What changed in this filing

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Item 1. Business

2023-03-16 compared with 2022-03-07 · 67 added, 63 removed, 283 unchanged (31% of the section changed)

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Our marine segment provides construction and dredging services relating to marine transportation facility construction, marine pipeline construction, marine environmental structures, dredging of waterways, channels and ports, environmental dredging, design, and specialty services.

Our concrete segment provides turnkey concrete construction services including pour and finish, site preparation, layout, forming, rebar, and mesh across the light commercial, structural and other associated business areas.

Our concrete segment provides turnkey concrete construction services including place and finish, site preparation, layout, forming, and rebar placement for large commercial, structural and other associated business areas.

We are headquartered in Houston, Texas with regional offices throughout our operating areas.

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Since then, we have expanded our reach both through organic growth and acquisitions.

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.

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.

Today we are focused on becoming the leading specialty construction company in the building, industrial, and infrastructure sectors and will continue to seek growth opportunities through greenfield expansion, acquisitions, vertical integration, and diversification.

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

Today we are focused on becoming the leading specialty construction and engineering company in the infrastructure, industrial, and building sectors and will continue to seek growth opportunities through greenfield expansion, acquisitions, vertical integration, and diversification.

Our operating principles and guiding beliefs include:

● Safety - We believe work place safety and accident prevention is our moral obligation as well as a good business practice.

● Safety - We believe workplace safety and accident prevention is our moral obligation as well as a good business practice.

By identifying and concentrating resources to address job site hazards, we continually strive to reduce our incident rates and the severity of the incidents.

● Quality - We believe in the importance of performing high quality work.

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

● Delivery - We believe in the importance of performing tasks safely, efficiently, and timely with industry-leading execution.

● Teamwork - We relentlessly pursue success together across the business as a team.

● 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 the overall Company’s 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.

By focusing on specific initiatives that address social, environmental, governance and economic challenges, we can minimize risk and increase our competitive advantage

● Sustainability - We are committed to sustainability throughout our operations and throughout our corporate functions and we advance initiatives that support a more sustainable world.

We do business in a way that meets the needs of the present while contributing to an environmentally, socially, and economically sustainable future .

Our Business Strategy

We employ the following key business strategies:

● 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.

● Continue to capitalize on favorable long-term industry trends - We seek to capitalize on infrastructure capital investments across the markets we serve including port and marine infrastructure, government funded projects, transportation, oil and gas facilities, recreational waterside industry infrastructure expansion and environmental restoration markets.

We seek to capitalize on privately and government funded projects across the commercial concrete markets we serve including industrial, institutional, commercial real estate, and recreational developments.

● Diversification - To mitigate the risks inherent in the construction business as the result of general economic factors, we pursue projects in both the public and private sectors for a wide range of customers within each sector (from the federal government to small municipalities and from large corporations to small property owners and developers and in diverse geographic markets).

● Continue to reinvest in our core operations - We pursue technically complex projects where our people, specialized services and equipment differentiate us from our competitors.

We intend to enhance the types, numbers and capabilities of our equipment so we can provide turnkey construction services to our customers.

This is intended to assure that when we are called on for business, we have the right people, skills, and equipment readily available for multiple projects.

● Continue to attract, retain and develop our employees - We believe our employees are integral to the success of our project execution, and we continue to allocate resources to attract and retain talented managers, supervisors and field personnel.

● Ownership of equipment - We own a large, versatile fleet of well-maintained construction equipment.

The ownership of this equipment enables us to compete more effectively by ensuring availability of equipment at a favorable cost.

Following a comprehensive review of our operations, assets and talent, we have developed a three point strategic plan to unlock Orion’s full potential for long-term, sustainable growth to the benefit of all of our stakeholders.

Three Point Strategic Plan

1.) Improve the profitability of the concrete business.

● Appointed new leadership for the concrete segment, tapping one of our senior leaders from the Marine business with many years of experience successfully and profitably delivering complex projects.

● Refocus our concrete business in core Texas markets of Dallas and Houston, robust markets where we have a track record of success and a runway to improve profitability.

