Orion Group Holdings Inc 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS Unless the context otherwise indicates, all references in this Quarterly Report on Form 10-Q to “Orion,” “the Company,” “we,” “our,” or “us” are to Orion Group Holdings, Inc. and its subsidiaries as a whole . Certain information in this Quarterly Report on Form 10-Q, including but not limited to Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), may constitute forward-looking statements as such term is defined within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts, including those that express a belief, expectation, or intention are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, our pipeline of opportunities, conversion of backlog, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control, including unforeseen productivity delays and other difficulties encountered in project execution, challenges incurred by virtue of our position as a substantial subcontractor that reports to a significantly larger project contractor, levels of government funding or other governmental budgetary constraints, contract modifications and changes, including change orders and contract cancellation at the discretion of the customer . These and other important factors, including those described under “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 may cause our actual results, performance- or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date of this report; we disclaim- any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. MD&A provides a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition since the most recent fiscal year-end, and (ii) results of operations during the current fiscal year-to-date period and current fiscal quarter as compared to the corresponding periods of the preceding fiscal year. In order to better understand such changes, this MD&A should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in our 2023 Form 10-K, Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2023 Form 10-K and with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. 32 ​ Table of Contents Overview Orion Group Holdings, Inc. and subsidiaries (hereafter collectively referred to as the “Company”), is a leading specialty construction company serving the infrastructure, industrial, and building sectors, providing services both on and off the water in the continental United States, Alaska, Hawaii, Canada and the Caribbean Basin through our marine segment and our concrete segment. Our marine segment provides construction and dredging services including marine transportation facility construction, marine pipeline construction, marine environmental structures construction, dredging of waterways, channels and ports, environmental dredging, design, and specialty services related to marine construction, fabrication, and dredging. Our concrete segment provides turnkey concrete construction services including concrete surface 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. ​ Our contracts are obtained primarily through competitive bidding in response to “requests for proposals” by federal, state and local agencies and through negotiation and competitive bidding with private parties and general contractors. Our bidding activity and strategies are affected by factors such as our backlog, current utilization of equipment and other resources, job location, our ability to obtain necessary surety bonds and competitive considerations. The timing and location of awarded contracts may result in unpredictable fluctuations in the results of our operations. ​ Most of our revenue is derived from fixed-price contracts. We record revenue on construction contracts over time, measured by the percentage of actual contract costs incurred to date to total estimated costs for each contract. There are a number of factors that can create variability in contract performance and therefore impact the results of our operations. The most significant of these include the following: ● completeness and accuracy of the original bid; ● increases in commodity prices such as concrete, steel and fuel; ● customer delays, work stoppages, and other costs due to weather and environmental restrictions; ● subcontractor performance; ● unforeseen site conditions; ● availability and skill level of workers; and ● a change in availability and proximity of equipment and materials. All of these factors can have a negative impact on our contract performance, which can adversely affect the timing of revenue recognition and ultimate contract profitability. We plan our operations and bidding activity with these factors in mind and they generally have not had a material adverse impact on the results of our operations in the past. Consolidated Results of Operations Backlog Information Our contract backlog represents our estimate of the revenues we expect to realize under the portion of contracts remaining to be performed. Given the typical duration of our contracts, which is generally less than a year, our backlog at any point in time usually represents only a portion of the revenue that we expect to realize during a 33 ​ Table of Contents twelve-month period. We have not been adversely affected by contract cancellations or modifications in the past, however we may be in the future, especially in periods of economic uncertainty. Backlog as of the periods ended below are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 Marine segment ​ $ 537.0 ​ $ 567.1 ​ $ 569.9 ​ $ 602.5 ​ $ 699.9 Concrete segment ​ 153.5 ​ 191.3 ​ 186.7 ​ 159.7 ​ 177.6 Consolidated ​ $ 690.5 ​ $ 758.4 ​ $ 756.6 ​ $ 762.2 ​ $ 877.5 ​ We are optimistic in our end-markets and in the opportunities that are emerging across our various marketplaces as evidenced by the $753 million of quoted bids outstanding at quarter end, of which over $116 million were awarded but not fully contracted as of or awarded subsequent to September 30, 2024. 