Orion180 Insurance Group, Inc. Class A

Revenue for the third quarter of 2022 was $99.8 million, versus $24.8 million in the third quarter of 2021. Adjusted EBITDA was a loss of $14.6 million, versus a loss of $6.3 million a year ago. GAAP loss from continuing operations was $1.22 per share, compared with a loss of $0.15 per share in Q3 2021. By segment, Electric Power revenue was $36.7 million with $6.1 million of adjusted EBITDA; Telecommunications revenue was $24.1 million with $4.5 million of adjusted EBITDA; Renewables revenue was $39 million with a $20.6 million adjusted EBITDA loss. Total backlog was $472.3 million, down 4.6% sequentially. Full-year 2022 guidance was lowered to revenue of $350 million-$375 million and adjusted EBITDA of $4 million-$6 million; segment guidance calls for Electric Power revenue of $155 million-$160 million with adjusted EBITDA margins above 20%, Telecommunications revenue of $85 million-$90 million with mid-teens margins, and Renewables revenue of $110 million-$120 million with no additional material losses expected at this time.

Jim O’Neil said he was disappointed by the guidance cut and blamed most of the shortfall on ongoing losses in Renewables, especially the Black Bear solar project. He stressed that Electric Power and Telecommunications have continued to deliver profitable growth, and said the company is moving away from fixed-price EPC solar work toward a subcontractor model with more predictable and recurring profitability. His tone was cautiously optimistic, with repeated emphasis that a balance-sheet solution could be in place by year-end.

Nick Grindstaff highlighted the quarter’s hard numbers: $99.8 million in revenue, a $14.6 million adjusted EBITDA loss, and a $1.22 per-share loss from continuing operations. He said the Renewables segment’s $20.6 million adjusted EBITDA loss was the main driver, and noted that without Renewables the company would have generated $6 million of adjusted EBITDA, or a 9.9% margin. He also said backlog ended at $472.3 million, holding company costs were $4.6 million in the quarter, and 2022 holding company costs are expected to be $16 million. On guidance, he reiterated the reduced full-year ranges and said the company is in the advanced stages of balance-sheet restructuring with multiple capital providers.

Analysts focused on whether fourth-quarter EBITDA needs are realistic after the guidance cut, and management said the improvement depends mainly on Black Bear losses being near completion and on stronger Electric Power and Telecom performance. Questions about the renewables pivot centered on visibility, margins, and backlog; management said the new model should improve visibility somewhat, avoid a joint venture partner, and produce better margins than the old EPC approach, with some projects in the $20 million-$25 million range. On Telecom, management said most work is negotiated rather than bid, and on Electric Power they did not expect a material hurricane-related windfall, only some additive margin from work already performed.