● Invest in additional experienced project managers, and give our project teams the training and tools to drive efficiency and improved business outcomes.

2.) Strengthen business development to drive growth.

● Build on our successful sales efforts and capitalize on favorable industry dynamics including the $1.2 trillion infrastructure bill;

Navy investments in the Pacific;

port expansions and maintenance resulting from the Panama Canal Expansion, and strong construction demand in both private and public sectors of the rapidly growing Texas market.

● Sharpen our business development focus, putting our efforts into pursuing those opportunities where our capabilities and expertise differentiate us.

Our aim is to win quality projects at improved margins.

● Leverage our experience in the public infrastructure construction market from other parts of our business to assist our concrete segment in penetrating this more predictably funded sector.

● Build and deepen our client relationships to gain actionable insight into their future pursuits by investing in additional business development resources.

3.) Investment and resources to realize Orion’s full potential.

● Strengthen our balance sheet for future growth.

Complete the refinancing of our current credit facility to extend our debt maturities and provide us with the capital to take advantage of our market opportunities.

● Optimize our return on assets.

The completion of our Central Texas concrete jobs in 2023 will present opportunities to sell or redeploy underutilized equipment.

In addition, we will continue our efforts to monetize non-core real estate assets this year.

● Invest in our dredging fleet to better service our growth.

Supporting our commitment to the environment, Orion’s fleet upgrades will also include investing in more efficient engines to achieve lower carbon emissions.

● Collaborate between our concrete and marine operations to drive synergies and leverage best practices.

Our teams are now working together across divisions and have a shared sense of mission and purpose.

● Continue to enhance and build our “Target Zero” safety culture, practices, and systems.

Services Provided

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and other marine-based 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.

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.

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Concrete Construction Services

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

The concrete segment has earned a reputation as one of the most recognizable and reputable concrete contractors where we operate.

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

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

We utilize different technologies for elevated concrete structures, such as high-rise 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 the abundant knowledge of the extensive formwork systems, cranes and equipment needed to successfully deliver multi-family projects – typically in tight spaces, whether it be podium structures, mid-rise, high-rise and luxury projects.

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

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While waterway usage is increasing, the facilities and supporting systems are aging.

In addition, channels and waterways must maintain certain depths to accommodate ship and barge traffic.

In addition, channels

and waterways must maintain certain depths to accommodate ship and barge traffic.

Natural sedimentation in these channels and waterways require routine maintenance dredging to maintain navigability.

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Coastal and Wetland Restoration and Reclamation

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.

Increases in coastal population density and demographic trends, along with the potential effects of rising sea-levels, 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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Our customers in the concrete segment are in diverse end markets such as industrial, institutional, commercial real estate, and recreational developments.

Our concrete segment depends on continued growth in population to support residential and nonresidential construction, specifically in the metropolitan areas of Texas.

The latest estimates from the U.S.

Census Bureau indicate that the metropolitan areas of Texas, specifically Dallas, Houston, San Antonio and Austin, are among the U.S.

top 10 in population growth based on the most recent survey results.

These markets show substantial growth in multi-family housing, medical facilities, and commercial, office, retail, and industrial buildings.

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.

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Industrial developments

Our industrial markets include manufacturing plants, industrial warehousing, distribution centers, waste water treatment facilities and facilities supporting the petrochemical industry.

Our industrial markets include manufacturing plants, industrial warehousing, distribution centers, wastewater treatment facilities and facilities supporting the petrochemical industry.

An expected increase in distribution has generated a need for substantial industrial park developments.

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Our customer base shifts from time to time depending on the types of projects we bid, and ultimately are successful on obtaining.

The following table represents concentrations of contract revenue by type of customer for the years ended December 31, 2021, 2020, and 2019.

The following table represents contract revenue and concentrations of contract revenue by type of customer for the years ended December 31, 2022, 2021 and 2020.

Federal Government

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In our marine segment, we compete with several regional marine construction services companies and a few national marine construction services companies.

