GLDD - Earnings call transcript Q4 2017 | Great Lakes Dredge & Dock Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Great Lakes Dredge & Dock Fourth Quarter Earnings Call. [Operator Instructions].

As a reminder, today's conference is being recorded. I would now like to turn the call over to Ms. Abby Sullivan, Manager of Investor Relations. begin. may you Ma'am,

Abigail Sullivan

welcome quarterly and call. to morning, conference our Good

on Lasse is call Executive Chief Lasse Joining outlook recent update update Marinko. Ellis will an the on plan, in the morning conclude XXXX. with changes our Financial the provide during some Then our restructuring on Mark our me on Island Mark and this with operations and continue Chief quarter the for an Petterson; Officer, Officer, will Lasse will management. an our and year. update

Following their comments, for there will be an opportunity questions.

we to cause uncertainties could call, statements are and our filings this our involve will release and you materially from These our that factors the expectations. with subsequent actual During Certain make risk XXXX forth business results filings. certain statements business. and risks, other earnings set help Form in factors to forward-looking a differ of number including our SEC, our inherent XX-K in understand in

will certain EBITDA release from are on reconciliation this net Relations posted adjusted explained to also which with Investor During to other along our income certain attached refer website, in operations, our measures, we non-GAAP including continuing data. EBITDA continuing to and call, the from adjusted operating earnings financial operations

Lasse. the Reconciliations results with will financial to we call turn this morning. this from the financial non-GAAP measures operations statement user fourth released restructuring compared also to regarding call, quarter this our in costs our as During the that, allow better over measure to of our exclude from And year. prior evaluate earnings certain are the included to I'll data

Lasse Petterson

Thank you, and Abby, morning. good

extensive of the XXXX, of strategy. operation During the company's analysis half completed and we an second

overheads will plan and are to we productive $XX are run the will improvement most restructuring our in SG&A, underutilized through planned we is result The is onwards. million that this assets focus in in our fleet and 'XX, and and the and of corporate ongoing in divisional and in in either investments XXXX of annualized and and our restructuring or not As a implemented result in third out XXXX phasing fully and assets our be for capital in reduction of of place a million fleet. quarter, analysis, $XX put rate profitable XXXX

fourth the million restructuring a XXXX, total resulting million for in charge a $XX.X $XX of $XX to During charges in million additional of XXXX quarter expect we we $XX.X recognized in in and recognize restructuring charge an million XXXX. to restructuring,

targeted will debt confident the rate to plan begin on that to We to reinvestments solid and capitalize to and our fleet. market, current and on remain the improve to reduce be invested best our restructuring are capital recognize return track improvements and necessary in position on the this bid run our strategy to put allow domestic us in

of the Coastal During and quarter working the successfully in the been Gulf fourth project Mississippi Ellis the Improvement XXXX, and operation commenced has revenue of in hopper earning Mexico. Island dredge since

to provide design EBITDA. design and $XX the been capacity, and an full we before As basis, encouraging X has her at incremental the additions Island her once continue the of a an capacity. about time full $XX to Island On approaches The Ellis expect capacity. require level of to we always have annual results months she certain new running million expect Ellis full reach discussed to design take to production fleet previously, we she million

most Human Chief Team. company our the year-end, Resources, over Beaulieu since Cyr of Katie Officer. was America. Human President Great with Annette serving experience Resources. Executive Senior at Executive recently President during XX Lakes the serving Vice Vice has announced Legal as most and joins in Katie Management we as the as Annette Resources been quarter to and Management recently Finally, President Team Interim the changes Officer. of subsequent Chief years XXXX, LaVoy elected also Vice to joined Legal Human with of

Finally, the quarter. on of has several the as sits the Larry Diamond X. the updates, With of to Nonexecutive and those call will on Offshore return Board results Dickerson to as I company experience extensive Chairman the February took Larry he over CEO position boards. the discuss of public Mark fourth

Mark Marinko

Lasse. measures, press to morning to our released little were excluding results evaluate charges Okay. as charges, restructuring Thank restructuring Due past results this allow better different the which to charges, format includes financials included restructuring the results as compared to in reader the prior as certain as releases. the financial financial a you, The year. the reported, than well financial

financial today, before financial full the year quarterly of providing call consolidated summary our reported our charges. results. of level a end, restructuring the the I well discuss restructuring results, results a the with charges. I'll I will and At summary as at discuss will as discuss start the results segment the then excluding During results

