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

Jonathon Tanwanteng - CJS Securities Veny Aleksandrov - FIG Partners Marco Rodriguez - Stonegate Capital Allie Hemmings - D.A. Davidson

Ladies and gentlemen, thank you for standing by and welcome to the Orion Marine Group Inc. Q1 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to introduce your host for today's conference, Mr. Andrew Swerdlow. You may begin sir.

Good morning. And welcome to the Orion Marine Group's first quarter 2015 earnings conference call. Joining me today are Mark Stauffer, Orion Marine Group's President and Chief Executive Officer and Chris DeAlmeida, our Vice President and 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 out market outlook. We will then open the call for sale 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 into queue. During the course of this conference call, we will make projections and other forward looking statements regarding, among other things, our in-markets, revenues, gross profit, gross margin, EBITDA, EBITDA margin, backlog, projects in 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 2014 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. Please note that EBITDA and EBITDA margin are non-GAAP financial measures under rules of the Securities and Exchange Commission, including regulation G. Please refer to the reconciliation accompanying this earnings call available on our website at www.orionmarinegroup.com for comments on the use of non-GAAP financial measures as well applicable reconciliations to the most comparable GAAP measures. Also, please refer to the press release issued this morning, April 30, 2015, and our quarterly and annual filings with the SEC, which are available on our website for additional discussions and risk factors that could cause actual results to differ materially from our current expectations. With that, I'll turn the call over to Mark Stauffer, President and Chief Executive Officer. Mark?

Thank you, Drew and thanks for joining us this morning. I want to start by thanking our more than 1200 co-workers for their commitment to safety as well as their hard work and dedication. We continue to be pleased with our backlog, record level of bids outstanding, our tracking database and strong demand across our end markets. These factors will continue to support growth and margin improvement. While we were pleased with solid asset utilization during the quarter, we did have certain job experience higher than expected cost, which we are hopeful will result in additional revenue in the future. As we look ahead, we continue to experience strong demand for our services across our end markets to maintain and expand water side infrastructure. Our private sector energy related clients continue to expand their marine facilities related to the storage, transportation and refining of domestically produced energy. To date we've not seen a decline in opportunities from our energy related customers. However, we will continue to monitor developments in this end market. As a reminder, we performed dock infrastructure development, improvement and maintenance for midstream and downstream customers. We also continue to see a healthy market for bid opportunities from petrochemical related customers, energy exporters, and LNG facilities. Additionally, private recreational customers continue to be a solid driver of bid opportunities as they expand, repair and refurbish water side infrastructure throughout the Caribbean. We believe we will continue to see opportunities for recreational customers for the foreseeable future as cruise lines seek new destinations and more robust infrastructure. As we’ve mentioned in the past, we’re seeing an increase in the number of design build projects in the private sector, which provides us more turnkey opportunities. This trend will help us maximize our customer's capital expansion dollars and better meet their marine infrastructure need. However, it general increases the length of time between when a bid is submitted and when an award is received from the customer. Today we have a record level of bids outstanding which include several design build opportunity. We were hopeful that we will begin seeing awards on these opportunities soon with construction beginning in the second half of 2015. Local port authorities should also continue to provide a steady source of bid opportunities as they undertake capital expansion plans in anticipation of larger shifts and increased cargo volumes, many of which are tied to the Panama Canal expansion to be completed in 2016. Larger ships transiting the Panama Canal are requiring ports in the Gulf Coast and Southeast Atlantic to undertake large scale deepening projects, infrastructure improvements and associated maintenance services in order to service these larger ships. With billions in work planned by port authorities, we believe we will see demand for our services related to an expanded Panama Canal over at least the next decade. We remain pleased with the amount of work expected to be led by the Corps of Engineers in their current fiscal year; however, we have seen delays in letting so far this year from our initial expectation. This uneven pace is of core lettings will lead to underutilization of certain assets in the second quarter special margins. However, we believe this is a timing issue and that the total number of core jobs to be let, will still occur and will likely benefit the second half of 2015. On the budgeting front, The House Energy and Water Appropriations Committee recently approved the core budget for fiscal 2016, this shows solid year-over-year increases in both operations and maintenance funding as well as the portion of funds drawn from the Harbor Maintenance Trust Fund as mandated by WARDA. While 2016 appropriations have a long way to go before becoming law, it is encouraging to see progress being made at this early stage as Congress continues its appropriations process through regular order, something that hasn’t occurred for several years. We also expect to see continued opportunities from the U.S. Navy and the U.S. Coast Guard for additional water side infrastructure, repairs and improvements. We also anticipate additional funding for coastal restoration project for the RESTORE Act once finds are assessed for the 2010 Gulf of Oil spill -- Gulf of Mexico oil spill, excuse me. We expect signs to be assessed and see identifiable bid opportunities as a result within the next 12 to 24 months. There is no doubt this process has been slow, but we do expect to see opportunities as early as 2016 related to the RESTORE Act. Finally, despite current stopgap, transportation funding expiring in May, we continue to see a healthy bid market for bridge construction opportunities. As we have said in the past it is our preference to see long-term funding in place for roads and bridges, which may lead to bid pricing improvement. While there has been some recent bipartisan support in the senate for our long term transportation bill, it is more likely these two gets deferred until after the 2016 Presidential Election and will continue to see stopgap funding in place. We believe the growing demand for the movement of goods and people on and over the waterways will continue to drive growth for the company. We will accomplish this by capitalizing on a strong bidding environment and a continued focus on project execution. I am committed to delivering solid bottom line performance, sustainable growth and returning value to our shareholders. As I’ve stated in the past we will also continue to be opportunistic when pursuing strategic growth opportunities via acquisition. This growth can be achieved either by capturing additional market share in our existing service lines, diversifying the business through acquisitions that provide complementary services or a combination of both. By doing so, we can stay true to our successful project management philosophy while further broadening our service offerings that are driven by the same or complementary end market drivers. With that I will turn the call over to Chris to discuss our financial results in more detail. Chris?

