GLDD - Earnings call transcript Q4 2018 | Great Lakes Dredge & Dock Corporation

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Operator

Good day ladies and gentlemen and thank you for standing by. Welcome to the Great Lakes Dredge & Dock Corporation fourth quarter 2018 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be follow at that time. [Operator Instructions].

conference being this reminder, a call recorded. is As introduce for today's would not Ms. host to like I presentation, your Abby Sullivan. Ma'am, please begin.

Abby Sullivan

Thank to you our Welcome quarterly conference and call. good morning.

is Lasse year. Joining Chief for Lasse the will on Financial this quarter the update update with financial me Marinko. for years. morning an events on Officer, results business Mark Executive and quarter Petterson the and Officer, provide our Then on and market our Chief of call our of an with outlook on Mark Lasse an will the conclude update the continue and the will the coming year.

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

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

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

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

Lasse Petterson

Thank you and good Abby morning.

and release million. improved results million earnings our fourth operations full-year and continuing operations, of had net quarter morning, $XXX.X adjusted significantly restructuring, strong excluding of from with income full-year $XX continuing a EBITDA this in we from a stated As

results, will moment on financial safety I our culture. start a our Before discussing with

in We year-over-year. continued the throughout decrease recordable injuries safety a XX% our to improve performance year, seeing

Our and and another. incident see our and strive safe safest drives well. am in safety employees industry dredging responsibility encouraged personal one the to for projects to work safety, create at care injury-free that the We I culture facility use home and for practices our sites concern as

social safety, to processes addition in aspires In company that follow and we everything environmental, to best-in-class the the do. governance

business channels storms is ensuring change associated navigation and on with are mitigated. Our potential our and focused nation that risks and shorelines sea protected are

that we sharing performance all executed governance environmental and life with mitigate standards areas this will and strict sea more look these later We social the in to year. on any details forward an specific to the are environmental, committed processes are projects to that be environment in in ensuring work. project published and We report strive we to impact

returning Now significant one was year to This of our Lakes. Great transformation XXXX. result for at

improvements continuing $XX.X from Our or restructuring, was nearly adjusted These of X% of million operations, EBITDA continuing excluding revenue. nearly $XXX.X direct and solid a restructuring, the projects result within dredging of XXXX executed program focus domestic and XXXX implemented energy market. a on in with are combination or doubled from Net income million to restructuring late performance strong revenue. excluding operations, in our XX.X% in in

continuing X.XX. healthy $XXX EBITDA net from also debt operations the of debt ratio of to reduction adjusted we in million, net During resulted which year, a achieved a

into with fourth work Tampa, projects in continuing the the quarter finished XXXX full production and into Charleston, port Delaware we XXXX. As also and Jacksonville XXXX, were deepening of in

and We remain the this product look with in improve to operations Lakes continue to While we we sheet. cultural to execution the come. years disciplined performance continue we the of to excited and teams that debt are excellence we about our to balance while ensure year, forward results work Great continue and reduce recognize for this we committed must to

project of the a Christi the first of market, project of December deepening expectations million work million we us $XX six have of capital already our XXXX Corpus XXXX, ended added deepening of to the XX which was giving weeks XX, work port start backlog solid of for which our On million, of at project bid $XXX In a $XXX a added at awarded additional was backlog. million Our port an December first $X.X mainly the which was a billion, phase $XX.X deepening strong at comprised fifth in to portfolio. projects. record

this for focus forward the Corps We partnerships safe Army on on Engineers, authorities and our and of expect port three ensure and with to constructions export these deepenings, port port on companies facilities beach look dredging United continued continue four strong energy market projects. to LNG will be on and and next completion projects renourishment on budget. to the We States domestic years the on successful to time

earnings our this from morning, assets. years, business in it noted not concluded to operating portfolio continue business our and good the have under the does As itself well dredging E&I core align our we reviewed it experienced improvements with segment while of have prior release has enough

results and discuss future. quarter position processes sale will divest strong I of the the over we this developments. Mark for on As an updates, second which and of turn years the to and business segment the the expect have and result diligence for last update this team improvement backlog year. I the over believe the a of that operational of the Shea review, of call a determined Chris we by with has those the hard will the year-end work end And to E&I of for their the and in commend quarter complete we to

