Adjusting EBITDA estimate ahead of earnings call due to heavy spring rainfall in Texas. Rainfall, especially in May, was heavy in Houston and Dallas, and our 2021 EBITDA estimate drops by $1.0 million to $9.5 million with gross margin of 11.0% and EBITDA margin of 6.7%. Outlook remains constructive, with new awards of $53 million announced in 2Q2021 ($38 million in Marine and $17 million in Concrete). Potential backlog likely to remain high since 1Q2021 bids outstanding were close to $1.9 billion (~75% in Concrete).Quarterly numbers and call late next week. 2Q2021 results will be out AMC on July 28th and management will host a 10:00 am EST call on July 29th. The call number is 201-493-6739 and the code is Orion Group. Our 2Q2021 EBITDA estimate is $46.0 million with gross margin of 11.0% and EBITDA margin of 5.8%. 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; 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.Free cash flow remains solid and financial flexibility is high. Despite lower expectations, free cash flow should remain positive at $14.5 million, or $0.47/share. Including asset sales, cash should increase to $33 million in FY2021 and net debt should decline into the $10 million range from $50 million in 2020. While the ERP program is under way, there is a strong preference for growth-oriented investments, like the renovation of an existing barge. Absent an acquisition, a dividend and/or a stock buyback seem possible since the one-year credit facility expired in June.Maintain Outperform and price target of $9.00/share. The current stock price doesn't appear to fairly reflect improved execution and higher profitability triggered by the ISG restructuring and solid market fundamentals. The bar high for 2021 comps, but improved profitability, lower financial leverage after the Tamp yard sale and attractive valuation of 4.1x 2021E EBITDA supports our view that the risk/reward profile remains compelling. Potential catalysts include added awards, 2Q2021 operating results, infrastructure legislation and the likely closing of the Port Lavaca sale in 3Q2021. Read More >>