Weather challenges prevailed...again. 3Q2021 Adjusted EBITDA of negative $0.5 million was ~$5 million below our estimate of $4.5 million and EBITDA margin was also 370 bps light. While we had 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 $139.9 million and gross margin of $6.6 million (4.7%) were down sequentially and expenses were higher. Fixed cost absorption was lower and Marine EBITDA dropped to $0.5 million from $7.8 million, while Concrete EBITDA remained negative at -$1.0 million.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 3Q2021 and any lingering impact due to wet weather; 2) 4Q2021 bidding activity for both Marine and Concrete; 3) Prospects for a rebound in overall profitability; 4) Timing of asset sales, including the East West Jones property on the Houston Ship Channel; and 5) Capital allocation priorities.Backlog rebounded, but lowering 2021 EBITDA estimate. Backlog of $573 million moved up $178 million due to a significant increase in Marine to $380 million, which offset a drop in Concrete to $193 million, but the surprising results have a negative impact. Our 2021 EBITDA estimate drops to $21.5 million from $31.4 million based on gross margin of 7.9% and EBITDA margin of 3.6%. Our 2022 EBITDA estimate stays at $43.0 million based on gross margin of 11.5% and EBITDA margin of 6.5%. We will adjust accordingly after the call.Asset sales have improved financial flexibility. Free cash flow should be neutral this year and rebound to $13.2 million, or $0.44/share in 2022. Asset sales have pushed net debt into the $33 million range and financial flexibility has improved. Growth-oriented investments, like asset upgrades and/or acquisitions, are preferred but stock buy backs seem possible.No change in Outperform rating, but lowering price target to $8.25/share from $9.00/share. We view the past two quarters as hiccups and think the current stock price doesn't fairly reflect the prospects for better execution and improved results driven by the robust backlog rebound. Rebounding profitability, lower financial leverage and an attractive valuation of 3.9x 2022E EBITDA support our view that the risk/reward profile is compelling. Catalysts include added awards, infrastructure legislation and added asset sales. Read More >>