Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the Second Quarter 2023 Great Lakes Dredge & Dock Corporation Earnings Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions]. Please be advised that today's conference is being recorded.

to Tina conference Baginskis. like first to now today, speaker would hand over the your I Please ahead. go

Tina Baginskis

Good morning, and conference call. welcome to our second quarter XXXX

an Chief will the Kornblau, on the for Lasse on Joining is for provide an an update and call update this the will conclude Scott Chief Executive events the the will on and with of our Scott me results Petterson; then outlook Officer, quarter. our and Officer, this Financial with financial update Lasse Lasse quarter, on the President business morning continue market.

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

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

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

Lasse Petterson

Thank you, Tina.

capital XXXX As to we for indicated restoration now a beach result as difficulties in end. the in call, of delayed an faced earnings slowly our market and last projects we severely bid the coming is

this EBITDA first EBITDA million, improved project the our quarter highest result resulted The combined, second in initiatives improved cost-saving since of EBITDA which of bid an All adjusted our resulted XXXX. of an in and a is $XX.X quarter margins. market

XXXX. which a normal return on challenges later that the bid towards number operations us, XXXX projects large us developments path the of and both into in we to XXXX with to continue a all part results coming we behind better to a are to provides of confidence of see positive mix not are and and Although from

June of of The was total peer. is won Xx next market the million, closest XXXX, or by XX% This market $XXX nearly bid. won total through the $XXX the bid amount we XX, which million

bid totaling year and Great on utilize which million, we for won of half bids project, including will provide. port of million X that first deepening saw only varied improvement market Freeport several a can dredging equipment $XXX The XX%, suite the $XXX projects Phase we Lakes which

$XX $XXX have of million pending our ended bids of offshore million quarter wind clients. dredging to backlog, proceed bid X been LNG low not We notice contracts waiting projects related with that performance and were obligations pending the Included include to in and the million which $XXX award. from award options approximately does low in

for the Grande notice received scheduled projects, our history. be end, we establishing which early dredging on XXXX next and is the In start Work areas July, starting the major Rio undertaking in the this years. will networks now post-quarter LNG the XXX-year proceed ongoing year, material in later to containment dredge largest to X on project

projects $XXX for and and all resulting in with Additionally, million $XXX as an to likely of awarded added the to total post these in projects, LNG an will we we've to a backlog when the quarter be have project, end, million increase coming together today And on low included Grande stated been Rio exceeding during quarter seen bidder additional the third were bids which backlog awarded. previously, market.

and onwards. cold-stacked latter and Hopper an anticipation various currently market dredging of XXXX Dredge company the Terrapin we took proactive As in action a had stated, dredges fleet and reductions on the year, swift we retired in and cost utilization support Last improved Island, and we adjustments. equipment part of XX-year-old

allowed have vessels to As reduced as initiatives we than in and navigate market bid market. cost our led which easily G&A to reduced delayed the previously XX% continues conditions. Correspondingly, has overhead more structures on XXXX reactivated stated, cost to we've to current by XXXX, can substantially These cold-stacked have us the improve. market impact be the adjusting

attend XX SIU, David Ann senior executives this hopper Also President Administrator by the Jimmy crew July to rock Trades Metal of and our have President Phillips, Admiral Rear AFL-CIO, from President year, current were honored potential Congresswoman On dredges. clients. we present was Heindel, Great MARAD Hart were Department wind installation SIU Scanlon, steel-cutting of vessel, joined Gay Lakes ceremony for Mary Biden Acadia. the offshore Biden and

Post-quarter first we Gravel with to signed our in and entry Equinor into 'XX. support projects wind York. offshore Lakes and Carver New the LLC with Wind from rock X rock X solidify market will installation of source state contract Empire the quarry awarded Great for windows U.S. and in installation XXXX with our the a milestones & procurement end, ever the contractual Both sub Sand