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. Delays in decisions on pending awards also have a negative impact on the timing and amount by which we are able to increase backlog. Income Statement Comparisons Three months ended September 30, 2024 compared with three months ended September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ ​ ​ 2024 2023 ​ Amount Percent Amount Percent ​ ​ ​ (dollar amounts in thousands) ​ ​ Contract revenues ​ $ 226,675 100.0 % $ 168,476 100.0 % ​ Cost of contract revenues ​ 199,611 88.1 % 149,406 88.7 % ​ Gross profit ​ 27,064 11.9 % 19,070 11.3 % ​ Selling, general and administrative expenses ​ 20,846 9.2 % 17,135 10.2 % ​ Amortization of intangible assets ​ ​ — ​ — % ​ 59 ​ — % ​ Gain on disposal of assets, net ​ ​ (1,563) ​ (0.7) % ​ (685) ​ (0.4) % ​ Operating income ​ 7,781 3.4 % 2,561 1.5 % ​ Other (expense) income: ​ ​ ​ ​ Other income ​ 107 — % 49 — % ​ Interest income ​ 73 — % 21 — % ​ Interest expense ​ (3,617) (1.5) % (3,414) (2.0) % ​ Other expense, net ​ (3,437) (1.5) % (3,344) (2.0) % ​ Income (loss) before income taxes ​ 4,344 1.9 % (783) (0.5) % ​ Income tax expense (benefit) ​ 82 — % (123) (0.1) % ​ Net income (loss) ​ $ 4,262 1.9 % $ (660) (0.4) % ​ ​ Contract Revenues. Contract revenues for the three months ended September 30, 2024 of $226.7 million increased $58.2 million or 34.5% as compared to $168.5 million in the prior year period. The increase was primarily due to an increase in Marine segment revenue related to the Pearl Harbor drydock project, partially 34 ​ Table of Contents offset by lower Concrete segment revenue due to our deliberate efforts to adhere to disciplined bidding standards to win quality work at attractive margins. Gross Profit. Gross profit was $27.1 million for the three months ended September 30, 2024 compared to $19.1 million in the prior year period, an increase of $8.0 million, or 41.9%. Gross profit in the quarter was 11.9% of total contract revenues as compared to 11.3% in the prior year period. The increase in gross profit dollars and margin was primarily driven by i mproved pricing of projects in both segments stemming from higher quality projects and improved execution. ​ Selling, General and Administrative Expense. Selling, general and administrative (“SG&A”) expenses were $20.8 million for the three months ended September 30, 2024 compared to $17.1 million in the prior year period, an increase of $3.7 million or 21.7%. As a percentage of total contract revenues, SG&A expenses decreased from 10.2% to 9.2%. The increase in SG&A dollars reflected an increase in compensation expense, business development spending and legal expenses. ​ Gain on Disposal of Assets, net. During the three months ended September 30, 2024 and 2023 we realized $1.6 million and $0.7 million, respectively, of net gains on disposal of assets. Other Income, net of Expense. Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses. Income Tax Expense (Benefit). We recorded tax expense of $0.1 million in the three months ended September 30, 2024, compared to tax benefit of $0.1 million in the prior year period. We expect near break-even operations for the full year ended December 31, 2024, such that a small change in the year-to-date operations could result in a large change to the estimated annual effective tax rate. Therefore, our effective tax rate for the period ending September 30, 2024, is based off actual year-to-date operations. 35 ​ Table of Contents Nine months ended September 30, 2024 compared with nine months ended September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended September 30, ​ ​ 2024 2023 ​ Amount Percent Amount Percent ​ ​ (dollar amounts in thousands) ​ Contract revenues ​ $ 579,514 100.0 % $ 510,184 100.0 % Cost of contract revenues ​ 518,631 89.5 % 471,488 92.4 % Gross profit ​ 60,883 10.5 % 38,696 7.6 % Selling, general and administrative expenses ​ 60,980 10.5 % 52,271 10.3 % Amortization of intangible assets ​ ​ — ​ — % ​ 383 ​ 0.1 % Gain on disposal of assets, net ​ ​ (1,986) ​ (0.3) % ​ (7,915) ​ (1.6) % Operating income (loss) ​ 1,889 0.3 % (6,043) (1.2) % Other (expense) income: ​ ​ ​ Other income ​ 299 0.1 % 592 0.1 % Interest income ​ 97 — % 90 — % Interest expense ​ (10,336) (1.8) % (7,674) (1.5) % Other expense, net ​ (9,940) (1.7) % (6,992) (1.4) % Loss before income taxes ​ (8,051) (1.4) % (13,035) (2.6) % Income tax expense ​ 347 — % 475 — % Net loss ​ $ (8,398) (1.4) % $ (13,510) (2.6) % ​ Contract Revenues. Contract revenues for the nine months ended September 30, 2024 of $579.5 million increased $69.3 million