Thank you, Mark and thanks again for joining us. For the first quarter, 2015 we reported a net loss of approximately $258,000 or $0.01 per diluted share. This compares with a net loss of $210,000 or $0.01 per diluted share in the prior year period. During the quarter, the company elected to accelerate divesting of certain stock compensation grants, our former Chief Operating Officer who passed away during the quarter. Excluding the one-time expense related for this acceleration, results for the quarter would have been breakeven. First quarter 2015 contract revenue was $81.5 million of which 53% was generated from the federal, state and local government agencies while 47% was generated from the private sector. This compares to the 40% being generated from the federal, state and local government agencies and 60% from the private sector in the prior year period. First quarter 2015 gross margin was 10.4% or $8.5 million, which compares to gross margin in the prior year period of 9.4% or $7.6 million. The improvement on our gross margin is attributable to both incremental bid margin improvement and a change in the mix of work performed during the quarter, which was offset by certain jobs that experienced higher than expected cost, which we're hopeful will result in additional revenue in the future. It is our belief that we will continue to see slowly improving bid pricing throughout the year. During the first quarter of 2015, we bid out approximately $320 million of opportunities and were successful on approximately $75 million. This resulted in a 23% win rate for the quarter and a book-to-bill of 0.92 times. SG&A expense for the first quarter of 2015 was $8.7 million, which compares to $8 million in the prior year period. The year-over-year increase was primarily attributable to stock-based compensation expense. Finally, our tax rate for the quarter was 38% which was in line with historical norms and our full year expectations. Turning to the balance sheet, as on March 31, 2015, we had approximately $34 million of cash on hand, which compares to approximately $39 million of cash on hand at the end of the last year. At the end of the quarter, we had access to $11.4 million under our revolver and total debt outstanding of $33 million. Our credit agreement expires in June and we're currently working with our -- working on a new agreement with our lender to meet our future capital needs. Additionally, our bonding programs remains solid and it is more than adequate to support our bid activities. We continue to enjoy excellent relationships with both our lender and our surety. As part of our capital allocation strategy, we continue to execute on our stock repurchase program. So far this year through our 10b-5 plan, we have purchased approximately 238,000 shares totaling $2.1 million. As we go forward, we will remain opportunistic with regard to our share repurchases. However, the specific timing and the amount of actual future share repurchases if any will vary based on our capital needs, market conditions, security law limitations and other factors. Cash flow from operations for the quarter was $5.5 million as compared to $6.5 million in the prior year period. EBITDA for the first quarter of 2015 was $5.3 million on an EBITDA margin of 6.5%, which compares to EBITDA of $5.4 million on EBITDA margin of 6.6% in the prior year period. Our free cash flow for the first quarter of 2015 was negative $460,000 which compares to a positive $3.4 million in the prior year period. We define free cash flow as EBITDA less CapEx. Our free cash flow was lower during the first quarter of 2015 as a result of the timing of certain CapEx projects this year versus the prior year period. As a reminder, we expect full year 2015 CapEx to be in the mid teens. Overall, we're pleased with the financial health of the company and we're focused on maintaining a solid financial position and returning value to shareholders. As we look ahead, we continue to have a solid bid market. As of March 31, 2015, we had backlog of work under contract of $208.5 million of which 16% is for federal projects, 14% is for state projects, 52% is for local projects and 18% is in the private sector. Additionally, we continue to have -- we currently have a record $374 million worth of bids outstanding of which we've been notified that we're the apparent low bidder on approximately $37 million. Of the $374 million of bids outstanding, approximately 64% are for private sector clients and 36% are in the public sector. As Mark said, we're hopeful that we will begin to see awards on these opportunities soon with construction beginning in the second half of 2015. However, the exact timing of awards can fluctuate based on several factors, which can impact the amount we bid on and our win rate in any given period. We believe the level of bids outstanding highlights the robust market we have and this combined with our backlog and projects we're tracking gives us optimism about 2015 and beyond Additionally, we continue to see pockets of bid pricing improvement. Going forward, we'll continue to test margins upward when appropriate. Given our solid level of backlog our focus remains on improving margins and getting back to our historical norms. As Mark mentioned, we do faced some near term challenges in regard to utilization in the second quarter as a result of slower lettings from the Corps of Engineers and the timing of anticipated awards for work floated that we now expect to begin in the second half of 2015. As a result we will have gaps between projects during the second quarter, which will pressure Q2 margins. However, we believe this is a timing issue and we remain excited about our opportunities for growth. Specifically, we anticipate to see the majority of the delayed opportunities from the core to be led in our third quarter, which should bode well for the remainder of the year. In conclusion, continued strength in the private sector, opportunities from local port authorities to expand our water side infrastructure and an encouraging project list from the Corps of Engineers should provide opportunities for good asset utilization in the second half of 2015. Beyond 2015, our market drivers remain strong which should lead to continued high demand for our services. Further we believe we are well positioned to meet this high demand with the right talent and equipment, also as Mark mentioned, we continue to explore acquisition opportunities to further expand and grow our business. We are excited about the road ahead and we believe Orion with a strong future with opportunities for continued growth. With that I will 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, Andrew would you please review the procedures for placing a question.

