What changed in this filing

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Item 1. Business

2021-03-02 compared with 2020-02-28 · 69 added, 84 removed, 277 unchanged (36% of the section changed)

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is listed on the New York Stock Exchange under the symbol ORN.

Unless the context otherwise requires, all references herein to “Orion”, the “Company”, the “Registrant”, “we”, “us”

or “our”

refer to Orion Group Holdings, Inc.

Unless the context otherwise requires, all references herein to “Orion”, the “Company”, the “Registrant”, “we”, “us” or “our” refer to Orion Group Holdings, Inc.

and its consolidated subsidiaries and affiliates.

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We have successfully acquired and fully integrated several companies into our operations, including the acquisition of T.A.S.

Commercial Concrete Construction, LLC ("TAS") during 2015, and Tony Bagliore Concrete, Inc.

("TBC") during 2017.

Commercial Concrete Construction, LLC ("TAS") during 2015, and Tony Bagliore Concrete, Inc.

("TBC") during 2017.

The TAS acquisition added another segment to our business, provided diversification of end market drivers and a diversified customer base.

The TBC acquisition expanded the Company’s current service offerings to an additional geographic market within its concrete segment.

These strategic acquisitions have also enhanced our operational capabilities, provided us with a larger geographic base, and added to our equipment fleet.

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● Production - We believe in the importance of performing tasks safely, efficiently, and timely.

Integrity –

We believe that integrity is the foundation upon which all other operating principles and guiding beliefs rest and it is achieved through maintaining high ethical standards through an established code of conduct and an effective company-wide compliance program.

Sustainability –

We are committed to sustainability, which encompasses many aspects of how we conduct ourselves and practice our core values.

● Integrity – We believe that integrity is the foundation upon which all other operating principles and guiding beliefs rest and it is achieved through maintaining high ethical standards through an established code of conduct and an effective company-wide compliance program.

● Sustainability – We are committed to sustainability, which encompasses many aspects of how we conduct ourselves and practice our core values.

We believe sustainability is important to our customers, employees, shareholders, and communities, and is also a long-term business driver.

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We employ the following key business strategies:

Continue to add construction capabilities - We also seek to add capabilities that will augment our core contracting and construction competencies, improve our gross margins, and allow us to compete more effectively for contracts that might not otherwise be available to us.

● Continue to add construction capabilities - We continue to seek to add capabilities that will augment our core contracting and construction competencies, improve our gross margins, and allow us to compete more effectively for contracts that might not otherwise be available to us.

● Expand into new markets and complementary service offerings and selectively pursue strategic acquisitions - We seek to identify attractive new markets and strategic opportunities to expand our service offering through greenfield expansions, diversification, or selective acquisitions.

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We have the capability of providing design-build services and typically serve as the prime contractor for these types of projects.

Marine transportation facility projects include public port facilities for container ship loading and unloading;

Marine transportation facility projects include building or rehabilitating public port facilities for container ship loading and unloading;

cruise ship port facilities;

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and other marine-based facilities.

These projects typically consist of the positioning and installation of steel or concrete fabrication dock or mooring structures designed for durability and longevity, and involve driving piles of concrete, pipe or sheet pile to provide a foundation for the port facility structure that we subsequently construct on the piles.

We also provide on-going maintenance and repair, inspection services, emergency repair, and demolition and salvage to such facilities.

These projects typically require the positioning and installation of steel or concrete fabrication dock or mooring structures designed for durability and longevity, and involve driving piles of concrete, pipe or sheet pile to provide a foundation for the port facility structure that we subsequently construct on the piles.

We also provide on-going maintenance and repair, inspection services, emergency repair, and demolition and salvage services to such facilities.

Our marine pipeline service projects generally include the installation and removal of underwater buried pipeline transmission lines;

installation of pipeline intakes and outfalls for industrial facilities;

construction of pipeline outfalls for

wastewater and industrial discharges;

construction of pipeline outfalls for wastewater and industrial discharges;

river crossing and directional drilling;

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We serve as the prime contractor for many of these projects, and some of these are design-build contracts.

These projects involve fabricating steel or concrete structures designed for durability and longevity, and involve driving concrete, pipe or sheet pile to create support for the concrete deck roadways that we subsequently construct on the piles.

