GLDD - Earnings call transcript Q2 2019 | Great Lakes Dredge & Dock Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the quarter two 2019 Great Lakes Dredge & Dock Corp earnings conference call. [Operator instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Ms. Kathy O'Halloran.

The floor is yours, ma'am.

Kathy O'Halloran

you. Thank welcome conference and our to morning, call. quarterly Good

update this our our quarter, Chief me provide Financial on our Officer, then is results. call the an will an Lasse and Joining Mark Executive will of update morning Lasse Mark Marinko. the provide on events Officer, on the Chief financial Petterson;

XXXX. for market for and Lasse with will business an conclude remainder update of our on the outlook the

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

statements call, to our number results you risks, that we business. will statements this uncertainties materially factors expectations. forward-looking These certain During our help make other from to differ actual understand involve of could a cause and

SEC, filings. Certain are risk in forth business including factors Form in the set our and XX-K in release XXXX our subsequent inherent our earnings with and filings

attached this adjusted will call we adjusted net from website. continuing financial over refer in our turn Investor from which non-GAAP EBITDA to With income and continuing our EBITDA Relations that, the to the call, During I'll explained reconciliation earnings are release to operations, posted to on Lasse. measures, including also operations

Lasse Petterson

you, morning. and Thank good

operations million As net second quarter, to million year-to-date net $XX.X our operations adjusted in income continuing morning, and the of respectively. stated company and from EBITDA generated $XX from bringing earnings in the continuing EBITDA our full release this and $XX.X continuing operations million, adjusted of $XX income million, from

year, had the making both maintenance normal the for period to continuing this mix both company, revenue Compared when from and projects flood continuing, active our protection EBITDA improvements quarter. consecutive adjusted new operations with another was prior-year port quarter of projects. the the quarter restorations, a second dredging deepenings to and quarter fourth quarter The showing more beach in second first comparing

performance deepening in were protection And Charleston, Myrtle good overall. engaged. Nags performance we and Beach and investment well on the saw on Beach, coastal mechanical projects where dredges few, project our mention dredges to in strong hopper experienced Jacksonville Emerald Isle projects and cutterhead a performed We and Head, our

have and the and the result third Planned from the direct some two scheduled the sand focus we Jacinto U.S., clamshell dry new continued levy with the Missouri for market vessels, large repairing results, hopper upgrading flood rivers our to the the ago international vessels impact as automation dredge, markets. with repatriation largest had which, second-quarter mechanical of U.S. heavy expect upgrades. work less-productive the and Island, a the dredge, on lakes the in San operational impact upgraded put a by older of dredges two and cutter in dredge, of good our is regulatory years and dockings dredges hopper the and Ellis Houston, a The retire place addition large quarter performance also way, results River. protection to the in is expenditure strong excavating along flooding dry in strategy Our and an dockings River the several some we breached capital have been and best-performing Carolina, combined to both younger fleet in the of with during on from

of seen continued Coast we Ellis moved any in project, from The to beach our work have dredge, market. Island, quarter, the outperform on Corpus slow. this remain to new the has she performing the international where dredge markets restoration During hopper hopper deepening East Christi the capabilities

we number to and the that to touch as Great a we projects in executed complete and areas end that are land all of committed with state by we've work result safety We hand project that leave in performed. robust year which Lakes year. are and environmental better execution is of incidents reclamation hand a performance Bahrain, currently the ensuring as we reduce working go on Safe of target the continue standards, a large -- workplace. strong in the our the to will in

During Week Great firms XX firm safe over participated to joined Safety Annual celebrate the where the the major construction the National Lakes culture. fifth company quarter, industry work -- in

would portfolio, be given We migrating we in previous strategic we a announced also divest and in this sale no a strategic Tampa on where business saw members To business business. this getting it rates. as longer was -- overall good of improvements to that that new affected environmental with a build utilized core overall team fit the years. reserve the injury Earlier our E&I we and the the continued with of out reports Bend counts incident that to clients the partner year are was bird quarter will initiate we impact, with a already second project material We birds, did process improve the owner. we and from and will nature dredge up our for the are our our believe year, our completed from fit nest Big a

will future. and better to E&I be And business position successful the transaction the transition this -- in the

updates, with call discuss Mark over the those turn to to quarter. the results the Now of I