[Operator Instructions] And I’m showing our first question or comment comes from the line of Trey Grooms with Stevens. Your line is now open.

Good morning guys, this is actually [Drew] [ph] for Trey.

Good morning, Drew.

Good morning. I guess first question I had was really as we look at, you talked about 2014 growth or 2015 growth being similar to what we saw in 2014 and as you look at this work getting pushed out into somewhat more elephant hunting that you’re doing on these large private sector projects and those being pushed out into the back half of the year, how should we think about just kind of topline growth through the year as we progress given the pipeline of visibility that you have?

Well as we kind of said in the remarks given the backlog we have, the bids outstanding, kind of the remarks that Chris just made we still believe similar growth is achievable. Obviously some of that is going to be dependent upon the timing of awards and the execution of work and things of that nature, but we’re still hopeful for that to occur. And again over the long run, we’re still excited about what we see out there. The opportunities, the backlog, the encouraging things we see happening in the Corps budgeting cycle. So we remain optimistic, but again some of that’s going to depend on the timing of awards.

Okay. And how much contribution do you expect from DMPA this year and how much did you see in the quarter?

We didn’t specifically break that out and we won't on a go-forward basis. That's the integral part of the service offerings that we have -- that we bring to bear. What I would say is we're pleased with it. We're pleased with the acquisition that we've made last year that's kind of met what we expected it to do and we kind of expect it to meet that going forward.

Okay. And then you talked about some cost that you incurred with some large projects. Can you elaborate on that a little bit more and you expect that to turn into revenue?

Well yes we're working very hard to make that happen. Primarily it relates to different site conditions on certain projects and as you're probably aware, a lot of times in these situation you've got to continue on and do the work and incur those costs and try to recover that at a later date through your contractual methods and others. So we expect anywhere from $1.5 million to $3 million type of recovery going forward and we’re working hard to make sure that happens but definitely had some impact in the quarter.

