quarter debt increased by $3.2 million, related to financing for the purchase of a replacement dry-dock to be used in the maintenance of our equipment. We expect the financing of dry-dock to move from the revolver to the term loan component of our credit facilities during the fourth quarter. Further, our bonding program remains solid and is more than adequate to support bid activities. Also, we continue to enjoy excellent relationships with both our vendor [ph] and surety. Overall we are pleased with our financial position and we remain focused on maintaining a strong balance sheet. As we have done it before, we are always looking at our capital allocation strategy. Along those lines, the Board of Directors has authorized a share repurchase program under which we may repurchase up to $40 million of the Company's stock over the next five years. The specific timing and amount of future share repurchases if any will vary based on our capital needs, market conditions, security wall limitations and other factors. In conclusion, we’re excited about the opportunities for growth in 2015. Continued strength in the private sector, opportunities from local port authorities to expand our waterside infrastructure in an encouraging project list from the corps engineers should provide opportunities for improved asset utilization in 2015. Beyond 2015, our market drivers remain strong, which should lead to continued high demand for our services. Further, we believe we're well positioned to meet this high demand with the right power and equipment to get the job done. Overall, we're excited about the road ahead and we continue to believe Orion has a strong future, with opportunities for continued growth for years to come. With that I'll turn the call back to Drew to begin the Q&A portion of the call. Drew.

Thanks Chris. We would now like to open the call up for questions. Jasmine, would you please review the procedures for placing a question.

Sure, thank you Drew. [Operator Instructions]. Your first question comes from the line of Veny Aleksandrov with SIP. Please proceed. Veny Aleksandrov - FIG Partners: My first question is on your outlook and on the energy related customers. You are very upbeat about the demand that's about to come from these kind of customers, but the energy sector has been under pressure. Apparently you don't see that pressure. Can you talk a little bit more about it?

Yes. Well there is a lot of infrastructure related projects. We're obviously well aware of what the price of oil has been doing, but we continue to see a lot of activity domestically in terms of the whole energy revolution that's going on here domestically. Certainly, we could in the long term be impacted by macroeconomic conditions, but right now what we're seeing is -- we continue to see opportunities. This stuff is being produced. It has to go somewhere. There is the whole infrastructure related efforts that are ongoing. And so we expect to continue to see these opportunities for the foreseeable future. Veny Aleksandrov - FIG Partners: And it sounded like you are seeing some buckets of pricing improvement, you're trying to push margins up here and there. Can you spend a little bit time talking about the backlog? The backlogs have decreased pricing in the quarter. It's probably a seasonal effect, but just give us a little bit more details.

Yes, absolutely. We did see a little bit of pullback in the backlog. That is in relation to; one, our strong demand for our services; and then general seasonality -- strong execution of our projects and our general seasonality. We're not alarmed by that all. We continue to have a great robust bid market ahead of us. Like I talked about we are seeing pockets of pricing improvement that is flowing in to our backlogs. So we're seeing a little bit of improvement there and our backlog; again it's not completely widespread but we are trying to see those pockets full through and come into both our backlog and will start going into our results.

And your next question comes from the line of Trey Grooms with Stephens. Please proceed. Trey Grooms - Stephens: On the pockets of improving bid pricing, is that more on the dredging side of the business or on the construction side of the business? Can you talk a little bit about that?

I think it's both. It's just -- again, we're seeing pockets of pricing improvement on the various projects that we're going after. It's -- again it's not widespread yet. We're hopeful that it will improve as we move through into 2015. As I've said on the calls for the last several quarters, we think that it should be more widespread. There is demand out there. There is wage pressure that we've seeing for quite some time. All the ingredients seem to be there for more widespread, pricing improvement. We're certainly going to try to do our part to as Chris said push that up when we see the opportunities; and again I think we're making steady progress in terms of market improvement and at this point we just need to kind of keep looking for opportunities to get the market where we think it should be and look for opportunities to keep the utilization levels high. Trey Grooms - Stephens: On the topic of utilization levels, as you come and look at your backlog, you're talking about a healthy bid market. Would you expect to see similar type utilization in the 4Q, as we did in the third quarter or any expected change there?

Yes, given where the backlog is in the project we have, we would expect our utilization in the fourth quarter would be somewhere into the third quarter. Trey Grooms - Stephens: Great. I'm going to sneak one more in here. On the DP -- excuse me DMPA, can you talk about the contribution from that in the quarter, kind of how that's going? And then lastly, would also like to congratulate you Mike on the retirement and best wishes as you enjoy your retirement years ahead. Thanks.

Thank you very much, drew.

With the regard to the DMPA. We don’t specifically break that out. We feel that’s part of our included and an extension of our total services that we offer. What I can say is it's performing as we expected.