These piles can exceed four feet in diameter, can range up to 170 feet in overall length, and are often driven 90 feet into the sea floor.

These projects involve fabricating steel or concrete structures designed for durability and longevity, and involve driving concrete, pipe or sheet pile into the subsurface to create support for the concrete deck roadways that we subsequently construct on the piles.

These piles can exceed four feet in diameter, can range up to 170 feet in overall length, and are often driven 90 feet into the sea or river floor.

We do not control the funding of bridge and causeway work, which has not been consistently available

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Concrete Construction Services

The concrete segment provides its services in the following areas:

light commercial, structural, and other services.

Light commercial services include horizontally poured concrete for products such as sidewalks, ramps, tilt walls, and trenches.

Structural services include elevated concrete pouring for products such as columns, elevated beams, and structural walls.

Other services comprise labor related to concrete pouring, such as rebar installation and pumping services and typically support our other services.

These services cover all phases of concrete construction including dirt work and layout, forming, rebar and mesh, and pour and finish.

The concrete segment has earned the reputation as being one of the area’s most recognizable and reputable concrete contractors.

Our success has been achieved by maintaining a focus on our clients and addressing their problems.

The commercial construction arena has been our focus and we have completed thousands of successful commercial projects – both simple and complex in the broader Texas market including Houston, Dallas, Fort Worth, Austin and San Antonio.

Our portfolio of commercial projects includes warehouse and distribution, medical, retail, education, office buildings, multi-family, religious, industrial and community projects – nearly the full spectrum of commercial construction projects.

We are a turnkey subcontractor that performs the vast majority of all our work with our own labor forces.

Warehouse and distribution projects include large, intermediate and small facilities serving needs in nearly every commercial, private and public industry.

Typically, the developer and builders construction method of choice for these projects are concrete tilt-wall structures ranging in size from a few thousand square feet to over one million square feet.

Speed, efficiency and quality are keys to meeting our clients’ needs to deliver projects on or ahead of schedule.

We have received awards for many of these projects.

Medical/healthcare projects always come with stringent requirements.

We have the knowledge and experience to meet these high expectations.

From hospitals to laboratories, including high rises and their garages we know how to carry out construction activities in densely occupied areas with minimal disturbance to critical facilities daily operations.

Office buildings, whether in downtown metropolitan cities or in business districts serving neighboring communities we apply our concrete experience to a variety of office project types, including low, mid-rise and high-rise concrete structures.

We utilize different technologies for elevated concrete structures.

Multi-family projects, whether it be podium structures, mid-rise, high-rise and luxury projects, we have the abundant knowledge of the extensive formwork systems, cranes and equipment needed to successfully deliver projects – typically in tight spaces.

We have earned the reputation for successfully managing and delivering multi-family projects with aggressive schedules.

We bring a breadth of knowledge and a diverse portfolio of education projects.

We have completed over 18 million square feet of education projects including libraries, higher education, research facilities, athletic facilities, stadiums, elementary, middle and high schools.

We have also applied our skills to state of the art performing arts facilities and studios.

Retail centers play an important role for serving our neighborhoods.

They address a variety of community needs and we have had the opportunity to build large regional shopping malls, national chain stores, power centers, small strip centers and corner retail shops.

We also have had the great privilege of teaming with church leaders and church builders to create worship areas for people from all walks of life.

With more than 4.7 million square feet of worship and fellowship facilities, our religious portfolio includes projects ranging from 2,000 square feet to more than 200,000 square feet.

Industry and Market Overview

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Department of Defense, the energy industry, coastal protection and reclamation, along with hurricane restoration and repair and environmental remediation.

We believe that this broad customer base enables us to lessen the negative effects during a downturn in a

specific end market and respond quickly to the needs of expanding end markets.

We believe that this broad customer base enables us to lessen the negative effects during a downturn in a specific end market and respond quickly to the needs of expanding end markets.

The following includes an overview of our diverse markets in the marine construction industry:

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Bridges and Causeways

According to the American Society of Civil Engineers, as of their most recent report, one in nine of the nation’s bridges are structurally deficient, and the average age of the nation’s bridges is 43 years old.

