Orion Group Holdings Q3 2026 revenue rises to $256M
Nine-month operating cash flow was a $10.722 million outflow; management believes liquidity will cover operations for at least 12 months.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Orion Group Holdings, Inc. (ORN) reported third-quarter 2026 contract revenue of $256.2 million, versus $225.1 million a year earlier, and net income of $5.473 million, versus $3.301 million. Operating income rose to $8.521 million from $5.321 million, while gross profit increased to $33.140 million from $29.752 million.
For the first nine months of 2026, revenue was $694.331 million versus $619.037 million, while operating income fell to $6.411 million from $9.586 million. Net income was $6.015 million versus $2.728 million, including a $5.990 million income tax benefit. Operating cash flow was a $10.722 million outflow, compared with $14.260 million provided in the 2025 period.
Orion completed its acquisition of J.E. McAmis, Inc. and JEM Marine Leasing, LLC on February 3, 2026; preliminary consideration was $72.935 million, including cash, a seller note, common stock and contingent consideration. At September 30, 2026, cash and cash equivalents were $5.671 million, revolving-credit availability was approximately $28.0 million, and backlog was $645 million. Management believes liquidity will be adequate for operations for at least the next 12 months.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointJEM acquisition: $72.935 million preliminary consideration; added dredging capabilities. 20% of market cap
- Moderate pointThird-quarter contract revenue rose 14% to $256.2 million.
- Moderate pointNet income: $5.473 million versus $3.301 million for the third quarter.
Negative
- Moderate pointNine-month operating income fell to $6.411 million from $9.586 million.
- Moderate pointOperating cash flow was a $10.722 million outflow in the first nine months.
Filing Explained
As of September 30, Orion reported
Key Figures
Key Terms
remaining performance obligations financial
purchase price allocation financial
cash flow hedges financial
weighted-average interest rate financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ORN’s third-quarter revenue and net income?
How much was ORN’s preliminary JEM acquisition consideration?
Why was ORN’s operating cash flow negative in the first nine months of 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
Commission file number:
(Exact name of registrant as specified in its charter)
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State of Incorporation | IRS Employer Identification Number |
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Address of Principal Executive Office | ( Registrant’s telephone number (including area code) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class | | Trading Symbol(s) | | Name of Each Exchange on Which Registered |
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| | NYSE Texas | ||
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days: ☑
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| |
Large accelerated filer ☐ | |
Non-accelerated filer ☐ | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
There were
Table of Contents
ORION GROUP HOLDINGS, INC.
Quarterly Report on Form 10-Q for the period ended September 30, 2026
Index
| | |
| | Page |
PART I | FINANCIAL INFORMATION | |
Item 1. | Financial Statements (Unaudited) | |
| Condensed Consolidated Balance Sheets at September 30, 2026 and December 31, 2025 | 3 |
| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 | 4 |
| Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2026 and 2025 | 5 |
| Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2026 and 2025 | 6 |
| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 | 7 |
| Notes to Condensed Consolidated Financial Statements | 8 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 35 |
Item 4. | Controls and Procedures | 35 |
PART II | OTHER INFORMATION | |
Item 1. | Legal Proceedings | 36 |
Item 1A. | Risk Factors | 36 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36 |
Item 3. | Defaults upon Senior Securities | 36 |
Item 4. | Mine Safety Disclosures | 36 |
Item 5. | Other Information | 36 |
Item 6. | Exhibits | 36 |
SIGNATURES | 39 | |
2
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PART I.FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Information)
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (Unaudited) | | | | |
ASSETS |
| | |
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Current assets: |
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Cash and cash equivalents | | $ | | | $ | |
Restricted cash | | | — | | | |
Accounts receivable: | |
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Trade, net of allowance for credit losses of $ | |
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Retainage | |
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Income taxes receivable | |
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Other current | |
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Inventory | |
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Contract assets | |
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Prepaid expenses and other | |
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Total current assets | |
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Property and equipment, net of accumulated depreciation | |
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Operating lease right-of-use ("ROU") assets, net of accumulated amortization | | | | | | |
Finance lease ROU assets, net of accumulated amortization | | | | | | |
Inventory, non-current | |
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Other non-current | |
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Goodwill | | | | | | — |
Intangible assets, net of accumulated amortization | | | | | | — |
Total assets | | $ | | | $ | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
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Current liabilities: | |
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Current debt, net of debt issuance costs | | $ | | | $ | |
Accounts payable: | |
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Trade | |
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Retainage | |
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Accrued liabilities | |
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Income taxes payable | |
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Contract liabilities | |
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Current portion of operating lease liabilities | | | | | | |
Current portion of finance lease liabilities | | | | | | |
Total current liabilities | | | | | | |
Long-term debt, net of debt issuance costs | |
| | |
| |
Operating lease liabilities | | | | | | |
Finance lease liabilities | | | | | | |
Other long-term liabilities | |
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Total liabilities | |
| | | | |
Stockholders’ equity: | |
| | |
| |
Accumulated other comprehensive income | | | | | | — |
Preferred stock -- $ | |
| — | |
| — |
Common stock -- $ | |
| | |
| |
Treasury stock, | |
| ( | |
| ( |
Additional paid-in capital | |
| | |
| |
Retained loss | |
| ( | |
| ( |
Total stockholders’ equity | |
| | |
| |
Total liabilities and stockholders’ equity | | $ | | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements
3
Table of Contents
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Information)
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Contract revenues | | $ | | | $ | | | $ | | | $ | |
Costs of contract revenues | |
| | |
| | |
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Gross profit | |
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Selling, general and administrative expenses | |
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Gain on disposal of assets, net | |
| ( | |
| ( | |
| ( | |
| ( |
Operating income | |
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| | |
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Other (expense) income: | |
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Interest expense | |
| ( | |
| ( | |
| ( | |
| ( |
Other income | |
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Other expense, net | |
| ( | |
| ( | |
| ( | |
| ( |
Income before income taxes | |
| | |
| | |
| | |
| |
Income tax expense (benefit) | |
| | |
| | |
| ( | |
| |
Net income | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Basic income per share | | $ | | | $ | | | $ | | | $ | |
Diluted income per share | | $ | | | $ | | | $ | | | $ | |
Shares used to compute income per share | |
| | |
| | |
| | |
| |
Basic | |
| | |
| | |
| | |
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Diluted | |
| | |
| | |
| | |
| |
The accompanying notes are an integral part of these condensed consolidated financial statements
4
Table of Contents
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(In Thousands)
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net income | | $ | | | $ | | | $ | | | $ | |
Change in fair value of cash flow hedges, net of tax expense of $ | | | | |
| — | |
| | |
| — |
Total comprehensive income | | $ | | | $ | | | $ | | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements
5
Table of Contents
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(In Thousands, Except Share and Per Share Information) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | |
| | Common | | Treasury | | Accumulated Other | | Additional | | | | | | | ||||||||
| | Stock | | Stock |
| Comprehensive |
| Paid-In |
| Retained | | | | |||||||||
| | Shares | | Amount | | Shares | | Amount |
| (Loss) Income |
| Capital | | Loss | | Total | ||||||
Balance, January 1, 2026 | | | | $ | |
| ( | | $ | ( | | $ | — | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | — | | | | | | — | | | |
Issuance of shares related to acquisition | | | | | | | — | | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | — | | | ( | | | — | | | — |