And your next question comes from the line of Jack Kasprzak with BB&T. Please proceed. Jack Kasprzak - BB&T: Best wishes to you as well Mike. I appreciate your generosity with your time over the years. I just wanted to ask about pricing again, because that’s obviously important. Is there a way to -- and your comments seem incrementally a little bit more encouraging, if that’s the word in what we’ve heard in recent quarters. Is there a way to kind of frame out a little bit on the amount of your business that is seeing a little bit more price improvement? Not necessarily asking per percentages but just some kind of more granular look; are people finishing projects and realizing there's more work coming in or just getting a little bit more bold? What’s kind of your feeling there?

Well, I think that it's a -- again, it obviously was a severe recession, arguably at least in 30 some years and maybe even 80 years. I think again as I kind of said on the calls last several quarters is -- I think the thing that's sort of been lacking is business confidence if you will in terms of all the ingredients being there. So I guess, yes, that’s a tough question to answer Jack, but I would say that again, incrementally I think you kind of phrased it correctly; we’re seeing steady progress kind of on that front. We expect that kind of continue. We feel good about 2015 being an improvement of 2014, and think we’re making -- continue to make steady progress along those lines. I think that -- we certainly have said barring any kind of macro breakout in the economy of sustained higher GDP growth, we certainly could see it accelerate. But we’re not talking about that in terms of our remarks, in terms of a hockey stick for next year if you will, but we do think we’ll see steady improvement and that full year 2015 results should be an improvement over ’14.

And your next question comes from the line of Scott Levine with Imperial Capital. Please proceed. Scott Levine - Imperial Capital: So maybe little bit more color on the public sector. The pace that you expect -- as you indicated your [indiscernible] at a pace of words can improve. Maybe just a little bit more color on recent budget trends, what they mean and your level of conviction that the pace of only core lettings and public sector lettings in general at the federal level have improved and will continue to improve from here?

Good question. I think -- in some respect I think we are setup a little bit better than previous years -- for the most recent previous years. Partially just the movement we've seen with the water bill and the direction, of the HMTF issue, that’s all very positive. There is a lot of -- one of the things we’ve kind of consistently said is, with respect specifically to the core, that demand does not go away. It may get deferred but it doesn’t go away. So that’s just one overall comment there. But I think we still are in a continuing resolution situation, versus having a full year of appropriations which we would have preferred to see. I think the good news is though that we seem to have made progress on that in the last 12 months. There was a budget framework in place that was put in place almost a year ago. The house did pass an Appropriations Bill. I think the Appropriate Senate committee passed an Appropriations Bill and it kind of got bottled up there. So we wound up in a continuing resolution mode. But I think again, we’re moving in the right direction. It does remain to be seen, how we’re going to be impacted by what they're going to do with the CR quote because everybody knows mid-terms are next week. I think that’s going to have an impact on this in some way, shape or form, no matter how it turns out. We’ll have to wait and see. The current CR ends up on December 11th, I believe. So, what we would prefer to see is a CR that carries us all the way through to September 30th next year. I am not sure that’s going to happen. I think that’s going to largely depend on do we see a change in the Senate or not and I think that’s going to impact what happens in the lane duck. So, we’re just going to have to wait and see that, I do think with respect to our backlogs, our backlog excuse me. I think we are set up a little bit better going into 2015 than we were coming into 2014. But the question is going to be that pace of lettings and again there is a good solid list of work there. We’re pleased with what we’re tracking. Again as I said, I think in my remarks, we hope to see that let and let timely and consistently and if that occurs that will give us the opportunity for -- keep that utilization out.

I think the encouraging thing there Jack is that the CR of this last pass did allow increased spending of the core for the first time in many years.

The only other thing I'd point is we do have [indiscernible] but, we can -- that should add a little bit to -- hopefully will add a little bit to the flow for 2015. Scott Levine - Imperial Capital: And then as a follow up maybe you, have guys have traditionally been pretty conservative with balance sheet. You're increasing your buyback program here. Maybe some color with regard to your comfort levels, what you plan to lever up, to repurchase shares plus around expected activity and just general comfort with the balance sheet.

Yes. Generally speaking we -- as I said, that's part of our allocation strategy. We did want to put a stock buyback in place. Won’t comment specifically on the timing or thoughts around any repurchase at this time. Again that’s going to vary based on our capital needs and marketing conditions, and security wall limitation and other factors. So we did feel it was prudent though to have a plan up there. There is a five year plan. Specifically with regard to debt and general, I think overall our philosophy remains the same. We’re comfortable with about a 2.5, 3 times leverage ratio on EBITDA. We remain comfortable with that. We’re below that today. I don’t know that that would specifically go into stock repurchase. However, that's kind of generally where our debt level feeling is. We remain comfortable with that and that’s kind of where we want to be.