According to the American Society of Civil Engineers, as of their most recent report, one in eleven of the nation’s bridges are structurally deficient, and the average age of the nation’s bridges is 43 years old.

We are able to construct or restore overwater bridges, and design, repair, or replace, fendering systems for customers.

Marine Infrastructure

Marine Transportation System (“MTS”) consists of waterways, ports and their intermodal connections, vessels, vehicles, and system users, as well as shipyards and repair facilities crucial to maritime activity.

The MTS is primarily owned and operated through an aggregation of federal, state, and local governmental authorities, as well as privately owned facilities and private companies.

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Coast Guard maintains more than 50,000 federal aids to navigation, which include buoys, lighthouses, day beacons, and radio-navigation signals.

Additionally, it has oversight responsibility for over 18,000 highway and railroad bridges that span navigable waterways throughout the country.

Additionally, it has oversight responsibility for approximately 20,000 highway and railroad bridges that span navigable waterways throughout the country.

As part of the Department of Homeland Security, we anticipate that the U.S.

Coast Guard’s needs for varied marine construction services, including those listed above, will provide opportunities for us in the future.

Energy Industry

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Coastal and Wetland Restoration and Reclamation

standpoint, the private sector, government agencies and municipalities will increase spending on restoration and reclamation projects.

We are hopeful that increases in coastal population density and demographic trends will lead to an increase in the number of coastal restoration and reclamation projects, and as the value of waterside assets rises from a residential and recreational standpoint, the private sector, government agencies and municipalities will increase spending on restoration and reclamation projects.

Hurricane Restoration and Repair

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Total contract revenues

We do not believe that the loss of any one of these customers would have a material adverse effect on our operations since no single customer sustains a large portion of our contract revenue over time.

Our contract backlog represents our estimate of the revenues we expect to realize under the portion of the contracts remaining to be performed.

Given the typical duration of our contracts, which generally is less than one 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 include projects in our backlog when the customer has provided an executed contract, purchase order, change order, or other legally binding notice to proceed.

Backlog as of the periods ended below are as follows (in millions):

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

December 31, 2018

Marine segment

Concrete segment

These estimates are subject to fluctuations based upon the scope of services to be provided, as well as factors affecting the time required to complete the project.

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.

We do not believe that the loss of any one customer would have a material adverse effect on our operations since no single customer sustains a large portion of our contract revenue over time.

Fluctuations in Quarterly Results

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Both of our segments are highly fragmented with competitors generally varying within the markets we serve and with few competitors competing in all of the markets we serve or for all of the services that we provide.

We believe that our turnkey

capability, expertise, experience and reputation for providing safe and timely quality services, safety record and programs, versatile equipment fleet, financial strength, surety bonding capacity, knowledge of local markets and conditions, and project management and estimating abilities allow us to compete effectively.

We believe that our turnkey capability, expertise, experience and reputation for providing safe and timely quality services, safety record and programs, versatile equipment fleet, financial strength, surety bonding capacity, knowledge of local markets and conditions, and project management and estimating abilities allow us to compete effectively.

We believe significant barriers to entry exist in the markets in which we operate, including the ability to bond large projects, maritime law constraints, specialized marine equipment and technical experience;

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Insurance and Bonding

We maintain general and excess liability, construction equipment, workers’

compensation and other forms of insurance;

We maintain general and excess liability, construction equipment, workers’ compensation and other forms of insurance;

all in amounts adequate for our operating needs and consistent with industry practice.

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We operate under a number of trade names.

We consolidate our operations under the brand name "Orion Group Holdings, Inc." We may be known as Orion Marine Group, Orion Marine Construction, Orion Marine Contractors, Orion Construction, East and West Jones Placement Area, Schneider E&C, Orion Industrial Construction, Orion Concrete Construction, T.A.S.

We consolidate our operations under the brand name "Orion Group Holdings, Inc."

We may be known as Orion Marine Group, Orion Marine Construction, Orion Marine Contractors, Orion Construction, East and West Jones Placement Area, Schneider E&C, Orion Industrial Construction, Orion Concrete Construction, T.A.S.

Commercial Concrete Construction, T.A.S.

