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

Jack O'Brien - CJS Securities Paul Betz - BB&T Capital Markets Matt Duncan - Stephens, Inc.

Good day ladies and gentlemen, and welcome to the Orion Marine Group's Third Quarter 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]. As a reminder today’s conference is being recorded. I would now like to introduce your host for today's conference, Investor Relations Manager Drew Swerdlow. Sir, please begin.

Good morning. And welcome to the Orion Marine Group's third quarter 2015 earnings conference call. Joining me today are Mark Stauffer, Orion Marine Group's President and Chief Executive Officer and Dwayne Breaux, our Executive Vice President and Chief Operating Officer and Chris DeAlmeida, our Vice President and Chief Financial Officer. Regarding the format of the call, we have allocated about 20 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 end-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. Also, please note that EBITDA and EBITDA margins 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 Web site 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, November 05, 2015, and our quarterly and annual filings with the SEC, which are available on our Web site 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. As we discussed on our update call last month, we experienced issues on five projects managed out of our Tampa, Florida office which led to significant rise right downs on these jobs to account for changes in management’s estimate to complete the projects and our actual cost incurred when performing and finalizing. In am confident that the actions I have taken will resolve these isolated correctable issues. I am also confident that our new COO Dwayne Breaux has the experience in leadership skills to help them from occurring in the future. We have instituted our complete realignment of the Tampa office and I have full confidence in our Tampa team going forward. Excluding the events in Tampa, I remain pleased with our overall operations and there performance. TAS performed exceptionally well during the quarter along with our other offices within the Marine Construction segment. Outside of the five specific projects we previously discussed both segments continued to executive projects successfully. There is no doubt our third quarter results are disappointment, but we have taken the steps necessary to correct our issues in Tampa and I am confident that 2016 will be a solid year with significantly improved bottom line performance. I am focused on moving our company forward, positioning us for success and delivering more predictable results in the future. As we look to next year, we continue to experience a high-level of demand for all of our services across both operating segments. Our Heavy Civil Marine Construction segment continues to see solid demand help maintain and expand the infrastructure that facilitates the movement of goods and people on and over the waterways. We continue to see bid opportunities from our private sector energy related customers as they continue to expand their marine facilities related to the storage transportation and refining of domestically produced energy. Taking a longer-term view, we expect further opportunities in this sector will come from petrochemical related customers, energy exporters and LNG facilities over the next several years. Additionally, private recreational customers also continue to be a solid driver of bid opportunities as they expand, repair and refurbish waterside infrastructure throughout the Caribbean. We believe we will continue to see opportunities from recreational customers for the foreseeable future as cruise lines sake new destinations and more robust infrastructure. With the expanded Panama Canal slightly to be completed next year, ports in the Gulf Coast and Southeast Atlantic are continuing to undertake large scale deepening projects, infrastructure improvements, and associated maintenance services in order to service the larger ships that will be able to transit the canal wider, deeper and longer locks. With billions in work planned by port authorities, we believe that we will see demand for our services related to the expanded Panama Canal at least over the next decade. With the recent agreement between Congress and the White House on the two year federal budget, we expect funding for the balance of fiscal year 2016 including the Army Corps of Engineers to occur before current funding expires on December '11. Additionally, appropriations for fiscal year 2017 should occur through regular order under this deal. While we hope better visibility for core funding will occur under this new deal, we expect our recently announced dredge fleet realignment along with private sector and port authority opportunities will lead to improve dredge utilization regardless of the pace of lettings from the core. Bid opportunities related to coastal restoration work funded through the RESTORE Act should occur within the next 12 to 18 months. Turning to DOTs, in the coming days the House of Representatives will bring their version of a long-term transportation bill to the floor, for consideration which follows the Senate's passage of a bill this past summer. If the house’s version is approved the two chambers will go into conference negotiations to work out the differences. While we are still early in this process, we believe the longer the term of the final bill to better as a long-term bill will provide visibility to the marketplace providing a catalyst for pricing improvements on state DOT jobs. Demand in our commercial concrete segment also remains strong as evidenced by our new record backlog and high level of bids outstanding. Demand for these services is being driven by continued population growth in Texas that has resulted in a large increase in non-residential construction in both Houston and Dallas. Texas' diverse business friendly economy continues to attract people and businesses to the state. As a result, there is an increase need for industrial warehouse office, retail, medical, multi-family and educational facilities. We are confident that the fundamental business drivers in our commercial concrete segment will continue to support solid performance and future growth as we look to expand our footprint within the state. In summary, we are confident in both our marine construction business and our commercial concrete business which is outperforming initial expectations. I am focused on moving our company forward positioning us for success and delivering more predictable results in the future. I am confident 2016 will be a solid year for the company with significantly improved bottom line performance. 