The Omega Report (Volume 2, Issue 2)

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THE

OMEGA REPORT Success, despite costly challenges Omega Construction looks optimistically at 2021, trusting our business will build on what we have achieved in previous years, despite rising material costs, and an epidemic that is continuously affecting the construction industry. Omega is adapting to changes and maneuvering client relationships that have also changed as a result of pricing inflation, schedule adjustments, and an ever-changing future.

THIS PUBLICATION Find up-to-date news on our portfolio of projects, staff announcements, and messages from our leadership.

the omega report

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volume two, issue two

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2021

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A MESSAGE FROM LEADERSHIP Material price volatility

BARRY HENNINGS President

We are continuing to be faced with unprecedented times.

First the pandemic in 2020, now material price volatility.

The pandemic concerns continue to ease as vaccinations are carried out and the States are opening back up.

Georgia lifted most all social distancing requirements in early April while North Carolina is set to lift most of its social distancing requirements by June 1st. As the Pandemic lessens, we are seeing a robust economy as business opportunities are abundant and backlogs are approaching all-time highs. In a recent article, ABC’s Chief Economist, Anirban Basu stated “The surprisingly strong economic recovery has brought projects that seemed dead back to life. The boom in e-commerce and other tech segments has also produced greater levels of demand for construction of fulfillment and data centers.”

We are seeing this increased demand particularly in our Industrial Division as there are more opportunities than we have resources to respond with.

As the economic principle of Supply and Demand comes into play, the market responds to the high demand, and the construction industry is faced with some of the most volatile material pricing and availability issues that we have seen in our careers. How does this material volatility affect our business?

Let’s take a quick look at how it impacts our business through the following: •

Lost Profits

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Delayed Revenue

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Customer Relations

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Delayed Projects

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Cancelled Projects

projects – current pre-engineered metal building deliveries are being quoted as 32 weeks from time of order. This time frame has typically been 12-14 weeks in the past.

Delays in deliveries equate to delays in billings/revenue.

Customer Relations We are fortunate to have many great customers and are committed to doing everything we can to be a customer advocate. When we have to be the bearer of bad news in delivering budget pricing or bids on projects in this current volatile environment, it can create tensions when the pricing delivered is so far outside the pricing that customers have been accustomed to seeing over the past 12-18 months. Imagine having to deliver the news that steel prices have increased almost 18% in the last 30 days... We have had budget updates on projects where we have seen a 50% increase in steel over a 4-5 month time period.

Delayed Projects Project Owners are receiving pricing on their projects that is dramatically higher than expected, and with time frames being extended due to availability (current joist and deck deliveries are being quoted as 10-12 months from placement of order vs. typical 10-12 weeks in a normal market). This price and schedule volatility has caused many owners to press pause on their projects, waiting to see if there will be some relief as material supply chains try to catch up with the current high demand.

Cancelled Projects And in the worst case, projects that would have been viable with normal material price and delivery schedules may get cancelled as owners decide they simply cannot make a return on their money with the current market conditions.

Lost Profits Anything we have under contract that has not been bought out is subject to price increases, thereby, reducing profits. If six months ago we estimated needing 25 sheets of ½” OSB on a project at the then current price of $22.00/sheet, we now must purchase this same OSB at $34.00/sheet, reducing profits by the increase in price - in this case, $300. Even worse is not tying down a major subcontractor, only to find out they will not honor their bid price and we must go back to the market and absorb the price to find a replacement subcontractor.

Delayed Revenue On projects we have under contract, if we don’t put work in place, naturally, we cannot bill for it. With the material availability issues we are seeing on many items, these delays are causing schedule slippage, which in turn, delays billings and ties up resources longer than necessary. Even on new projects awarded, material delays are pushing out the time frame to complete

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Many factors come into play as we move through these unprecedented times of material volatility. We are fortunate that our backlog is strong and we have great relationships with our customers and subcontractors/ suppliers, as we continue to deal with these issues. Rest assured, we will do everything in our power to protect our employees, our customers, and Omega Construction as we navigate through this continuously challenging environment.

