Orion Group Holdings Inc

(Tabular Amounts in Thousands, Except Share and per Share Amounts)

**1.**Description of Business and Basis of Presentation

Description of Business

Orion Group Holdings, Inc. and its 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 and concrete segments. We are headquartered in Houston, Texas.

Basis of Presentation

The accompanying condensed consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Accordingly, these financial statements do not include certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and should be read together with our 2024 Annual Report on Form 10-K. For the periods presented, there were no items of other comprehensive income.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. Such adjustments are of a normal recurring nature. Interim results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results realizable for the year ending December 31, 2025.

**2.**Recent Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issues accounting standards and updates (each, an “ASU”) from time to time to its Accounting Standards Codification (“ASC”), which is the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers applicability to its business. All ASUs are adopted by their respective due dates and in the manner prescribed by the FASB.

In December 2023, the FASB issuedASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. Adoption of this standard will not impact our financial position or results of operations but is expected to result in expanded tax disclosures in the full year financial statements for the year ended December 31, 2025.

In November 2024, the FASB issuedASU No. 2024-03,Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. The amendments require entities to provide enhanced disaggregation of certain expense categories presented in the income statement, including details on significant components within those categories, to provide greater transparency and decision-useful information to users

of financial statements. The ASU is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on the disclosures within its consolidated financial statements.

In July 2025, the FASB issuedASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments introduce a practical expedient that allows entities to assume current conditions as of the balance sheet date remain unchanged over the remaining life of current accounts receivable and current contract assets arising from transactions within the scope of ASC 606. The ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the impact that the guidance will have on the disclosures within its consolidated financial statements; however, adoption is not expected to have a material impact on the Company’s financial position or results of operations.

**3.**Revenue

Contract revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The following table represents a disaggregation of the Company’s contract revenues by service line for the marine and concrete segments:

The Company has determined that it hastwo reportable segments as described in Note 15, but has disaggregated its contract revenues in the above chart in terms of services provided within such segments. Additionally, both the marine and concrete segments have limited contracts with multiple performance obligations. The Company’s contracts are often estimated and bid as one project and performance is evaluated as one project, not by individual services performed by each.

Additionally, the table below represents contract revenue by type of customer for the three and nine months ended September 30, 2025 and 2024, respectively:

On March 10, 2023, the United States Navy awarded the Dragados/Hawaiian Dredging/Orion Joint Venture a contract to complete the construction of a dry dock at Pearl Harbor Naval Shipyard. The Company’s joint venture with Dragados/Hawaiian Dredging is a related-party transaction. The Company’s portion of work as a dedicated subcontractor totals $461.3 million.

For the three months ended September 30, 2025 and 2024, the United States Navy, included in the Federal Government category, accounted for 15% and 25% of total contract revenues, respectively. For the three months ended September 30, 2024, a customer in the Private Companies category accounted for 10% of total contract revenues. For the nine months ended September 30, 2025 and 2024, the United States Navy, included in the Federal Government category, accounted for 16% and 26% of total contract revenues, respectively.

For the three months ended September 30, 2025 and 2024, the Company’s revenue related to the joint venture subcontract was approximately $33.7 million and $57.2 million, respectively. For the nine months ended September 30, 2025 and 2024, the Company’s revenue related to the joint venture subcontract was approximately $100.4 million and $150.7 million, respectively.

The Company does not believe that the loss of any one of its customers would have a material adverse effect on the Company or its subsidiaries and affiliates since no single specific customer sustains such a large portion of receivables or contract revenue over time.

Contract revenues generated outside the United States totaled 4% and 10% of total revenues for the three months ended September 30, 2025 and 2024, respectively, and 5% and 8% for the nine months ended September 30, 2025 and 2024, respectively, and were primarily located in the Caribbean Basin.

**4.**Concentration of Risk and Enterprise-Wide Disclosures

Accounts receivable include amounts billed to governmental agencies and private customers and do not bear interest. Balances billed to customers but not paid pursuant to retainage provisions generally become payable upon contract completion and acceptance by the owner.

The table below presents the concentrations of current receivables (trade and retainage) at September 30, 2025 and December 31, 2024, respectively:

At September 30, 2025, the United States Navy, which is included in the Federal Government category, accounted for 25% of total current receivables. At December 31, 2024, the United States Navy, accounted for 11% of total current receivables.

**5.**Contracts in Progress

Contracts in progress are as follows at September 30, 2025 and December 31, 2024:

Included in contract net assets (liabilities) is approximately $5.2 million and $19.8 million at September 30, 2025 and December 31, 2024, respectively, related to claims and unapproved change orders.