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 third quarter, 2015 we reported a net loss of approximately $7.4 million or a loss of $0.27 per diluted share. These results compared to a net income of $3 million or $0.11 earnings per diluted share in the prior year period. Third quarter 2015 contract revenue was $137 million of which our Heavy Civil Marine Construction generated approximately $90 million and our Commercial Concrete Construction segment generated approximately $47 million. Within the Heavy Civil Marine segment, approximately 63% was generated from federal, state and local government agencies and 36% from the private sector. This compares to 40% being generated from federal, state and local government agencies and 60% on the private sector in the prior year period. For our Commercial Concrete segment, 100% of revenue was generated from the private sector. Consolidated third quarter 2015 gross profit was $8.3 million or gross profit margin of 6% which compares with gross profit on the prior year period of $12.9 million or a gross profit of 12.1%. Gross profit for the third quarter 2015 was impacted by the increases in forecasted cost for the five jobs in our Tampa office as well as the one-time non-cash expense related to assets held for sale and the NOL valuation allowance. Without these adjustments, we believe our results would have been in line with analyst estimates. During the third quarter 2015, we bid on approximately $682 million of opportunities and we’re successful on approximately $195 million. This resulted in a 29% run rate for the quarter and a book to bill ratio of 1.18 times. We currently have approximately $724 million worth of bids outstanding of which $262 million related to the marine construction segment and $462 million are related to the commercial concrete segment. The Marine Construction segment is currently the apparent low bidder on approximately $18 million and the Commercial Concrete segment has received award subsequent to the end of the quarter of approximately $16 million worth of jobs. We are very pleased with our run rate for the third quarter and the visibility our backlog provides us for 2016 and beyond. SG&A expense for the second quarter of 2015 was $14.5 million which compares to $7.9 million in the prior year period. The increase is primarily related to the acquisition of TAS including the amortization of intangible assets and other acquisition related cost. EBITDA for the third quarter 2015 was $42,000 which compares to EBITDA of $11.4 million in the prior year period. While EBITDA in the Marine Construction segment was a negative $3.9 million for the quarter, our Commercial Concrete segment performs well producing $4 million in EBITDA attributable to Orion Marine Group for the quarter. On a pro forma basis, that is assuming TAS was a part of Orion for the entire third quarter commercial concrete EBITDA would have been $8.4 million. Now turning to the balance sheet. As of September 2015, we had approximately $17 million of cash on hand which compares to approximately $39 million of cash on hand at the end of last year. The decrease in cash balances is primarily related to changes in working capital and cash uses for newly acquired entity. At the end of the quarter, we had approximately $147 million in total debt outstanding and availability under our revolver of approximately $35 million. Subsequent to the end of the quarter, we made an additional unscheduled payment of approximately $5 million on the term portion of our credit facility. Looking ahead, we will continue to be opportunistic with regard to paying down debt through ongoing cash flow from operations. Additionally, we continue to enjoy excellent relationships with both our - and vendors. Turning to our outlook for the reminder of the year in 2016, due to the challenges, we face in third quarter, we now expect full year 2015 revenue to be between $460 million and $480 million with full year EPS loss in the range of $0.30 to $0.35. We remain confident in the fundamental drivers in our Marine Construction segment and the ability of our Commercial Concrete segment to continue to grow considering our near record backlog and bids outstanding. For 2016, we expect full year revenue to be in the range of $625 million to $675 million with full year EPS in the range of a positive $0.30 to $0.40. Additionally, full year 2016 SG&A should be approximately 10% of revenues which includes $7 million for the amortization of intangible assets related to the acquisition of TAS. While 2015 is been a disappointing year due to certain isolated issues. We have experienced growth in some of our marine construction offices and we are very pleased with the addition of TAS commercial concrete. We are confident in the year ahead and our ability to deliver more predictable results in the future. As a company, we are well positioned for future success, remain confident in our market fundamental and we believe there remain ample opportunities for growth across our end market. With that I’ll turn the call back over to Drew to begin the Q&A portion of the call. Drew?

Thank you Chris. We will now like to open the call up for questions. Liz, would you please review the procedures for placing a questions?

Certainly. [Operator Instructions]. Our first question comes from the line of Jon Tanwanteng with CJS Securities. Your line is now open. Jack O'Brien: Good morning this is actually Jack O'Brien filling in for Jon.

Hi, Jack.