And your next question comes from the line of John Tanwanteng with CJS Securities. Please proceed. Jon Tanwanteng - CJS Securities: Just on top of the previous caller, could you help us bracket what kind of utilization of margins you could see if the army corps projects either awarded or they get delayed and maybe what specifically in the new CR in December would cause them to push out?

We did on the last part first, just as a reminder, when the core operates under a CR, particularly when they’re very short term or shorter term, it's just very inefficient to then to execute their program. It’s -- obviously what we'd like to see is a full year appropriation. That's a much more efficient way for them to let their program. So again -- that’s why I said a minute ago -- we’d like to -- since we're in a CR situation, what we'd like to see is the longer, the better. The shorter, that we don’t like that, because I just bring less visibility for them to execute their program and less visibility therefore to the marketplace. On the utilization front of things, keep in mind we have been backfilling from utilization with private sector opportunities. We saw that in the third quarter. Really what we're looking at from the core of engineer standpoint is that provides better continuity in between jobs so we can maintain that utilization over the full year period, not see system starts -- like for example go back to the first quarter of this year, we have less utilization. We had some gaps in between some of the projects which caused less utilization. It would be nice to see have the opportunity to go bid on some core work that would fill in that -- that provide better continuity and maintain the higher levels of utilization that we're kind a seeing more in the third and fourth quarter this year. Jon Tanwanteng - CJS Securities: Okay thanks. And then regarding the share repurchase, are you intending to reduce the share count in total or just limit the [indiscernible] for the next five years?

Again, we really don’t want to get specific on that at this time. At this point we’ve just -- with the program, it is out there. It’s in place. And we’ll evaluate that continuously to what and how much of a repurchase we do.

Along with again, just all other uses of capital. That’s just one to be considered and having the plan in place just lets us be more efficient should we choose to do something in the future. Jon Tanwanteng - CJS Securities: Okay got it and then just one housekeeping question. Just seeing depreciation, amortization jumped up sequentially. I'm wondering what went into that and maybe what should we expect going forward?

Overall, a little bit of that was the additional equipment. Keep in mind, like we noted, we did buy a dry-dock. That really hasn’t gone into service yet that. That won’t go into service until the fourth quarter. Generally speaking, that's just the equipment. There was nothing specific that made it jump up. I would kind of think about it Jon, in probably the mid-20s -- lower to mid-20s color -- call it 0.2 to 24 million depreciation and amortization on a full year basis and that should be fairly consistent as we head into 2015. Jon Tanwanteng - CJS Securities: And then finally, one quick one. On the fifth side of the energy prices question, are you seeing any benefit from lower fuel cost?

There is the benefit from lower fuel cost. So again long term obviously, there is a lot of macro things that go into that and there is short term benefit there. As I said earlier we still expect to see these bid opportunities from the private sector in the energy sector with the project they have ongoing but yes there is -- we do see some benefit in lower energy cost.

And one point to that. Do keep in mind most of our engines -- we run diesel engines. We are of course getting into the fall and winter season, in which heating oil will start to take a fact and that can have some fluctuation on the price of diesel versus the price of unleaded.

[Operator Instructions]. And your next question comes from the line of Alex Rygiel with FBR Capital Markets. Please proceed. Alex Rygiel - FBR Capital Markets: Thank you. Mike, I as well want to say thank you for your time and all the best going forward.

Thank you very much Alex, I appreciate that. Alex Rygiel - FBR Capital Markets: Absolutely. Mark, could you update us on sort of the status of the Bayport project, how it proceeded during 3Q and kind of how it's going to proceed over the next handful of quarters.

That project is underway. I think as we may have said in our mid-period update that did get -- I guess we referred to that by inference -- that did start during the quarter. We're in the early stages of that project. Very glad to be doing that project. It's meeting our expectations and we expect to be working on that for the next several quarters as we undertake that deepening project. Alex Rygiel - FBR Capital Markets: And then Chris, I think you mentioned that sort of fourth quarter revenue and gross margin expectations should sort of be similar to the third quarter level. That would imply sort of flattish sequential revenue. How do I reconcile that with Bayport sort of contributing on a full quarter basis in the fourth quarter, versus probably only a partial basis in the third quarter?

Well, the DMPA kicked off in the July timeframe. So it did contribute to the third quarter. I would say much more than partial. So that job ongoing. As Mark talked about, it will be ongoing in the fourth quarter. And then again, it's just a matter of looking at our total backlog and all the jobs we have to execute across the Company. We think it's a reasonable assumption to assume revenues and gross margin will be similar to third quarter into the fourth quarter.

And there are no remaining questions at this time. I'd now like to turn the conference back over to your host for closing remarks. Mr. Drew Swerdlow, please proceed.

On behalf of Orion Marine Group, we would like to thank you for taking the time to talk with us this morning and we look forward to speaking with you in the future. Also, if you have any follow-up questions please feel free to give me a call. Thanks and have a good day.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and you all have a great day.