Remaining performance obligations represent the transaction price of firm orders or other written contractual commitments from customers for which work has not been performed or is partially completed and excludes unexercised contract options and potential orders. As of September 30, 2025, the aggregate amount of the remaining performance obligations was approximately $679 million. Of this amount, the current expectation of

the Company is that it will recognize $547 million, or 81%, in the next 12 months and the remaining balance thereafter.

**6.**Property and Equipment

The following is a summary of property and equipment at September 30, 2025 and December 31, 2024:

Substantially all depreciation expense is included in the cost of contract revenue in the Company’s Condensed Consolidated Statements of Operations. Substantially all of the assets of the Company are pledged as collateral under the Company’s Credit Agreement as discussed in Note 9. Substantially all of the Company’s long-lived assets are located in the United States.

**7.**Fair Value

Recurring Fair Value Measurements

The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. Due to their short-term nature, the Company believes that the carrying value of its accounts receivable, other current assets, accounts payable and other current liabilities approximate their fair values.

The Company classifies financial assets and liabilities into the following three levels based on the inputs used to measure fair value in the order of priority indicated:

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.

Our concrete segment has life insurance policies with a combined face value of $11.1 million as of September 30, 2025. These policies are invested in mutual funds and the fair value measurement of the cash surrender balance associated with these policies is determined using Level 2 inputs within the fair value hierarchy and will vary with investment performance. The fair value of the cash surrender value of these policies at September 30, 2025 and December 31, 2024 was $1.3 million and $1.2 million, respectively. These assets are included in the "Other non-current" asset section in the Company’s Condensed Consolidated Balance Sheets.

Other Fair Value Measurements

The fair value of the Company’s debt at September 30, 2025 and December 31, 2024 approximated its carrying value of $26.5 million and $26.8 million, respectively, as interest is based on current market interest rates for debt with similar risk and maturity.

**8.**Accrued Liabilities

Accrued liabilities at September 30, 2025 and December 31, 2024 consisted of the following:

**9.**Debt

On May 15, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with White Oak ABL, LLC and White Oak Commercial Finance, LLC, providing for a $65 million asset-based revolving credit facility (the “Revolver”) and a $38 million fixed asset term loan (the “Term Loan”). The Credit Agreement, as subsequently amended, matures on May 15, 2028 and is secured by substantially all of the assets of the Company and its subsidiaries, including fixed assets and accounts receivable.

The Company has a maximum borrowing capacity under the Revolver of $65 million and a letter of credit sublimit that is equal to the lesser of $5 million and the aggregate unused amount of the revolving commitments then in effect.

The Company is subject to a commitment fee for the unused portion of the maximum borrowing availability under the Revolver.

As of September 30, 2025, the Company had no borrowings under the Revolver. The Company’s borrowing availability under the Revolver at September 30, 2025 was approximately $41.2 million.

The Company’s obligations under debt arrangements consisted of the following:

The Credit Agreement is used to finance working capital and general corporate purposes, capital expenditures, permitted acquisitions and associated transaction fees, and to refinance existing indebtedness. Borrowings under the Revolver may be repaid and reborrowed, subject to the borrowing base and other conditions.

As amended, the Revolver and Term Loan bear interest at rates based on 30-day SOFR plus applicable margins, subject to a SOFR floor. As of September 30, 2025, the applicable margin is 4.50% for the Revolver and 6.50% for the Term Loan, with a 4.39%SOFR floor.

The quarterly weighted average interest rate for the Credit Agreement, as of September 30, 2025 and 2024 was 10.53% and 11.87%, respectively.

The Credit Agreement contains customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, asset sales, and dividends, as well as financial maintenance covenants. The financial covenants, as amended, include a minimum Consolidated Fixed Charge Coverage Ratio and/or Consolidated EBITDA thresholds and a minimum liquidity requirement, each tested periodically.

Financial covenants

Restrictive financial covenants under the amended Credit Agreement include:

Under the Credit Agreement, the Company may not permit Liquidity (as defined in the Credit Agreement) to fall below $15 million (i) for more than three (3) consecutive Business Days (as defined in the Credit Agreement) nor (ii) as of the close of business on Friday of each week.

In addition, the Credit Agreement contains events of default that are usual and customary for similar arrangements, including non-payment of principal, interest or fees; breaches of representations and warranties that are not timely cured; violation of covenants; bankruptcy and insolvency events; and, events constituting a change of control.