Hi, Jack. Jack O'Brien: First, could you clarify your - at the top line growth numbers and finding your EPS outlook for next year? And then what assumptions are you making about the pace of the Army Corps letting in that forecast?

Well, on the top line we were giving specific so for 2016, we expect full year revenue to be in the range of $625 million to $675 million so that does include growth but keep in mind we’ll all get a portion for this year we only have a portion of the benefit of TAS since we completed the transaction on August.

And with respect to the core, what we’ve assumed as we said in our previous call, we don’t necessarily expect improvement or non-improvement in the pace of corps lettings. However, with the changes that we’ve made to the Dredge Fleet, the private sector opportunities, we see or have in hand and the port authority work that we see or have in hand. We’re focused on keeping utilization up regardless of the pace of lettings from the corps is. Jack O'Brien: Okay. Thank you. And then have you guys continue to see any sort of rational building from your judging competitors that kind of been going on nearly?

We’ve seen some related in the third quarter, related to the just the lack work coming out previously but then its, I wouldn’t call that wide spread, we’ve seen its periodically and which is one of the reasons why we’d like to see a better pace of lettings but as I said minute ago, we were focused on Dredge utilization regardless of that pace of the corps lettings is going to be. Jack O'Brien: Okay. Thank you very much. I’ll hop back in queue.

Our next question comes from the line of Matt Duncan with Stephens. Your line is now open.

Good morning guys. This is Blake [ph] filling in for Matt.

Hi

So, just first question. Your initial expectations for 2016 was sales essentially a mine with expectations from consensus but EPS is a fair amount - it looks like you’re expecting gross margins to be pretty low and then you mentioned SG&A cost are running pretty high with the acquisition. Would gross margin level are you expecting in your earnings guidance? And then can you talk about what’s your margin expectations are for your TAS business first your legacy business?

Yeah. Certainly can. On the gross margin side of thing, I mean keep in mind couple of these jobs that we talked about in the third quarter continue into the first quarter and they would be recognized at zero profit from this point forward. So that will put some pressure both on the fourth quarter and the first quarter of next year. So generally speaking large end perspective overall looking at the two segments independently, we actually do expect that a little bit of gross margin improvement on inhabitable marine construction side of things. A little bit back towards where they were previously again this year is been somewhat hampered by the issues here in the third quarter. I would expect the TAS or the commercial concrete segment to continue to perform fairly inline with where they have been.

Okay, great. So, second question TAS segment has a solid quarter exceeded your expectations and you noted that was up about 25% year-over-year on a pro forma basis was some maybe an easy comp helping a little there or what were the main drivers that show on year-over-year increase, I know you mentioned population increases in Texas but what kind of end markets or customers are really the strongest there?

Well, I mean I think generally it's been very strong across the Board in terms of type of jobs we’re working on in that segment. I think partially to it was a good solid quarter. I think partially though a little bit of impact on the quarter in terms of the comps was keep in minded in Q2 there was a significant amount of rain in Texas, we talked about that earlier in the year. It impacted both segment what are now segments of time they want but I think there was a lot of work that got pushed from Q2 into the third quarter and particular in July we personally didn’t have any rain after getting the dilution in May and June and so we’re able to execute on a lot of work. So, I think just good solid execution and just solid business during the quarter both contributed to the increase year-over-year.

Okay. Thanks a lot.

Yeah.

Our next question comes from the line of Paul Betz with BB&T Capital Markets. Your line is now open.

Hello, good morning everybody.

Good morning Paul.

Just following along with that question. The year-over-year growth was good I know as the pro forma EBITDA margin was above 11% which I think maybe a little higher than what has been historically. Does that revenue being pushed in the Q3 maybe boost that a little higher or is this kind of the current run rate of that business as well?

Generally speaking it did help is out a little bit with the good weather here in the third quarter for them and the strong backlog across the Board that really allowed Commercial Concrete segment can go full throttle which gave them a little bit of a benefit in the third quarter here.

Okay. You mentioned the bids outstanding for the commercial concrete business I guess 462 million, you mentioned $16 million award was there any bids that you seem to be the apparent low bidder or is that just the $16 million or you expect to get from the $462 million bids outstanding?

Yeah now the $16 million is not all we expect. With the Commercial Concrete segment it’s a little bit different than the Heavy Civil Marine primarily as a result of its predominantly private sector work and we’re predominantly working as a sub-contractor. So, generally speaking it kind of goes from bid outstanding to award straight away so there is not, $16 million has actually been awarded but we really don’t have an interim step with the Commercial Concrete segment like we do with on the Heavy Civil Marine side where we might have the step of the award and then coming under contract and all that so it’s a little bit different from those guys but we know actually now were helpful that we’ll get have a lot more of that turn into workforce as we proceed forward here.