Mark Marinko

our Thank our The the recent format financial the morning Okay. than a some the financial charges in you excluding certain year. were slightly financial results with as allow prior of well charges results as released the prior Lasse. as most compared earnings results restructuring to evaluate Consistent the financials which measures this to reported releases, as different better to included includes restructuring reader years.

our been Please earnings not from specifics then commentary of near related charges. end our included and restructuring the all operations. not note specific Lasse the discussed with discontinued quarterly charges to and and As include and some annual continuing results dredging results will has is restructuring start that operationally business release, E&I in business. provide results discuss comments. the consolidated be will I my consolidated in will thus noted do disclosed and focused on the I by

utilization was compared EBITDA profit income million is quarter Total on in which to the $XX.X vessels prior Total quarter XXXX $XX.X in XXXX. prior of in operations fourth tax XX.X% G&A XXXX. compared company's quarter expense capital the was the The & Gross to benefit. were fourth an the the was margin to of and million, million income XXXX. tax was increase of XX% $X.X compared $XX.X company was was $XX.X was positively the of XXXX. by for operations quarter to to quarter. in of $X.X operating million, net as by continuing increase rivers Tax caused income quarter million was to XXXX quarter quarter operations rationalization incentive tax the XXXX cost of in profit an continuing of of passing lower current $XX quarter. EBITDA in utilization of plant compared the note fourth represented million. The a million the asset a high for operations from EBITDA that related and benefit quarter partially programs. continuing interest increase million quarter. and For from from was continuing million performance, income income $XX.X offset from million of increase fleet, XXXX the from million, a saving from $XXX.X interest net net worked to and Jobs increase Net of the the factors by driven expense $X.X our on $XX our of These XXXX, fourth income project strong for from gross Please quarter the expense impacted million. quarter $XX.X net projects. of operations fourth fourth $XX.X the revenue prior $X.X an by and continuing were savings included operations of continuing million, in is revenues Cuts of and related fourth over income $X.X fourth Act compared expense year income fourth adjusted of XXXX adjusted million $XX.X year includes from our fourth Adjusted of year lakes compensation. Total $XX.X net continuing consolidated the Net quarter of for million and million The they expense million, company strong operations

results. full-year our turning Now to

adjusted revenues $XX.X December million a and EBITDA operations in ended year-over-year from increase continuing increase $XXX.X operations from in from $XX.X continuing revenue represent year in the For results of net XX, increase EBITDA of XXXX, million, income adjusted and $XX.X operations $XX.X $XXX.X million operations. and was were continuing million from was an income continuing net million. These million

restructuring the a million full-year were loss Excluded the operations, compared operations, of assets $XX.X discontinued discussed I from from for recognized tax, $XX.X disposal our the of to loss net net just XXXX million XXXX. company of For discontinued related plan. held The includes of million, in loss a full-year, from to tax, on loss charges preliminary $XX.X of a sale. results

fourth operations. on the $X.X quarter impact of of $X.X restructuring, related million million EBITDA XXXX, which from During adjusted charge a had recognized we a to continuing

from charge $X.X which For a XXXX, EBITDA the we a adjusted full-year had operations. of million, continuing recognized million on impact $XX.X

million result $XX reduction a achieved savings we our XXXX, initiatives. During cost of as of

this December do to charges completed and recognize XXXX. have expect XX, in XXXX, additional any of we plan As not restructuring

debt balance $XX.X our million. leaving $XX.X in us XX, on Next, sheet, had cash turn million we at had $XXX million with and of drawn we where net December our to XXXX, revolver

sheet XXXX As throughout back we year, the health with has focus been in to the Lasse balance bringing paydowns. noted have our and debt discussed

to in We down the first quarter made are revolver be progress XXXX. far fully pleased the thus expect paid balance and of the with

$XX.X the Our total million. capital for year expenditures were

was the During million exiting dredge the clamshell market. that that company who purchased from $XX.X a spent is on fourth a competitor quarter,

strict the a in will increase dredge. will the half capabilities in dredge perform under Southeast water XXXX this This work deepening quality payment States. final million requirements make We mechanical of for the of United $XX to environmental company's first

since market which in backlog first XXXX. first awarded awarded Finally, totaled of deepening work quarter phase bid and Corpus the will billion million XXXX, we project the project to added in an the XXXX. be Christi billion compared been of to $XX.X XX, $X.X On December XXXX in have were additional year-end the $X.X

