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The third quarter was a tough one for Houston-based Orion Marine Group, a civil marine contactor, and the company pointed to the firm's Tampa office for most of its problems.
Officials at Orion, awarded a $12 million maintenance-dredging contract from Port Tampa Bay in May, say they remain confident in the firm's long-term market outlook. But in the third quarter, say company executives, five projects run out of the Tampa office went overboard in costs, estimates and time frames. The problems, the company says in a statement, “are a result of a vacuum in the Tampa office's operational leadership” after COO James Rose died in January, at 50 years old. Rose had a “significant influence over” area operations, the firm adds.
The problematic Tampa projects weren't specifically identified in company filings or conference calls.
Orion, in a statement late last month, says impacts from the underperforming Tampa projects, along with some other issues, will cause a third quarter loss of 25 cents to 30 cents a share. The company is scheduled to officially announce third quarter earnings Nov. 5.
Shares of the firm also suffered following the earnings warning. The stock dropped 7.13% in the last week of October, and was hovering near its 52-week low of $3.84 in early November. Shares closed Nov. 3 at $3.94.
Orion officials say fixes to the problems are underway. They have realigned the operations and project management for the Tampa office, and implemented a cost reduction program, according to the statement. The firm also recently appointed marine contracting industry veteran Dwayne Breaux to the vacant COO post. Orion, which does work from Alaska to the Caribbean Basin for both public and private clients, had $385.8 million in revenues in 2014.
“I'm extremely disappointed with the recent developments in Tampa,” Orion Marine President and CEO Mark Stauffer says in the statement. “As the CEO of a company that prides itself on successful project execution, this situation is completely unacceptable. In our history, we have never had this level of problems on projects, and I am taking aggressive action to ensure we will not have this issue in the future.”
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