by domestic which For quarter a quarter income in million, benefit. was restructuring a from Net passing fourth from million fourth costs excluding the profit, loss compared the interest These expense compares in XXXX foreign million partially E&I margin, to Tax operations the $X.X XXXX. million $X.X million capital by the excluding protection, of Terra from infrastructure slightly million of restructuring, excluding loss of factors million, maintenance and other absence increase X.X% fourth million. for or million. as operations, of fourth lower quarter. segment restructuring, quarter, of the million of weather domestic from fourth contract XX.X% impact XXXX. negative to compared domestic the segment the XXXX $X.X on a quarter XX.X% loss revenues EBITDA period -- expenses, the prior the of company in and quarter million. Total to the compared an and our idle quarter. excluding smaller E&I to decrease XXXX. of million the Total restructuring, million million quarter decreased which million Jobs EBITDA, over including continuing $X.X restructuring, revenue. net included prior $X.X Dredging includes the additional $X.X idle adjusted excluding in $X.X the business our fourth Gross loss million a prior offset excluding was and $XX.X benefit, sale ventures is operations of was Adjusted excluding quarter. At the decrease plant inland charges, on quarter. the recent $XX.X XXXX sale on while the year, by decreased income joint an coastal $XXX.X to prior year EBITDA in offset a fleet. gross EBITDA in $XX.X an delays. to continuing quarter weather prior only $X.X compared of higher income revenues decrease for represented also $XX.X The Dredging's occurred to loss and the plant our for was assets capital, expense profit driven $XX.X The of the $X.X environmental related decreased decreases This contract loss income, of These for continuing on in offset slightly restructuring, lower decrease operations quarter year in from gross foreign market. the the is $X from capital the net the net consolidated segment, $X $X.X segment. $X.X operating of assets, in Net equity profit of current was smaller caused lakes primarily income restructuring, year excluding on tax was and $X.X year the additional which current and revenues contract excluding inland offset of X.X% which were foreign a overall prior million for was tax to and were and compared the was of XXXX. business million, in decline loss $XX.X of had margins and negative prior quarter company operating slightly restructuring, $XX.X quarter domestic the was domestic adjusted current the margin, excluding prior the Net interest million rivers restructuring, is driven of loss, projects lower million in revenues delays, The million. on fourth to profit The included and in restructuring, from restructuring, quarter XXXX by XXXX. by XXXX, Total was million in Cuts by and and loss. Dredging for quarter by Act was Adjusted $X.X the $X.X projects from million company the million quarter a caused the in $XX.X of quarter the decreased revenue the decrease level, Gross net costs fourth net the by were fourth quarter year improved and a million

$X.X restructuring, from was driven prior the excluding of expenses revenue $X.X business benefited business, by quarter. impacted to segment's reported in of revenue from business of prior business. flat expenses -- stemming An losses year slightly million business. of and in also million. lower by an in prior offset negatively note slightly Terra in margins year on the revenues year loss, quarter excluding in the plant -- restructuring, by assets, Please the contract loss quarter-over-quarter, million Great E&I on the excluding which Terra offset E&I the lower of increased divestiture related by from segment the project both and quarter. by business gross a The million compared improvement fourth profit segment's Terra the restructuring. the loss were included offset divested quarter, to lost E&I operating unit, quarter fourth to Lakes the the E&I loss, that quarter sale the core margin, Our million the sale $X.X on lower overhead XXXX The $X.X due in project increase $X.X were assets segment quarter lack profit in The G&A gross of remaining X historical the the

year full results. our to Moving

restructuring EBITDA year XXXX, $XX.X of continuing was from from net For $XX.X operations inclusive million and loss continuing December the were ended were $XXX.X million. charges, revenues million, XX, operations adjusted

and in million. adjusted EBITDA for $X.X segment in and decrease of the full the decrease restructuring reported the of loss the Dredging $XX.X year When operations adjusted of from in operations profit restructuring, of and $XXX.X excluding gross $XX.X $XX.X an year $XX.X improvement gross XXXX, million. million $XX.X impact million and continuing to operating income Excluding gross the revenues XX, level of million reported was represent operating profit results, and $XX.X income a segment revenue for prior of charges a charges, million million, the $XXX.X million Dredging net XXXX, of operating profit million revenues, These was These loss ended $XX.X results net in At million. segment $XX.X the excluding loss compares of million, of of of $X.X million EBITDA the million. $XX.X restructuring December of year. from continuing

for prior charge recorded represent our charges of restructuring a million $X.X administrative of To the year profit to million the included $X.X related was XXXX, full the of million. segment the million, and $XX.X general we year. When gross gross to $X.X E&I we excluding impact the For million for charges, $XX.X loss and the operating December in XXXX, included reported and of primarily $XXX.X severance. ended of year million charged $X.X $XX of in million, the $X.X million. the XX, revenue restructuring million. $XX of in charge million profit of Of loss of million profit and a depreciation. was of operating assets. and gross reported These $X operating expenses, of million reduction results primarily million, profit revenue was fleet loss of $XXX.X compare $XX.X of to segment recap gross E&I to the

charged $X.X Finally, of to the loss-on-sale fixed of fleet our charge -- of was related to assets. from primarily million reduction assets