Galveston to of As the vessels, current third hopper operational for XXXX. be we in adjust new our is our to back U.S. situation, sister XXXX, our have outlook in in dredge, fleet industry leader. Amelia quarter be several is ship, to dredging program to dredging and in in renewal strategies her the and long-term we best-performing fundamental And invested Island, is strategy optimistic delivered older expected the be continue decommissioning our expected to the the At the the Island, we continue upgrades ongoing XXXX. in market of remain productivity our market to the to

then the market discuss commentary our around our business. the I the for quarter, to further now turn call and Scott over a to and I'll provide further results

Scott Kornblau

and good morning, Lasse, everyone. you, Thank

and the XXXX and the The as utilization quarter was that million, the retired the second year XXXX in worked were second adjusted Terrapin was in to to of revenue quarter $XXX.X X cold-stacked the $XXX.X dredges recently net the For were less XXXX, XXXX, compared of EBITDA $XX.X of were work second quarter in XXXX. decreased quarter dry second income million last utilization second of quarter-over-quarter million same offsetting year the currently in days of the due second docking in decrease revenue $X.X Island of $XX.X most prior from quarter was prior operating didn't Revenue million. Partially quarter. the decrease revenues and primarily lower in year. quarter million

XXXX. Despite in the and The the lower respectively, gross margin increase to and our current year in due gross dockings dry operating quarter-over-quarter project profit improved cost lower second primarily due $XX.X XX.X%, to is focus on profit performance, margin gross increased fewer in and reduction quarter. and quarter costs $XX.X continued revenue, million compared current million quarter to X%, to of the respectively,

during to quarter, benefit a In the settlement to previously and $X.X recorded on addition, million a closed we project. cost completed legal related a

improved incentive is due of current nonrecurring the $XX.X increased of quarter and and partially prior year. the the profit. year to a our offset $X.X headcount lower the The million year onetime higher G&A due prior last prior net pay the XXXX of loss year recruiting $X.X and $X.X $X lower than quarter, of income Houston prior in in year for a the higher million general increase was million gross the legal Operating the same quarter from expansion headquarters from quarter driven by expense. by quarter's million, in Second decrease adjustment expenses primarily to and million quarter, administrative rent in office

quarter expense of XXXX build in second down program, interest interest $X.X of offset second by increase related interest million to in expense. from revolver slightly partially was to $X.X due quarter the Net our for XXXX quarter current primarily the million an capitalized new

tax Second quarter XXXX of income compared quarter from was of XXXX current same driven tax income. income by quarter million $X.X $X.X net of benefit million provision the and higher the to

up was a in quarter $X for the million net the year out million, Rounding net from P&L, $X.X the prior income quarter. second XXXX loss

$XXX CapEx. ended $X or consisting unchanged, revolver, the $XX Total for to quarter second million balance million on $XX.X third in increase second multicats, XXXX and Turning of which mature depending Galveston with payments. million, the the new decrease Island, and quarter approximately timing milestone the million build $XXX for sheet. build quarter for for can expenditures Acadia of drawn were $XX.X Island, of of for maintenance our the We the of XXXX the $XX.X year guidance doesn't XXXX. remains Amelia the of million capital until $X million of $X on Full million for million million $X.X but the million the cash CapEx

explore for of As we is with Department ongoing very progressing, applied MARAD, other review previously terms, discussed, we with financing which but of of XI this on parallel, comes the year, Title the in typically continue of and wind process capital. is our in vessel or January Transportation a sources Administration to the Maritime unit new attractive which

a the XXXX regulatory return the expected quarter. in previously third see in the major in to so during project of backlog have capital work to dredge our dredges more shipyard project. to the shipyard of fourth we quarter, most work that the the likely is and backlog recently the will XXXX, the beginning third will X have towards Costs fourth work a the on from cold-stacked will drastically expected XXXX undergoing and the be dredges our in Both quarter she of new reactivation not will quarter starts increase of specifically, won projects dockings. dry as a third Though quarter. is these we increasing, for in Also are the commence during as end impact we