Okay. And then last one for me as you kind of look at your private sector backlog, I think about two-thirds of that is mid and downstream energy related projects and with the delays in the lower commodity environment that we’re facing are you seeing these projects continually pushed out or can you just make us talk to a little bit more to us around that scenario.

Yes absolutely, I would say, I don’t think there is a correlation between where energy prices are which have been rather down significantly from this point last year of course. They have been fairly stable throughout this year but I think, the bigger factor that or the factor I guess that we commented on in the remarks is that’s driving the award cycle if you will on some of these things is more the design build factor there. That design build on balance is a very good thing for us. We commented on that, that it provides us with turnkey opportunities. Often times, it’s kind of a short list or limited bidder type opportunity as opposed to just an open bid. So there is tremendous amount of positives that we see from design build opportunities. The offset to that, is that the bidding process particularly, when it's in the private sector which we commented on its kind of got a little bit longer lifecycle if you will from the bidding process to award and kick off of work. So that’s really what's driving the comments that we made. We’re not seeing any kind of delays in the work that we’ve been going after or things of that nature. So we remain upbeat and positive about what we see out there and obviously we’re going to continue to monitor that end market to as developments occur to see if we do see an impact that we haven’t seen out today and again, I think the gas that we’re talking about are more related to just this whole design build thing and that whole lifecycle of bid to award.

Okay. Thank you, Mark.

You bet.

And our next question or comment comes from the line of Jonathon Tanwanteng with CJS Securities. Your line is now open.

Good morning and thanks for taking my questions.

Good morning, John.

Just given the commentary on Q2 scheduling gaps, do you expect revenues and utilization or margins to decline sequentially?

On the revenue side, I don’t know that we see a sequential decline on the revenue side. We probably will see somewhat of a pullback in gross margins because of the under utilization of assets. Sequentially, don’t know that it would dip as far as Q2 2014 in particular, but do expect to see somewhat of sequential decline from the first quarter of this year.

Okay, great. And then just based on the bids you have outstanding and the schedule of army core lettings may be in Q3 would you expect a pretty big sequential improvement from Q3 to Q4?

If potential, yes. The one thing that would apply into is when those jobs actually are less because as you know, particular with the Corps of Engineers, but the job is what you're typical on site fairly quickly in the normal process. So with that occurrence you could actually see that start to pickup in the third quarter and benefit both the third quarter and the fourth quarter from utilization standpoint. So it will really depend on the timing of the awards and the timing of when the note proceed occurs and you’re on site on the job as to where we see an uptick between Q3, Q4 or we see the higher elevated level in both the third and fourth quarters.

Right, and kind of like if you think about what occurred last year with the core and the impact that had, it looks like that's while we were helpful, it would be little bit different this year, it looks like given the way that the, lack of budgeting process, the Omnibus bus occurred and the dead feeling stuff has occurred, it looks like we're sort of seeing a replay of what happened last year with their lettings.

Okay, great and then finally just you mentioned the possibility of a highly build, probably next year, what does that do to your revenues and margin profile?

It really doesn’t change the revenue and margin profile to be honest with you. When we see these builds coming out, we don’t see a lot of change in activity we have. Really the issue is it's the competitive landscape, which I guess that would help drive the margins in the future, but that could change the competitive landscape ultimately for the longer term. And John our belief there is that if you have a longer term highway bill, which if you think back traditionally these were five, six year long bill. It provides the market place with the visibility. Therefore it can lead to bid margin improvement. What we've seen not unlike some other areas of federal government the last few years is there has been these short term things, therefore lack of visibility and our belief is that that's just kind of had a negative effect on the bidding psyche out there if you will. So the opportunities are still there. Our preference to see a longer term funding bill though is I think a psychological impact it has on giving the visibility for the marketplace to know that there is a lot of visibility in the future. So therefore it should lead to better bid pricing and that's why we want to see that, but even if we go to another stopgap funding which is what we expect at this point, May starts tomorrow, our expectation is we continue to still see the opportunities there, the bid opportunities for that type of work it's just that impact on the bid pricing that we would like to see from a longer term funding bill.

Okay great. Thank you very much.

