Reported 1Q2021 EBITDA of $9.6 million was in line with expectations due to asset sales of $1.6 million. Severe weather hit was >$8 million. Versus 1Q2020, EBITDA of $9.6 million was $2.6 million lower. Profitability was solid, albeit at lower levels with gross margin of 10.1% and EBITDA margin of 6.2%. Excluding asset sales, EBITDA was $7.9 million versus $11.2 million in 1Q2020, and EBITDA margin of 5.2% dropped 150 basis points versus 1Q2020.Maintaining 2021 EBITDA estimate of $47.0 million, including asset sales of $1.6 million. The company faces tough comps, but Marine results should pick up over rest of year and Concrete represents upside potential.Backlog down, but low bids pending award is up. 1Q2021 backlog of $365 million dropped due to lower Marine and Concrete backlogs. One bright spot was the low bids pending award of $134 million (+$38 million), but potential backlog dropped to $499 million (-$37 million). Industry fundamentals remain positive despite state level concerns about COVID-19 and bids outstanding total $1.9 billion, with about 75% in Concrete.Asset sales will increase flexibility to an already strong capital structure. Absent acquisitions, a stock buyback program seems likely in 2H2021, if not sooner. The focus remains on monetizing idle/non-core assets and about $28.7 million could be generated over the next two quarters. We believe that there is a strong preference for growth-oriented investments given that the potential impact on the small asset base. Absent acquisitions, other moves like a dividend and/or stock buyback seem possible.Maintain Outperform and price target of $8.25/share due to compelling risk/reward profile. While the stock is up 12% this year, we believe that the current stock price, including the 9% pullback in April, doesn't fairly reflect the structural improvement in execution and profitability triggered by the ISG restructuring. The strong operating performance in 2020 established a high bar and upcoming comps will remain challenging, but a combination of firming backlog, improving profitability, declining financial leverage and attractive valuation supports our view that the risk/reward profile remains compelling. Potential catalysts include added awards, 2Q2021 operating results, infrastructure legislation and the closing of real estate sales (Tampa in 2Q2021 and Port Lavaca in 3Q2021). Read More >>