or 13.6% as compared to $510.2 million in the prior year period. The increase was primar ily due to an increase in marine segment revenue related to the Pearl Harbor drydock project, partially offset by lower concrete segment revenue due to disciplined bidding standards to win quality work at attractive margins. Gross Profit. Gross profit was $60.9 million for the nine months ended September 30, 2024 compared to $38.7 million in the prior year period, an increase of $22.2 million or 57.3%. Gross profit in the nine months ended September 30, 2024 was 10.5% of total contract revenues as compared to 7.6% in the prior year period. The increase in gross profit dollars and margin was primarily driven by improved pricing of projects in both segments stemming from higher quality projects and improved execution. ​ Selling, General and Administrative Expense. SG&A expenses were $61.0 million for the nine months ended September 30, 2024 compared to $52.3 million in the prior year period, an increase of $8.7 million or 16.7%. As a percentage of total contract revenues, SG&A expenses increased from 10.3% to 10.5%. The increase in SG&A dollars and percentage reflecting an increase in IT, compensation, business development spending, and higher legal costs related to pursuing project-related claims. ​ Gain on Disposal of Assets, net. During the nine months ended September 30, 2024 and 2023 we realized $2.0 million and $7.9 million, respectively, of net gains on disposal of assets. The nine months ended September 30, 2023, included a gain of $5.2 million related to the sale-leaseback of our Port Lavaca South Yard property in Texas. Other Income, net of Expense. Other expense primarily reflects interest on our borrowings, partially offset by interest income and non-operating gains or losses. 36 ​ Table of Contents Income Tax Expense. We recorded tax expense of $0.3 million in the nine months ended September 30, 2024, compared to tax expense of $0.5 million in the prior year period. We expect near break-even operations for the full year ended December 31, 2024, such that a small change in the year-to-date operations could result in a large change to the estimated annual effective tax rate. Therefore, our effective tax rate for the period ending September 30, 2024, is based off actual year-to-date operations. Segment Results The following table sets forth, for the periods indicated, statements of operations data by segment, segment revenues as a percentage of consolidated revenues and segment operating income (loss) as a percentage of segment revenues. Three months ended September 30, 2024 compared with three months ended September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ ​ ​ 2024 ​ 2023 ​ ​ Amount Percent Amount Percent ​ ​ (dollar amounts in thousands) ​ Contract revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marine segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ $ 94,719 ​ 67.7 % $ 61,144 ​ 75.6 % Private sector ​ ​ 45,294 ​ 32.3 % ​ 19,769 ​ 24.4 % Marine segment total ​ $ 140,013 ​ 100.0 % $ 80,913 ​ 100.0 % Concrete segment ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ $ 10,782 ​ 12.4 % $ 7,974 ​ 9.1 % Private sector ​ ​ 75,880 ​ 87.6 % ​ 79,589 ​ 90.9 % Concrete segment total ​ $ 86,662 ​ 100.0 % $ 87,563 ​ 100.0 % Total ​ $ 226,675 ​ ​ $ 168,476 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ ​ ​ Marine segment ​ $ 5,485 3.9 % $ 2,001 2.5 % Concrete segment ​ 2,296 2.6 % 560 0.6 % Total ​ $ 7,781 ​ ​ ​ $ 2,561 ​ ​ Marine Segment Revenues for our marine segment for the three months ended September 30, 2024 were $140.0 million compared to $80.9 million for the three months ended September 30, 2023, an increase of $59.1 million, or 73.0%. The increase was primarily related to the Pearl Harbor Project. Operating income for our marine segment for the three months ended September 30, 2024 was $5.5 million, compared to $2.0 million for the three months ended September 30, 2023, an increase of $3.5 million. The increase in operating income was primarily related to the Pearl Harbor Project. Concrete Segment Revenues for our concrete segment for the three months ended September 30, 2024 were $86.7 million compared to $87.6 million for the three months ended September 30, 2023, a decrease of $0.9 million, or 1.0%. This decrease was primarily due to disciplined bidding standards to win quality work at attractive margins. 37 ​ Table of Contents Operating income for our concrete segment for the three months ended September 30, 2024 was $2.3 million, compared to $0.6 million for the three months ended September 30, 2023, an increase of $1.7 million. This increase was primarily due to reduction of lower margin work, winning higher margin jobs due to disciplined bidding standards and improved execution. Nine months ended September 30, 2024 compared with nine months ended September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended September 30, ​ ​ ​ 2024 ​ 2023 ​ ​ Amount Percent Amount Percent ​ ​ (dollar amounts in thousands) ​ Contract revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marine segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ $ 290,995 ​ 77.1 % $ 193,813 ​ 74.3 % Private sector ​ ​ 86,296 ​ 22.9 % ​ 66,941 ​ 25.7 % Marine segment