Galveston quarter the or should projects and With the the shaping planned fourth for XXXX. shipyard of into of is Island momentum dry better up year, going further no remainder regulatory online, nicely, strong coming the and which stays capital provide backlog mix dockings a

turn outlook to the moving the over for Lasse forward. on his I'll that, With back remarks call

Lasse Petterson

you, Scott. Thank

the works law, record support Appropriation U.S. strong another billion billion maintain 'XX Corps dredging In was nation's of $X.X Harbor and program waterways. for modernize We Engineers of from the civil December is Army budget to Bill for for which Trust Biden the included industry. signed of XXXX, which Omnibus and our for to continue provided the into administration fiscal Fund $X.X Maintenance the see Congress year

Supplemental includes addition, half of natural resiliency. fiscal additional billion the $X.X approved, these to of strong will year. and for take to coastal increased in that repairs XXXX disasters has expect for In which the by will the and other market hurricanes funding projects which Act first budget in necessary remainder increase for Appropriations the resulted year was infrastructure we the a renourishment 'XX continue bid This and initiate to Relief Corps Disaster impacted

clients. for the Support dredging private the in increase market dredging -- works for the major market supporting is also

to expected As second with proceed the to quarter, the for issued their award services Brownsville, Texas. the been months. awarded have be facility in in we earlier Arthur FID Sempra Port stated And for dredging and dredging decision project the is LNG previously, few NextDecade's in the next contract made LNG

announced offshore loan of the projects. XX ambitious XXXX, energy of provided and Biden guarantees In an by in wind Administration $X for goal XXXX gigawatts federal offshore billion wind

the As Great installation stated for Lakes and Wind awarded installation and previously, with X rock XXXX the windows in was projects X 'XX. contract Empire

by of take support the Jersey's end Interior 'XX, issued of Mexico, their place July 'XX, the begin showed federal Department lease wind for offshore final the Gulf also offshore wind to And further the offshore sales first-ever the July sale the farm In notice the in for first approval at in government will New wind which construction. of August. for providing of

Acadia tendered as wind the and XXXX scheduled in beyond projects, she support the work bids operation. to have multiple for rock offshore starts for placements We

this focus that managing presented is the main market the various our conclusion, to In delayed challenges bid us. XXXX year through keep

call fleet questions. As including have reductions large capital of and to a a seen so we improved for results productivity bids for will combined cost strong onwards. projects. market, our for dredging adjustments, And turn that, ensure the I'll year This, with XXXX number and we far expected, with continue provide this initiatives overall over

Operator

[Operator the Thompson, of the question Adam comes Thalhimer Instructions]. line Davis. from from And

Adam Thalhimer

Congrats on the QX. solid

lowest do kind while be With swinging you from think in to When QX to a you're utilized the going here again? in backlog July. of in fully record probably

Scott Kornblau

Yes.

thanks question. So Adam, for the

but not booked only of well a this now year. year, our number for dredges completely into So next are

for that for a but availability still next very some have year. very, is dredges year, few. have QX already that also of very, is getting booked couple We this pretty

remarks we projects my though, reactivating are get QX. will the previously to a utilization, that mention, the will prepared cold-stacked that that of of recent in vessel when on start can't one are these say, work did full So going in midst I we I in award

a trying we now So we're it with problem coming lot we're it going have a of where all to through is what year dredges, with to out in. we good to to work a do how were out ago this figure were going get figuring that's

so will the mention, get us the timing reason the things number a projects, is them flexibility of lot these to to of they're there's in though, a of I One done. attractive

allow does to move try and scopes fit to the us vessels and of the it move So left around certain all strategically of to in. this to right work

Adam Thalhimer

there deepening $XX Texas then was X the your and you jobs the jobs? out those of Jersey release, were And timing Okay. are in plus that one on New billion thoughts New job. York, was called What one super

