Good morning everyone, and welcome to Orion Group Holdings' Fourth Quarter 2020 Earnings Conference Call and Webcast. My name is Fran Okoniewski, I'm Vice President of Investor Relations, and joining me today are Mark Stauffer, Orion Group Holdings' President and Chief Executive Officer; and Robert Tabb, our Vice President and Chief Financial Officer. Regarding the format of the call, we've allocated about 10 minutes for prepared remarks in which Mark and Robert will highlight our results and update our market outlook. We will then open the call for questions. Through the course of this conference call, we'll make projections and forward-looking statements regarding, among other things, our end markets, revenues, gross profits, gross margin, EBITDA, EBITDA margin, backlog, projects and negotiation and pending awards as well as our estimates and assumptions regarding our future growth, administrative expenses and capital expenditures. These statements are predictions that are subject to risks and uncertainties, including those described in our 10-K, that may cause actual results to differ materially from those statements. Moreover, past performance is not necessarily an indicator of future results. By providing this information, we undertake no obligation to update or revise any new projections or forward-looking statements, whether as a result of new developments or otherwise. Also, please note that adjusted net income, adjusted earnings per share, EBITDA and EBITDA margin are non-GAAP financial measures under the rules of the Securities and Exchange Commission, including Regulation G. Please refer to the reconciliations and definitions inclusive for the most comparable GAAP measures and reconciliation tables accompanying this earnings call within the press release issued yesterday. The press release can be found on our website at www.oriongroupholdingsinc.com. Also for additional discussion of Risk Factors that could cause actual results to differ materially from our current expectations, please refer to our quarterly and annual filings with the SEC, which are also available in the Investors section of our website. And with that, I'd like to turn the call over to Mark Stauffer, President and Chief Executive Officer. Mark?

Thank you, and good morning, everyone. Thanks for joining us today. Today, we'll discuss our fourth quarter and full-year 2020 results, provide updates on the benefits we continue to reap from our ISG and other operational improvement initiatives and discuss our outlook for 2021. I'll begin with an overview of the fourth quarter. Robert will then discuss our financial performance and provide an update on expectations for 2021. Then I'll come back to discuss our markets and provide an update on our ERP implementation before we turn to Q&A. I'd like to start by noting that our operations in Texas resumed this week after being impacted last week by the winter storm. Many of our employees across Texas were affected by the winter storm, and we are working through our HR support programs to provide assistance to our team members most impacted. I'd like to thank our team for their strong performance and ability to overcome obstacles, hardships and challenges this past year. I'm proud of our entire team on all our project sites, vessels, construction yards, shops and field support offices and their continued resilience and commitment to improve our performance. Along with our focus on operation and financial performance, our foremost priority is that all our employees go home to their families the same way they came into work, healthy and injury free. As such, we remain deeply committed to our Target Zero program to support our vision of an incident-free workplace. Turning to our financial results. During 2020, we made significant progress in our financial performance with near record level adjusted EBITDA. This progress is directly attributable to the implementation of our ISG initiatives, especially around labor and equipment efficiencies. Overall, end market demand remains positive, as evidenced by our Q4 year-over-year bookings growth of 30% and the approximately $1.6 billion in bids outstanding at the end of 2020. We continue to see bid opportunities in both our segments, and we expect to see bid opportunities increase as the COVID-19 vaccine rollout intensifies and the headwinds from the pandemic abate. A new infrastructure bill would also add an additional catalyst for bid opportunities. These factors, combined with the operational transformation we've implemented through ISG, support our ability to continue to deliver improved results as we progress through 2021. Now I'll turn the call over to Robert to discuss our financial results for Q4. Robert?

