Orion Group Holdings Inc (NYSE:ORN) has announced the termination of a previously agreed land purchase deal. On Monday, the company was informed by Capital Development Partners Acquisitions, LLC that the agreement to buy approximately 341.3 acres of land in Harris County, Texas, has been cancelled.
The land, known as the East and West Jones property, was set to be acquired by a subsidiary of Orion Group for a purchase price of about $30.5 million. The transaction, initially disclosed in a July 2, 2024 filing, was supposed to expand Orion's asset base in the region.
Orion Group Holdings, specializing in heavy construction and marine projects, has not disclosed any immediate plans following the termination of this agreement. The company, headquartered in Houston, Texas, has a diverse portfolio that includes construction services for marine transportation facilities and infrastructure.
In other recent news, Orion Marine Group's financial performance has been a topic of interest. The company reported Q2 2024 revenues of $192 million and an adjusted EBITDA of $5.5 million. However, due to project delays, the annual guidance has been revised to a revenue range of $850 million to $900 million and an adjusted EBITDA range of $40 million to $45 million.
B.Riley, an analyst firm, has adjusted its outlook on Orion Marine Group, reducing the price target from $11 to $9 but maintaining a buy rating. This comes in response to the company's recent secondary offering of 4.89 million shares at $5.15 each, which raised $25 million in capital. The capital raised helped Orion Marine Group comply with a credit agreement with White Oak, avoiding potential penalties.
Orion Marine Group also announced the pricing of its public offering of 4,860,000 shares at $5.15 each, aiming to raise approximately $25 million before expenses. The funds are intended for working capital and other general corporate purposes, potentially including debt repayment. Craig-Hallum Capital Group and Roth Capital Partners are managing the offering.
Despite the challenges, Orion Group Holdings maintains a strong backlog and awarded work totaling $876 million. The company has secured significant project contracts with Port Everglades, Port Tampa Bay, and Costco Wholesale (NASDAQ:COST). It is also actively pursuing additional phases of Costco projects in Florida and Texas.
InvestingPro Insights
Amid the recent announcement of Orion Group Holdings Inc's (NYSE:ORN) terminated land purchase deal, current and potential investors might be seeking a deeper financial understanding of the company. According to InvestingPro data, Orion Group Holdings has a market capitalization of approximately $260.06 million. The company's revenue over the last twelve months as of Q2 2024 stood at $722.91 million, with a modest revenue growth of 0.33%. Despite the challenges, the company's gross profit margin remains at 10.49%, indicating some level of efficiency in its operations.
InvestingPro Tips suggest that Orion operates with a significant debt burden and may struggle with making interest payments, which could be a concern given the recent termination of a major investment deal. Moreover, the company's stock has experienced high volatility, with a significant return over the last week but a considerable decline over the last three months. On a positive note, net income is expected to grow this year, and analysts predict the company will be profitable within the year. For a comprehensive analysis, there are additional InvestingPro Tips available that could provide further insights into Orion's financial health and future prospects.
These financial metrics and expert tips from InvestingPro can help investors better assess the risks and opportunities associated with Orion Group Holdings, especially in light of its recent strategic shift. For those looking to dive deeper, more InvestingPro Tips can be found at https://www.investing.com/pro/ORN, offering valuable guidance for making informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.