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wise words for company communications

Greg marshall Chief Financial Officer

A Project Manager that I used to work with had a sign in his office that said something like “If it isn’t written down, it didn’t happen.” Unfortunately, that gets more and more true all the time. And I can tell you from the mediations, arbitrations and litigation I have been involved in through the years, it’s never more true than when there is a dispute. In fact, lack of written documentation is the cause of many disputes. Lack of written documentation not only allows people to have “convenient memories,” but even when people have honest intent, with all the information we are bombarded with every day, when something is not written down, it’s easy to forget or not remember correctly.

As Barry pointed out in his article, material price volatility and availability issues are greatly impacting our industry at the moment and pose a risk for Omega. One of the best ways to mitigate that risk is to buy out projects as quickly as possible with fully executed agreements (subcontracts, lump sum purchase orders (LSPO), etc.).

Once we have a fully signed agreement with a sub or supplier on our standard agreement form, we have them effectively locked in for price and delivery as much as legally possible. Letters of intent can work to some extent but aren’t nearly as binding as one of our fully signed agreements. Unless there is some unusual reason that there is not time to issue a subcontract or LSPO, letters of intent should not be used to tied down subs or suppliers.

There is a common misconception that if we only have a letter of intent from the project owner, we can’t issue subcontracts or LSPOs and have to issue letters of intent to subs and suppliers. Nothing could be further from the truth. Our subcontracts and LSPOs have very clear language regarding what happens if the project doesn’t go forward, and limits our liability to the sub or supplier significantly more than a letter of intent.

Once subcontracts, LSPOs, etc. are sent out to subs or suppliers for execution, it is very important that we follow up to make sure they are signed and returned, ASAP. Until the document is returned signed, we only have an offer, not a contract, and the sub or supplier can back out of it, leaving us in a bad spot. Because that is so important, over the last few weeks, we have set up weekly email notifications from Viewpoint to project managers and subcontractors to remind them to return signed documents to us. I know this causes more email communications, but it’s imperative in the current environment that we have signed commitments from subs and suppliers. We can and have gone after subs with litigation for backing out on subcontracts after they have already started some work, and we have won, but we still lost money due to the cost and time required for litigation.

Documentation is important with project owners and architects, as well. Over the last couple of years, we have implemented our Weekly Report for all projects to provide more clear communication and documentation to owners, architects and Omega’s project and executive management. The weekly reports are invaluable to keep everyone informed of project progress and critical items.

Most of our customers have been highly complementary of our weekly reports and the reports are an added value differentiator that many of our competitors do not

provide. Should we have to go to litigation on one of our projects, I can tell from experience that our weekly reports will be important evidence that should help our position significantly. The weekly reports take time to put together, so we appreciate the time investment project managers put into them and continue to look for ways to streamline the process.

Another critically important part of project documentation are Daily Logs and job site photos. They are invaluable to project managers in following job progress and preparing the weekly reports. I hate to keep mentioning litigation, but in nearly every litigation or arbitration I’ve been involved in, Daily Logs and progress photos, or the lack of them, have played a key role.

There is nothing better to document what happened on a project with, than contemporaneous Daily Logs and photos. Even when litigation is not involved, we often find ourselves going back to look at Daily Logs and photos on completed projects to resolve issues and to try to solve issues on current projects. Again, we are very appreciative of the time commitment our superintendents put into Daily Logs and photos. We are very close to rolling out a new, more-streamlined version of the Daily Log that is being tested by some superintendents currently. Thanks to Matthew Cave, Patrick Casstevens, Elly Bledsoe and the Safety Committee for their work on streamlining the Daily Log. We also plan to roll out a new, easier method to upload project photos later this year.