Employee share purchase plan issuance | | | | | | | — | | | — | | | — | | | | | | — | | | |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Payments related to tax withholding for share-based compensation | | ( | | | ( | | — | | | — | | | — | | | ( | | | — | | | ( |
Net income |
| — | | | — | | — | | | — | | | — | | | — | | | | | | |
Other | | — | | | — | | — | | | — | | | ( | | | — | | | — | | | ( |
Balance, March 31, 2026 | | | | $ | |
| ( | | $ | ( | | $ | ( | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | — | | | | | | — | | | |
Exercise of stock options | | | | | — | | — | | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Payments related to tax withholding for share-based compensation | | ( | | | — | | — | | | — | | | — | | | ( | | | — | | | ( |
Net loss |
| — | | | — | | — | | | — | | | — | | | — | | | ( | | | ( |
Other | | — | | | — | | — | | | — | | | | | | — | | | — | | | |
Balance, June 30, 2026 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Employee share purchase plan issuance | | | | | | | — | | | — | | | — | | | | | | — | | | |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Net income |
| — | | | — | | — | | | — | | | — | | | — | | | | | | |
Other | | — | | | — | | — | | | — | | | | | | — | | | — | | | |
Balance, September 30, 2026 | | | | $ | |
| ( | | $ | ( | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Common | | Treasury | | Accumulated Other | | Additional | | | | | | | ||||||||
| | Stock | | Stock |
| Comprehensive |
| Paid-In |
| Retained | | | | |||||||||
| | Shares | | Amount | | Shares | | Amount |
| (Loss) Income |
| Capital | | Loss | | Total | ||||||
Balance, January 1, 2025 | | | | $ | |
| ( | | $ | ( | | $ | — | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | — | | | | | | — | | | |
Exercise of stock options | | | | | — | | — | | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | — | | | ( | | | — | | | — |
Employee share purchase plan issuance | | | | | | | — | | | — | | | — | | | | | | — | | | |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Net loss |
| — | | | — | | — | | | — | | | — | | | — | | | ( | | | ( |
Balance, March 31, 2025 | | | | $ | |
| ( | | $ | ( | | $ | — | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | — | | | ( | | | — | | | — |
Forfeiture of restricted stock | | ( | | | ( | | — | | | — | | | — | | | | | | — | | | — |
Net income |
| — | | | — | | — | | | — | | | — | | | — | | | | | | |
Balance, June 30, 2025 | | | | $ | |
| ( | | $ | ( | | $ | — | | $ | | | $ | ( | | $ | |
Share-based compensation | | — | | | — | | — | | | — | | | — | | | | | | — | | | |
Issuance of restricted stock | | | | | | | — | | | — | | | — | | | ( | | | — | | | — |
Employee share purchase plan issuance | | | | | | | — | | | — | | | — | | | | | | — | | | |
Forfeiture of restricted stock | | ( | | | — | | — | | | — | | | — | | | — | | | — | | | — |
Payments related to tax withholding for share-based compensation | | ( | | | ( | | — | | | — | | | — | | | ( | | | — | | | ( |
Net income |
| — | | | — | | — | | | — | | | — | | | — | | | | | | |
Balance, September 30, 2025 | | | | $ | |
| ( | | $ | ( | | $ | — | | $ | | | $ | ( | | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements
6
Table of Contents
Orion Group Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
| | | | | | |
| | Nine Months Ended | ||||
| | September 30, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: |
| | |
| | |
Net income | | $ | | | $ | |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |
| | |
| |
Depreciation and amortization | |
| | |
| |
Amortization of ROU operating leases | | | | | | |
Amortization of ROU finance leases | | | | | | |
Amortization of deferred debt issuance costs | | | | | | |
Non-cash interest expense on seller note | | | | | | — |
Deferred income taxes | |
| ( | |
| |
Share-based compensation | |
| | |
| |
Gain on disposal of assets, net | |
| ( | |
| ( |
Allowance for credit losses | |
| | |
| |
Change in operating assets and liabilities: | |
| | |
| |
Accounts receivable | |
| | |
| ( |
Income tax receivable | |
| ( | |
| ( |
Inventory | |
| ( | |
| |
Prepaid expenses and other | |
| | |
| |
Contract assets | |
| ( | |
| |
Accounts payable | |
| ( | |
| |
Accrued liabilities | |
| ( | |
| |
Operating lease liabilities | | | ( | | | ( |
Income tax payable | |
| ( | |
| ( |
Contract liabilities | |
| ( | |
| ( |
Net cash (used in) provided by operating activities | |
| ( | |
| |
Cash flows from investing activities: | |
| | |
| |
Proceeds from sale of property and equipment | |
| | |
| |
Purchase of property and equipment | |
| ( | |
| ( |
Business acquisition, net cash acquired | | | ( | | | — |
Net cash used in investing activities | |
| ( | |
| ( |
Cash flows from financing activities: | |
| | |
| |
Borrowings on credit facilities | |
| | |
| |
Payments on credit facilities | |
| ( | |
| ( |
Proceeds from term loan | | | | | | — |
Payments on term loan | | | ( | | | — |
Proceeds from deemed financing obligation | | | | | | |
Principal payments on deemed financing obligation | | | ( | | | ( |
Loan costs related to credit facilities | |
| ( | |
| ( |
Payments of finance lease liabilities | | | ( | | | ( |
Employee stock plans, net activity | | | ( | | | |
Net cash provided by (used in) financing activities | |
| | |
| ( |
Net change in cash, cash equivalents and restricted cash | |
| | |
| ( |
Cash, cash equivalents and restricted cash at beginning of period | |
| | |
| |
Cash, cash equivalents and restricted cash at end of period | | $ | | | $ | |
| | | | | | |
Supplemental disclosures of cash flow information: | |
| | |
| |
Cash paid during the period for: | |
| | |
| |
Interest, net of amounts capitalized | | $ | | | $ | |
Taxes, net of refunds | | $ | | | $ | |
| | | | | | |
Noncash financing activity: | | | | | | |
Capital expenditures included in accounts payable and accrued liabilities | | $ | | | $ | — |
The accompanying notes are an integral part of these condensed consolidated financial statements
7
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Orion Group Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and per Share Amounts)
(Unaudited)
1.Description of Business and Basis of Presentation
Description of Business
Orion Group Holdings, Inc. and its subsidiaries (hereafter collectively referred to as the “Company” or “Orion”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine and concrete segments. We are headquartered in Houston, Texas.
Basis of Presentation
The accompanying condensed consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Accordingly, these financial statements do not include certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should be read together with our Annual Report on Form 10-K for the year ended December 31, 2025.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. Such adjustments are of a normal recurring nature. Interim results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results realizable for the year ending December 31, 2026.
2.Recent Accounting Pronouncements
The Financial Accounting Standards Board (“FASB”) issues accounting standards and updates (each, an “ASU”) from time to time to its Accounting Standards Codification (“ASC”), which is the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers applicability to its business. All ASUs are adopted by their respective due dates and in the manner prescribed by the FASB.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. The amendments require entities to provide enhanced disaggregation of certain expense categories presented in the income statement, including details on significant components within those categories, to provide greater transparency and decision-useful information to users of financial statements. The ASU is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the disclosures within its consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments introduce a practical expedient that allows entities to assume current conditions as of the balance sheet date remain unchanged over the remaining life of current accounts receivable and current contract assets arising from transactions within the scope of ASC 606 when estimating expected credit losses. The Company adopted ASU
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2025‑05 effective January 1, 2026 and elected to apply the practical expedient. Adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.
3.Acquisition
Acquisition Overview
On February 3, 2026 (the “Acquisition Date”), the Company completed the acquisition of all of the outstanding capital stock of J.E. McAmis, Inc., a California corporation, and all of the membership interests in JEM Marine Leasing, LLC, a Washington limited liability company (collectively, “JEM”), pursuant to a Securities Purchase Agreement (the “Purchase Agreement”). J.E. McAmis, Inc. specializes in dredging, jetty and breakwater construction, environmental restoration and rehabilitation, and dam and spillway work and has historically operated primarily in Washington and Oregon, with additional projects in Canada, Florida, Alaska, and Hawaii. JEM Marine Leasing, LLC provides marine equipment leasing services to the operating business. The acquisition expands the Company’s marine platform, enhances its presence in West Coast and Pacific markets, and adds specialized dredging and marine construction capabilities. The Company has included the results of JEM in its condensed consolidated financial statements from the Acquisition Date.
Consideration Transferred
The preliminary purchase consideration consisted of (i) $
The following table shows the preliminary purchase consideration transferred:
| | | |
Cash consideration | | $ | |
Fair value of contingent consideration | | | |
Fair value of common stock | | | |
Fair value of promissory note | | | |
Total consideration transferred | | $ | |
The fair value of the common stock was measured based on the closing market price of the Company’s common stock on February 3, 2026, the Acquisition Date. The fair value of the seller promissory note was estimated using a discounted cash flow model based on the contractual payment terms and an estimated market rate of interest for similar debt instruments.