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● Tugs - larger pushboats and tug boats are used to transport barges and other support equipment to and from the project site.

Dredges - 24”

cutter head suction dredges (diesel), 20”

cutter head suction dredge (diesel/electric), 20”

cutter head suction dredges (diesel), 16”

cutter head suction dredges, and 12”

portable cutter head suction dredges are used to provide dredging services at project sites.

● Dredges - 24” cutter head suction dredges (diesel), 20” cutter head suction dredge (diesel/electric), 20” cutter head suction dredges (diesel), 16” cutter head suction dredges, and 12” portable cutter head suction dredges are used to provide dredging services at project sites.

● Cranes - crawler lattice boom cranes with lift capability from 50 tons to 400 tons and hydraulic rough terrain cranes with lift capability from 15 tons to 60 tons are used to provide lifting and pile driving capabilities on project sites, and to provide bucket work, including mechanical dredging and dragline work, to project sites.

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● Pump Trucks - concrete pump trucks are large, diesel-powered trucks mounted with a powerful pump, and an extendable, sectioned hose or cylinder to help facilitate the placement of concrete for construction projects.

Laser Screeds - laser screeds are self-propelled four wheel drive, four wheel steer units that encompass a 20’

telescoping boom with a 12’

wide placement head.

● Laser Screeds - laser screeds are self-propelled four wheel drive, four wheel steer units that encompass a 20’ telescoping boom with a 12’ wide placement head.

The screed head itself consists of 3 parts:

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The screed has an on board computer system able to determine the correct elevation height and provide commands for elevation control.

We believe that ownership of certain equipment is generally preferable to leasing or rental in some cases because it ensures the equipment is available as needed and normally results in lower costs.

As a general rule, we believe that ownership of certain equipment is generally preferable to leased or rented equipment in some cases because it ensures the equipment is available as needed and normally results in lower costs.

We continually monitor and adjust our fleet size so that it is consistent with the size of the business, considering both existing backlog and expected future work.

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All equipment which requires certification has obtained such certification and is maintained in good standing thereunder.

In addition, where required, our vessels’

permissible loading capacities require certification by the American Bureau of Shipping (“ABS”).

The ABS is an independent classification society which certifies that certain of our larger, seagoing vessels are “in-class,”

signifying that the vessels have been built and maintained in accordance with ABS standards and applicable U.S.

In addition, where required, our vessels’ permissible loading capacities require certification by the American Bureau of Shipping (“ABS”).

The ABS is an independent classification society which certifies that certain of our larger, seagoing vessels are “in-class,” signifying that the vessels have been built and maintained in accordance with ABS standards and applicable U.S.

Coast Guard rules and regulations.

All of our vessels that are required to be certified by the ABS have been certified as “in-class.”

These certifications indicate that the vessels are structurally capable of operating in open waters, which enhances the mobility of our fleet.

All of our vessels that are required to be certified by the ABS have been certified as “in-class.” These certifications indicate that the vessels are structurally capable of operating in open waters, which enhances the mobility of our fleet.

Government Regulations

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● permitting and inspection requirements applicable to marine construction projects.

In our marine segment, we are also subject to government regulations pursuant to the Dredging Act, the Merchant Marine Act of 1920, commonly referred to as the "Jones Act", the Shipping Act and the Vessel Documentation Act.

These statutes require vessels engaged in the transport of merchandise or passengers between two points in the United States or dredging in the navigable waters of the U.S.

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crews, and to be built in the U.S.

citizenship ownership and control standards require the vessel-owning entity to be at least 75% U.S.

citizenship ownership and control standards

require the vessel-owning entity to be at least 75% U.S.

citizen owned, and prohibit the demise or bareboat chartering of the vessel to any entity that does not meet the 75% U.S.

citizen ownership test.

These statutes, together with similar requirements for other sectors of the maritime industry, are collectively referred to as “cabotage”

These statutes, together with similar requirements for other sectors of the maritime industry, are collectively referred to as “cabotage” laws.

In both our marine and concrete segments, we are subject to the requirements of OSHA and certain regulations for the EPA.