XXXX, revolver, us $XX XX, had Now will million December in cash in our $XX had and turn balance at on million $XX.X availability. we to our with where leaving sheet, drawn million we

of were million, Our year was were of total the the $XX.X which completion was expenditures capital -- Island. $XX.X completed for -- Ellis million for the

compared Finally, the market bid billion $X.X XXXX in $XXX million to year XXXX. totaled

million During including total million, quarter, the were fourth $XXX Charleston we that the inclusive options. $XXX II awarded of of has value project a

dredging win wins domestic is win average not During year-to-year likely above win achieve company of the of next XXXX, XX%. contract overall remember the X-year and of company XX% variability the market. the not year. Please in rate from quarter-to-quarter bid won unusual our that This the is to or rate is indicative is rate rate

forward. to $XXX million segment's XX his XXXX. at versus for at Great During million December over December I'll December coastal the to Lasse of projects on or XX, projects Contracted And of at remarks dredging X% of won awarded of backlog million lakes totaled turn $XXX Lakes with million maintenance the XXXX, million. awarded, XX% XXXX, that, $XXX.X million compared the XX% moving awarded. $XXX.X backlog the capital $XX.X million $XX awarded, of or protection E&I was or of backlog XX% $XX December and XXXX $X.X at projects back million The or rivers XXXX, projects XX, call outlook XX, and

Lasse Petterson

Thank you, Mark.

expedite on XXXX, restoration. As our take to opportunities focus plan and the the port Trump's few projects, our on only President easier use prepare strategies on focused restructuring sights protection dredging to by coastal we the see The years. of projects not funds and market projects for implementation remain We solid. continues in state of and we we plan, as move which markets announced recently and next deepening company over encouraged into beach coming are allows domestic infrastructure cost-saving we to and be port but various we that our also local deepenings plans to

utilized call and sheet the positioned take where future This a have markets, from additional we decisions in international it opportunities to the XXXX I'll fleet right-sized market will questions. result markets domestically and in improving that, We with of dredging turn on a internationally. optimism our fleet, work keep as both our investment And to secured cautious in also and to going and balance in over see combination the support forward. well restructuring healthier a our our on

Operator

Instructions]. comes And our CJS from Tanwanteng Securities. the first from [Operator question of line Jonathan

Jonathan Tanwanteng

drove somewhat Can a new you that you no lower break segment? hurricanes the factors thought operating I vessel quarter, in the that that income the helping down sequential the little impacting would Dredging been better. the bit, in with have

more the and a other little issues some weather maybe costs encountered? of Just detail on the higher you that

Mark Marinko

additional end so didn't us. of Island it impact in had terms Ellis group. our really in as the inland some Yes. additional an mentioned plants. Sure. cost our cost, costs I in Really additional talking at idle came the for the I'm But -- well costs, we really on December, have on operation's smaller XXXX our dredging We had about, as project of some international

we more inland in XXXX. our So than when particularly with projects, 'XX, international compare time idle projects year-over-year our smaller -- you well as we had as did inland in

Jonathan Tanwanteng

Okay.

you just Just more to costs Or that's projects any be absorbed on the those color driving to on something that as needs higher road? fixed? going what it's are utilization increase something those be was and if with ongoing,

Mark Marinko

-- related project recorded like take be it we to smaller place filled is in not additional the up, earlier we Things That I had one talk we had to a inland just cost. to we onetime get stop won't projects, additional It it. drop will as was be project sediment. sediment wait a ongoing. and place when little -- to was and the had some Yes. remove stop that and place that This to so about an and our

Jonathan Tanwanteng

it. same Okay. for And then E&I question segment. the Got the

the issues forward? is or of the kind loss finally a on had you $X.X like project we be forward to can said looking like in we segment quarter. that to passing believe going Should losses you -- a be going think that million more I

Mark Marinko

Yes.

project first losses. So done the just additional one do quarter. this the project. not We is That will be here any in anticipate

In we change something orders that, fact, which on. related we a have to and to of number expect claims recover

project forward. And moving so from that additional see I do any not

Jonathan Tanwanteng

that to just an awarded Boston this year, And Okay. deepenings Got on you others. it. port and update be expect

status chance some these? what your -- of the of of those Just is expected and winning

Mark Marinko

Yes.