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

December XX, forward. for With outlook was backlog During or awarded. coastal capital of his million XXXX, projects Great Lakes or at $XXX over won moving million. XX% maintenance to awarded, million the $XXX that, or awarded XXXX XX% $XXX the projects awarded, the XXXX $XXX XX, will $XX on call compared Lasse of XX% rivers protection of Contracted million back lakes projects and million projects of at $XX December or turn the XX% I to of remarks and backlog million

Lasse Petterson

Thank you Mark.

the outlook XXXX. Turning for to

solid. be We to expect market the dredging continue domestic to

and we are experience and half performing Our focus second are Several XXXX. with the to works challenging where expected projects technical phases additional in bid expertise, our of port of fleet. is already deepening large the we excel diverse on deepening to remain can where technically projects

and Additionally, United supplemental result XXXX Harvey, disaster as Maria, future involving $XX.X Corps extreme for States in reduce recovery fund damage to Senate includes on a events. risk projects for and appropriations Appropriations the billion and that will storm relief systems which the the flood hurricanes Committee of of storm Irma passed from

Florence. Hurricane quarter $X.X billion of disaster XXXX, appropriations During Congress additional supplemental as for an a funding result the relief of of passed fourth

Trump, We these government of on major year. any quarter we dredging and President national appropriations and bidding point third this declared impact projects shutdown XXXX. be see time funded by emergency by do not fourth in to the seen to to at expect new in regards not the market to a expect have earlier start With with year for this this the newly the

markets. international the to Moving

project XXXX, our on will keep mobilized however, in which our contribution level. have at We in busy only unexpected an Bahrain breakeven fleet

full new XXXX in with backlog, We an capacity savings Ellis production solid million to from be Island the up another year beyond. expect restructuring, XXXX and additional the the start cost strong hopper market dredge we expected improving anticipate year. $X to to in In full for and conclusion, a a

high the to I we resulting implemented, and improved safe for our changes to have opportunity positive now which a a safely, of delivering over a activities perform on utilization on well expect call half showing in was with good net the normal adjusted the and on is project than return we first the domestic will projects returns working million, impact approximately work the XXXX quality for XXXX with year the We heavier EBITDA drydocking quarters. our impact fleet fourth year, the to third shareholders. a activity clients, time and market the timing. in that that, employees however be in $XX environment budget, And We to drydocking year, depending from higher anticipate successful questions. in

Operator

Instructions]. [Operator

Our Andrew Bank. Casella line from Deutsche first from question or of the comment comes

open. line is Your

Andrew Casella

Hi would you a proceeds divest guys. or the know or other little is, it decided can is then in came prepare as think potential question. it you happened to that sale quarter. if from there Thanks potential business of first And for it and turning to like sounded around, about like some the Nice guys fork the prospect business question market Thanks. talk who road taking the you was that foothold and about whatnot but sounded second the to any to we it? charges be? buyers bit for the what guess E&I? it finally Was getting I I decided a ultimate

Lasse Petterson

a reductions. restructuring When including as the our segment. I by we up months comment XX And in that position we to decision took of will took the has that improved energy process, And process think I the to aspects going will also all in And well here XX, comment in implemented. I on at business fleet. the the rationalized resulted now assets, impacts. the the then with on We businesses. ago, company, the the and E&I the performance did focus. E&I heading Mark which started that on financial on look focus We Shea, of lot been Chris cost the were a plan this led through and it's

our was alignment believe need our However, between the and to us the our when prominent also capital energy strategic best we gives resources in as and we we where outset. the the focus at for shareholders and synergies, look E&I, dredging future, I the it return seen not think the the overlaps were

So that to And better E&I last Mark, comment? decision made place to that that a and conclusion going forward year. late we you led for the need find we can

Mark Marinko

Yes.

middle the half of are question, second So of on process. we the your in the Andrew,

required sale, number have GAAP. But by not on can or estimated the booked we the material price disclose that at included this kind a we in expect as any loss from future. related So change the release, the press don't to any of time. proceeds charge in We