Mark Marinko

as some discontinued that Please I E&I in have results all Okay. Thank I you, quarterly December specifics the placed will start that remember segment results the XXXX, regarding included in operations the results Lasse. business. and with therefore, our of discuss been discuss. our XX, will from and, then dredging not

remarks. discontinued near quick I'll provide on operations a my of the end update

million. the the were or the quarter from was net represented of million, $XX.X XXXX. For of revenues result quarter second of revenue was quarter continuing $XX was adjusted from increase increase throughout million operations for a fleet. EBITDA XXXX compared $XXX revenues quarter XXXX, and The company's operations second income Total XX% project of a continuing $XX million to strong performance second -- the domestic

income increase from preparation planning, XX.X%, The was the in compared million profit prior-year was quarter. revenue operating XXXX. operations $XX.X $XX.X and to the quarter. margin additional the Gross execution. of XX.X% in an million, over to which profit $XX.X is from project of project continuing prior-year was quarter million increase compared by enhanced $XX.X company Total driven second is performance the strong and million, resulting Gross

These factors an income in offset expense for of net to increase continuing compensation. included $X.X continuing income tax for expense of XXXX quarter. million quarter million of in Net net an was and $X income second million income net income operations $X.X expense Current operations expense the related million. interest by Net tax of second million, includes XXXX of quarter income quarter in to the were from and $X.X from of million expense. G&A incentive $X.X interest net partially the prior-year $XX.X compared

on The our EBITDA net in from by on balances. reduction along operations our continuing to income for in paydown million, driven of the second interest operations continuing compared the expense quarter the interest EBITDA $XX quarter adjusted Adjusted $XX.X with cash million second of from significant was is revolver, XXXX. XXXX generated of

let sheet balance XX, $XXX.X me had Next, at we our million cash. where to turn in XXXX, June

net XX, debt June was at Our XXXX, $XXX.X million.

million. We in for competitor dredge in earnings this Our on expenditures announcement, total last who amount clamshell company XXXX $XX.X made from capital a April the in quarter million. that is our a as noted in market. XXXX, exiting of And final the dredge purchased the of the payment were $XX

$X.X recorded of the second quarter, net of which of E&I taxes. an additional the the business, of divestiture As the on loss sale a we is million, income result in

our project in combined XX, high with bid the first the $X.X quarter the revenues in totaled reducing income XXXX, operations of second Contracted was quarter, extending XXXX, June the anticipated million. credit of operations taxes the revolving million, in it a drop five discontinued net to of facility low XXXX, market, December and in at loss million, caused at to XX, million XXXX, million, the performance years size During discontinued of $XXX of XXXX, half $XXX taxes and compared We backlog from net out June income quarter loss to backlog. XXXX. and this second domestic compared a million. of at $XXX The of $X.X of $XXX XX, from backlog amended

of improved achieve pricing to we're credit us With able Lakes, the more and Great to significantly allow effectively profile strategy. our flexible terms lower to execute

that, is on over the to to remarks for With forward. ratio the moving debt-to-EBITDA his turn outlook call now Lasse down back net X.XX times. Our I'll

Lasse Petterson

you, Mark. Thank

bid awarded in second-quarter million like only the total of the the market, expected, much was As first, Great $XXX with year Lakes below which prior $XX.X market, million. the awarded was

with to be bidding expect total we billion. to market $X.X the fourth approximately However, significantly anticipated increase bid year the third and for in quarters our

focus will new restoration driven coastal projects port large energy remain are shipping projects, Our and deepening challenging improvement by projects, technically which and major channel facilities. on export the

expertise, technical and where fleet. excel performance we diverse can our These our are projects experience, large, safety with