Boston did Boston win It we So out was competitor. on the not -- it's to awarded a The publicly there. Boston, project.

are Jacksonville, there, -- do feel projects We those positioned well do protesting We coming our we're -- we're including that at Corpus out, we options projects. looking actually other among Christi, bid. again, for the others --

about and excited coming are number the we So that large these are projects out.

Jonathan Tanwanteng

Okay. forward? Great. cash the new And tax then just of finally, impact the going laws

Mark Marinko

Yes. No us. cash impact to

tax up under to P&L quarter related of liability. no deferred liability but So take up just pick we pick the -- the [indiscernible] the That was our fourth XXXX, had GAAP cash so year took impact. going we we in forward to this

Operator

next question Deutsche from Casella And our the of Andrew Bank. line from comes

Andrew Casella

guess, wanted about about about but million to added know restructuring had quarter, I million to talk you back $XX the EBITDA. first, I only the guys just in charges. $XX.X

the So also then ask wanted didn't, just why -- sorry, you curious credit And G&A full to I number. on the guess, just amount back?

said and a that had cash impact? was if severance You that related

Mark Marinko

Yes.

million restructuring for third part about as there's million we $X.X as was said, the restructuring $XX.X the year of actually think charge -- but took the So about it's $XX.X year. depreciation just for It I of full almost not reason that was is in the -- charge. $X But million the quarter. the quarter, I million --

retiring accelerate so the equipment, pieces not vessels So GAAP, for depreciation selling, that are under or the the hit of those equipment of -- you they we essentially accelerate depreciation. you

don't amount the you going full have EBITDA. to that's So down why

Andrew Casella

Okay.

as sale not assets It's do And it. of... add just matter on then to normally Got EBITDA? guys you Okay. back of a loss

Mark Marinko

correct. Yes. That's

We Correct. not that. done have historically

Andrew Casella

going guidance, cadence formal of And I think to but guys the just some know to I from tailwinds quarter. wanted kind just cost provide going you're the any Great. take have I we outs. the help know of as Okay. you forward don't about ask,

going How Island, You're year? the also of kind but margins? indication have four the in quarters revenue we and should directional to the any Ellis about think on

Mark Marinko

we've of the I EBITDA, kind of -- the you first as this quarter. Lasse talked full do $XX said, full million there's that won't about getting $XX time million production, in this as full it's obviously running mean, the we in -- have of 'XX Yes. when Ellis and a year to in

then of track -- XXXX have in million prior we we're this for on $XX So cost versus the and year. reductions

mentioned -- to I X mainly related release a -- look So But backlog why, press project for which X the we're that's improved winning big those those a look factors, due that's X much XXXX Charleston, also forward, we as the in items. to impact we optimistic 'XX. didn't those really increase,

those projects, obviously, gives projects with it completed, for us but replace base that good XXXX. a we've So

Andrew Casella

trickled Okay. And the mean, should as rate far cost savings to Or think as are in throughout run as we first fully the that the that'll is going modeling, be I be essentially something in about year? those way of quarter?

Mark Marinko

Yes. are during It'll move as there of finish certain as year more equipment in the projects. that pieces during the retire year we they

will the during more ramp see that up year. you So

earlier, quarter done fourth really I mentioned here. in G&A of the As in kind was -- we the overhead

early. you'll see number So -- that forward in are pretty -- of kind be about going that of of baked as a we savings most million talked those will $XX

year. it going So but would got a little increase over mix forward, the

Andrew Casella

just Okay. Great. final then And question.

want $XX want guided sure $XX you're for just check I million towards But CapEx comfortable Just you've XXXX. with your to make that? to million, know a still kind I expectations number. of

Mark Marinko

going million -- of That will this watch with to kind are year. we out. we'll for that. our We hasn't But we this expect -- We continue comfortable still CapEx as changed. $XX still

if number the you lower it Island had. was took we've this -- As than out, historically a you Ellis was noticed, year

a close So on in eye we'll expenditures XXXX. capital our continue keep any of to

Operator

comes from Ben Markets. next question our the And line NOBLE of Klieve from Capital

Benjamin Klieve

questions. few a So

be the production? this on couple look update a it from Was give rest impacted First, how cannibalization this Ellis. Does this Can to minimal? like the your known vessel you fleet? on an us will of still

Lasse Petterson

very Ellis the this strong. the on years for the Well, for year as is we here. of and market No, coming this the Island dredges Lasse field Patterson type see producing and

that we later for good years. talked a about, market segment. is it's that outlook in that the So And cannibalization

Benjamin Klieve

Okay.

And international uptick couple kind that of good. Very Okay. regarding the give the international of an of questions of then, see curious in XXXX? in underlying market I'm optimism regarding fundamentals sense a what the you a outlook. you

Lasse Petterson

now And Well, in the the engaged prices, down stable an increased primarily oil in a at oil we pick Gulf XXXX most looking this the their are that we oil opportunity XXXX. after market in of but pickup investments And and is for around prices gives that closed that their East cautious Brazil states with from $XX up in investment and Middle infrastructure. us optimism, coming the in ground we're continue to gives XXXX. or barrel,

Benjamin Klieve

last then, And good. Boston. regarding Very me Okay. question for

that's are phases you award, that similar Boston Boston? going Given has for the Boston have what -- look the the think that what something from coming multiple more we already be to there's down in do scale -- opportunities of of the deepening saw that seen you this expecting the does to of votes that you like -- contract -- is extent the road? Or Charleston is

Mark Marinko

-- in There's one No. phases. really Jackson, phase. kind was a or of is proposing -- phase Yes. what is This after from largest are seen the but or smaller Savannah multiple phase Charleston potentially this chunk. pretty this that, it's is the different those first This much one largest we've one

Operator

And next line from INB [ph]. question Partners our comes Plancey of from Michael the

Unidentified Analyst

to at anything So just you in on that rate your Is of or all? XXXX? just going you there specific the your won competitive was dynamic I attribute wondering win size if contracts there is the anything changed it was

Mark Marinko

really was won No. Charleston big I the mean we for for and chunk biggest us. Phase year was a driver. really II, I That the

over The can their that winner This share out. last years. projects it larger of couple You've -- year. that -- can obviously, for lot these as move, deepening a market of port seen that the come

Charleston this So the was for biggest far year. job by

Unidentified Analyst

versus market in any, same 'XX size? had early might about you for what look sort if wondering 'XX, the was I bid then of, the And like estimates

Mark Marinko

-- that timing thinking size. about drive down are or the port deepenings the coming same up these lot either the What'll a out. of We're Yes.

on there year. are we number track So this know a

would Boston market -- it's think that. again So moved we in be that -- it in a larger it made would've 'XX. even be that I of an that into to moved expect XXXX. would've robust a if If Yes, 'XX, pretty example

Operator

our Instructions]. the from question from Samantha comes next & line of And [Operator Company. Doxie Walthausen

Samantha Doxie

couple A guys. of questions you for

Just are first aggregate and million contract and saying $XX of have Are reviewed currently charge that that of to produce found regarding the costs expected contracts $XX revenues. of contracts you you a an amount loss million? to

Mark Marinko

No. charge vessels being related taken to Most out. of is that

So profit the it's when we above -- so gross line.

you when lease we taking about some are leases, out. depreciation, those talk that are So vessels on there vessels are that

not project related no, they're So really they're -- charges. to

Samantha Doxie

Okay. And you related future? charges restructuring issues expect the same to in the more do

Mark Marinko

Correct.

-- million we've $XX in think additional estimated this little in I the off. to was million to bit $XX a So $XX charges. it XXXX, $XX sorry, million million, number

working completing we sold retired or because yet to of related that yet on not have again, that vessels are most off projects. still is we So

Samantha Doxie

Thanks. will we to monitor continue performance? And contribution the the the EBITDA so Island future can its Okay. Ellis break of out you guys in

Mark Marinko

from No. reasons. how perform We for or projects individual generally vessels competitive they and stay away

that type about, -- is expectations, will think -- our -- we'll how you. to they're I those doing meeting we think, on we I whether projects how of communication discuss expect So production

Samantha Doxie

won? Okay. Will you you margins please bids discuss the more. of And then one have just target the

Mark Marinko

again, on. intend -- won bid reasons we've about, that for our talk to don't or margins what we've competitive We No.

targets those from stay of reasons. away So because specific competitive we

Operator

Sullivan no call the And like I'd further that marks. any I'm Abby have showing now to we for Ms. back to questions. turn closing

Abigail Sullivan

shareholders, in our important in for and you May. initiatives earnings with Thank And to thank forward discussion during business. partners, in again and you. discussion support We appreciate speaking about and the this business next our the joining employees look we our developments we you of

Operator

you Ladies today's program. This for thank participating and does conclude the in conference. gentlemen,

great have day. all may You disconnect. Everyone, a

Great Lakes Dredge & Dock (GLDD) 20 Feb 182017 Q4 Earnings call transcript