The contingent consideration was estimated using a combination of valuation techniques, including a Black-Scholes option pricing model for one tranche and a discounted cash flow model for the other tranche. Unobservable inputs included projected completion and payment dates, expected project profitability, expected volatility of the underlying performance metrics, discount rates, and risk-adjusted performance scenarios. Because the valuation relies on unobservable inputs, the contingent consideration liability is classified within Level 3 of the fair value hierarchy. During the measurement period, adjustments to the contingent consideration may be recorded as purchase accounting adjustments when based on facts and circumstances that existed as of
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the Acquisition Date. Thereafter, changes in the fair value will be recognized in earnings in the period of change. As of September 30, 2026, the valuation of the contingent consideration is preliminary.
Preliminary Allocation of Purchase Price
The acquisition has been accounted for as a business combination in accordance with ASC 805, Business Combinations. The preliminary purchase price allocation reflects management’s current estimates of the fair values of the assets acquired and liabilities assumed as of the Acquisition Date. The following table summarizes the preliminary allocation of the purchase price:
| | | |
Assets acquired and liabilities assumed | | | |
Cash and cash equivalents | | $ | |
Accounts receivable | | | |
Contract assets | | | |
Other assets | | | |
Intangible assets | | | |
Property and equipment | | | |
Accounts payable and accrued liabilities | | | ( |
Contract liabilities | | | ( |
Deferred tax liability | | | ( |
| | | |
Net assets acquired | | $ | |
| | | |
Goodwill | | $ | |
The excess of the purchase consideration over the preliminary fair value of the net identifiable assets acquired and liabilities assumed was recorded as goodwill in the marine segment. Goodwill primarily reflects the value of the assembled workforce, expected synergies, expanded market opportunities, and future growth opportunities resulting from the acquisition. The goodwill is not deductible for U.S. federal income tax purposes.
Property and Equipment
Property and equipment acquired primarily consisted of marine construction equipment, vessels, vehicles and related operating assets. The preliminary fair value of the acquired property and equipment was estimated using a combination of the cost and market approaches, as applicable. Under the cost approach, fair value was based on current replacement cost, adjusted for physical deterioration and functional and economic obsolescence. Under the market approach, fair value was based on available market data for comparable assets, adjusted for differences in age, condition, capacity, utilization and other asset-specific factors. The fair value measurements were classified within Level 3 of the fair value hierarchy. The acquired property and equipment will be depreciated over its estimated remaining useful lives, which range from approximately one to ten years.
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Identifiable Intangible Assets
The following table presents the preliminary fair values and weighted-average useful lives of these assets:
| | | | | | |
Intangible Asset | | | Useful life in years | | | Estimated fair value |
Tradename | | | | $ | | |
Customer relationships | | | | | | |
Backlog contracts | | | | | |
The fair values of the identifiable intangible assets were estimated using income‑based approaches (e.g., multi‑period excess earnings method for customer relationships and backlog contracts and relief‑from‑royalty method for tradenames). Inputs include forecasted revenues, attrition rates, royalty rates, contributory asset charges, and discount rates commensurate with the risks of the underlying cash flows. These measurements are categorized as Level 3 in the fair value hierarchy due to the use of unobservable inputs.
Measurement Period and Status of Estimates
The purchase price allocation is preliminary and subject to change within the measurement period (not to exceed one year from the Acquisition Date) as the Company obtains additional information regarding the facts and circumstances that existed as of the Acquisition Date.
During the nine months ended September 30, 2026, the Company recorded measurement-period adjustments to the preliminary purchase price allocation. These adjustments included a $
As of September 30, 2026, the Company’s valuation of property and equipment, intangible assets, working capital, and income taxes remains preliminary and subject to adjustment during the measurement period.
Acquisition-Related Costs
Acquisition-related costs, consisting primarily of legal, accounting, valuation, and other professional fees, were $
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4.Revenue
Contract revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The Company has determined that it has
| | | | | | | | | | | | |
| | | | | ||||||||
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Marine Segment |
| | |
| | |
| | |
| | |
Construction | | $ | | | $ | | | $ | | | $ | |
Dredging | |
| | |
| | |
| | |
| |
Specialty services | |
| | |
| | |
| | |
| |
Marine segment contract revenues | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Concrete Segment | |
| | |
| | |
| | |
| |
Structural | | $ | | | $ | | | $ | | | $ | |
Light commercial | |
| | |
| | |
| | |
| |
Concrete segment contract revenues | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Total contract revenues | | $ | | | $ | | | $ | | | $ | |
Additionally, both the marine and concrete segments have limited contracts with multiple performance obligations. The Company’s contracts are often estimated and bid as one project and performance is evaluated as one project, not by individual services performed by each.
The table below represents contract revenue by type of customer for the three and nine months ended September 30, 2026 and 2025, respectively:
| | | | | | | | | | | | |
| | Three Months Ended | Nine Months Ended | |||||||||
| | September 30, | September 30, | |||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Federal Government(1) |
| $ | |
| $ | |
| $ | |
| $ | |
State Governments(1) |
|
| |
|
| |
|
| |
|
| |
Local Government(1) |
|
| |
|
| |
|
| |
|
| |
Private Companies |
|
| |
|
| |
|
| |
|
| |
Total contract revenues |
| $ | |
| $ | |
| $ | |
| $ | |
| (1) | Sales to federal, state and local governments include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is the federal, state and local governments. |
On March 10, 2023, the United States Navy awarded the Dragados/Hawaiian Dredging/Orion Joint Venture a contract to complete the construction of a dry dock at Pearl Harbor Naval Shipyard. The Company’s joint
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venture with Dragados/Hawaiian Dredging is a related-party transaction. The Company’s portion of work as a dedicated subcontractor totals $
For the three months ended September 30, 2026 and 2025, the Company’s revenue related to the joint venture subcontract was approximately $
For the three months ended September 30, 2026, a customer in the Federal Government category, accounted for
The Company does not believe that the loss of any one of its customers would have a material adverse effect on the Company or its subsidiaries and affiliates since no single specific customer sustains such a large portion of receivables or contract revenue over time.
Contract revenues generated outside the United States totaled
5.Concentration of Risk and Enterprise-Wide Disclosures
Accounts receivable include amounts billed to governmental agencies and private customers and do not bear interest. Balances billed to customers but not paid pursuant to retainage provisions generally become payable upon contract completion and acceptance by the owner.
The table below presents the concentrations of current receivables (trade and retainage) at September 30, 2026 and December 31, 2025, respectively:
| | | | | | | | | | | |
| | September 30, 2026 | | December 31, 2025 |
| ||||||
Federal Government(1) | | $ | | | | % | $ | | | | % |
State Governments(1) | |
| |
| | % |
| |
| | % |
Local Governments(1) | |
| |
| | % |
| |
| | % |
Private Companies | |
| |
| | % |
| |
| | % |
Gross receivables | | | | | | % | | | | | % |
Allowance for credit losses | | | ( | | | | | ( | | | |
Net receivables | | $ | |
| | | $ | |
| | |
| (1) | Receivables from federal, state and local governments include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is the federal, state and local governments. |
At September 30, 2026, the United States Navy, which is included in the Federal Government category, accounted for
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6.Contracts in Progress
Contracts in progress were as follows at September 30, 2026 and December 31, 2025:
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Costs incurred on uncompleted contracts | | $ | | | $ | |
Estimated earnings | |
| | |
| |
Costs and estimated earnings on uncompleted contracts | |
| | |
| |
Less: Billings to date | |
| ( | |
| ( |
Net contracts in progress | | $ | | | $ | ( |
| | | | | | |
Included in the accompanying Condensed Consolidated Balance Sheets under the following captions: | |
| | |
| |
Contract assets | | $ | | | $ | |
Contract liabilities | |
| ( | |
| ( |
Net contracts in progress | | $ | | | $ | ( |
Included in contract assets (liabilities) is approximately $
Remaining performance obligations represent the transaction price of firm orders or other written contractual commitments from customers for which work has not been performed or is partially completed and excludes unexercised contract options and potential orders. As of September 30, 2026, the aggregate amount of the remaining performance obligations was approximately $
7.Property and Equipment
The following is a summary of property and equipment at September 30, 2026 and December 31, 2025:
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Construction equipment | | $ | | | $ | |
Vessels and other equipment | |
| | |
| |
Building and improvements | |
| | |
| |
Office equipment | |
| | |
| |
Automobiles and trucks | |
| | |
| |
Gross book value of depreciable assets | |
| | |
| |
Less: Accumulated depreciation | |
| ( | |
| ( |
Net book value of depreciable assets | |
| | |
| |
Construction in progress | |
| | |
| |
Land | |
| | |
| |
Property and equipment, net of depreciation | | $ | | | $ | |
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Substantially all of the assets of the Company are pledged as collateral under the Company’s UMB Credit Agreement as discussed in Note 10. Substantially all of the Company’s long-lived assets are located in the United States.