total ​ $ 377,291 ​ 100.0 % $ 260,754 ​ 100.0 % Concrete segment ​ ​ ​ ​ ​ ​ ​ ​ ​ Public sector ​ $ 20,211 ​ 10.0 % $ 17,662 ​ 7.1 % Private sector ​ ​ 182,012 ​ 90.0 % ​ 231,768 ​ 92.9 % Concrete segment total ​ $ 202,223 ​ 100.0 % $ 249,430 ​ 100.0 % Total ​ $ 579,514 ​ ​ $ 510,184 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating (loss) income ​ ​ ​ Marine segment ​ $ (4,847) (1.3) % $ (587) (0.2) % Concrete segment ​ 6,736 3.3 % (5,456) (2.2) % Total ​ $ 1,889 ​ ​ ​ $ (6,043) ​ ​ Marine Segment Revenues for our marine segment for the nine months ended September 30, 2024 were $377.3 million compared to $260.8 million for the nine months ended September 30, 2023, an increase of $116.5 million, or 44.7%. The increase was primarily related to the Pearl Harbor Project. Operating loss for our marine segment for the nine months ended September 30, 2024 was $4.8 million, compared to $0.6 million for the nine months ended September 30, 2023, an increase in operating loss of $4.2 million. Adjusted for the gain on the Port Lavaca South Yard property sale-leaseback in Texas operating loss for the nine months ended September 30, 2023 was $5.8 million. This $1.0 million decrease in operating loss was primarily due to margin improvements stemming from higher quality projects and improved execution. Concrete Segment Revenues for our concrete segment for the nine months ended September 30, 2024 were $202.2 million compared to $249.4 million for the nine months ended September 30, 2023, a decrease of $47.2 million, or 18.9%. This decrease was primarily due to disciplined bidding standards to win quality work at attractive margins. Operating income for our concrete segment for the nine months ended September 30, 2024 was $6.7 million, compared to an operating loss of $5.5 million for the nine months ended September 30, 2023, an increase of $12.2 million. This increase was primarily due to a reduction of lower margin work, winning higher margin jobs due to disciplined bidding standards and improved execution. 38 ​ Table of Contents Liquidity and Capital Resources ​ Changes in working capital are normal within our business given the varying mix in size, scope, seasonality and timing of delivery of our projects. At September 30, 2024, our working capital was $72.2 million, as compared to $55.9 million at December 31, 2023. As of September 30, 2024, we had unrestricted cash on hand of $28.3 million. Our borrowing availability under our revolving portion of our Credit Agreement at September 30, 2024 was approximately $46.1 million. Our primary liquidity needs are to finance our working capital and fund capital expenditures. Historically, our source of liquidity has been cash provided by our operating activities, sale of underutilized assets, and borrowings under our credit facilities. The assessment of our liquidity requires us to make estimates of future activity and judgments about whether we are compliant with financial covenant calculations under our debt and other agreements and have adequate liquidity to operate. Significant assumptions used in our forecasted model of liquidity include forecasted sales, costs, and capital expenditures, as well as expected timing and proceeds of planned real estate transactions. ​ Recent Developments ​ On September 12, 2024, we completed the sale of 5,589,000 shares of common stock, including 729,000 shares of common stock pursuant to an option granted to the underwriters, in an underwritten public offering. We received net proceeds of approximately $26.5 million, after deducting underwriting discounts and other estimated offering expenses payable by us. The net proceeds were used for working capital and for general corporate purposes, including repayment of borrowings under the Credit Agreement. ​ ​ ​ ​ 39 ​ Table of Contents Cash Flow ​ The following table provides information regarding our cash flows and our capital expenditures for the three and nine months ended September 30, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine months ended ​ ​ ​ September 30, ​ September 30, ​ ​ 2024 2023 2024 2023 ​ Net income (loss) ​ $ 4,262 ​ $ (660) ​ $ (8,398) ​ $ (13,510) Adjustments to remove non-cash and non-operating items ​ ​ 8,362 ​ ​ 8,214 ​ ​ 27,874 ​ ​ 16,393 ​ Cash flow from net income after adjusting for non-cash and non-operating items ​ ​ 12,624 ​ ​ 7,554 ​ ​ 19,476 ​ ​ 2,883 ​ Change in operating assets and liabilities (working capital) ​ ​ 22,532 ​ ​ (24,079) ​ ​ (20,163) ​ ​ (31,384) ​ Cash flows provided by (used in) operating activities ​ $ 35,156 ​ $ (16,525) ​ $ (687) ​ $ (28,501) ​ Cash flows (used in) provided by investing activities ​ $ (2,589) ​ $ (1,650) ​ $ (8,722) ​ $ 5,391 ​ Cash flows (used in) provided by financing activities ​ $ (9,150) ​ $ 13,990 ​ $ 6,725 ​ $ 23,207 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures (included in investing activities above) ​ $ (4,157) ​ $ (2,387) ​ $ (10,644) ​ $ (6,678) ​ ​ Operating Activities. During the three months ended September 30, 2024, we generated approximately $35.2 million in cash from our operating activities. The net cash inflow was comprised of $22.5 million of inflows related to changes in net working capital and $12.6 million of cash inflows from net income, after