In the past, interest groups have unsuccessfully lobbied Congress to modify or

repeal the Jones Act to facilitate foreign flag competition for trades and cargos currently reserved for U.S.

flag vessels under the Jones Act.

If these efforts are ever successful, it could result in significantly increased competition and have a material adverse effect on our marine segment business, results of operations, cash flows or financial condition.

From time to time, we compete with certain national land-based heavy civil contractors.

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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.

Commercial Concrete Solutions, T.A.S.

Proco, or Houston Industrial Tool Services, as well as our former names of King Fisher Marine Service, F.

Miller Construction, T.

LaQuay Dredging, Misener Marine Construction, Misener Diving & Salvage, Northwest Marine Construction and West Construction.

Proco, or Houston Industrial Tool Services.

We do not generally register our trademarks with the U.S.

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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.

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 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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Our strategy is to deploy our fleet from project to project as required.

The assets (including equipment) are pledged as collateral under the Credit Facility.

Equipment Certification

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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.

In our marine segment, we are also subject to government regulations pursuant to the Foreign Dredge 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.

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

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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.

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.

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.

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

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The regulations provide for a general permit to cover such discharges and impose on marine vessel operators, including us, certain discharge, permitting, record keeping, reporting, monitoring, maintenance, and operating restrictions and requirements with respect to materials that are or may be discharged from certain vessels.

Applicability of these restrictions and requirements is based on size and type of vessel, and they apply only to a minority of our vessels.

The applicability of these restrictions and requirements is based on size and type of vessel, and they apply only to a minority of our vessels.

We, nevertheless, are implementing such restrictions and requirements with respect to our vessels which are subject thereto, and we do not anticipate that such regulations or the associated permit terms, restrictions and requirements will adversely impact our business and results of operations.

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

Climate Change

Congress may consider legislation to reduce emissions of greenhouse gases in response to climate change concerns.

In addition, several states have declined to wait on Congress to develop and implement climate control legislation and have already taken legal measures to reduce emissions of greenhouse gases.

Passage of climate control legislation or other regulatory initiatives by Congress or various states, or the adoption of regulations by the EPA and analogous state agencies that restrict emissions of greenhouse gases in areas in which we conduct business could have an adverse effect on our operations and demand for our services.

Endangered Species

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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.

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.

Climate Change

Congress may consider legislation to reduce emissions of greenhouse gases in response to climate change concerns.

In addition, several states have declined to wait on Congress to develop and implement climate control legislation and have already taken legal measures to reduce emissions of greenhouse gases.

Human Capital Management

At December 31, 2021, our marine segment had 845 employees, 277 of whom were full-time salaried personnel and most of the remainder of whom were hourly personnel.

Our concrete segment had 1,602 employees, 101 of whom were full-time salaried personnel and most of the remainder of whom were hourly personnel.

As of December 31, 2022, our marine segment had 868 employees, 286 of whom were full-time salaried personnel and most of the remainder of whom were hourly personnel.

Our concrete segment had 1,348 employees, 197 of whom were full-time salaried personnel and most of the remainder were hourly personnel.

From time to time, we hire additional employees for certain large projects and, subject to local market conditions, additional crew members are generally available for hire on relatively short notice.

We believe our employees are our most valuable resource, and our workforce possesses a strong dedication to and pride in our company.

Our employees are not currently represented by labor unions, except certain employees in our marine segment located in the Pacific Northwest and Alaska, in respect of which collective bargaining agreements are in place.

Certain employees are represented by collective bargaining agreements in our concrete segment.

Our employees are not currently represented by labor unions, except certain employees in our marine segment located in the Pacific Northwest and Alaska and certain employees operating specialized equipment for our concrete segment, in respect of which collective bargaining agreements are in place.

Employees represented by collective bargaining agreements represent approximately 4.3% of our total workforce.

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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.

The website is made available for information purposes only.

It should not be relied upon for investment purposes, and none of the information on our website is incorporated into this Annual Report on Form 10-K by reference.

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

None of the information on our website is incorporated into this Annual Report on Form 10-K by reference.

The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

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