Andrew Casella

That's how said help Thanks. as about I just that to about to direction headwinds XXXX, we about think year-over-year of the quarterly XXXX think million. as second rate as it. you exit half XXXX kind or Got $XX seasonality about the the performance kind be, $XX second you is XXXX should as higher of the some Can be the of we understand But about half the going notably just guys appreciate drydocking? we and us we you second my there And having related with was think headwind drydocking. of to then million think would guys Okay. run related question helpful. and

Mark Marinko

is Mark. This Sure. Yes.

kind to, intentionally strong look we we compared half why first I year. say, talked half that's XXXX, at than would of better the second about of performance much you was had of the when year the So the

And work So of then higher we more the that we do deepening have half the in do lowers as utilization. year, have. the get related the half Lasse year utilization the port said, to to of dockings you vessels back we expect, when dry the first of

to have weaker prior quarter, years, years. in as quarter-to-quarter more we prior year much, opposed the throughout the the don't strongest as be our the be would year, where quarter, it's opposed but quarter have So third maybe a our smoother much a would quarter third for the to you

Andrew Casella

And it. Got then I asking question so the way. guess a different

had So think EBITDA when obviously rate kind downtime in handle, was the the first new new banner fourth, the quarterly high-twos? your run with think three a like quarter third sounds of quarter, so baseline should about whatnot, quarter fourth to it we or about? for mean I quarter we relative third and Or and some that the opinion a is

Mark Marinko

but a the quarter. So a look quarter, this some of about quarter, an last performance at did the good. about exceptional was current in when little you fourth terms as exceptional run bit, on as quarter the we be really we talk it, talked have And projects really that. quarter decent this you as would But rate, not in that yes, good that really quarter time

So quarter for still an this quarter little I call, us. even exceptional is would a of, bit

little looking So when about I exceptional still give, an don't you it's quarter talk bit a us. for of just forward,

Andrew Casella

I so get queue. Thanks much back will in the Okay. and

Operator

you. Thank

CJS from or next Our question the line from comment Securities. John comes of Tanwanteng

Your line is open.

John Tanwanteng

guys. morning Good for thanks taking quarter and Nice my questions.

Lasse Petterson

John. Hi

John Tanwanteng

the the ops? from charge out as break and business DNA income the disc that to for well moving the in you as you the took maybe E&I operating Can quarter

Mark Marinko

So the charge is $XX million.

tax a effect I the So on, $X I the from ops $X we was it and million when segment it of talk million net. Yes. operations it. Hold about of million breakdown, entire the John, $XX got to for have think was disc about we then overall charge that,

charge. why $XX.X this that's million we got have So

from the operations, tax so a effect from $XX for $XX benefit So from net that the loss $X and the $X million of that then million. million

John Tanwanteng

with have asset Great. Or buyers you Thank in contact too for in early this yet? still And it you. the process? potential been is

Mark Marinko

No.

We are of in now. right process the the middle

John Tanwanteng

do bidders? just there Are [indiscernible]? Okay. you potential Or

Mark Marinko

as don't process. But I first it to XXXX. about have talk of divest want we half in the or we to the of anymore stated, this expect sell

John Tanwanteng

that major what LNG these been you come that talking awards Okay. perspective, port deepening to Lasse, the major or XXXX Fair lettings are in are facilities even work have coastal out enough. or from about? a large you expecting larger

Lasse Petterson

Yes.

As LNG from increase exports the U.S. is there you LNG facilities, starting know, a huge in the with

to previous the are now up to terminals a work developments the the U.S. you need business. reversed the import also the So exporting companies let's energy say, for portfolio LNG fantastic our, gives built being then to same a is for facilities end and and And change do the world, of being clients. good at you for port which when broaden opportunity And that this, and time. us energy

are an will On those And the follow Corpus project. in are is may Savannah year. we projects, of deepening also There the be expect Christi us, additional Charleston projects also later and deepening we with second for this quarter that the ones. up come port main with on their work Jacksonville engaged And case good. And additional we of this year. that the will out work the already additional expect and in

are We on the mobilized already project.

these large projects the as sometime then cases the Coastal end are coming continue Improvement are the for out We the to able did X of also being also good X. on of project. being doing hopeful new and Phase be work that new Mississippi is Phase projects year. the that the Program, is bid. towards are to to We There work we And announced