You bet.

And our next question or comment comes from the line of Veny Aleksandrov with FIG Partners. Your line is now open.

Good morning.

Good morning.

My first question is on the backlog, so with designing delays as you call them, is there a change in the composition of the backlog in terms of how many months your average job in the backlog.

Not really. It’s the same kind of duration, but I guess I would especially when you're comparing year-over-year, one thing I would point out, which we talked about on the last call is that the backlog coming into 2014 a lot of that did not start to burn in the first half of last year. So while the backlog was up a lot of it was longer term starting projects versus the backlog that we have today. So when we look at our backlog we were very pleased with it. Its north of $200 million. Book-to-bill was $0.92. Obviously we would like to see that above $1, but we also look at the other data point out there. Our couple other data points is that we've a record level of work coated out there, which again we hope to start seeing turned into backlog fairly soon or at least a large portion of it and we see the bid opportunities in front of us. So when we look at all those things on a combined basis we remain optimistic about what we're seeing out there.

Great. So the duration of the progress into backlog is still six to 18 months.

Yes.

As it used to be. Okay. Thank you. Thanks for the clarification. And then again looking to the backlog and the GAAP that you're expecting on the Federal side in Q2, you could feel this or is it's short term project, which you can secure between now and the end of quarter?

It's possible, but again the time taken two pieces of that with respect to some of the private sector stuff that a significant amount of that coded work the 374 that we've bid and letting award on, about two-thirds of that is in the private sector. It's possible that if we get some awards sooner rather than later, we could see some of that burn in the quarter, but I think a lot of that would probably again be burning in the back half of the year beginning. With the core at this point, it's possible, but as we said at this point we're expecting a repeat of last year where we're going to see a lot more of their lettings occur in the third quarter versus this quarter. They don’t really have much on the bidding calendar at this point. So again it is possible that they could put something out and as Chris just said that award to start cycle with them is typically fairly quick. So if we get something soon, we could go to work on that, but our expectation is that, that's more of a third quarter event.

Thank you. And my last question, I think you mentioned that pricing is swallowing but at the same time we're going to be facing global utilization in Q2, in the second half of the year if pricing continues to improve and utilization go out because of core letting can we expect to see better margins in 2014?

That’s what we hope yes. I go back to the fourth quarter of last year. On a gross margin standpoint its 16.9% gross margin in Q4 of '14 with 12.5% EBITDA and that’s some pricing improvement to it, but better utilization of our assets. Hopefully as we march through the year we could see that pick up a little bit. Now that being said keep in mind if margins double tomorrow you still have a lot of backlog at varying levels of margin. So you got to work through that as well. So it's incremental and every little piece is incremental. And we're definitely focused on testing margins upward when appropriate. We continue to see pockets of pricing improvement and we're hopeful that we'll continue to see that in the future albeit expected to be kind of a slow study March. And just to add to that too is while we're focused on as Chris said, focused on the testing margins upward and improvement in those and improvement in utilization, the flip of that is as we also want to maintain the backlog and be cognizant of that, so its walking the line that we have been walking for quite some time and will continue to balance pushing margins when we can taking advantages of these pockets of pricing improvement. At the same time trying to keep that win rate at the backlog where we want to see it. So as Chris said, it’s an incremental improvement, but again we think we continue to move in the right direction on that front.

Thank you so much. Really appreciate it.

You bet.

Our next question or comment comes from the line of Marco Rodriguez with Stonegate Capital. Your line is now open.

Good morning, guys. Thank you for taking my question. Most of my questions have been asked and answered, but just kind of want to follow up here a little bit on the gross margin aspect on the additional cost that you guys saw in the quarter, $1.5 million to $3 million. So if I kind to take, if I am understanding you correctly, if I kind of take the midpoint there about $2 million, kind of back that out, that kind of implies gross margin in the quarter, normalize if you will at about 13% give or take. Is that one correct way to look at it and then number two what sort of drove that increase year-over-year? Is it utilization rate? Is it mix? Can you kind of give us a little of bit color regarding that?