adjusting for non-cash items. The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $11.5 million cash inflow related to an increase in our net position of accounts receivable and accounts payable plus accrued liabilities during the period, $9.4 million of cash inflows pursuant to the relative timing and significance of project progression and billings during the period, and a $4.2 million inflow related to a decrease in prepaid expenses and other, partially offset by a $2.1 million decrease in operating lease liabilities and $0.5 million of other outflows. During the nine months ended September 30, 2024, we used approximately $0.7 million in cash in our operating activities. The net cash outflow was comprised of $20.2 million of outflows related to changes in net working capital, partially offset by $19.5 million of cash inflows from net income, after adjusting for non-cash items. The changes in net working capital, which are reflected as changes in operating assets and liabilities in our Condensed Consolidated Statements of Cash Flows, were primarily driven by a $21.1 million cash outflow related to a decrease in our net position of accounts receivable and accounts payable plus accrued liabilities during the period, a $6.6 million decrease in operating lease liabilities and $0.7 million of other outflows, partially offset by a $4.9 million inflow related to a decrease in prepaid expenses and $3.3 million of cash inflows pursuant to the relative timing and significance of project progression and billings during the period. Investing Activities. Capital asset additions and betterments to our fleet were $4.2 million and $2.4 million in the three months ended September 30, 2024 and 2023, respectively. Proceeds from the sale of property and equipment were $1.6 million in the three months ended September 30, 2024, as compared with $0.7 million in the three months ended September 30, 2023. Capital asset additions and betterments to our fleet were $10.6 million and $6.7 million in the nine months ended September 30, 2024 and 2023, respectively. Proceeds from the sale of property and equipment were $1.9 million in the nine months ended September 30, 2024, as compared with $12.1 million in the nine months ended 40 ​ Table of Contents September 30, 2023. Included in the nine months ended September 30, 2023 was $8.1 million of proceeds related to the sale-leaseback of the Port Lavaca South Yard property in Texas. Financing Activities. During the three months ended September 30, 2024, we had proceeds from an offering of common stock of $27.2 million, borrowings of $10.1 million and repayments of $32.8 million on the White Oak revolving credit line, repayments of $10.0 million on the White Oak term loan, payments on finance lease liabilities of $2.3 million, payments made on failed sale-leaseback arrangements of $0.9 million, $0.4 million of payments related to tax withholding for share-based compensation and repayments of $0.1 million on other debt. During the nine months ended September 30, 2024, we had proceeds from an offering of common stock of $27.2 million, borrowings and repayments of $39.3 million on the White Oak revolving credit line, repayments of $10.0 million on the White Oak term loan, payments on finance lease liabilities of $6.5 million, payments made on failed sale-leaseback arrangements of $3.2 million, $0.4 million of payments related to tax withholding for share-based compensation, repayments of $0.4 million on other debt, loan costs of $0.4 million and a cash inflow of $0.4 million for proceeds from the exercise of stock options. Sources of Capital On May 15, 2023, we entered into a new three-year $103.0 million Credit Agreement with White Oak which includes a $65.0 million asset based revolving credit line and a $38.0 million fixed asset term loan. Please see “Note 9 – Debt” in our unaudited condensed consolidated financial statements for a more detailed description of the Credit Facility. We were in compliance with all financial covenants under the amended agreement as of September 30, 2024. ​ Bonding Capacity We are often required to provide various types of surety bonds that provide additional security to our customers for our performance under certain government and private sector contracts. Our ability to obtain surety bonds depends on our capitalization, working capital, past performance and external factors, including the capacity of the overall surety market. At September 30, 2024, the capacity under our current bonding arrangement was at least $950 million, with approximately $550 million of projects being bonded. While we believe that our current bonding capacity is sufficient to satisfy current demand for our services, any new major project opportunities may require us to seek additional bonding capacity in the future. We believe our balance sheet and working capital position will allow us to access additional bonding capacity as needed in the future. Effect of Inflation We are subject to the effects of inflation through increases in the cost of raw materials, and other items such as fuel, concrete and steel. Due to the relative short-term duration of our projects, we are generally able to include anticipated cost increases in the pricing of our bids.