Lasse Petterson

Yes. included The New York in is -- was WaRDA. the

Engineers X studies And So would the years before we X are start. it the dredging that take ongoing. of executing assume the is Army to U.S. Corps to actual some that

we to it But that important large projects forward. that capital time a So have that's is as of so there kind we continuation a comes it's when more also to see projects perspective. a view longer-term these go of

Adam Thalhimer

the And differing been last the X lastly, about, differing things think in then legal on contents? I And we site for the Are site do was Got we've -- it you where year, QX related? those gain stand had it. X and jobs conditions. then talking the with

Scott Kornblau

claim. a unrelated. matter Yes. This It’s legal has the old. is is a one settled a old been – these – very during quarter. this just from that an No, not are It’s

sheet that the gets they cleanup comfortable I’m called of claims, balance larger in some third at pick just that So X of up. those the out. quarter. are out and one The very least closed progressing I’ve ones

quarter, quarter, making fourth we’re third not of on progress if it’s confident, I’m both good very one, second those. The

Operator

line of And Gomes the the comes NOBLE Joe from question from Capital.

Joe Gomes

is Corps. one competitors less or out on level delayed in kind of coming there's historical have last your a activity guys than here to more or kind there? it's get that to a of perception are that start the been normal room They of to the a level getting of out of mentioned talk the of to guys better award than Or kind Corps week. on wanted I what you do So award and the And projects Corps think do historical seeing about the releases, think of were in of feel more XXXX, of the main and continue for you're you sequencing some the but less upside capital back level? listening you of you what still

Lasse Petterson

scheduled on seen is projects in We Yes. projects delays is here out. coming combined out projects the of see market, addition, What the improvement from seen still we turns the the as the good larger Corps. we dredging that XXXX. bid to is And be have dredging for and are the market maintenance capital with out an that have but coming in the good market now some client private

but or are projects and there bid, projects scheduled maintenance out the the of short, is in some has been delays. So coming as projects some still capital

Joe Gomes

talk to might Okay. able be about little NextDecade wondering project, the was I And a more you that. if on bit

all large were can come to do you if some other will other previous onetime? as in capacity-wise I in how it's I what a terms how to be the it these But if was. know of, can couple that and the that that I terms to you stages largest that kind project at have, into of and think detail us percentage largest, for project. you know on you know break of seen the what your much don't give down revenue sizing With these stay in a mentioned I you of LNG, flow, able did projects you You go the don't as at you capital win

Lasse Petterson

out The to number we not respecting good exact project, out the year, beginning utilizes It's the in let's with work cutter XX the the almost main so It been on that of to come start market us over very years. areas has soft are X starting say, we last, couple dredges, year, order position and projects those do we execute. the with we very dredge other for is of our preparatory for as asked the do capital I next has that. are all to large. material. dredging then containment projects NextDecade we And It's build have There with bidding the a in project soon the for will project. for to that to then The up to we of the mentioned, the are goes successful, there, are capacity as well. a end pretty If Yes. now that as need which months. we get

that not side. So there's concern on a

Joe Gomes

more, one may. if then And I Okay.

$XX could CapEx was $XX.X roughly, talked $XX $XXX we million talk million, $XXX the north a QX year, last million QX, about We've were million. it even million, little though let's the $XX.X in Just, initial X guide million a Scott, expectations it, even leads the though number, of it about here. for In quarters expectations that were bit significant for the here. the call was

going hit you the the And in rush ability the And can little stuff spend? we for it And time how quarter, right are -- you of weeks, last that mentioned the last in as of with us the talked but the you on whole financing are what with more here X quarter to some it's than more give of comfortable couple year. a insight to that CapEx first maybe up $XXX a if the to talked, we least. seems last the at it kind slipping in is million quarters like you