Thank you, Mark, and thanks, everyone, for joining us. Today, I will review the financial results for the fourth quarter 2020, provide an update on the company's liquidity position and discuss the company's full-year 2021 outlook. Starting with the financials. Revenue for the fourth quarter 2020 were $170 million compared to $199.8 million in the fourth quarter of 2019. This decrease was due to the timing and mix of projects in both the Marine and Concrete segments in the current year period. Fourth quarter year-over-year gross profits rose 13.7% to $21.7 million. This increase was a result of continued project execution gains and better labor utilization across both segments. As a percentage of revenues, gross profit margins expanded 320 basis points to 12.8%. Turning to our segments. In the fourth quarter of 2020, our Marine segment had revenues of $97.6 million and an adjusted EBITDA of $13.1 million. This equates to an adjusted EBITDA margin of 13.5%. In the prior-year period, we had revenues of $111.2 million and an adjusted EBITDA of $12.1 million, resulting in an adjusted EBITDA margin of 10.9%. The year-over-year revenue decline was due to timing and mix of projects in the current period. Despite this, we were still able to improve our profitability in this segment as a result of better labor and equipment utilization. Our Concrete segment had fourth quarter revenues of $72.5 million compared to $88.6 million in the fourth quarter of 2019. Adjusted EBITDA for the Concrete segment was a loss of $580,000 compared to a loss of $577,000 in the current year period. Our Concrete segment's year-over-year revenue decline was driven by a decrease in production volumes resulting from the timing of start-ups on certain newly awarded projects. That being said, we were able to more than offset the year-over-year revenue…

Thanks, Robert. Turning to our markets. As I've stated previously, while pandemic-related uncertainty has pushed some bidding opportunities in certain sectors to the right, other end markets continue to function normally, and we continue to pursue projects in both our segments. Our focus is on profitably bidding these opportunities and our ability to adjust between differing end markets continues to serve us well. Additionally, we continue to target select larger and longer duration projects in both segments to provide us with greater operational visibility. In our Marine segment, we continue to pursue opportunities in the public sector at the federal, state and local levels, including port expansion projects, DOT work involving bridges over water, Navy facilities and environmental and flood control projects. We are also continuing to see bid opportunities materialize in the private sector with expected upcoming projects in the energy space and the Caribbean market. In our Concrete segment, we are continuing to pursue project opportunities in functioning end markets, including the tech, e-commerce and large retail sectors. We are also pursuing larger structural projects involving high-rise residential or mixed-use towers similar to those we are currently working on in Austin and Houston. Throughout 2020, the changes we previously implemented through our ISG initiative have resulted in improved operational effectiveness as we focus on labor management, equipment management, project execution and corporate process. In all these areas, we've implemented enhancements and improvements, leading to improved efficiencies and cost control. As part of our push to improve our operational efficiency, we have continued with the process of our new ERP system implementation. This will not only solidify our operational efficiencies, but also allow us to scale these efficiencies as we grow in the future. As a reminder, as a result of the acquisitions we've made, we currently operate on…

Thank you. [Operator Instructions]. Our first question is from Julio Romero with Sidoti & Company. Please proceed.

Hey good morning. Hope you all are well?

Good, Julio. How are you doing?

I'm good. Thanks. So my first question is just on the guidance. I wanted to ask about what are the big swing factors that get you to the high-end of your EBITDA guide range?

Well, I think this is kind of where we are right now. I mean we're coming into the year, we feel good about where we are with respect to the backlog, the bid opportunities we see in front with the comments we made in the remarks. But we've still got the uncertainty around the COVID-19. Our focus is to meet or exceed the guidance, like we did last year. We've got a good plan. We've got good people, a good team. And so we're focused on the kind of the same thing we did in 2020 and just focused on beating it. And certainly, if we see an infrastructure bill, that would be a positive catalyst. But again, we've got functioning end markets now, and we expect those to improve as the year progresses.

Okay. On the ERP implementation, can you just talk about how much investment you're expecting for 2021? And if you're still expecting to realize the full annual benefit beginning in 2023?

Yes. We -- as we previously stated, we think that the total cost is going to be somewhere in the $15 million range once it's all said and done. In 2021, we'll spend somewhere between $4 million and $6 million on the expense side and another $2 million or $3 million on the CapEx side. As far as realizing the benefits, yes, we're still on schedule. We think that we'll be able to start seeing those gains in 2023.