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Our activities, including concrete construction, infrastructure construction, salvage, demolition, dredging and dredge material disposal activities are subject to stringent and complex federal, state, and local laws and regulations governing environmental protection, including air emissions, water quality, solid waste management, marine and bird species and their habitats, and wetlands.

A portion of our construction contracts are entered into with public authorities and frequently impose additional governmental requirements, including requirements regarding labor relations.

A portion of our construction contracts are entered into with public authorities and frequently impose additional governmental requirements, including those related to environmental concerns.

Such laws and regulations may require that both segments and their customers obtain, and comply with, various environmental permits, registrations, licenses and other approvals.

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Waste Management

Our operations could be subject to the federal Resource Conservation and Recovery Act (“RCRA”) and comparable state laws, which impose detailed requirements for the handling, storage, treatment and disposal of hazardous and non-hazardous solid wastes.

Under the auspices of the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent, requirements.

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Site Remediation

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as “Superfund,”

and comparable state laws and regulations impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons responsible for the release of hazardous substances into the environment.

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as “Superfund,” and comparable state laws and regulations impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons responsible for the release of hazardous substances into the environment.

Such classes of persons include the current and past owners or operators of sites where a hazardous substance was released, and companies that disposed or arranged for the disposal of hazardous substances at offsite locations, such as landfills.

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Under CERCLA, such persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies.

In addition, neighboring landowners and other third parties often file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

neighboring landowners and other third parties often file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

We currently own or lease properties that have been used by other industries for a number of years.

Although we typically have used operating and disposal practices that were standard in the industry at the time, wastes may have been disposed of or released on or under the properties owned or leased by us, on or under other locations where such substances have been taken for disposal, or on or under project sites where we perform work.

In addition, some of the properties may have been operated by third parties or by previous owners whose treatment and disposal or release of wastes was not under our

In addition, some of the properties may have been operated by third parties or by previous owners whose treatment and disposal or release of wastes was not under our control.

These properties and the substances disposed or released on them may be subject to CERCLA, RCRA and analogous state laws.

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Water Discharges

The Federal Water Pollution Control Act, also known as the Clean Water Act (“CWA”), and analogous state laws impose strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States, including wetlands.

The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency.

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Under the CWA, federal and state regulatory agencies may impose administrative, civil and/or criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.

The Oil Pollution Act of 1990 (“OPA”), which amends and augments the CWA, establishes strict liability for owners and operators of facilities that are sites of releases of oil into waters of the U.S.

OPA and its associated regulations impose a variety of requirements on responsible parties related to the prevention of oil spills and liability for damages resulting from such spills.

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Air Emissions

The Clean Air Act (“CAA”) and comparable state laws restrict the emission of air pollutants from many sources, including paint booths, and may require pre-approval for the construction or modification of certain facilities expected to produce air emissions, impose stringent air permit requirements, or require the utilization of specific equipment or technologies to control emissions.

We believe that our operations are in substantial compliance with the CAA.

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Endangered Species

The Endangered Species Act (“ESA”) restricts activities that may affect endangered species or their habitats.

We conduct activities in or near areas that may be designated as habitat for endangered or threatened species.

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Further, restrictions on work during the Whooping Crane nesting period in the Aransas Pass National Wildlife Refuge from October 1 through April 15 each year and during the non-dormant grass season for sea grass in the Laguna Madre from March 1 through November 30 each year impact our construction operations in the Texas Gulf Coast area.

We plan our operations and bidding activity with these

restrictions and limitations in mind, and they have not materially hindered our business in the past.

We plan our operations and bidding activity with these restrictions and limitations in mind, and they have not materially hindered our business in the past.

However, these and other restrictions may affect our ability to obtain work or to complete our projects on time in the future.

In addition, while we believe that we are in material compliance with the ESA, the discovery of previously unidentified endangered species could cause us to incur additional costs or become subject to operating restrictions or bans in the affected area.

Human Capital Management

At December 31, 2020, our marine segment had 923 employees, 279 of whom were full-time salaried personnel and most of the remainder of whom were hourly personnel.

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Our long-lived assets are substantially located in the United States.

Access to the Company’s Filings

We maintain a website at www.oriongroupholdingsinc.com on which we make available, free of charge, access to the various reports we file with, or furnish to, the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business