The Company was in compliance with all financial covenants under the Credit Agreement as of September 30, 2025.

**10.**Other Long-Term Liabilities

Other long-term liabilities at September 30, 2025 and December 31, 2024 consisted of the following:

Sale-Leaseback Arrangements

On May 15, 2023, the Company entered into a $13.0 million sale-leaseback of certain equipment pursuant to which the Company leased-back the equipment for terms ranging fromone tothree years. The transaction above was recorded as a failed sale-leaseback.

Concurrent with the sale of Company’s Port Lavaca South Yard property, the Company entered into atwenty-year lease agreement whereby the Company leased back the property at an annual rental rate of approximately $1.1 million, subject to annual rent increases of 2.5%. Under the lease agreement, the Company hasfour consecutive options to extend the term of the lease byfive years for each such option. The portion of the above transaction related to the building was recorded as a failed sale-leaseback.

On September 27, 2019, the Company entered into a purchase and sale agreement (the “Purchase and Sale Agreement”). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold certain properties for a purchase price of $19.1 million. Concurrent with the sale of the property, the Company entered into afifteen-year lease agreement whereby the Company leased back the property at an annual rental rate of approximately $1.5 million, subject to annual rent increases of 2.0%. Under the lease agreement, the Company hastwo consecutive options to extend the term of the lease byten years for each such option. The transaction above was recorded as a failed sale-leaseback.

Related to the failed sale-leasebacks, the Company recorded liabilities for the amounts received, will continue to depreciate the non-land portion of the assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining assets will be zero at the end of the initial lease terms.

**11.**Income Taxes

The Company’s effective tax rate is based on expected income, statutory rates and tax planning opportunities available to it. For interim financial reporting, the Company estimates its annual tax rate based on projected taxable income for the full year and records a quarterly tax provision in accordance with the anticipated annual rate.

Income tax expense included in the Company’s accompanying Condensed Consolidated Statements of Operations was as follows:

The effective rate for the three and nine months ended September 30, 2025 differed from the Company’s statutory federal rate of 21% primarily due to the tax impact from the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.

The Company assessed the realizability of its deferred tax assets and determined that it was more likely than not that some portion or all the deferred tax assets would not be realized and therefore recorded a valuation allowance on the net deferred tax assets. The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company considers the scheduled reversal of deferred tax liabilities, available carryback periods, and tax-planning strategies in making this assessment. For the three and nine months ended September 30, 2025 the Company evaluated positive and negative evidence in determining the amount of deferred tax assets more likely than not to be realized. Based on the review of available evidence, management believes that a valuation allowance on the net deferred tax assets at September 30, 2025 remains appropriate.

The company completed its analysis of the One Big Beautiful Bill Act (“OBBBA”) enacted on July 4th and determined there are no material impacts to the Company.

**12.**Earnings Per Share

The following table reconciles the denominators used in the computations of both basic and diluted earnings per share:

For the three months ended September 30, 2025 and 2024, the Company had 45,325 and 187,235 shares, respectively, that were potentially dilutive in earnings per share calculations. For the nine months ended September 30, 2025 and 2024, the Company had 49,819 and 196,744 shares, respectively, that were potentially dilutive in earnings per share calculations.

Such dilution is dependent on the excess of the market price of the Company’s common stock over the exercise price and other components of the treasury stock method. The exercise price for certain stock options awarded by the Company exceeded the average market price of the Company’s common stock for the three and nine

months ended September 30, 2025 and 2024. Such stock options are anti-dilutive and are not included in the computation of diluted earnings per share for those periods.

The Company reported a net loss for the nine months ended September 30, 2024; therefore, all potentially dilutive securities are antidilutive and are excluded from the computation of diluted loss per share for that period.

**13.**Share-Based Compensation

The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s stock incentive plans. In general, the Company’s Long-Term Incentive Plan (“LTIP”) provides for grants of restricted stock and performance-based awards to be issued with a per-share price not less than the fair market value of a share of common stock on the date of grant. The Company accounts for forfeitures of awards as they are incurred.

In May 2024 shareholders approved the Employee Stock Purchase Plan (“ESPP”), which became effective on September 16, 2024. The Company has reserved a total of 1,000,000 shares under the ESPP, all of which are authorized and available for future issuance under the ESPP. During the three and nine months ended September 30, 2025, there were 82,873 and 154,006 shares, respectively, issued under the ESPP.