XXXX are Charleston awarded are we the bid where Corpus as such in already Christi, Savannah, half projects second phases Additional to Jacksonville. be of of expected and working and

bid projects to in deepening We in are on Norfolk, ports coastal also Mississippi new expected to the Several and Louisiana. Texas. projects and Virginia Freeport, bid restoration large expect of

supplemental to beach disaster Now we events. the for and for XXXX flood that from have storm reduce flood from projects fund relief bid future control advertisements will restoration $XX.X for projects from or damage includes risk see new billion appropriations funded started recovery, to corps the for the of which and

And indicate work be dredging-related. as billion this $X.X of will as much some estimates

funding $X.X for XXXX, billion relief result at appropriations Florence. passed Additionally, the as end Congress of Hurricane a of of supplemental disaster

activity bidding any these but projects on as from the the expect seen these year. second yet funds not have of well half We movement in

Engineers, and Great was and enhancing first timely look to good we backlog ensure XXXX. the assets employees new to year States Army and with believe we for financial partnership with we our be projects of shareholders. an and working and a of in projects a docks, excellent the to United forward completion in we energy in their Lakes. to and We another With strong budget outlook will market, thereby, continue are future of domestic what our fleet, to XXXX position the With and current performance, Corps of positive success solid in active planned a to the our conclusion, investments the believe time in level this port continued environment safe the In providing authorities safe a for companies prudent XXXX, even half returns additions. dry and, the on on successful for make planning saw start

over turn I'll the call that, And for with questions.

Operator

from Your first the of Jon Mr. line comes instructions] question Tanwanteng. [Operator

is open, line sir. Your

Jon Tanwanteng

quarter. thank questions. gentlemen, A for you taking very my Hey, nice

Lasse Petterson

Thanks, Jon.

Jon Tanwanteng

strong Or new the pay what is down you given of capital plans your the by My first allocation operational one should how closer infusion now? Are performance, E&I, year? deciding from next on a cash than debt to to think becomes callable the dredge? when still the way, we your better expected, was which, priority is, we it

Mark Marinko

Yeah.

know you as next before, it's a here, Jon, I premium good pretty May we call can't XXX term that, would in call So you say premium. I at pay that the short to it really of -- said And debt. year until

Lasse So short said plan in done his future for term we comments, and as enhancing as the at is just assets kind our additions. then current here, look will we've on of

the short enhancing So about in say it's assets. our current term, I'd really

Jon Tanwanteng

you what Got that's a for from capex year before? Do you OK. it. have different said expectation the

Mark Marinko

this No. We're point. still at $XX million at

Jon Tanwanteng

looking is second to bid outlook much in months coming at and And does ability look the it to bidding outlook market, on enhanced Understood. ago? an three -- OK. you How your market win the compared do for awards does your to have half? the how

Mark Marinko

Yeah.

And first year be All that So then second of third next going what in was. the the mean in a weeks, -- expectation actually today, even of I coming the bidding and few into long, rest up we and quarters number the lot large today, to up, knew coming it's half. a we third here. quarter have still light two our and the projects were then

million. have So large, island today, a barrier bidding $XXX over we

of a up up have Virginia, in August. over Phase in coming million protection middle early coastal X Port We August. $XXX The the that's deepening in coming project, Mississippi of

as deepenings earlier, today. So we're phases of we said additional port working then -- of, a and number

next XX So robust -- yeah, the up ones looks numbers days. pretty large coming it with in

Jon Tanwanteng

color. docking or any the and your schedule into QX how you that And do Great. change have online of second to expect docking? the capital dry for Thanks update work you come And other OK. back as dry your in vessels go half? maintenance for and that mix on

Mark Marinko

Right.