John Tanwanteng

might there. did. happened Thank And better? in I doing much you much. quarter. very thought then gives doesn't delay you there in confidence international be will And some you be a then business It some Was like Great. what that XXXX of the that what look you sort? just

Lasse Petterson

start is see the our, good we want work for have do said good it developments We we general international year, up, we Middle East. that to in are XXXX they being market beyond. at do the the in got over the oil price and planned margins come see. Well, as have will internationally. improve busy. the last as fleet not But XXXX. we which covered. the that new international the are is and for activity like to XXXX, indicator in up infrastructure And a That say, reduced in backlog have the for market the now Unfortunately, projects our keeps to fleet But we keep would for that let's up then markets will backlog large

John Tanwanteng

Okay. Great.

any the anything capital on got the quarter. dredges? closer know clamshell any pipe else to new decisions there I just XXXX? the spending you fourth in for have Finally, Is in

Lasse Petterson

for dredges. we at what plan we we new And do, future. and looking Well, for the are concepts designs

is However, balance wait new and those time good this our that in to healthy see market sheet the when a decisions invest. wait we will see level capacity for when and and in to prudent is invest it we is at

John Tanwanteng

Great. Thank you very much.

Operator

Thank you.

Blair. question next from Joseph comes William Our Farricielli line from the comment of or

open. is line Your

Joseph Farricielli

Good bit morning. are that a for now at dredging expectations looking Can this just capital operations? about you talk working we little year

Mark Marinko

Yes. Sure.

it is all, that big increase So bit next a so for with flow we we But the be Mark. year. will negative see as to of will little capital the backlog, backlog revenues won't working be some have, next cash to expect this free a have year. overall we material first Yes,

a have bit little AR. higher You a of

items year that cash. won't coming have in our were into positive large had in process the did You into XXXX we some we this sitting as impact had that that work turn

So work XXXX. we big a in going have process don't into

a little a but bit will amount not flow. it material free impacting negative, So cash be

Joseph Farricielli

this related little your more is on that? to checks regular give Thank you behind you. the be, then question color to Okay. a do equipment? Could next that would with you Great. have And safety drydocking, me

Mark Marinko

dry. Yes. Sure. are regulatory Those

are keep You class. we XXXX. have year Guard a in all some Coast regulatory just through and that you certain cycles the them These have to for are in in more cycle that

Joseph Farricielli

Great.

XXXX, am this. what you And at are think do for you percentage fleet you are of mean think what you percentage I do XXXX? you sorry, the for right, -- So

Mark Marinko

are You mean in percentage drydock? vessels a of that

Joseph Farricielli

Yes.

that? Just is and safety cycle your like checks what wondering, stuff for required the

Mark Marinko

Yes.

generally these through go major vessels regulatory So every three drydock a years.

think it a aspect XX% little higher is the of cycle this bit from average. an of one than type So And on a just of XXXX.

Joseph Farricielli

Okay.

closer that of So see? XX% you this XX.XX% to instead traditionally year maybe little a pushing

Mark Marinko

And they the don't Yes. obviously take up year. entire

you So generally two months. in are these to drydocks three for

Joseph Farricielli

Okay. we And higher from don't that anticipate could CapEx of the this there? that? saying Coast historically, fix What's change traditional see impact you this, Guard because

Mark Marinko

Yes.

You do have CapEx. The $XX million number we are talking about expense.

You these It our CapEx related in can do that number is million CapEx. said have we be $XX to the for drydocks included expected but that was XXXX.

Joseph Farricielli

Okay. Thank Got That's it it. for me. you.

Mark Marinko

Good. Thanks.

Operator

you. Thank

Our Fratt or Capital of comment next Noble from the from Markets. line question Poe comes

open. is line Your

Poe Fratt

Could morning. give Good the of the helpful. us would if versus XXXX? us went to you on the up backlog? It give the timing $XXX be Any aging million. could you Wonder color what your Hi. of you XXXX timing backlog

Mark Marinko

pretty Yes. expect. we to what give close you I can

$XXX that so high we expect highs, to be in the the in XXXX. XX% in expect million, earned we So

Poe Fratt

the project, as far all that of Or be to a out as Mark, then years? that foreign is going is couple And spread over XXXX business?