Finally, as much as we all seem to get swamped with emails, it’s important to point out that they are a very important documentation and communication tool in today’s business world. I deal with so many different issues on different projects each day, that later on, I tend to forget or be fuzzy on the details of particular situations, so I rely on emails to refresh my memory on nearly a daily basis. Often, when I have an important phone call or conversation, I follow up with an email to the person or persons I talked to, in order to document what was said and make sure it is clear. Emails don’t need to be lengthy; in fact it is much better if they are short and to the point. Later on, they will provide documentation of conversations to help everyone remember details and prevent “convenient memory.” And remember, to help cut down on email clutter for everyone, only copy people on emails that need to be involved or informed.

Communication and information are vitally important to our business – they are an important part of everything we do, on a daily basis. The pace of the current business environment means that we are all inundated with so much communication and information that it is hard to keep up with it all. So today, probably more than ever, it is important to make sure we have proper documentation, important communication, and relevant information. We continue to look for ways to make this process easier and more effective for everyone at Omega, and suggestions are always appreciated.

Thanks for all you do to help Omega build trust.

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HUMAN RESOURCES HR Update Our annual performance reviews have started in April. Performance reviews are an opportunity for us to step back from the day-to-day tasks to review past accomplishments and set clear goals for the future. Our people are our biggest asset, and to be successful, people need to know how they’re doing and how they can improve. It’s also an opportunity to celebrate accomplishments and think about how we can develop professionally. Thank you all for the work that you do every day and for making Omega successful. Stay tuned for further information about our reviews. As a reminder, our Employee Benevolence Fund needs more donations. Employees can donate on a one time or recurring basis by submitting a request on the Intranet or by emailing Patrick Casstevens or Lisa Singleton. Also, we are constantly looking for great people to add to our Omega family. Current employees can receive a bonus for referring candidates to Omega. Please see the Employee Referral Program on the Intranet for additional details.

WELCOME TO THE TEAM WE ARE PROUD TO WELCOME THE FOLLOWING TEAM MEMBERS TO THE OMEGA FAMILY:

Bill brown

Superintendent

james bell

40 under 40

PATRICK CASSTEVENS

Director of Safety/Human Resources Omega Construction congratulates Patrick for earning a spot as one of the top 40 Under 40 leaders in the triad, recognized by Triad Business Journal!

He is very involved with every Omega employee, and is an integral part of Omega’s company leadership team.

Thank you for building trust, Patrick.

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Assistant Superintendent

matt kyper

Project Engineer

omega TRUST academy Our TRUST Academy is continuing to work through the construction divisions set out under the Master Format by CSI (Construction Specifications Institute). Our last module was covered on March 12, 2021. Eric Misenheimer from Chandler Concrete discussed Concrete Material Technology and Practices. Participants learned about concrete ingredients, material properties, mixtures, production, environmental conditions, etc. Our next scheduled module is set for May 21, 2021 and will continue with the concrete subdivision. Thank you for your continued support!

“We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.” – Aristotle

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HUMAN RESOURCES EMPLOYEE SPOTLIGHTs Why did you join Omega?

I worked for John S. Clark for fifteen years, and Barry asked me to join him at Omega about nine years ago.

What do you love most about Omega?

nature of the work.

They keep me busy all the time. I enjoy the

If you could choose anyone as a mentor, who would it be? My mom… I’ve

learned a lot from her and she encourages me to be a better man and take care of myself.

I look up to her. I just talked to her last week.

Who inspires you?

Taurino Medrano

My grandkids… I raise them and watching them smiling, laughing, and playing after work makes my day.

Foreman

Why did you join Omega? I saw an opportunity to contribute long-term. While

Omega needed some of the skills I already had, I am always encouraged to learn new things and to take on more responsibility.

What do you love most about Omega? At Omega I never feel like my potential is limited or stagnant.

How do you define success? If I could achieve it, success would be prioritizing my family, my health, and my hobbies, while still delivering great results at work.

What is a fun fact about you that not many know? I am an amateur, selftaught taxidermist, and it shows, LOL!

Kelly Gubenko Georgia Office Manager

Kelly recently mounted one of Todd Mayo’s prized ducks! He resides at the Georgia office, currently.

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RECENT HAPPENINGS

At Omega, we not only build trust on the jobsite but in our lives outside of work and in our communities, too! Check out some recent employee news.

omega Spreads joy and cheer with “Random acts of kindness” office event The Omega offices participated in an event benefiting Habitat for Humanity, as money was earned for donation with each act of kindness! Beginning February 6th, employees made intentional efforts to act in kindness as much as possible in and out of the office - and around 50 acts were reported during the two week event! Other acts of kindness included paying it forward in a drive-thru, cleaning up litter on the road, walking the elderly neighbor’s dog, helping the neighbor cheer up after surgery with their favorite homemade desert, babysitting your neighbor’s children while the parents took one injured child to the emergency room, helping a friend move houses, and more! Thank you to all who chose to spread kindness and joy during this event!

FEB 6-21

Handmade dessert for a friend “Knowing Lee Cook likes to eat at the Angus Barn in Raleigh, this weekend during the Super Bowl, I attempted to make their famous Chocolate Chess Pie and brought Lee a piece this morning.” - Barry Lee’s response: “This act of kindness deserves more than one entry.”

donuts for my co-workers “Nothing like hot fresh donuts in office to start your morning off right... just because!” - Adelle

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Filling in for sick nursery worker “While caring for other people’s babies is far from my comfort zone, I served in this area one Sunday morning recently, when help was needed last minute.”

- Amber

Total Acts

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Donation

$100

Thanks for spreading the love!

rescuing a hurting animal, gaining a forever pet We’ve never rescued a dog before and never thought about taking in an older dog but have zero regrets. Lacie is doing great. She is getting accustomed to her new home and has quickly become a part of the family. -Jeff

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DIVISIONAL UPDATE

At Omega, we have four divisions: Triad, Retail, Industrial, and Georgia. Vice Presidents oversee divisional projects, team members, and marketing initiatives. Omega sincerely thanks each Vice President for the significant contributions they make, daily. We are proud of the leadership in place and highlight recent divisional achievements. Let’s hear from Dustin Hunter, VP of the Retail Division.

dustin hunter retail division

“Despite pandemic-related delays and material price increases, 2021 continues to be a busy and successful year for the Retail Division. Historically, our primary focus has been food-store-anchored shopping centers, but over the past few years, we have seen opportunities diversify, making way for a new sector in our retail portfolio. This new sector includes multiple small-box clients and tenants including 7-Eleven, O’Reilly Auto Parts, Advance Auto Parts, and AAA Fins Car Washes. These projects provide a steady source of revenue for the Retail Division, and through our project managers and superintendents diligent efforts, allowed us to negotiate multiple projects in a traditionally 8

hard-bid market. Our food-store-anchored projects, both ground-up and renovations, continue to stay highly active as well; these projects have also fostered expanded growth with new developers, allowing us to break ground in new markets, such as self-storage.

With the influx of new customers and tenants through our small-box projects, coupled with our tried-and-true grocery store tenants, we are on track to meet (and hopefully exceed) our budget projection for the year.”

Well done, Retail Division!

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ALWAYS PUTTING SAFETY FIRST Working in the Heat The well-being of our team is especially important when soaring temperatures and heavy working gear are both present on jobsites, in warm weather months. Team members are advised to take preventative measures.

What are heat-related illnesses?

In a warm environment, especially when physically active, the human body relies on its ability to get rid of excess heat (i.e., heat dissipation) to maintain a healthy internal body temperature. Heat dissipation happens naturally through sweating and increased blood flow to the skin. If heat dissipation does not happen quickly enough, the internal body temperature keeps rising and the worker may experience the following symptoms: high body temperature, abnormal skin issues, strong or weak pulse, headache, dizziness, nausea, confusion, loss of consciousness, heavy sweating, cramps, extreme thirst, vomiting, weakness, spasms, and/or blisters.

Workers should become familiar with these overheating symptoms. When any of these symptoms are present, promptly provide first aid. Do not try to diagnose which illness is occurring. Diagnosis is often difficult because symptoms of multiple heat-related illnesses can occur together. Time is of the essence. These conditions can worsen quickly and result in fatalities.

Cool these workers by sitting them down in a shady or cool area, providing cold water, and immediately calling 911!

Prevention: Workers who have not spent time recently in warm or hot environments and/or being physically active will need time to build tolerance to the heat.

During their first few days in warm or hot environments, workers should:

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Consume adequate fluids (water and sport drinks)

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work shorter shifts

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take frequent breaks

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quickly identify any heat illness symptoms

Engineering controls such as air conditioning, with cooled air, and increased air flow, leading to increased evaporative cooling, can make the workplace safer. Other options for keeping body temperatures down in warm environments include making changes to workload and schedules. OSHA encourages water, rest, and shade as preventative measures.

Hydrate. Rest. Recover. tips of the trade HEAR FROM OUR SEASONED EMPLOYEES ON THEIR “TIPS OF THE TRADE” BELOW:

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“Regardless of whether you work in the office or on the jobsite, we all spend a great deal of time solving problems.

Always ensure that you are effectively identifying and addressing problems. Understand the big picture and understand how everyone is affected or impacted by the problem. Problems don’t go away and you should prioritize your problems…always put out the biggest fire, first. If you delegate a problem, be sure to follow up…

9 trust, but verify.” - Matt Pardue, Project Manager

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PROJECT SPOTLIGHTS

THE GROVE AT ARDSLEY SAVANNAH, GA PHASE ONE

Omega was proud to be chosen as the construction partner for The Grove at Ardsley, a new, multifamily residential development. These beautifully renovated residences sit on the site of the former Abercorn Terrace Apartments, between 61st and 63rd Streets, in Midtown Savannah.

This 156-unit development transforms the former Abercorn Terrace Apartments into The Grove at Ardsley. In phase one, twelve historic buildings, originally constructed in 1947 to house veterans, underwent complete interior and exterior renovations, including 160 bedrooms and 128 bathrooms. Subsequent phases include the demolition of non-historic row houses to accommodate new apartments, a new leasing center, pool, and site amenities. Once completed, The Grove at Ardsley will provide a total of 186 new and renovated apartments.

Project Team: Scott Fournier, Project Manager; Ryan Maines, Project Engineer; Jason Nearen, Asst. Project Manager; Leigh Smith, Superintendent

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PROJECT SPOTLIGHTS

7-ELEVEN CONCORD, NC The 7-Eleven is a 4,080 square foot convenience store located in Concord, North Carolina. It sits on over four acres of prime real estate in the greater Charlotte market. Service in style at this new 7-Eleven.

This facility includes a modern, full-service car wash and sixteen convenient fueling stations. Exterior building includes a mixture of exterior finishes such as Nichiha – Fiber Cement panels and EIFS. Interior building includes finishes and features such as polished concrete floors, ceramic wall tile, and fresh paint to offset a modern design. Pit stop in style at this lavish service station, located in Concord, NC!

Project Team: Dustin Caudle, Project Manager; Eddie Keenan, Superintendent

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PROJECT SPOTLIGHTS

TOWNEPLACE SUITES WEST COLUMBIA, SC TownePlace Suites by Marriott, in West Columbia, SC, consisted of the construction of an impressive four-story structure, including 59,753 square foot with its’ 111 luxury guestrooms.

This new wood-framed structure includes construction of over one-hundred guest suites. A newly constructed interior and exerior includes dining and seating areas, a fully-equipped exercise room with sports flooring, a guest laundry area, and large, luxury guest suites for individuals or families to enjoy short or long term! Aside from an aestectically pleasing visual and live-in experience, this hotel also boasts an outdoor swimming pool and a courtyard area with gas fire pit and grill, for guest convenience and enjoyment. A home away from home!

Project Team: Chris Leonard, Project Manager; John Karfit, Superintendent

2021 q1 completed projects A job well done to the Omega staff who worked diligently to complete the following projects in the first quarter of 2021.

DOOSAN OFFICE REMODEL

STATESVILLE, NORTH CAROLINA Brock Hennings, Senior Project Manager Barrett Hennings, Assistant Project Manager Mark Natale, Superintendent Randy Wilson, Assistant Superintendent

7-ELEVEN #41347

CONCORD, NORTH CAROLINA Dustin Caudle, Project Manager Eddie Keenan, Superintendent Chandler Whitaker, Field Engineer

HARRIS TEETER #401

CHARLOTTE, NORTH CAROLINA Jimmy Poore, Senior Project Manager Chase Brewster, Superintendent Mac McMillian, Superintendent Danny Gobble, Assistant Superintendent Ben Marshall, Field Engineer

HARRIS TEETER REMODEL #168

ST. SIMONS ISLAND, GEORGIA Dustin Hunter, Project Executive Jimmy Poore, Senior Project Manager Marty Murray, Assistant Superintendent

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TOWNEPLACE SUITES

WEST COLUMBIA, SOUTH CAROLINA Matthew Cave, Project Executive Chris Leonard, Project Manager John Karfit, Superintendent Josh Miller, Assistant Superintendent Taurino Medrano, Foreman Fernando Medellin, Carpenter

SMALLCAKES BAKERY DOBY’S BRIDGE FORT MILL, SOUTH CAROLINA Matthew Cave, Project Executive Jeff White, Senior Project Manager Randy Kilts ll, Superintendent

AVID HOTEL

SAVANNAH, GEORGIA Todd Mayo, Project Executive Jason Nearen, Assistant Project Manager Connor Grant, Field Engineer Hal Dasher, Superintendent Taurino Medrano, Foreman

O’REILLY AUTO PARTS

CORNELIUS, NORTH CAROLINA Lewis Furr, Project Manager Luke Thompson, Superintendent

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EMPLOYEE UPDATES

Connor Grant recently proposed to his girlfriend, Christiana, the last weekend of March in downtown Savannah, GA!

Todd Mayo, his wife, and son vacationed at Snow Mass in Colorado for spring break!

Brandon and Kayla Parsley bought a camper in February.

They had a blast on their first family camping trip over Easter weekend, and are excited for the adventures to come!

Amber Luffman’s daughter, Ava, was recently accepted into Salem Baptist Christian School’s private program, to begin her Kindergarten education this coming Fall... go, Vikings!

LIFE IS AN IMPRESSIVE BALANCE

We work hard at Omega to accomplish our tasks, and we strive to enjoy home life as much as we enjoy life within Omega.

“

Omega truly has a family atmosphere; they’re going to support you and support your family... it’s really somewhere to build a career; it’s not a job. You come to Omega for a career.

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EMPLOYEE UPDATES

John Wayne Flippen’s daughter, Faith, holds the 1st place trophy for her basketball team, the Virginia Blaze in mid-March.

They placed 1st in 2A, out of 18 teams across the U.S.!

Dustin Caudle and family welcomes Burt, the newest (also cutest?) addition to their pack! Burt is a 14-week-old Lab.

omega Q4 work anniversaries

Happy work anniversary to the following individuals! We appreciate your hard work and dedication to Omega Construction.

DOUG COSBY

ALFREDO MALDONADO

BARRY HENNINGS

SCOTT CRAVER

GREG MARSHALL

KAYLA PARSLEY

RON HUDDLESTON

HERB FERNANDES

RANDY KILTS ll

JOHN WAYNE FLIPPEN

BROCK HENNINGS

MARCO GODINEZ

MARTY MURRAY

WILLIAM DICKERSON

MATTHEW CAVE

RYAN MAINES

DUSTIN CAUDLE

DANA STUNKEL

Superintendent, fifteen years President, nine years Chief Financial Officer, nine years Superintendent, nine years Superintendent, nine years Senior Project Manager, nine years Assistant Superintendent, nine years Vice President, Triad Division, eight years Project Manager, six years

GRAY GENTRY

Superintendent, six years

LEWIS FURR

Project Manager, five years

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Carpenter, five years

Business Development/Preconstruction, three years Administrative Assistant, three years Superintendent, three years Superintendent, two years Assistant Project Manager, two years Field Engineer, one year Project Engineer, one year Senior Project Manager, one year

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