Okay. Thank you. If I speak-out real quick one and tax rate what are you expecting?

For 2015, we are expected to be slightly below our statutory rate of 35% for 2016, it's like the it’s the back above our statutory rate so I would model probably the 37ish percent range for 2016 and call it maybe 32% to 34% for 2015.

Okay. Thank you very much.

Thanks.

Our next question comes from the line of Bill - with D.A. Davidson. Your line is now open.

Good morning guys. This is Bill - here for John Rogers.

Hey, Bill.

Let's hoping a lot a little bit more about the past business as you guys kind of get more comfortable after that acquisition I know you guys talked about mentioned and expand a little bit more in Texas are there any more opportunities you guys are looking to move into in the concrete?

Well, I mean clearly, we’ve got a strategy with that segment. First, we want to keep doing what we’re doing, it’s a very well-run business has been throughout its history so we obviously want to continue that. But clearly we’d like to experience profitable growth in that segment so that will entail us looking at opportunities to expand in the markets we currently are in, in the short-term and then in the longer-term, near-term, longer-term look to see if there is other markets that might be a good opportunities for us to expand into.

Okay. So not familiarly specific geographic wise you guys are seeing as an opportunity?

Well, I mean clearly we think the state of Texas in that segment we’re based in Texas in Houston have big presence in Dallas. There is other parts of the state that are very attractive potentially as I said in my remarks the state of Texas is very business friendly environment expected significant population growth in the coming years, not just in Houston and Dallas but another parts of the state. And so as we look to grow that segment will certainly be looking at other parts of the state that we think are good growing opportunities for us and like I said, we think we’re very bullish on Texas and think that there will be opportunities to expand that segment.

Thank guys.

Okay.

We have a follow-up question from the line of Matt Duncan with Stephens. Your line is now open.

Hey, guys just a couple of quick follow-ups. You mentioned for your guidance, you expect SG&A to be about 10% of revenue? What are you doing there to pull those costs down more aggressively at this point?

Well, we are looking at areas that we can improve cost overall. Do keep in mind that $7 million of that SG&A is the accelerated amortization of the intangible assets related to the acquisition and that will decrease in out years and then go away in pretty short order. So, with that if you take that out you’re naturally little bit lower less than a 10% area and then we’re clearly always looking at ways to help improve our cost structure overall.

Okay, great. And then lastly, you kind of touched on this earlier but the overall dredging industry looks healthy and should improve as - funds start to get used facing signs that our business getting - on heading through 2016 and if so is it sort of help that bidding environment yet from a competitive standpoint?

Well, keep in mind there are two kind of things that they go into that and that is one what the bid opportunities out there and two as where our people located because obviously that’s going to have factor in and weigh in on what a specific job bidding environment looks like. So there is kind of two factors there. As I said earlier in the remarks and then answer to your question. We’re focused on getting our dredge utilization consistently higher regardless of what happens with the core of engineers, we have a lot of opportunities that we are either expecting to start or are looking to get in the backlog so we either have it in backlog or we’re looking to get in backlog in the private sector, we have port authority work that we’re working on. So, as we look out particularly into ’16, we see opportunities beyond just with Corps of Engineers is doing. But certainly we’re hopeful that the more visibility I think we would have preferred to see a full year appropriations in place for the corps on October 1st that didn’t happen but we do have this budget bill now that should mean that will have not the best case scenario but second best case scenario will get funding for the balance of the year in placed by the December 11th deadline here. And then the budget agreement is in place for next fiscal year so our expectations to that will happen in regular order and we’ll see something happen there. We are encourage that subsequent to the end of the government’s fiscal year in early October we did see, we’re successful better out of corps job that came out, that quite frankly we’d sort of expected when they’ve got house - out of September that it would probably next year before we saw that bid but a bid happen in early October, we were successful better on it. So, I’d said, we’re focused on dredge utilization regardless of what they do but certainly we’re hopeful that with clarity on this two year budget deal that hopefully we’ll see an improved pace of lettings but we’re not going to, regardless of that we’re going to focus on dredge utilization.

Okay, great. That helps. Thanks a lot.

[Operator Instructions]. I am showing no further questions on the phone lines at this time. I’d like to turn the call back to Drew Swerdlow for closing remarks.

On behalf of Orion Marine Group, we would like to thank you for taking this time to talk with us this morning. And 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 your participation in today’s conference. This concludes the program and you may now disconnect. Everyone have a great day.