The table below presents the share-based compensation expense included in the Company’s accompanying condensed consolidated statements of operations:

Under its approved long-term incentive plan, the Company grants share-based awards to its employees. The following table presents a summary of the Company’s unvested restricted stock awards and performance share units granted under the plan:

On March 20, 2025, the Company granted certain executives a total of 293,073 performance-based units. The performance-based units will potentially vest 100% if the target is met, with 50% of the units to be earned based on the achievement of an absolute adjusted EBITDA target, measured in the final year of athree-year performance period and 50% of the units to be earned based on the achievement of an objective, tiered return on relative total shareholder return, measured over athree-year performance period. The Company evaluates the probability of achieving targeted award levels each reporting period. The fair value of the grants awarded related to the adjusted EBITDA target was$5.89 per share and the fair value of the grants awarded related to the relative total shareholder return target was $8.45 valued using a Monte Carlo simulation model.

The following table presents the assumptions related to the performance share units granted in 2025 related to the relative total shareholder return, as indicated in the previous summary table:

In the nine months ended September 30, 2025, there were 15,000 options exercised generating proceeds to the Company of $0.1 million. In the three months ended September 30, 2024, there wereno options exercised. In the nine months ended September 30, 2024, there were 56,568 options exercised generating proceeds to the Company of $0.4 million.

The following table presents a summary of the unrecognized compensation cost, and the related weighted average recognition period associated with unvested awards and units as of September 30, 2025:

**14.**Commitments and Contingencies

The Company is involved in various legal, audit, and other proceedings that are incidental to the conduct of its business, none of which in the opinion of management will have a material effect on the Company's financial condition, results of operations, or cash flows. Management believes that it has recorded adequate accrued liabilities and believes that it has adequate insurance coverage or has meritorious defenses for these claims and contingencies.

In October 2025, the Company received a sales tax assessment of $15 million from the State of Texas covering multiple periods. The Company believes it has meritorious defenses and based on current facts and circumstances does not believe a loss is probable.

**15.**Segment Information

The Company has determined that it has two reportable segments pursuant to ASC Topic 280, Segment Reporting: marine and concrete, both operating under the Orion brand and logo. The Chief Operating Decision Maker (CODM), identified as the Chief Executive Officer, allocates resources and assesses performance based on these two reportable and operating segments.

In making this determination, management considered both quantitative and qualitative factors under ASC 280-10-50-11, including similarities in products and services, production processes, customer types, distribution methods, and regulatory environments. Although the segments share certain macroeconomic drivers, they are managed separately and have distinct operating results reviewed by the CODM for purposes of resource allocation and performance evaluation.

Each segment has a designated management team responsible for day-to-day operations, and discrete

financial information is produced and evaluated at the segment level.

Segment operating income (loss) is the primary performance measure used by the CODM in assessing performance of the segments. Segment operating income (loss) represents revenues, less direct costs of contract revenues, selling, general, and administrative expenses, and gains or losses on the disposal of assets.

The CODM reviews segment results inclusive of all expenses directly attributable to the respective segments. Interest expense, income taxes, and other non-operating items are not allocated to the segments. The total of the segment operating income (loss) measures equals the Company’s consolidated operating income (loss); therefore, no reconciling items are required between total segment operating income and consolidated operating income.

Marine Segment

Our marine segment provides construction, dredging and specialty services. Construction services include construction, restoration, maintenance, dredging and repair of marine transportation facilities, marine pipelines, bridges and causeways and marine environmental structures. Dredging services generally enhance or preserve

the navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Specialty services include design, salvage, demolition, surveying, towing, diving and underwater inspection, excavation and repair.

Concrete Segment

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.

Segment information for the periods presented is provided as follows:

Intersegment revenues totaled $1.2 million and $0.1 million for the three months ended September 30, 2025 and 2024, respectively, and $2.8 million and $1.8 million for the nine months ended September 30, 2025. These primarily relate to labor and equipment services between the Marine and Concrete segments and are eliminated in consolidation.

**16.**Leases

The Company has operating and finance leases for office space, equipment and vehicles.

Leases recorded on the balance sheet consists of the following:

Other information related to lease term and discount rate is as follows:

The components of lease expense are as follows:

Supplemental cash flow information related to leases is as follows:

Maturities of lease liabilities are summarized as follows:

**17.**Subsequent Event

On October 24, 2025, the Company closed on the sale of its East and West Jones property in Harris County, Texas for a purchase price of $23.5 million. Proceeds will be used to reduce debt and for general corporate purposes. In connection with the sale of the property, the Company entered into an Exclusive Dredge Spoils Agreement with the purchaser which provides the Company with the right to deliver dredge spoils to the property for ten years.