similar of very said representation Lasse think now mix, was we as the terms expect earlier, project QX. as dry very be QX So and it QX right in the it's The good business similar I in of a in what QX was docks and QX. to will in

be will season very some strong -- QX, little to a replicate QX in had hurricane and projects as kind So head performance QX into we here. we on we in challenging do which us for of

But in we project QX the the the performance. dry docks not but expect being -- because strong maybe level that, so of of same same

a gross We we two margin or the expect were to in where from QX. percentage maybe dip point

Jon Tanwanteng

Got the you're billion LNG back you then any, just opportunity to talking about? going it. How the XXXX? OK. size that that, Can And much of market. $X.X into bid falls in if

Lasse Petterson

some LNG around by driven channel, the new over $XX current are bids million. and this it, state being on the $XXX is mostly There large the Yeah. bids, built up, coming million coast. call shipping facilities These depending of varies between, and

the are depends are that it really forefront. So coming -- to on which projects

opportunities But it's nice for look we as us forward.

forward positive look one story to gas in export the of and of this products LNG, and very market. is participate U.S., petrochem export from oil we a for the know, you As

Jon Tanwanteng

then any be trend your I York is update And on now. New for to offshore last, that the farms? forefront Okay. trying to aspirations Great. wind work know finally, of do at

Lasse Petterson

Yeah.

you in Europe that forefront years. developing wind As over been companies offshore the And That XX and market the the has dredging up opening has in our in the is been know, international market. very in participating has -- U.S. last -- competitors market of now been the strong

of participate it uncertain. like in diversification would bit very is But be definitely a The pace we that to going and us forward. a for could market, those nice potentially developments

Operator

question of from next line comes Matt Your the Baxter.

sir. open, is line Your

Matt Baxter

What give you if little us -- of us a to E&I company. give Lasse, means morning. transaction and color much a color Good more money wondering, any for could did you more little or here? the it? the And the me happened? all what it on financial give at just part Can How all you get

Lasse Petterson

Yeah.

We we E&I half year, there's successful all that E&I future new was in of our the of were to the first the believe announced Just that year. target. in And a last with business plan good the divest business do owner. achieving as the for I

I'll impact. comment financial the let on Mark

Mark Marinko

Sure.

So hi, Matt.

in As I'd That's we million capital closing close, stated at adjustments, cash. earnings $XX.X the closing, subject they adjustments, the release, won't second the to, in in but say, working be received, we customary quarter, of material.

million We end the to -- be put loss related about on loss quarter, We approximately XXXX book took the the We for a asset sale. loss don't -- them of expect material. held we we the it. to sale. talking In the end did took the an at when $X of

So again, on things, the is total business that to that agreements, that loss of that related quarter some retained. end in a took the of took most those approximately around But year. employment little loss at $XX we -- we the mainly liabilities We last additional million. of type bit

Matt Baxter

thank So in [Audio you, if at forward, the looking Mark, gap] you're any going -- improvement

Mark Marinko

Matt. sorry, Oops,

You've -- we've the lost you call. on

Matt Baxter

me hear Can you now?

Mark Marinko

Yes. Could you…

Matt Baxter

retained in this My is transaction, view, question your any since today? reductions point at own favorable is best the issued was of now look since SG&A you would done from GLDD a this

Mark Marinko

done related all and stand-alone It discontinued fairly into this no. to standpoint, SG&A really those from a already was No. of were business. thrown We've -- kind that We've operations.

reductions, did did have Last in end that year, prior we the some of the year. we but

Matt Baxter

thanks a and the Well, of work. being to It guys. stop a any needs lot, good kind distraction continue

Mark Marinko

Thank you.

Operator

line next Your Fratt. the from of question Poe comes

open, is Your line sir.