Scott Kornblau

what's milestone various payments the number. unusual large that for high will CapEx be to Joe. is projects slip. capital these on QX here. milestone for not Thanks is those That Yes. happened a payments It have question,

expected that They end some happened June. July. We have early made of those of already were payments

we the stick still million. If year. one the would $XXX for that December year, that increase by for but it do of big slips and payment lower next these are I So payments, this left spend total and program right. is still left these ebbs intact. again, the And to new to and kind of to have amount build be there's The going on the flows

To answer only looking towards we working year year, now. doesn't your were we nothing not geared full right change the the Title other second to alternatives, It the the year. half some XI the question, CapEx, second first change was financing it of though need this Even we do whether that half it. timing on doesn't way at of are more but

Our $XXX and revolver we the $XX of sheet time. the balance at cash had at million million the the first drawn half, on end had

we with So looking even help liquidity of of is we have mentioned, and into stronger much plenty years, year get flow to of these us programs will which cash the on the and to end large into CapEx be year next 'XX through things. as QX side

Operator

Tanwanteng Instructions]. CJS. comes from the [Operator question the line next And Jon of from

Pete Lukas

It's Jon. Pete Lukas for

You temporary? better prepared you how reductions. a touched remarks this your on when And utilization what potential talk in Can versus and in little of cost QX does much bit return permanent after you your to mean was cost terms margin about for more mix?

Lasse Petterson

Yes. SG&A a XX% we on overhead What permanent than basis. our cost of and targeted and was more have reduction that's

may you cost an will annual needs saving on do want to and add look But picking not is a permanent up, that any have careful overhead activity basis. as Scott, I some there upon details? So to come. be we to be as this some SG&A

Scott Kornblau

dry did we Yes. in to docking QX. that in start should It's then this a going for have QX. specifically Yes. And start quarter,

is we The just working. didn't all increased then. So have the have equipment. dredge will We costs some

the we'll earned vessel, just utilized year. shifts, just to costs and which it for her margin to that it down. we instead QX shift during into the really quarter, QX of on fully the take anything change have the was some So also doesn't It's going

to aggressive I'll unusual fleet lot last that had sitting if we invest be very also reduce take were a we the not dredges time proactive market, our only at we're say, recall of bid year, did to have on you dock, doing and initiatives the the and advantage of of that then. we in been lot of a because that costs,

So didn't down. to see to times starting utilization now we're we like up that again, take vessels have pick

also that down. keeping So is what's the cost

Pete Lukas

settlements? is those? potential then Very much left helpful. the in how what order is potential change And timing on And

Scott Kornblau

Yes.

had. called So as the the ones unusual last they by that mentioned we year that I were out earlier, size we because

That in As year. settle one I not do just -- will third done third largest be done we're and them, quarter mentioned, of one that does surprised expect very get not in if quarter, dialogues. it gets if very one having those of I'd the I this the the advanced

last year, between said have the we're of them, we dollars. X tens As in of millions

were scope these the of things. claims So in pretty large

we it were called we Fortunately, is at true. the large thought and they that's holding an anomaly, them out year same out because unfortunately nature last and reason was hit in the time,

have see seen of not those like sort claims last year. did We we

Pete Lukas

me. expecting What in expect helpful. capacity? working Very you signings? at for can terms And wind last seeing in And we are one you are of Acadia terms to of what XXX% be

Lasse Petterson

the out in cables, to goes addition And the protection, the scheduled with Yes. Empire which help is utilization is monopile project. also come a Wind of the is supporting to number the will work that rock seeing which to the addition main foundation’s bids for in on doing installation, then XXXX, so and out in coming we’re Acadia to support. she work,

opportunities her fully are seeing for onwards. we utilized in XXXX good having and So

Operator

Baginskis questions any closing the Thank Tina you. time. would to over no this at are for conference There to remarks. I further hand now like

Tina Baginskis

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

Operator

concludes call. your for you Thank participation. This conference today's

disconnect. now may You

Great Lakes Dredge & Dock (GLDD) 1 Aug 232023 Q2 Earnings call transcript