Okay. And I guess just on the ISG plan, can you maybe discuss the labor and equipment efficiencies you saw in the fourth quarter? Can they progress throughout the year? And if so, what's kind of the cadence of that -- of those gains throughout the year?

Well, I think we've kind of seen those in -- throughout 2020. So I think a lot of the improvement we saw in 2020 was related around better control around indirect, the indirect labor, indirect equipment. If we look at Q4, we actually -- we continue to have improvement in indirect, but we actually had a lot of improvement in the production efficiency on the project. So it's a little -- in the fourth quarter, a little more weighted to that, to the project efficiencies, as we noted in the earnings release. But yes, I mean, our focus has been to -- with ISG is to consistently focus on -- or have consistent performance with respect to controlling those costs. I think we've demonstrated that as we went through 2020. Our mission is to keep on that as we go-forward. And I think we're -- we've done a good job with that. And I think as we've kind of noted in the remarks that with the implementation of ERP, that's just going to enhance our ability to manage those costs as we go-forward even better. So right now, it's about consistency. I think we've demonstrated that in the last four quarters. And we just keep on with that to continue to have consistency in our performance.

Okay. I'll pass it on and circle back with any follow-ups. Thank you.

Thanks Julio.

Our next question is from Alex Rygiel with B. Riley FBR.

Thank you. Nice quarter, gentlemen.

Thanks, Alex.

Mark, have you seen any early proposals of the infrastructure bill and how the Army Corps' budget could be impacted? Or possibly, could you address how their budget was impacted in previous infrastructure bills?

Yes. No, it's a good question. And I think a couple of things. One, I think the overall spend on the Corps relative to kind of some of the numbers that we've heard, and right now, we've heard inconsistent things. I think if -- on the President transition website, they're talking about a pretty significant, $2 trillion-type infrastructure bill. So I think a lot remains to be seen about the details of it. But to your -- the latter part of your question, for the Corps of Engineers, relative to whether we see a $1 trillion, $1.5 trillion, $750 billion stimulus, I think the Corps' piece will be relatively small compared to that overall infrastructure bill. But relative to the Corps' budget can be very, very significant. And by way of example, back in 2009, when we had a kind of a stimulus bill -- it's a little bit different than infrastructure, but the stimulus bill, the Corps' budget -- operations budget kind of doubled with the -- so they sort of saw a 100% add to their normal budget with the stimulus. So again, we think it can be very, very significant for the Corps of Engineers. And we think we can see other opportunities through DOT and other transportation, surface transportation projects that could potentially be funded by infrastructure. So we think it will be a very good catalyst for us across our business.

That's great. And then turning to the Concrete segment for a second. Backlog is holding up pretty well. Can you address the intermediate term sort of bidding environment? And do you have any plans to expand this more aggressively from a geographic standpoint?

Yes. So I think the first part of the question is -- yes, I mean, if you go back to the Q2 and Q3 of last year, you saw kind of a pullback in our book-to-bill just as sort of the markets adapted. And as we've said in the remarks, there is -- there are functioning end markets. I think the good news is for us with those -- the end markets that are being impacted, we think that's deferred demand. We think that those projects will eventually come back. So that's a positive for future bid opportunities. But right now, yes, we saw in Q4 very nice bookings for our Concrete business. We've seen that continue on with some of the project announcements you've seen in the first quarter so far. And yes, we are already stretching beyond the Texas borders for bid opportunities. As I've said before, we're -- our mantra internally is to focus on backlog. We're going to focus on the project opportunities that are coming out. But along with all of the work that we've done in our Concrete group in this past year, and really, the improvements and the strides we've made. We are expanding our reach with our potential opportunities with a lot of our customers, and we are currently pursuing work outside the state of Texas, both in Louisiana and in Florida. And we think we'll have some news on that as the year progresses in terms of project wins.

That's great. And lastly, Robert, maybe you could help us to sort of understand the first quarter a little bit in light of sort of the difficult weather in Texas this month and how we should think about sort of revenue and EBITDA or EBITDA margins?

Yes. I think if you're looking at a year-over-year comparison to 2020, I expect the revenue to dip back maybe in that 5% range. I expect us, from a profitability standpoint, to be a little bit closer to break-even than we were in 2020 -- Q1 of 2021. As we laid out that full-year guidance, so we did reflect that pullback in Q1 because of the winter weather. But we think as the year progresses, we'll make it up.

Thank you very much.

Thanks Alex.

Our next question is from Marco Rodriguez with Stonegate Capital Markets.

Good morning. Thank you for taking my questions.

You bet.

I was wondering if maybe you could talk a little bit more about your backlog. On the prepared remarks, it seems like things are going pretty well. You're feeling pretty good about what you have in there. If you can talk maybe about what the margin profile kind of looks like in that backlog. And while I understand that the Concrete backlog is pretty quick turn stuff, if maybe you can kind of help us understand, by the two segments, how that backlog should sort of flow into fiscal 2021.

Well, I think a couple of things. One, we've obviously factored that into what we've talked about with guidance. Again, it depends on the type of work and the projects, the number of bidders on projects. I think, again, we feel good about where we are relative to the macroeconomic factors right now. As we said in the Marine segment, we've got a lot of opportunities in the public sector space. We are expecting, as we said, private sector opportunities to start percolating, and we've already kind of seen evidence of that. And so I think, again, it just -- it depends on the opportunity, whether how competitive the bid pricing is going to be. We'd always like to see that that press upward in our view. But we're focused on pursuing those opportunities -- as we said in the remarks, pursuing those opportunities that we think give us the best option and opportunity given what else is out there to achieve our objective. So we want to focus on the opportunities that are out there, of course, but we also want to focus on those that we think will give us the best profitable projects to achieve our objectives. So again, I think I'll just sum it up by saying, look, we feel comfortable with the backlog and the opportunities we have and I think it supports what we've talked about for 2021. And of course, as always, and I touched on earlier, we're going to focus on beating that out just like we did in 2020.

Got it. And then in terms of the bids outstanding in the quarter, you're at $1.6 billion level there. Can you maybe talk a little bit about that right there? Just I believe in prior conference call, you had discussed the fact that, obviously with COVID, some of the bid markets had kind of been pushed and were kind of slower just because of the decision-making and obviously not having everybody maybe in offices to make these sort of decisions. Are the bids outstanding still sort of reflecting that impact? Or that sort of kind of cleared away for you guys?

I think it's largely cleared away. I mean I think -- again, I think everybody has learned how to work in the COVID environment over the last three quarters. And so I think at the year end, that's a reflection of a -- of kind of a fairly normal churn in the business development process. So our bids outstanding quoted work, it's very dynamic. There's projects coming on, on that. There's projects coming off that. We may bid a project, and then it turns out, it gets reshuffled somewhere in the deck and gets deferred or gets re-bid or you might try something two or three times. All of that's fairly normal. And so I think as we look at that, we feel good. It's up year-over-year versus what we had in our quoted work and bids outstanding at the end of 2019, which was again pre-COVID at that time. It's up over the -- where we saw that at the third quarter. So we think that's a good sign. We did see, as we got in the latter part of the year, an uptick in our book-to-bill. You can see that over 1 for fourth quarter, where we were below 1 in Q2 and Q3. So I think it's indicative of just kind of, I'm not going to say normalization of the end markets, but I will say, of functioning end markets in the environment. And so again, that's a good indicator for us. And again, as we look at that, both at that and the opportunities we see upcoming, we feel good about that. Obviously, we think that can improve even further as COVID starts to abate or at least vaccine rolls out and hopefully, other parts of our end markets begin functioning more normally as a result of that.

Got it. And then another question here on the Concrete business, in relation to your prior remarks or answers around the question, expanding your bids into Louisiana and Florida. Can you maybe talk a little bit about what is necessary from an infrastructure standpoint to support that business, assuming that you start to see -- to win some bids there?

Yes. Well, obviously, it's stepping out from the normal footprint. But in both cases, Louisiana, we have a lot of experience working in the state. It's the neighboring state of Texas. So it's not too far of a distance. And like I said, we've got -- and we have a lot of experience on the Marine side, Marine segment, working in that state. So we feel confident in our team's ability to step into that market. Likewise, with Florida, we've had a big presence in that state for 20 years, and from a legacy perspective, even longer than that. So we've got a lot of infrastructure around that state with our Marine segment. And we're focused on leveraging that that presence with our Concrete group and again, feel very confident in our ability to execute that work.

Got it. And if I can just sneak one last one in, and then I'll jump back in queue. Can you provide an update on the non-operational asset sales, Tampa, Port Lavaca and East and West Jones?

Yes. I'll start with Tampa. There was a hearing with the City Council on February 11. The buyers group asked for a continuous. The City wanted a couple of other concessions made to their designs and their drawings and their plans. So they will reconvene back on April 8, and we'll get an update on what that rezoning is on April 8. As far as the Port Lavaca property, the buyer continues to work with their bank to finalize their funding. We're awaiting pattern and today, wrap up the financing fees, but they're working through that. On East and West Jones, I guess, no real update to report here. I can say that there's been an increase or an uptick in interest and activity. So we feel good where that property is. And we feel comfortable that we'll be able to get a transaction on that property in the next, call it, 6 to 18 months.

Got it. Thanks a lot guys. I really appreciate your time.

Thanks, Marco.

Our next question is from Poe Fratt with NOBLE Capital Markets. Please proceed.

Yes. Just a quick follow-up on the Tampa sale deferred. They're going to come back with a modified development plan. Hopefully, it will be approved by the City Council. If it's not rezoned, is there a drop-dead date on that? And is there a deposit that you -- sort of what are the economics if they walk?

Yes. We have a contract in place, and we're going to go through with the process and the hearing and see where that shakes out. I don't want to, Poe, negotiate over a conference call. But what I can tell you is that we have significant interest in the property beyond the party that we have a contract with. And we feel comfortable that this property is marketable, and we'll get a transaction done.

Just to clarify though, Robert. Is there a drop-dead date there? They -- there were scheduling issues at the City Council where they were talking about potentially going to the April 22 meeting, but the buyer said that they couldn't do that from a contractual standpoint. Can you just address that? And also, do they have a deposit down? Would they forfeit the deposit if they walked?

Yes. Again, we typically -- yes, we typically have drop-dead dates in contracts, and it's fair to say that we do have one there. We do have -- they do have money up on this contract. So again, as Robert said, we don't want to get into negotiating publicly, but there is a termination date if we don't get a transaction done or agreed to an extension, and -- but right now, we're focused on working through the issues with this buyer and the City and getting a transaction closed. As Robert said, we feel this property is very, very marketable, and we will get a transaction done on it.

Great. And then if you could just address the fourth quarter. You were above the range for EBITDA that you gave of $10 million to $12 million. It was all because of Marine. Can you address, one, how sustainable the Marine performance is? And then, second, just clarify what happened with Concrete. It seemed like you had a head start with some of the deferrals that you saw from -- or the shift from the third quarter into the fourth quarter there, yet revenues were down quarter-over -- sequentially. On top of that, profitability was disappointing. Can you just address what happened in the fourth quarter?

Yes. Well, a couple of things. One, on the Marine side. As you know, that -- again, if we look at the full year 2020, we have said previously that we want to consistently be targeting a 10% to 12% EBITDA margin, and we've done that. If you look at 2020, that's the range we are in. Obviously, as we've also said, we want to try to outperform that. And I think you can see that we were able to do that somewhat in the Marine business as well. So again, this has been a huge focus of our ISG initiative that we spoke about earlier. And again, that's our objective, is to keep that sustainable. And again, I think we've demonstrated that through the last four quarters. With respect to Concrete, couple of things. One, we've made tremendous progress in that segment, in that business for us. We've got a great team in place. We continue to make changes kind of from the ISG perspective into the first part of 2020. So again, we're very confident in our team and the progress we've made in -- throughout 2020. With respect specifically to the fourth quarter, again, as Robert kind of mentioned in his remarks, it really has to do with the start-up of projects. Again, if you go back and look at what the book-to-bill was in Q2, Q3, we were substantially less than 1 in the segment. And -- but we -- as we got into the end of the third quarter and as the fourth quarter had a substantial pickup in that work. Again, timing of the start-ups of that -- of those projects drove that. Obviously, we don't report it out this way, but I think it's fair to say that as the quarter progressed, we improved our performance in that division as that work started up. But clearly, a lot of that work started later in the quarter than at the beginning of the quarter as we won that new work. So that's really what went on there. Again, we feel good about the progress we've made in that segment. We still have work to do. As we've said before, we're targeting high-single-digits for EBITDA margins in that business. We're not quite there yet, but we've made big progress in getting there. And again, we've got the right team to make that happen. And we're focused on making that happen.

And then maybe, Robert, in that context, if you could sort of give us an idea to the mid to high $40 million range as far as EBITDA, the mix between Concrete and Marine, that would be helpful if you sort of can give us a ballpark.

Yes. No, Poe, where we are right now is still pretty fluid. We expect continued performance in the Marine segment, but we also expect to take a step forward in the -- on the Concrete side. And as we sit here today and you see the book-to-bill ratio in Q4 for Concrete, they're starting to build up their backlog and have a healthy backlog to burn off. Marine is going to go through a period here where we have good bid opportunities in front of us and some work that we have to go get and some awards that we have to win. As that starts to play out, that margin profile will become a little bit clearer for us. But I think the mid to high $40 million range where we sit today is a good target. As we stated in the remarks earlier, as we get further into the year, we're going to update that number and provide a much targeted number.

Just a follow-up on that, Robert. If you look at the Marine segment EBITDA for -- well, first of all, let's just -- you're excluding ERP spending from that EBITDA estimate, just to clarify, right?

Yes. Adjusted EBITDA does not include ERP expenses.

But Marine EBITDA was $47.7 million. Concrete EBITDA was $6.7 million for the full-year. Can you give us an understanding of Marine is likely to be down, will Concrete be down, too? Or will you be able to enhance the performance of Concrete in 2020/2021 -- or 2021 relative to 2020?

Well, I think the point is, is look, there -- this is where we are today, Poe. We're factoring in the kind of the uncertainty around COVID. We feel good about where we are with respect to the start of the year and awards that we've gotten in Concrete. We've got great opportunities in Marine. Again, we're focused on beating this out like we did in 2020. We've kind of stated what we think the ranges -- the targeted ranges for EBITDA. We want to be in the 10% to 12% range on the Marine side and the high-single-digits on the Concrete side. So look, this is kind of how we see it today. And as we said, we'll update it as we go-forward. But again, we're focused on consistently performing and beating this out, as we did in 2020.

Sounds good. If -- Robert, if you could just give us an idea of what your capital spending level is for 2021. And then also, if you could just -- since SG&A is a little more controllable than other factors, can you just give us an idea of how SG&A looks in 2021 versus 2020?

Yes. So starting with the capital expenditures, we'll guide to $20 million to $22 million, that's inclusive of the ERP spend. But as we say every year, we manage CapEx, we watch it. It ebbs and flows with the business, with the schedule. And we'll continue to manage that. As far as SG&A, I'll talk about it from an adjusted standpoint. We set the target of 8.5%, and we're extremely focused on meeting or beating that percentage.

Great. Thanks for your help.

Thanks, Poe.

Our next question is from Gerry Heffernan with Walthausen & Co.

Good morning everybody. Mark, Rob, Fran thank you for having the call.

You bet.

I guess the backlog is the topic that I'd like to focus on here. And I understand a lot of people have asked the question. Mark, you made the comment that you think the slowdown in the bid process due to COVID is kind of behind us, that people have figured it out. However, if I look at the bid outstanding number that you put in the release of $1.6 billion, that's significantly higher than any number that you have had out there in the last -- for any quarter over the last three years. So that kind of sticks out a little bit. Can you just tell us a little bit more as to why is that number so high and is there any reason not to expect a historical hit rate on that? Also, if you could give us any color as to how that breaks out between Concrete and Marine and how that break-out may be different from previous periods.

Yes. So I think the -- I'll take the last one first. The break-out is pretty -- it's weighted towards the Concrete business because that's kind of just the nature of it. Concrete, we've bid a lot more volume of work because we're bidding -- just the nature of how that business works and as a subcontractor and in order to get -- the hit rate is a little bit lower. Our targeted hit rate is a little bit lower in the Concrete business. So we tend to bid -- two things, we bid more volume in that business, number one. And number two, the duration that the bids are outstanding before there's a decision on it is typically a little longer. So none of that's changed in -- from prior quarters. That's consistent. On the Marine side, again, the -- it's less weighted. That number outstanding is less weighted to the Marine side. And the cycle of quoting the work and getting a decision on it is typically much quicker, particularly one of the things that drives that on the Marine side is the public sector work largely, you know, when you bid it. There's a lot of open bid reads then you know exactly then with certainty, whether you're the apparent low bidder or not. With one of the other things that's driving that, though is as, again, we are selectively targeting larger, longer duration projects in both businesses. So if you think about it from the Concrete side, the structural work, which is work that we talked about, is we're focused on expanding our structural market share. So therefore, there's more of that work that we're bidding in the bid process. And those are larger projects. So that that contributes to that. Likewise, on the Marine side. As we've evolved and grown and increased the size of some of the projects that we're currently working on, we're pursuing more larger projects in that group as well. So that's going to impact the overall outstanding number as well.

Okay. Okay. I understand the idea for the Marine side of targeting the larger, longer duration programs -- projects. Are they out there, right now? I mean are those -- are we limiting ourselves as to what we're able to win here because of the desire for a certain demographic of a project?

No. So just to be very clear, we're still pursuing all levels of projects. I mean our dive group is literally pursuing $50,000, $100,000 projects. We continue to blanket the -- all sizes of projects, whether it's a couple of million dollars or $10 million or $25 million. So there is the mix of the work out there right now. And it varies. There's large port development projects out there. There's DOT bridge work that's out there. There's work for the U.S. Navy that's out there that is in the realm. We expect, again, as the Caribbean market improves with the improvement of COVID, there are some potential large projects there as well. So there is a good mix of work at all levels that drive what we go after. We're not exclusively -- I'll say it in a different way. We're not excluding anything whether it's large or small. If it makes sense for us and it's a good project for us and we think it helps us achieve our objectives, then it's something that we target. If it doesn't, we don't. And again, there's projects in that description at all levels, large and small.

Okay. All right. In regards to the guidance, Robert, you said the mid to high 40s for EBITDA -- adjusted EBITDA. You cited the comparability issue to the current year, which came in at $54 million due to the sale -- gain on sale of assets, correct?

Yes, that's correct.

Okay. And we had about $9 million of income from the sale of assets. So just to be clear, for the guidance, you're assuming zero as far as gain on asset sales?

Well, in that $54 million of EBITDA, $2.8 million in Q3 was already removed out of it. So if you normalize the $9 million for that $2.8 million, then you back it out of the $54 million that will give you a pretty good number.

I'm sorry, you lost me. What was the -- we have -- on the year-to-date -- or total year, we have $9 million in EBITDA?

No. So you had $9 million of gain on the sale of assets. If you back out the $2.8 million from the Waymon Boyd incident, and then you use that number to back off of the $54 million that will give you a pretty good year-over-year comparison.

Okay. So I backed it out. I'd bring the -- I normalized the EBITDA number. And it kind of seems, for all intents and purposes, you're looking for a flat year on an organic basis in 2021 versus 2020 adjusted EBITDA number. Would that be correct?

Yes. Yes.

From where -- again, from where we stand today based off of factoring in the uncertainty around COVID, again, focused on beating that out like we did in 2020. And then as things progress in the year, we'll update.

Understood. Understood. Yes. So it's as a matter of what we see here and now and being appropriately balanced as far as how good things can be given that COVID is still a real issue. I just want to make sure the -- that I understood the comparison now. And really, I guess it's -- if the backlog in Marine was -- we were able to have a better scenario there. Can you tell us about how you see the Marine business as far as big picture industry? Excluding any possibility of an infrastructure bill, just is it an improving industry?

Well, yes. I mean, I think, again, as I've said on prior calls, the long-term drivers, we feel very positive about. Again, some of those have been impacted by COVID. But if we look across both in the public and the private sector, we think that the drivers are there for the long-term. Again, there's a tremendous amount of infrastructure in the Department of Defense. There's recurring dredging that needs to be done year in, year out. In my view, the Corps is getting a lot more effective in executing their work. We'd like to see make some improvements maybe in the pace at which they did work. But I think there's a lot of that work that's going on and that is recurring work. Again, I think the energy space is still going to be a driver of opportunities. We're still producing a lot of energy domestically, and I think that's going to continue even with maybe some of the changes in this new administration. There's still going to be a lot of energy produced domestically that has altered the supply chain dynamics that are driving opportunities for us. There's -- even without an infrastructure bill, there's still DOT funding and DOT work that's out there. And again, in the private sector as well, we think there's a lot of pent-up demand in the recreational space and that's going to drive opportunities in the Caribbean. That's a classic case of where we see those opportunities as not going away. They just kind of slid to the right with COVID. But we think they'll come back. We think the demand for that is about ready to bust loose, as we kind of see it.

Okay. Great. And if I could change focus for a second and jump over to the balance sheet. Certainly, your leverage is way down. That's very comfortable. You're going to be generating cash again next year. How do we see the formation of the balance sheet? I guess I'm most interested in how do you see the current bank agreement that you have, which, unfortunately, has -- still has some restrictions as far as capital allocation decisions that you guys can or cannot make. Can you update us as to what the status of that is?

Yes. So as far as the banking relationship, it's in a good place. We're at a good leverage ratio, well within covenant compliance. A lot of those restrictions that you're talking about, they will alleviate here in the next several months. But it is something that we're looking at as we look at our overall strategy for the company. And where we stand today, I think our banking relationship is more than adequate and supportive of what we need to execute this year. But we'll look into that, and we'll be looking to make adjustments as needed.

And then, Gerry, I would add to that, too, is I think I said this on the remarks last time and touched on it a little bit this time. Again, we've been focused on that balance sheet and strengthening it and cash flow generation. Obviously, we've got the real estate transactions hanging out there, which are just going to improve us even further. But the way we look at that as that opens up a lot of options for us. And with respect to capital allocation, to your point, and we think that's a good place to be. So I think in executing our strategy or otherwise deploying capital, we expect to have a lot of options as we go through the year here.

Well, Mark, I appreciate that. I really do. I guess the biggest sticking point is the inability to repurchase shares, which, when you're trading at just round numbers, call it, 5 times EBITDA, in my opinion, seems to be a very low valuation. A very good investment to be buying a quality company at 5 times EBITDA, particularly if you see things on the verge of getting even better. Having that credit agreement out there that restricts dividends and/or buybacks, to me, seems like it's something that should be taken care of as soon as it's possible to be taken care of.

Yes, yes. I hear you.

Okay. Hey, thank you very much for the time today. Good luck going forward.

Thanks, Gerry.

This does conclude our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Thank you, everyone, for joining our fourth quarter earnings conference call. We look forward to talking with you again in late April for our Q1 earnings results. Thank you.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.