8.Fair Value
Recurring Fair Value Measurements
The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. Due to their short-term nature, the Company believes that the carrying value of its accounts receivable, other current assets, accounts payable and other current liabilities approximate their fair values.
The Company classifies financial assets and liabilities into the following three levels based on the inputs used to measure fair value in the order of priority indicated:
| ● | Level 1- fair values are based on observable inputs such as quoted prices in active markets for identical assets or liabilities; |
| ● | Level 2 - fair values are based on pricing inputs other than quoted prices in active markets for identical assets and liabilities and are either directly or indirectly observable as of the measurement date; and |
| ● | Level 3 - fair values are based on unobservable inputs in which little or no market data exists. |
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.
The Company’s derivatives, which are comprised of interest rate swaps, are valued using a discounted cash flow analysis that incorporates observable market parameters, such as interest rate yield curves and credit risk adjustments, that are necessary to reflect the probability of default by us or the counterparty. The derivatives are classified as a Level 2 measurement within the fair value hierarchy. At September 30, 2026, the fair value of the swaps were approximately $
Our concrete segment has life insurance policies with a combined face value of $
Other Fair Value Measurements
The fair value of the Company’s debt under its UMB Credit Facility at September 30, 2026 and December 31, 2025 approximated its carrying value of $
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9.Accrued Liabilities
Accrued liabilities at September 30, 2026 and December 31, 2025 consisted of the following:
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Accrued salaries, wages and benefits | | $ | | | $ | |
Fair value of contingent consideration | | | | | | — |
Acquired barge repair liability | | | | | | — |
Accrued liabilities expected to be covered by insurance | |
| | |
| |
Property taxes | |
| | |
| |
Sales taxes | |
| | |
| |
Sale-leaseback arrangements | | | | | | |
Other accrued expenses | |
| | |
| |
Total accrued liabilities | | $ | | | $ | |
10.Debt
On December 23, 2025, the Company entered into a $
The UMB Credit Agreement is used to finance working capital and general corporate purposes, capital expenditures, permitted acquisitions and associated transaction fees, and to refinance existing indebtedness. Borrowings under the UMB Revolver may be repaid and reborrowed, subject to the borrowing base and other conditions. The UMB Credit Agreement matures in December 2030.
The UMB Credit Agreement includes a letter of credit sublimit equal to the lesser of $
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The Company’s obligations under debt arrangements consisted of the following:
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Revolver | | $ | | | $ | — |
Term loan | | | | | | — |
Equipment loan | | | | | | — |
Seller note | | | | | | — |
Other | |
| | |
| |
Total debt | |
| | |
| |
Less: current | | | | | | |
Less: deferred debt issuance costs(1) | | | | | | — |
Total long-term debt | | $ | | | $ | |
| (1) | Deferred financing costs include lender/arrangement fees, legal fees and other third-party costs incurred in connection with entering into or amending the Company’s credit facilities. Deferred financing costs are presented as a direct deduction from the carrying amount of the related debt when amounts are outstanding. At December 31, 2025, because there were |
The Company’s borrowing availability under the UMB Revolver at September 30, 2026 was approximately $
Borrowings under the UMB Credit Agreement must be of the same type and may bear interest at either an alternate base rate (“ABR”) or a Secured Overnight Financing Rate (“SOFR”), in each case plus an applicable margin determined by the Company’s consolidated senior leverage ratio. The applicable margin ranges from
The weighted-average interest rate under the UMB Credit Agreement was
The UMB Credit Agreement contains customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, asset sales, and dividends, and includes financial maintenance covenants requiring the Company to maintain (i) a consolidated fixed charge coverage ratio of not less than
In addition, the Company’s credit agreements contain events of default that are usual and customary for similar arrangements, including non-payment of principal, interest or fees; breaches of representations and warranties that are not timely cured; violation of covenants; bankruptcy and insolvency events; and events constituting a change of control.
The Company was in compliance with all covenants under its credit agreements as of September 30, 2026 and December 31, 2025.
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Seller Note
In connection with the acquisition of JEM, the Company issued an unsecured subordinated seller promissory note with an original principal amount of $
Other Debt
The Company had $
The Company has entered into debt agreements for the purpose of financing equipment purchased. As of September 30, 2026 and December 31, 2025, the carrying value of this debt was
On June 23, 2023, the Company closed on a land-sale leaseback contract for the Company’s Port Lavaca South Yard property located in Port Lavaca, Texas for a purchase price of $
Derivative Financial Instruments
On March 10, 2026, the Company entered into an interest rate swap with UMB Bank, N.A., to hedge changes in interest payments on a portion of its variable-rate borrowings. The swap became effective on March 1, 2026. It had an initial notional amount of $
On June 16, 2026, the Company entered into an interest rate swap with UMB Bank, N.A., to hedge changes in interest payments on a portion of its variable-rate borrowings. The swap became effective on July 1, 2026 with a notional amount of $
At inception, the Company designated the swaps as cash flow hedges. As a result, the effective portion of changes in the fair value of the swaps are recorded in accumulated other comprehensive income (loss) and later reclassified into interest expense in the periods when the hedged forecasted interest payments affect earnings. Any hedge ineffectiveness is recognized in current-period earnings. At each reporting date, the Company presents the fair value of the swap as a derivative asset or derivative liability in the appropriate balance sheet
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caption and discloses the related amount recorded in accumulated other comprehensive income (loss). See Note 8 for more information about the valuation of the Company’s derivative instrument.
11.Other Long-Term Liabilities
Other long-term liabilities at September 30, 2026 and December 31, 2025 consisted of the following:
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Sale-leaseback arrangements | | $ | | | $ | |
Fair value of contingent consideration | | | | | | — |
Deferred compensation | |
| | |
| |
Other | | | | |
| |
Total other long-term liabilities | | $ | | | $ | |
Sale-Leaseback Arrangements
On May 15, 2023, the Company entered into a $
Concurrent with the sale of the Company’s Port Lavaca South Yard property, the Company entered into a
On September 27, 2019, the Company entered into a purchase and sale agreement whereby the Company sold certain properties for a purchase price of $
Related to the deemed financing obligation, the Company recorded liabilities for the amounts received, will continue to depreciate the non-land portion of the assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining assets will be zero at the end of the initial lease terms.
12.Income Taxes
The Company’s effective tax rate is based on expected income, statutory rates and tax planning opportunities available to it. For interim financial reporting, the Company estimates its annual tax rate based on projected taxable income for the full year and records a quarterly tax provision in accordance with the anticipated annual rate.
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Income tax expense (benefit) included in the Company’s accompanying Condensed Consolidated Statements of Operations was as follows:
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended |
| ||||||||||
| | September 30, | | | September 30, | | ||||||||||
| | | 2026 | | | 2025 | | | 2026 | | | 2025 | ||||
Income tax expense (benefit) | | $ | | | | $ | | | | $ | ( | | | $ | | |
Effective tax rate | |
| | % | |
| | % | |
| N/M(1) | | |
| | % |
| (1) | For the nine months ended September 30, 2026, the effective tax rate was not meaningful ("N/M") due to the tax benefit recorded relative to income before taxes. |
The effective rate for the three and nine months ended September 30, 2026 differed from the Company’s statutory federal rate of
The Company assessed the realizability of its deferred tax assets and determined that it was more likely than not that some portion or all the deferred tax assets would not be realized and therefore recorded a valuation allowance on the net deferred tax assets. The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company considers the scheduled reversal of deferred tax liabilities, available carryback periods, and tax-planning strategies in making this assessment. For the three and nine months ended September 30, 2026, the Company evaluated positive and negative evidence in determining the amount of deferred tax assets more likely than not to be realized. Based on the review of available evidence, management believes that a valuation allowance on the net deferred tax assets at September 30, 2026 remains appropriate.