Poe Fratt

morning. Good

detail. little Just I in to talk guess, granular bid market, a more the about

to you award? that you last the this understanding, [indiscernible]. be have [indiscernible] are first, bid It'll project will typically my on the FID On you that there, week, -- anticipate hopefully quarter, bids see FERC, -- that so and received Do pending go this

Lasse Petterson

sorry. I'm

repeat time hard you. Could a question? have you the hearing We

Poe Fratt

with [indiscernible]? next expect the work that decade you submitted decision do When you've and the on

Lasse Petterson

a these, fairly FERC the approval. that of And several -- projects, you decision. the be we FERC following are in as are work. will through clearly, the There's the coming time, have And Yeah. that investment need we approval, the these closely, after final by bidding to

these. there some So lag on are

are following delay been we these projects that the As you projects. but know, there has are on proceeding, some

Poe Fratt

might company be [indiscernible] might on And October? it you would you do in because early capability. a next low are is early looks smaller that like that the a that [indiscernible] focused there's the then Or bidder Great. of [indiscernible] possibility out -- think less July, be with in just leg you

Lasse Petterson

up the that Again, is breaking related you were or Savannah to question project?

Poe Fratt

that second like bidder do Yes. that is next were a -- October? you more through? of Savannah, the it will to the focusing possibility in come on in the looked early low you Are July. still Or you right think work now that bid out go Savannah

Lasse Petterson

larger execute Well, fits port the several as what we are you is these there really, on phases. with of awards And deepening projects, part know, best. what

Some done the inside harbor being work is is the that of [indiscernible].

are easily are accessible -- out. for that particularly the our deepening phases general as Savannah, there there some phases there projects on are Savannah of So a And comment. further coming of that competitors, are of is

Poe Fratt

for then the to Great. repairs Liberty until you the least, third according the at, then down that And be talked pretty down all looks fourth we most much Terrapin what be would downtime looking if to in going the quarter. of Island for could at I'm And of November. the It -- second much like its Island quarter. about quarter, for pretty -- is

accurate? that Is

Mark Marinko

accurate. really That's That's Yes. correct.

Poe Fratt

the you the credit revolver? could little talk us that Mark, the saw pricing more about improvement give -- then, the And on And flexibility on on you you Can Okay. about flexibility. comment? a you maybe talked detail then new expand

Mark Marinko

sure. Oh, Sure.

that. we basis are points they So interest than lower -- different old They're talk revolver. the we that -- to about there's our our have -- better, when a terms, a better XXX-point had rates grid -- on

In any talk allows all. and flexibility at increased, limits what revolvers need say, we things baskets what so across have would approval and or to do. board, And XXX do cases, flexibility, those were about either, without generally, we to these removed a were you lot the us limits can baskets without many overall, But to lower. or bank I more or do restrictions bps

Poe Fratt

Great. number -- far as what Maybe back could that you we your bids? bids as Do a you've bidding. the submitted outstanding can you have talk about actually where to that current go are

Lasse Petterson

yeah, waiting -- bids -- there would a of away. RFP and can't really, we rip one give are so you read, out want there's But right know have right that But number don't about. we're the most now. I large I do to hear one

Poe Fratt

in work? that Or back the to that is the addition to Is back work? to

Lasse Petterson

was call, This no. corps referring yeah. This Oh, to. -- I just was army was, I'll regular work

In terms side, of to there's there. it one The was was was just the one yes, LNG -- the a on referring regular deepening. one around port only I

Operator

question next of Your Mr. the comes from Heffernan. line Gerry

is sir. line open, Your

Gerry Heffernan

a Good some that if and that for I good certainly question. Lasse morning, bigger sold, last cleaned reports, business seen we've the turnaround is report back here. a really business can years. We've three a in very E&I We've and thank you step up. just and tremendous everybody, group, over -- the ask the and good really happy

in like And just results. what's these look to I And would great seeing gross we're in margin here movement ahead.