Mark Marinko

It's XXXX. all

Poe Fratt

XXXX might backlog enough the And color up? will a you to end when little quarter backlog your do it, you coastal backlog. you see think over drawdown year-end protection, of then awards be fourth quarter the of stabilize with Do just sort course at a to look think year? backlog? And of a continued that draw Or on maybe third that bit in there the you big where

Mark Marinko

Yes.

have to a up that expect it was, will awards will even where we back some So bring that we bit. little maybe that

Lasse Petterson

Yes.

to through here towards XXXX projects projects. actively we during expect the I to year. second the here the beach think backlog comment has that and that, replenish the wetlands appropriation our supplemental And are improvement been coming restoration to then already, and on those quite with projects market of those that will bid half made

Poe Fratt

you fill course look you Great. about understand sort you like just or or cash me looks to used of flow all what? quarter? could so. up was there? you the about help quarter, like of you debt. sort the Operating went over It to for down the flow $XX in Could the the cash million quarter? of bridge, plug Mark, Can just of the $XX pay million cash quarter-to-quarter. bridge it Was $XX Can the third fourth quarter capital working just cash bridge, sort million

Mark Marinko

Yes.

little the of it $XX $XX.X million So piece quarter we in that. had that million, the the with major was being But of CapEx a We yes, capital. new clamshell call working our the the limited, the would that it working of bit assets related in yes, of generally plug terms capital would not the material rest be, would be rest CapEx but I selling of restructuring to some almost had there.

Poe Fratt

the Thanks. what's then the charge, what as helpful. take $XX.X business books Great. That's to far down million And on right did the as that E&I now?

Mark Marinko

numbers time. talk about So details the we are in point in around to any of E&I this want the the at the middle of process, so don't I

at leave going to this I So point. that am to have it at

Poe Fratt

number was me You can't give the that down too? written

Mark Marinko

No.

Poe Fratt

Thanks a lot. Great. Okay.

Mark Marinko

Yes.

Operator

Instructions]. [Operator

Co. Walthausen or Our Hinman DeForest & comes the next question of from comment line from

Your line is open.

DeForest Hinman

second working my we know a from be was in questions. or you tailwind very we last performance. a Island, my higher and That's over Hello. what perspective coming stated first I expectation about hard and improving performance. That's very been of discipline overall Congratulations in with seeing years and have perspective three of performance But Good some have going half morning. Thanks a reset of from bid the business? strong been look had four should nice the in bids forward Ellis are you for the the you a seen taking thinking have When at pleasant we dredging know bids. the surprise. of XXXX I margin versus that question. on the the gross full-year that winning a what we on volume with those some margin

Mark Marinko

Yes.

you perspective, we that we a the kind said. talk margins next pretty What's achieved for year when margin what our have the this full So that about profit margin of percentage line, year. is similar the for gross driving to are exactly from expectations year

from year. profit the full the Island gross which additional with drydock have offset Ellis are You effect above expenses, year next some of these

from XXXX. percentage, be full the going a with to year So margin it's relatively flat

DeForest Hinman

going And think that bid a maybe XX% margins? restructuring gross this is this have should with business I this ex-drydocks, a forward, is we guess, is different discipline, business a Island, actions taken, Ellis to expect way generate we of we some the

Mark Marinko

yes. Since is approach yes. can a say, Yes. here, this number, drydock that yes. We higher would I

DeForest Hinman

In ex-drydocks? saying Or XXXX? are you

Mark Marinko

at in XX.X% we gross No. operations that did profit line. XXXX, continuing from

going it's think we to So similar be next year.