13.Earnings Per Share
The following table reconciles the denominators used in the computations of both basic and diluted earnings per share:
| | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||
| | September 30, | | September 30, | ||||
| | 2026 | | 2025 | | 2026 | | 2025 |
Total basic weighted average shares outstanding |
| |
| |
| |
| |
Effect of potentially dilutive securities: |
| |
| |
| | | |
Common stock options |
| |
| |
| |
| |
Performance share units | | — | | — | | | | — |
Employee stock purchase plan | | | | — | | |
| — |
Total diluted weighted average shares outstanding |
| |
| |
| |
| |
For the three months ended September 30, 2026 and 2025, the Company had
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Such dilution is dependent on the excess of the market price of the Company’s common stock over the exercise price and other components of the treasury stock method.
14.Share-Based Compensation
The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s stock incentive plans. In general, the Company’s Long-Term Incentive Plan (“LTIP”) provides for grants of restricted shares and performance-based stock units to be issued with a per-share price not less than the fair market value of a share of common stock on the date of grant. The Company accounts for forfeitures of awards as they are incurred.
In May 2024, shareholders approved the Employee Stock Purchase Plan (“ESPP”), which became effective on September 16, 2024. The Company has reserved a total of
The table below presents the share-based compensation expense included in the Company’s accompanying Condensed Consolidated Statements of Operations:
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Restricted share awards | | $ | | | $ | | | $ | | | $ | |
Performance share unit awards | |
| | |
| | |
| | |
| |
Employee share purchase plan | | | | |
| | | | | |
| |
Total share-based compensation expense | | $ | | | $ | | | $ | | | $ | |
Under its approved LTIP, the Company grants share-based awards to its employees. The following table presents a summary of the Company’s unvested restricted share awards and performance share unit awards granted under the LTIP:
| | | | | | | | | | |
| | Restricted Shares | | Performance Share Unit Awards | ||||||
| | | | Weighted |
| | | Weighted | ||
| | Number | | Average |
| Number | | Average | ||
| | of | | Fair Value |
| of | | Fair Value | ||
| | Shares | | Per Share |
| Shares | | Per Share | ||
Nonvested at December 31, 2025 |
| | | $ | | | | | $ | |
Granted |
| | | $ | | | | | $ | |
Vested |
| ( | | $ | | | ( | | $ | |
Forfeited shares |
| ( | | $ | | | — | | $ | — |
Nonvested at March 31, 2026 |
| | | $ | | | | | $ | |
Granted | | | | $ | | | — | | $ | — |
Vested | | ( | | $ | | | — | | $ | — |
Forfeited shares | | ( | | $ | | | — | | $ | — |
Nonvested at June 30, 2026 | | | | $ | | | | | $ | |
Granted | | | | $ | | | — | | $ | — |
Vested | | ( | | $ | | | — | | $ | — |
Forfeited shares | | ( | | $ | | | — | | $ | — |
Nonvested at September 30, 2026 | | | | $ | | | | (1) | $ | |
| (1) | A maximum of |
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On March 3, 2026, the Company granted certain executives a total of
The following table presents the assumptions related to the performance share units granted in 2026 related to the relative total shareholder return, as indicated in the previous summary table:
| | | |
| | 2026 | |
Grant-date stock price | $ | | |
Risk-free interest rate |
| | % |
Volatility factor |
| | % |
Contractual term (years) |
| |
The following table presents a summary of the unrecognized compensation cost, and the related weighted average recognition period associated with unvested restricted shares and performance share units as of September 30, 2026:
| | | | | |
| | Restricted Shares | | | Performance Share Unit Awards |
Unrecognized compensation cost | $ | | | $ | |
Weighted average period for recognition (years) |
| |
|
15.Commitments and Contingencies
The Company is involved in various legal, audit, and other proceedings that are incidental to the conduct of its business, none of which in the opinion of management will have a material effect on the Company’s financial condition, results of operations, or cash flows. Management believes that it has recorded adequate reserves and believes that it has adequate insurance coverage or has meritorious defenses for these claims and contingencies.
In October 2025, the Company received a sales tax assessment of $
16.Segment Information
The Company has determined that it has
In making this determination, management considered both quantitative and qualitative factors under ASC 280-10-50-11, including similarities in products and services, production processes, customer types, distribution methods, and regulatory environments. Although the segments share certain macroeconomic drivers, they are
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managed separately and have distinct operating results reviewed by the CODM for purposes of resource allocation and performance evaluation.
Each segment has a designated management team responsible for day-to-day operations, and discrete
financial information is produced and evaluated at the segment level. Segment operating income (loss) is the primary performance measure used by the CODM in assessing performance of the segments. Segment operating income (loss) represents revenues, less direct costs of contract revenues, selling, general, and administrative expenses, and gains or losses on the disposal of assets.
The CODM reviews segment results inclusive of all expenses directly attributable to the respective segments. Interest expense, income taxes, and other non-operating items are not allocated to the segments.
Marine Segment
Our marine segment provides construction, dredging and specialty services. Construction services include construction, restoration, maintenance, dredging and repair of marine transportation facilities, marine pipelines, bridges and causeways and marine environmental structures. Dredging services generally enhance or preserve the navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair. We also perform engineering design, analysis, and consulting projects for both internal and external clients.
Concrete Segment
Our concrete segment provides turnkey concrete construction services, including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.
General Corporate
General Corporate includes unallocated general and administrative expenses and other corporate activities that support the Company’s overall operations, including executive management, finance, legal, human resources, information technology, treasury, and other shared services, as well as eliminations and other items not directly attributable to the marine or concrete segments.
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Segment information for the periods presented is provided as follows:
| | | | | | | | | | | | |
| | For the Three Months Ended September 30, 2026 | ||||||||||
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Contract revenues | | $ | | | $ | | | $ | — | | $ | |
Cost of contract revenues | | | | | | | | | — | | | |
Gross profit | | | | | | | | | — | | | |
Selling, general and administrative expenses | | | | | | | | | | | | |
Gain on disposal of assets, net | | | ( | | | ( | | | — | | | ( |
Operating income (loss) | | $ | | | $ | | | $ | ( | | $ | |
Other income (expense): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | ( |
Other income | | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | | | |
Income tax expense | | | | | | | | | | | | |
Net income | | | | | | | | | | | $ | |
| | | | | | | | | | | | |
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Depreciation and amortization | | $ | | | $ | | | $ | | | $ | |
Capital expenditures | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
| | For the Three Months Ended September 30, 2025 | ||||||||||
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Contract revenues | | $ | | | $ | | | $ | — | | $ | |
Cost of contract revenues | | | | | | | | | — | | | |
Gross profit | | | | | | | | | — | | | |
Selling, general and administrative expenses | | | | | | | | | | | | |
(Gain) loss on disposal of assets, net | | | ( | | | ( | | | | | | ( |
Operating income (loss) | | $ | | | $ | | | $ | ( | | $ | |
Other income (expense): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | ( |
Other income | | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | | | |
Income tax expense | | | | | | | | | | | | |
Net income | | | | | | | | | | | $ | |
| | | | | | | | | | | | |
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Depreciation and amortization | | $ | | | $ | | | $ | | | $ | |
Capital expenditures | | $ | | | $ | | | $ | | | $ | |
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| | | | | | | | | | | | |
| | For the Nine Months Ended September 30, 2026 | ||||||||||
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Contract revenues | | $ | | | $ | | | $ | — | | $ | |
Cost of contract revenues | | | | | | | | | — | | | |
Gross profit | | | | | | | | | — | | | |
Selling, general and administrative expenses | | | | | | | | | | | | |
Gain on disposal of assets, net | | | ( | | | ( | | | — | | | ( |
Operating income (loss) | | $ | | | $ | | | $ | ( | | $ | |
Other income (expense): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | ( |
Other income | | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | | | |
Income tax benefit | | | | | | | | | | | | ( |
Net income | | | | | | | | | | | $ | |
| | | | | | | | | | | | |
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Total assets | | $ | | | $ | | | $ | | | $ | |
Property and equipment, net | | $ | | | $ | | | $ | | | $ | |
Depreciation and amortization | | $ | | | $ | | | $ | | | $ | |
Capital expenditures | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
| | For the Nine Months Ended September 30, 2025 | ||||||||||
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Contract revenues | | $ | | | $ | | | $ | — | | $ | |
Cost of contract revenues | | | | | | | | | — | | | |
Gross profit | | | | | | | | | — | | | |
Selling, general and administrative expenses | | | | | | | | | | | | |
(Gain) loss on disposal of assets, net | | | ( | | | ( | | | | | | ( |
Operating income (loss) | | $ | | | $ | | | $ | ( | | $ | |
Other income (expense): | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | ( |
Other income | | | | | | | | | | | | |
Income before income taxes | | | | | | | | | | | | |
Income tax expense | | | | | | | | | | | | |
Net income | | | | | | | | | | | $ | |
| | | | | | | | | | | | |
| | Marine | | Concrete | | General Corporate | | Consolidated | ||||
Total assets | | $ | | | $ | | | $ | ( | | $ | |
Property and equipment, net | | $ | | | $ | | | $ | | | $ | |
Depreciation and amortization | | $ | | | $ | | | $ | | | $ | |
Capital expenditures | | $ | | | $ | | | $ | | | $ | |
Intersegment revenues totaled $
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17.Leases
The Company has operating and finance leases for office space, equipment and vehicles.
Leases recorded on the condensed consolidated balance sheets consisted of the following:
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Assets | | | | | | |
Operating lease ROU assets, net | | $ | | | $ | |
Finance lease ROU assets, net | |
| | |
| |
Total assets | | $ | | | $ | |
Liabilities | |
| | |
| |
Current | |
| | |
| |
Operating | | $ | | | $ | |
Finance | |
| | |
| |
Total current | |
| | |
| |
Noncurrent | |
| | |
| |
Operating | |
| | |
| |
Finance | |
| | |
| |
Total noncurrent | |
| | |
| |
Total liabilities | | $ | | | $ | |
The components of lease cost were as follows:
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Operating lease costs: |
| | |
| | | | | |
| | |
Operating lease cost | | $ | | | $ | | | $ | | | $ | |
Short-term lease cost(1) | |
| | |
| | |
| | |
| |
Finance lease costs: | |
| | |
| | |
| | |
| |
Interest on lease liabilities | |
| | |
| | |
| | |
| |
Amortization of right-of-use assets | |
| | |
| | |
| | |
| |
Total lease cost | | $ | | | $ | | | $ | | | $ | |
| (1) | Includes expenses related to leases with a lease term of more than one month but less than one year. |
Supplemental cash flow information related to leases is as follows:
| | | | | |
| Nine Months Ended | ||||
| September 30, | ||||
| 2026 | | 2025 | ||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
Operating cash flows for operating leases | $ | | | $ | |
Operating cash flows for finance leases | $ | | | $ | |
Financing cash flows for finance leases | $ | | | $ | |
Non-cash activity: |
| | |
| |
ROU assets obtained in exchange for new operating lease liabilities | $ | | | $ | |
ROU assets obtained in exchange for new finance lease liabilities | $ | | | $ | |
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1
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Unless the context otherwise indicates, all references in this Quarterly Report on Form 10-Q to “Orion,” “the Company,” “we,” “our,” or “us” are to Orion Group Holdings, Inc. and its subsidiaries as a whole.
Certain information in this Quarterly Report on Form 10-Q, including but not limited to Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), may constitute forward-looking statements as such term is defined within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical facts, including those that express a belief, expectation, or intention are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, our pipeline of opportunities, conversion of backlog, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “plan,” “goal,” “may,” “will,” “could,” “would” or other words that convey the uncertainty of future events or outcomes.
We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control, including unforeseen productivity delays and other difficulties encountered in project execution, challenges incurred by virtue of our position as a substantial subcontractor that reports to a significantly larger project contractor, levels of government funding or other governmental budgetary constraints, contract modifications and changes, including change orders and contract cancellation at the discretion of the customer, and the general economic impact of government shutdowns, tariffs, trade wars and other geopolitical tensions. These and other important factors, including those described under “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”) may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date of this report; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly.
MD&A provides a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition since the most recent fiscal year-end, and (ii) results of operations during the current fiscal year-to-date period and current fiscal quarter as compared to the corresponding periods of the preceding fiscal year. In order to better understand such changes, this MD&A should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in our 2025 Form 10-K, Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Form 10-K and with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.
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Overview
Orion Group Holdings, Inc. and its subsidiaries (hereafter collectively referred to as the “Company”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine segment and our concrete segment. Backed by nearly a century of experience, a skilled workforce, extensive self-perform capabilities, and a commitment to safety, quality, and delivery, Orion is focused on creating long-term value through construction with predictable excellence.
Our marine segment provides construction, dredging and specialty services. Construction services include construction, restoration, maintenance, dredging and repair of marine transportation facilities, including jetties and breakwaters, marine pipelines, bridges and causeways and marine environmental structures. Dredging services generally enhance or preserve the navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair. We also perform engineering design, analysis, and consulting projects for both internal and external clients.
Our concrete segment provides turnkey concrete construction services, including concrete surface place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.
Our contracts are obtained primarily through competitive bidding in response to “requests for proposals” by federal, state and local agencies and through negotiation and competitive bidding with private parties and general contractors. Our bidding activity and strategies are affected by factors such as our backlog, current utilization of equipment and other resources, job location, our ability to obtain necessary surety bonds and competitive considerations. The timing and location of awarded contracts may result in unpredictable fluctuations in the results of our operations.
Most of our revenue is derived from fixed-price contracts. We record revenue on construction contracts over time, measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. There are a number of factors that can create variability in contract performance and therefore impact the results of our operations. The most significant of these include the following:
| ● | completeness and accuracy of the original bid; |
| ● | increases in commodity prices such as concrete, steel and fuel; |
| ● | customer delays, work stoppages, and other costs due to weather and environmental restrictions; |
| ● | subcontractor performance; |
| ● | unforeseen site conditions; |
| ● | availability and skill level of workers; and |
| ● | a change in availability and proximity of equipment and materials. |
All of these factors can have a negative impact on our contract performance, which can adversely affect the timing of revenue recognition and ultimate contract profitability. We plan our operations and bidding activity
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with these factors in mind, and they generally have not had a material adverse impact on the results of our operations in the past.
Recent Developments
JEM Acquisition
On February 3, 2026, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) and completed an acquisition (the “JEM Acquisition”) of all of the capital stock of J.E. McAmis, Inc., a California corporation, and all of the membership interests in JEM Marine Leasing, LLC, a Washington limited liability company (collectively, “JEM”).
The purchase price consisted of: (a) $44.9 million in cash, subject to adjustments pursuant to the Purchase Agreement; a $12.0 million unsecured subordinated promissory note issued to the sellers; and 182,392 shares of Orion’s common stock, and (b) contingent post-closing cash payments dependent upon project profit realized from contracts of JEM under backlog identified in the Purchase Agreement. The cash consideration and related expenses were funded with cash on hand and borrowings of approximately $46.9 million under the UMB Credit Agreement (as defined below).
JEM is engaged in the business of providing dredging, jetty and breakwater construction, environmental restoration and rehabilitation, and dam and spillway construction.
UMB Credit Agreement
On December 23, 2025, we entered into a five-year $120.0 million Credit Agreement (as amended, the “UMB Credit Agreement”) with certain financial institutions from time-to-time party thereto, as lenders, and UMB Bank, N.A., as administrative agent and issuing bank. The UMB Credit Agreement consists of a $60.0 million revolving loan, a $20.0 million equipment term loan, and a $40.0 million acquisition term loan.
Consolidated Results of Operations
Backlog Information
Our contract backlog represents our estimate of the revenues we expect to realize under the portion of contracts remaining to be performed. Given the typical duration of our contracts, which is generally less than a year, our backlog at any point in time usually represents only a portion of the revenue that we expect to realize during a twelve-month period. We have not been adversely affected by contract cancellations or modifications in the past, however we may be in the future, especially in periods of economic uncertainty.
Backlog as of the periods ended below were as follows (in millions):
| | | | | | |
| | September 30, 2026 | | December 31, 2025 | ||
Marine segment | | $ | 506 | | $ | 480 |
Concrete segment | |
| 139 | |
| 160 |
Consolidated | | $ | 645 | | $ | 640 |
Backlog is not necessarily indicative of future results. In addition to our backlog under contract, we also have a substantial number of projects in negotiation or pending award at any given time.
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Income Statement Comparisons
Three months ended September 30, 2026 compared with three months ended September 30, 2025
| | | | | | |
| | Three Months Ended September 30, | ||||
| | 2026 | 2025 | |||
| | Amount | | Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | $ | 256,152 |
| $ | 225,097 |
Cost of contract revenues | |
| 223,012 |
|
| 195,345 |
Gross profit | |
| 33,140 |
|
| 29,752 |
Selling, general and administrative expenses | |
| 24,727 |
|
| 25,059 |
Gain on disposal of assets, net | | | (108) | | | (628) |
Operating income | |
| 8,521 |
|
| 5,321 |
Other (expense) income: | |
| |
|
| |
Interest expense | |
| (2,950) |
|
| (2,120) |
Other income | |
| 290 |
|
| 417 |
Other expense, net | |
| (2,660) |
|
| (1,703) |
Income before income taxes | |
| 5,861 |
|
| 3,618 |
Income tax expense | |
| 388 |
|
| 317 |
Net income | | $ | 5,473 |
| $ | 3,301 |
Contract Revenues. Contract revenues for the three months ended September 30, 2026 of $256.2 million increased $31.1 million, or 14%, as compared to $225.1 million in the prior year period. The increase was driven by double-digit growth in both operating segments reflecting highly active projects, disciplined execution, favorable operating conditions, and the acquisition of J.E. McAmis.
Gross Profit. Gross profit was $33.1 million for the three months ended September 30, 2026 compared to $29.8 million in the prior year period, an increase of $3.3 million, or 11%. The increase was primarily driven by higher revenue volume and increased profitability in our concrete segment attributable to strong execution, partially offset by marine close-out benefits in 2025 that did not recur in 2026.
Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses were $24.7 million for the three months ended September 30, 2026 compared to $25.1 million in the prior year period, a decrease of $0.4 million or 1%.
Gain on Disposal of Assets, net. During the three months ended September 30, 2026 and 2025, we realized net gains on disposal of assets of $0.1 million and $0.6 million, respectively.
Other Expense, net. Other expense, net increased by $1.0 million to $2.7 million from $1.7 million, primarily due to higher interest expense on our borrowings, and lower other income.
Income Tax Expense. We recorded tax expense of $0.4 million in the three months ended September 30, 2026, compared to $0.3 million in the prior year period.
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Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
| | | | | | |
| | Nine Months Ended September 30, | ||||
| | 2026 | 2025 | |||
| | Amount | | Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | $ | 694,331 |
| $ | 619,037 |
Cost of contract revenues | |
| 612,385 |
|
| 540,473 |
Gross profit | |
| 81,946 |
|
| 78,564 |
Selling, general and administrative expenses | |
| 75,831 |
|
| 70,378 |
Gain on disposal of assets, net | | | (296) | | | (1,400) |
Operating income | |
| 6,411 |
|
| 9,586 |
Other (expense) income: | |
| |
|
| |
Interest expense | |
| (6,986) |
|
| (7,373) |
Other income | |
| 600 |
|
| 761 |
Other expense, net | |
| (6,386) |
|
| (6,612) |
Income before income taxes | |
| 25 |
|
| 2,974 |
Income tax (benefit) expense | |
| (5,990) |
|
| 246 |
Net income | | $ | 6,015 |
| $ | 2,728 |
Contract Revenues. Contract revenues for the nine months ended September 30, 2026 of $694.3 million increased $75.3 million, or 12%, as compared to $619.0 million in the prior year period. The increase was driven by double-digit growth in the concrete segment reflecting highly active projects, disciplined execution, and favorable operating conditions.
Gross Profit. Gross profit was $81.9 million for the nine months ended September 30, 2026 as compared to $78.6 million in the prior year period, an increase of $3.3 million or 4%. The increase was primarily driven by higher revenue volume, improved profitability in our concrete segment, mainly attributable to strong execution and favorable operating conditions, partially offset by marine close-out benefits in 2025 that did not recur in 2026.
Selling, General and Administrative Expenses. SG&A expenses were $75.8 million for the nine months ended September 30, 2026 compared to $70.4 million in the prior year period, an increase of $5.4 million or 8%. The increase in SG&A was due to costs associated with the JEM Acquisition and other costs to support business growth.
Gain on Disposal of Assets, net. During the nine months ended September 30, 2026 and 2025, we realized net gains on disposal of assets of $0.3 million and $1.4 million, respectively.
Other Expense, net. Other expense, net decreased by $0.2 million to $6.4 million from $6.6 million, primarily due to lower interest expense on our borrowings, partially offset by lower other income.
Income Tax (Benefit) Expense. We recorded a tax benefit of $6.0 million in the nine months ended September 30, 2026, compared to tax expense of $0.2 million in the prior year period. The tax benefit for the nine months ended September 30, 2026 primarily relates to a decrease in the valuation allowance attributable to the recognition of the deferred tax liabilities arising from the fair value adjustments recorded as part of the JEM Acquisition. These deferred tax liabilities represent a source of future taxable income that supports the realizability of the Company’s deferred tax assets.
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Segment Results
The following tables present contract revenues and operating income (loss) by segment for the periods indicated.
Three months ended September 30, 2026 compared with three months ended September 30, 2025
| | | | | | |
| | Three Months Ended September 30, | ||||
| | 2026 | | 2025 | ||
| | Amount | | Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | | | | | |
Marine segment | | $ | 161,193 | | $ | 142,943 |
Concrete segment | |
| 94,959 | |
| 82,154 |
Total | | $ | 256,152 | | $ | 225,097 |
| | | | | | |
Operating income (loss) | |
| | |
| |
Marine segment | | $ | 12,626 | | $ | 19,444 |
Concrete segment | |
| 9,387 | |
| 481 |
Total | | $ | 22,013 | | $ | 19,925 |
| | | | | | |
General corporate | | $ | (13,492) | | $ | (14,604) |
Consolidated | | $ | 8,521 | | $ | 5,321 |
Marine Segment
Revenues for our marine segment for the three months ended September 30, 2026 were $161.2 million compared to $142.9 million for the three months ended September 30, 2025. Operating income for our marine segment for the three months ended September 30, 2026 was $12.6 million, compared to $19.4 million for the three months ended September 30, 2025. The increase in marine revenue was driven by increased volume on active projects and the acquisition of J.E. McAmis, partially offset by lower run-rates in 2026 on projects completed or nearing substantial completion. The decrease in operating income was primarily due to close-out benefits in 2025 that did not recur in 2026.
Concrete Segment
Revenues for our concrete segment for the three months ended September 30, 2026 were $95.0 million compared to $82.2 million for the three months ended September 30, 2025. Operating income for our concrete segment for the three months ended September 30, 2026 was $9.4 million, compared to operating income of $0.5 million for the three months ended September 30, 2025. The increases were primarily driven by strong demand, higher volume, and strong project execution.
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Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
| | | | | | |
| | Nine Months Ended September 30, | ||||
| | 2026 | | 2025 | ||
| | Amount | | Amount | ||
| | (dollar amounts in thousands) | ||||
Contract revenues | | | | | | |
Marine segment | | $ | 402,165 | | $ | 405,409 |
Concrete segment | |
| 292,166 | |
| 213,628 |
Total | | $ | 694,331 | | $ | 619,037 |
| | | | | | |
Operating income (loss) | |
| | |
| |
Marine segment | | $ | 26,908 | | $ | 45,427 |
Concrete segment | |
| 21,321 | |
| 4,883 |
Total | | $ | 48,229 | | $ | 50,310 |
| | | | | | |
General corporate | | $ | (41,818) | | $ | (40,724) |
Consolidated | | $ | 6,411 | | $ | 9,586 |
Marine Segment
Revenues for our marine segment for the nine months ended September 30, 2026 were $402.2 million compared to $405.4 million for the nine months ended September 30, 2025. Operating income for our marine segment for the nine months ended September 30, 2026 was $26.9 million, compared to $45.4 million for the nine months ended September 30, 2025. Marine revenue was relatively flat with the prior-year period, while operating income decreased primarily due to close-out benefits in 2025 that did not recur in 2026.
Concrete Segment
Revenues for our concrete segment for the nine months ended September 30, 2026 were $292.2 million compared to $213.6 million for the nine months ended September 30, 2025. Operating income for our concrete segment for the nine months ended September 30, 2026 was $21.3 million, compared to operating income of $4.9 million for the nine months ended September 30, 2025. The increases were driven by strong demand, higher volume, and strong project execution.
Liquidity and Capital Resources
Changes in working capital are normal within our business given the varying mix in size, scope, seasonality and timing of delivery of our projects. At September 30, 2026, our working capital was $81.0 million, as compared to $74.3 million at December 31, 2025. As of September 30, 2026, we had unrestricted cash on hand of $5.7 million. Our borrowing availability under the revolving portion of our UMB Credit Agreement at September 30, 2026 was approximately $28.0 million.
Our primary liquidity needs are to finance our working capital and fund capital expenditures. Historically, our sources of liquidity have been cash provided by our operating activities, sale of underutilized assets, borrowings under our credit facilities, and equity issuances. The assessment of our liquidity requires us to make estimates of future activity and judgments about whether we are compliant with financial covenant calculations under our debt and other agreements and have adequate liquidity to operate. Significant assumptions used in our forecasted model of liquidity include forecasted sales, costs, and capital expenditures, as well as expected
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timing and proceeds of planned asset sale transactions. As of September 30, 2026, management believes the Company will have adequate liquidity for its operations for at least the next 12 months.
Cash Flow
The following table provides information regarding our cash flows and our capital expenditures for the nine months ended September 30, 2026 and 2025 (in thousands):
| | | | | | |
| | Nine Months Ended | ||||
| | September 30, | ||||
| | 2026 | | 2025 | ||
Net income | | $ | 6,015 | | $ | 2,728 |
Adjustments to remove non-cash and non-operating items | | | 24,581 | | | 29,249 |
Cash flow from net income after adjusting for non-cash and non-operating items | | | 30,596 | | | 31,977 |
Change in operating assets and liabilities (working capital) | | | (41,318) | | | (17,717) |
Cash flows (used in) provided by operating activities | | $ | (10,722) | | $ | 14,260 |
Cash flows used in investing activities | | $ | (70,213) | | $ | (23,778) |
Cash flows provided by (used in) financing activities | | $ | 83,321 | | $ | (13,881) |
| | | | | | |
Capital expenditures (included in investing activities above) | | $ | (28,109) | | $ | (25,510) |
Operating Activities. During the nine months ended September 30, 2026, we used approximately $10.7 million of cash in our operating activities. The net cash outflow was comprised of $41.3 million of outflows related to changes in net working capital, partially offset by $30.6 million of cash inflows from net income, after adjusting for non-cash and non-operating items. The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $63.2 million outflow pursuant to the relative timing and significance of project progression and billings during the period and a $4.2 million decrease in operating lease liabilities and $0.4 million of other outflows, partially offset by a $24.3 million cash inflow related to a decrease in our net positions of accounts receivable, accounts payable, and accrued liabilities during the period and a $2.2 million decrease in prepaid expenses.
Investing Activities. During the nine months ended September 30, 2026, we used approximately $70.2 million of cash in our investing activities. Cash used in investing activities relating to the JEM Acquisition totaled $42.9 million in the nine months ended September 30, 2026. Capital asset additions and betterments to our fleet, reported as capital expenditures in the table above, were $28.1 million and $25.5 million in the nine months ended September 30, 2026 and 2025, respectively.
Financing Activities. During the nine months ended September 30, 2026, we were provided approximately $83.3 million of cash by our financing activities. During the nine months ended September 30, 2026, we had net borrowings of $29.0 million on the UMB revolving credit line, borrowings of $40.0 million related to the JEM Acquisition and net borrowings of $14.9 million related to the UMB equipment line of credit.
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Effect of Inflation
We are subject to the effects of inflation through increases in the cost of raw materials and other items such as fuel, concrete and steel. Due to the relative short-term duration of our projects, we are generally able to include anticipated cost increases in the pricing of our bids.
Critical Accounting Estimates
Refer to our 2025 Form 10-K for a description of our critical accounting estimates that require us to make estimates and assumptions that affect both the Company’s carrying values of its assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. There have been no material changes or developments during the reporting period with respect to methodologies that we used when developing critical accounting estimates as disclosed in our 2025 Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, our results of operations are subject to risks related to fluctuations in commodity prices and fluctuations in interest rates. Historically, our exposure to foreign currency fluctuations has not been material and has been limited to temporary field accounts located in foreign countries where we perform work. Foreign currency fluctuations were immaterial in this reporting period.
Commodity price risk
We are subject to fluctuations in commodity prices for concrete, steel products and fuel. Although we routinely attempt to secure firm quotes from our suppliers, we generally do not hedge against increases in prices for commodity products. Commodity price risks may have an impact on our results of operations due to the fixed-price nature of many of our contracts, although the short-term duration of our projects may allow us to include cost increases to the pricing of our bids.
Interest rate risk
At September 30, 2026, we had $83.9 million in outstanding borrowings under our UMB Credit Agreement, with a weighted average ending interest rate of 6.2%. Based on the amounts outstanding under our UMB Credit Agreement as of September 30, 2026, a 100 basis-point increase in SOFR (or an equivalent successor rate) would increase the Company’s annual interest expense by approximately $0.8 million. Also, we have entered into interest rate swaps to hedge the variability in the interest payments on the principal amount of the acquisition term loan outstanding under the UMB Credit Agreement. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. See Note 10 — Debt to the unaudited condensed consolidated financial statements for additional information regarding the UMB Credit Agreement and related interest rate swaps.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required, the Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2026.
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Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II.OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information about litigation involving us, see Note 15 to the unaudited condensed consolidated financial statements in Part I of this report, which we incorporate by reference into this Item 1 of Part II.
ITEM 1A.RISK FACTORS
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors” of our 2025 Form 10-K.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales or issuer purchases of equity securities in the period ended September 30, 2026.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
During the third quarter of 2026, no director or officer of the Company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
Exhibit | | Description |
|---|---|---|
2.1# | | Securities Purchase Agreement, dated as of February 3, 2026, by and among Orion Group Holdings, Inc., the Shareholders, the Members, the Beneficial Owners and the Sellers Representative (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 4, 2026 (File No. 001-33891)). |
3.1 | | Amended and Restated Certificate of Incorporation of Orion Group Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the Securities and Exchange Commission on August 5, 2016 (File No. 001-33891)). |
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Exhibit | | Description |
|---|---|---|
3.2 | | Certificate of Amendment of Amended and Restated Certificate of Incorporation of Orion Group Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 20, 2026 (File No. 001-33891)). |
3.3 | | Amended and Restated Bylaws of Orion Group Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 25, 2025 (File No. 001-33891)). |
10.1† | | Amendment No. 1 dated September 18, 2026, to Employment Agreement by and between Orion Group Holdings, Inc. and Travis J. Boone, effective September 27, 2023 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 21, 2026 (File No. 001-33891)). |
10.2† | | Amendment No. 1 dated September 18, 2026 to Employment Agreement by and between Orion Group Holdings, Inc. and E. Chipman Earle, effective March 20, 2024 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 21, 2026 (File No. 001-33891)). |
10.3† | | Employment Agreement dated October 12, 2026 by and between Orion Group Holdings, Inc. and Alison G. Vasquez (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 15, 2026 (File No. 001-33891)). |
*31.1 | | Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
*31.2 | | Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
**32.1 | | Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Title 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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Exhibit | | Description |
|---|---|---|
*101.INS | | XBRL Instance Document. |
*101.SCH | | Inline XBRL Taxonomy Extension Schema Document. |
*101.CAL | | Inline XBRL Extension Calculation Linkbase Document. |
*101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
*101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. |
*101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
*104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith
** Furnished herewith
# | Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Commission upon request. |
† | Compensatory plan or arrangement. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| | ORION GROUP HOLDINGS, INC. |
| | |
October 28, 2026 | By: | /s/ Travis J. Boone |
| | Travis J. Boone |
| | |
October 28, 2026 | By: | /s/ Alison G. Vasquez |
| | Alison G. Vasquez |
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