You that out paint business two, If a continues stay I'm as years, pretty there. out work looking positive as to strong. bid far picture three is

basis, proud you and be of? a operation gross a an have What moving should level, gross properly, you way to obtain assets utilizing level efficient you is and is in XX-month want margin really working trailing really annual when see company margin as this basis the the see that on

Lasse Petterson

being market the deepening for good of projects was the in getting also Panama thank starting that lot the forward, for Well, to to is deepening on very at been see. we When improve our and of ports look go by a fleet up Coast work When market will here Canal incentive gave do our performance widened, are think the have that and to East that continuing. I a organization those going continue. opened meet now the the we the to projects, a comments. there's shape in you place put -- lot

bid export the going a us also, to forward. Gulf products give is And petroleum very the good market from and going of continue

be margins executed, fleet as think to horizon advantage position I satisfied So up a with the now, with take years. see a that's next in And have to enhancements the coming five to we're that for very have. it already that right three a market that we're level. excellent I'm The contractor gross good we starting achieving of we the to

gross and continuing, a around level at see XX%, keep looking here we and target to We're that that at that's it better. margin my or

Gerry Heffernan

better. a say some Panama room And that in position hydrocarbon coming you you a in, for revenue further America or really things time. the together years expansion opening, really business also Canal and Okay. of to North your top-line said, couple for position quite further continent There's when as XX% -- hasn't been you three in growth, out. looking would export, or

Lasse Petterson

market, as the I is years market. last been for strong has as and Yeah. The to see, can than going stronger far domestic be it the in

year. increased the by a came last Ellis which have addition million, for earnings We Island, online $XXX us, huge of was our investment that potential

have our we can what continued very, about going in are contribute Now very forward we this performance, improvements market. seen and that in optimistic

results. We also operation which revenue call, cutter with market, the potential. we quarter a you good and into large commented dredge bought from in here And a been as also -- earnings put has we our on second and enhanced dredge, the repatriated international very that the here as clamshell

So the going it see We of potential enhancement is fleet. earnings the there. definitely an being forward

Gerry Heffernan

is this thank you going -- snapback couple have levels to the this power business that time. the your we're upcoming And much the I'm market how very over depressed very there Okay. for recognizing stock if been of wondering before, to years. very see price strong you from earnings certainly, fully in cycle. is always a develop while, I next looking has appreciate of some

Mark Marinko

Thank you.

Lasse Petterson

you. Thank

Operator

of the from question next Your Mr. line Tanwanteng. Jon comes

sir. open, is line Your

Jon Tanwanteng

Hi, guys.

from a little Gerry's back bit step question. Just

going you you what last what to I for we time projects, that from looking see how do improve have there? all coming relatively the steady bid restoration, you're fairly what Is and you're funding XXXX. from with you, seeing see do was XXXX, spoke, market As place? you into -- LNG the it this to it trending believe XXXX going Or steady? saw to for

Lasse Petterson

Yeah. X.X that with The market I next bid, has that the come see billion supplemental -- do And bid not remarks, through starting next we market, it continue do funding in $X.X believe, decreasing upon way be to this said We bid we look the as my around year. we projects to see will the see been coming year for those Congress. year. and that to we as are into

So market I in increased definitely potential see a an bid going forward.

Jon Tanwanteng

Okay.

at unsure it may what improve degree So by. flat, to least

Mark Marinko

It's too early.

Lasse Petterson

Can you repeat that? Sorry.

Jon Tanwanteng

degree and quite not least at flat, clear So maybe improvement, the of yet.

Lasse Petterson

Oh, I'm or it. that getting next to But increasing is this that we year. positive will bid we early. see indications strong year. little the market a the a we'll are will that see from we But get when market strong bid It's very be also

Operator

further I'm please showing questions no at this continue. Presenters, time.

Kathy O'Halloran

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

Operator

call. conference concludes This today's

You Have may a great day. now disconnect.

Great Lakes Dredge & Dock (GLDD) 2 Aug 192019 Q2 Earnings call transcript