Weather challenges prevailed. 2Q2021 Adjusted EBITDA of $7.4 million was ~$2.1 million below our estimate of $9.5 million and EBITDA margin of 5.1% was also 70 bps light. While we had recently lowered our estimate based on wet weather in Texas, the main market for the Concrete business, we underestimated the impact on the Marine business. Total revenue of $145.9 million and gross margin of $12.3 million (8.4%) were down sequentially and well below 2Q2020 levels. Excluding the $6.8 million gain on the Tampa yard sale, Marine EBITDA was $7.8 million, but Concrete EBITDA turned negative again at -$0.4 million due to lower fixed cost absorption.Call today at 10am EST — Number is 201-493-6739 and code is Orion Group Holdings. On the call, we will look for details on: 1) Impact of weather in 2Q2021 and any lingering impact due to a wet July; 2) 2H2021 bidding activity for both Marine and Concrete; 3) Prospects for a rebound in Concrete profitability; 4) Timing of closing of the Port Lavaca sale; 5) Interest in the East West Jones property on the Houston Ship Channel; and 6) Capital allocation priorities after the sale of the Tampa yard in June.Backlog increased, but lowering estimates. Backlog of $394 million moved up from $365 million due to $15 million increases in both Marine to $170 million and Concrete to $224 million, but the surprising operating results have a negative impact. Our 2021 EBITDA estimate is $43.1 million (down $2.9 million from $46.0 million) based on gross margin of 10.4% and EBITDA margin of 6.7%. We will adjust accordingly after the call.Free cash flow remains solid and financial flexibility is high. Despite surprising results, free cash flow should remain positive at $15.0 million, or $0.47/share. Following asset sales, net debt should move into the $14 million range in 4Q2021 from $50 million in 2020. A strong preference remains for growth-oriented investments, like enhancing existing assets and/or finding an acquisition, but a dividend and/or a stock buyback seem possible in the interim. Read More >>