DeForest Hinman

numbers. some then CapEx Okay. of gave That's helpful. And the we

a We outlook XXXX. for broader have given

$XX yield give higher cash will free the looking much can Just envelope, million the goals always to million, net free forward million margins. especially free a some accomplish the reducing XX% flow sorry, I type is of burn, flow that for expectations of us important, that's backlog this of of trying are very right that am back which gave do flow possible revenue debt. $XX year, this business now? with Is a you guys than and yield? Or CapEx But at free flow. with I gross $XX about for XX% Is yield. cash cash flow you next of the cash think business cash that,

Mark Marinko

would cash really would flow possible. expect But The call I level. XXXX. We be But lot expectation here. in high lower free at we that to some say, don't solid a everything at that's I that do a utilized. being a of fully level of expect it that's, drydock

DeForest Hinman

XXXX, when X.XX. bonds do helpful. level like Okay. we are we vessel some about cash, And start think And it cash do a XXXX because and looking how if obviously being problem, is that I something flow? think even and we previous the that really near-term. can't that statements do That's even free patient at high we then we our not to are do cash? call it at sounds at capacity we I the with adding that's with What What until guess were really then with do we that's

Mark Marinko

that's a problem So at this to point, yes, I nice think have.

paying debt. We on past. haven't Obviously, have down in the focused that problem had we

looks that of off forward, this want Lasse we do pay the of more revolver we mentioned still to for to there as the in assets are similar new going remainder options those, is as in to what point of would assets. way But of, do have a assets, of based we in our with So XXXX first do looked our the market we retire the opposed But at what we keep of as investments look, that's said, think XXXX. terms is, of in we we I do discussion those, and we have piece fleet that. invest quarter forward. have how look at on the first in have we prudent as to the we look going a do as And rationalization here, the

But because as and debt more going for discussion time. And definitely down. to make So probably And we this to we prudent out still at close a said and invest prudent as disciplined bit in we are we make it where XXXX have to sure are in out future. far But pay are we in a sure of want to to more opposed still are better as point. that to to Lasse much the where as little that, do XXXX want it's at it we at we to looking a a position. close still we want designs dredges we earlier, to related

DeForest Hinman

those internationally thinking overhauls of where of XXXX vintages. some Is we the at Jones, of dredges, about early-XXs about more doing look vessels to discussion, vintages are that investments? think vessels? Or with replacements the or and need thinking those major the XXXX areas we those that we And

Lasse Petterson

Yes.

at only new investments. U.S. has us, markets. And look saying, aspects been market when with when market international that the a good. the Mark good to who and prudent That international we We operations. as dredger domestic as is has was those the market be we want at investments, considering But for based new are also are all looking we both

the be reliability optimize into that availability, We existing looking production. and market. new fleet, the And which investments this of our we our How improve domestic point are we vessels through and uptime secondly, replacement in investing our in will most our at investments that earnings we at optimize make then sure productive do are time.

at in of the doing vessels this design are We time. point new

when would decisions come investment feel it's prudent. However, we

DeForest Hinman

questions. Okay. two That's helpful. then more lastly, sorry And

answered it. it have have missed and might You I might

it Or project On the go Bahrain over on going that Is XXXX. project, recognition what XXXX? does forward? is the into revenue that

Mark Marinko

Yes. into It's XXXX. It just XXXX. doesn't go

DeForest Hinman

evenly we should or half? more first pretty it And is weighted the year for

Mark Marinko

actually It's No. more in half the of XXXX. first

DeForest Hinman

I the Okay. branch rented some last a business some about as the equipment not some itself let business of half just think offices, year, E&I of sales we sold an and understanding that it's assets question, equipment. getting process comments. And the be months But exit given When and Is four businesses, potentially then seems potential you the me even laid XXXX? process are or as the have making my of could terms pretty whole. much sales just know in But to process. gives of might business. I that really option finished sell we of this that believe that business aggressive a are process, that confidence a in the us we business, the half of sale that first the in that first to this out of remaining. only out be mix owned The auction strikes it

Mark Marinko

to press press the as point. this I want release just So to release stick at said, that

have We firm. an hired outside

the We are process middle the in now. of right

time. comment And anymore at that really this so I in can't on point

DeForest Hinman

up work. the guys. again, good and you. keep Once results congratulations on Okay. the Thank

Mark Marinko

Thank you.

Lasse Petterson

you. Thank

Operator

you. Thank

of Our next or line from Wynnefield Obus Nelson comes comment from the question Capital.

open. is line Your

Nelson Obus

remarkable paydown debt, remarkable. of extremely A Lasse. Hi

of you the Just a the and I that believe, assets K questions couple want avoiding keep division. the environmental of in number have a I do about in you total side. $XX.X But questions for to know million,

that as write-off mean to And subtract just we question. a be number that's yes so would a from? use I appropriate that the no. or just would a It's technical

Lasse Petterson

recognize I Nelson. that number, don't

Nelson Obus

total $XX.X the under and segment your it's note it environmental in XX, that's Environmental and business. of information million infrastructure for assets infrastructure, shows K. Well,

Mark Marinko

Yes.