Yes. Well I think a couple of things one is your analysis is in the right direction, but I think may be a little bit strong because I don’t know if that full impact would have been in the quarter just given how POC accounting works and all that and the cost versus how that would have flown through. So I think directionally you are spot on, but I am not sure that it would be quite as strong as what you said. However, the basic point of your question is I think accurate and I think Q1 we were pleased with the asset utilization. We did as we kind of talked about late last year I think we were very pleased about how we were set up coming into 2015 as opposed to last year in 2014. However, it's just one of those kind of things in the business sometimes that you run into and coincidentally it just happened this quarter where we did have certain projects that where we ran into this situation where it's kind like you incur a cost now and you sort of argue about some of the additional revenue in the future and that’s kind of where we've found ourselves. So I think as we said that in the remarks and in the release is positive things going on, but offset by this occurrence. So again, we're going to work hard to get those change orders and/or claims recovered and hope to do that sooner rather than later, but that will just happen when its happens in future periods.

Got it. Understood and then in terms of the pricing environment you talked about seeing some positive aspects there, which I believe you've been talking about for the last few quarters. Maybe if you can provide a little bit of color there or additional prospective, are there particular areas where you're seeing a return to more normal rates in some areas that are still a little bit tight.

There are some pockets and it really -- I will be honest with you Marco, we're looking at everything on a job-by-job basis. So it really comes down into who is showing out the better jobs, what type of work, where is the work, what are the services brought to bear and we're looking at that individually by individually. So I don’t think it’s fair to say that it's just that one geographical area, one type of customer, thing of that nature. It's really driven by the type of work we're going after. We're trying to be more selective, when we can be selective about the type of jobs we go after and with that hopefully have the opportunity to test margins upward when appropriate. And then also -- and again as Chris was kind of commenting on that, it's also where you can select the opportunities that gives you a competitive advantage and that may be certain opportunities where just location wise you've got a mobilization advantage let's say or as we talked about earlier, with the design built things and net, net, we believe design build is very, very positive. One of the positive things about design build is typically it is a sort listed group of competitors. So where we can position ourselves to take advantage of that type of thing, I think that’s kind of the point that Chris was just making as opposed to other work where there is not those competitive advantages by location and where you're be more of advantage and the bid like. So again I think it's across the Board in terms of where we're seeing pricing improvement and where we're still seeing challenges. Q – Marco Rodriguez: Understood. And last quick question, if I could. You repaid a fair amount of debt here the quarter. Can you talk a little bit about the capital allocation decision there and how should we be thinking about that credit facility that’s maturing in June.

Yes we actually did repay as much as you think. What is happening at the end of the year last year actually if you go back in the third quarter of last year, we purchased dry-dock and we pulled off of our revolver to make that purchase. We subsequently went and did a term facility specifically related to that dry-dock to then repay down the revolver. It was simply a timing issue at the end of the year that was it actually back term keys and the amount was showing up on the revolver at the same time. We've picked that in January of this year and that's just a pull down of cash and a payment on to the revolver to again free up some capacity on that. So that’s where you see kind of change. Other than that of course we made our normal terms of payment as we would. As we kind of look at the capital allocation strategy going forward and we look at specifically the facility, you're right, the facility is up at the end of June this year. Kind of my thought process on that right now is we're working with our lender who we enjoy great relationships with to kind of reset that facility for the future and hopefully we will be bringing up some more updates on that here in the next quarter.

Thanks a lot guys.

You bet.

[Operator Instructions] And our question or comment comes from the line of Allie Hemmings with D.A. Davidson. Your line is now open.

Hi good morning.

Good morning.

So I was wondering about your win rate. It's a bit lower than it has been recently. Would you say this is mostly due to changes in bidding practices? I know you talked a little bit earlier on the call about design builds work.

It's really not to be honest Allie, if we look historically we average about 25% of what we go after. So if we're in that range of around 25% win rate we're happy about. So being at a 23% run rate for the quarter doesn’t bother us at all. That’s purely the timing of some of the jobs. Like we talked about, there is $374 million of bids outstanding, which we were the apparent better on $37 million. Again some of that is just the timing of when those jobs, when those awards come through is going to of course affect that win rate. But given -- we believe the 23% was a good type of run rate for the quarter. We're very pleased with the bids we have outstanding. Our bid amount and what we're tracking through the rest of the year and that's when we talk about the contract about the future and the excitement about 2015 and the opportunities out there, that's what we're talking about.

Great. Thank you very much.

You bet.

And I am showing no questions or comments at this time. So with that, I would like to turn the call back over to Management for any further remarks.

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

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect.