← Back to ORN filing summaryOriginal filing text · Part I
Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Orion Group Holdings Inc · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
View complete filing on SEC EDGAR ↗This is the extracted source text from the SEC filing. Formatting may differ from the original document.
In the normal course of business, our results of operations are subject to risks related to fluctuations in commodity prices and fluctuations in interest rates. Historically, our exposure to foreign currency fluctuations has not been material and has been limited to temporary field accounts located in foreign countries where we perform work. Foreign currency fluctuations were immaterial in this reporting period.
Commodity price risk
We are subject to fluctuations in commodity prices for concrete, steel products and fuel. Although we routinely attempt to secure firm quotes from our suppliers, we generally do not hedge against increases in prices for commodity products. Commodity price risks may have an impact on our results of operations due to the fixed-price nature of many of our contracts, although the short-term duration of our projects may allow us to include cost increases to the pricing of our bids.
Interest rate risk
At June 30, 2026, we had $78.0 million in outstanding borrowings under our UMB Credit Agreement, with a weighted average ending interest rate of 6.12%. Based on the amounts outstanding under our UMB Credit Agreement as of June 30, 2026, a 100 basis-point increase in SOFR (or an equivalent successor rate) would increase the Company’s annual interest expense by approximately $0.8 million. Also, we have entered into interest rate swaps to hedge the variability in the interest payments on the principal amount of the acquisition term loan outstanding under the UMB Credit Agreement. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. See Note 10 — Debt to the unaudited condensed consolidated financial statements for additional information regarding the UMB Credit Agreement and related interest rate swaps.