Nelson Obus

it's means that there. in So

can was deal a we want with it, to base. you don't If forget there it. But I mean

Mark Marinko

That's so not no, that's obviously, right. technically Yes. calculation, only that

from liabilities just technical calculate assets No, not that's moved year's business. have to that's your there. of how obviously But the Things You it. K. number anyway, from question. is answer at to that have you But look the would last and

Nelson Obus

Fine. right. All

in you on be If how take a and put make exactly long and in, to it you that between of guess to I the put order on may it in or when order ship-ready? were invest to which a whatever you depend it type when dredge average would order the would fleet, you decision determine wanted you

Lasse Petterson

size type But reason the and schedule. accelerating vessel. on we design are depends the the of is the now the doing It for then

So the we we to make ready everything shipyard have investment put into when decision. a it

when on, point and we two ready, it this from the take will two-and-a-half design have between years. So

Nelson Obus

interesting. take long there Obviously a different. Is what a have Well, the that a it so Because level be there you of we is and is things competitive us Or market? why utilization But time it's will into and in factors international of okay, is you that consideration lead can confidence it finally, quite to internationally? give your are competitors? tougher sense can any And improve a picture the capacity competitive slog. there? it of simply other

Lasse Petterson

Yes.

compete history being nature do I that It of dredger, be XXX the that equipment on the that competence to the to we of the head from with old year depends nature international It utilized. the based projects. U.S. on competitors as able on knowledge project. is and have on believe us For the depends

Panama larger is linking Sea. Once of between Denmark as a requires such Canal probably have with Suez something working That's these point Europe, Med And it drives utilization I for on I in many range huge larger international international the on you which the of of between think are has is projects, the the been being what you one to part kick project market. in at are, time, at markets. And market discussions fleet a then Canal, includes East And good dredges them of work that the and So the Europe And oil in will through. discussed we about huge years, going recovering and to looking Germany. been XX%. XX% a the There this should between second the need is the There is fact successful we infrastructure when fleet think need internationally off, but the the be carry it move that to these oil happened Europe that in that is that canal and recognize. that a funded. signs in market, in and of Middle order projects the northern Caspian international not needle that price, we which they projects. part southern

Nelson Obus

terms least finally, greatest has the Thanks. my experience. magnitude was perspective from And reduction Okay. just I at of implications. think challenge, debt and And unprecedented really to that reduction of is reiterate, some the sort transformational my of congratulations, in it

Lasse Petterson

Nelson. you Thank

Operator

you. Thank

Our comes comment Feeley William Feeley next or question from Capital Markets. of line the from

open. line is Your

William Feeley

a area lot your Mid-Atlantic out we kind I that case of hellacious weather on vis-à-vis in for one worked of of and winter cold your utilization curious, gentlemen. events, this how morning planning projects am couple in snow just had curious, another. in am days? weather Good a I the in

Lasse Petterson

Yes.

long in and have over track record business been projects the doing over these in different We we ports. have and a dredging the

less on good it the impact stronger have where how impacts us. estimates are out. time we but there So years years Clearly, evens is over and where weather, have weather weather you

handle we the And our So you include that's that really for estimates in project. how it.

William Feeley

unusual in your or around? heavy So allowances nothing from year's the other weather cycle way this exceeding

Lasse Petterson

it's On let's for we the weathers. average, the on good latter the say, we around on state and on sea an of the year. Well, But that But average the has seen other instance, some very East say, average seen the the have during, here U.S. better I extraordinary. would say, have been of able have But Coast project. get then to would been And Charleston work year. on performance part we I geographies, no. on weather strong

William Feeley

very Thanks Great. much.

Operator

remarks. queue additional at you. management I no turn this to conference in to over showing I time. questions the for Thank the would back am any like closing

Abby Sullivan

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

Operator

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

now a disconnect. wonderful day. Everyone, have You may

Great Lakes Dredge & Dock (GLDD) 20 Feb 192018 Q4 Earnings call transcript