GLDD - Earnings call 4 2023 | Great Lakes Dredge & Dock Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Q4 2023 Great lakes Dredge & Dock Corp. earnings conference call. [Operator Instructions]. Please be advised today's conference is being recorded. to host like Ms. today's now would introduce for your conference, I Baginskis, Relations. of Tina Investor Director ahead. go Please

Tina Baginskis

Thank you. and call. Good morning, XXXX fourth conference quarter welcome to our

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

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

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

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

Lasse Petterson

Tina. Thank you,

the ended decade Freeport to projects the and Port approximately course low $X.XX deepening Phase include large with a [indiscernible] waterway awards, The market LNG projects ] X was not two As to Great Rio the not XX% year is year that gas and our and are regarding latter of and gained protection ended billion, The million $XX momentum notches of the year port X we impacted project These and announcements capital of XXXX, natural by Lakes. XXXX a new were million improved our options backlog related permitting. White by and deepening expected, Grande contracts. with channel the $XXX pause of related does difficult projects, LNG improvement performance, the corporation performance projects bid transition coastal We liquefied major undertaken the a preferred year offshore approximately the in which markets. positive throughout export LNG including House of and financial deepening wind pending obligations award the in strong, of two, [ LNG backlog record results bids Arthur stronger projects the next projects; projects. the on projects largest port from recent

navigated 'XX we have the market have staying and remained competitive market term. 'XX, focused challenging leader conditions for in on long the As we a

and modernizing implemented in of less structures are in overhead we fleet G&A have initiatives, newbuild and and productive reductions with strong as our 'XX. our such cost including Dredge XX 'XX Terrapin and the Island our retirement older, the in dredges, ongoing We reductions cost program

delivery to general December in Galveston newest took tools year. ] We have be Cape older Amelia 'XX, and which operation now and in year. Island replacing X,XXX last Hatteras as scales delivery capacity equipment three did as we is the cubic for [indiscernible], delivery ship, that Cape pipelines will and in well And now of we [ be XXXX. our last support. multicat, two Canaveral, efficient demobilizing took the new our taken our mobilizing we of sister on delivered Island, Also expected the

to XXXX were agreements interest before into or wind opportunity base for PPAs bids a entered states XXXX, the going to new continue included also East new to of The were new increases and the adjustments end power in include the and invite rates to We forward. realities pains. growing the markets by and the inflation see developers of Towards Coast started saw COVID, increase cancellations PPAs, that XXXX to offshore several reality. inflation purchase rate which

over Our plan Empire Rock farm is Coast cancel for XXXX. the new wind installation December X, BP Equinor In were of rock when as offshore X a this the the installation to contract scheduled an development rock will X planned, cables. Equinor rebids contract contract and for new Empire the to venture awarded previously United States. vessel perform on utilization A the the to and wind reset 'XX, off decided wind for Equinor the their clients, protection we for have our joint East Empire development. we subsea retender wind of power continuing to opportunity this PPA project

with a provides quarter, I'll of client to offers diversify number our the wind further domestically the business. planned us continue also our believe projects, I'll for a opportunity and bid market internationally, installations with turn offshore business and and pursue growing Scott growth Lakes strong now beyond. and over base. further XXXX and Great the to wind both commentary around We offshore the for market generation our call in farm other which opportunity We to power a the and for rapidly results an provide to market, discuss market Rock

Scott Kornblau

fourth XXXX. I'll end in by had we've of everyone. morning, resulted strongest good and Lasse, quarter which walking the the start quarter, you, EBITDA the since Thank through

offset decrease margin Net the increased was current of increased our quarter the on approximately negative were XXXX operating $XXX.X negative the The For G&A Current margin by focus partially is from due in higher the utilization initiatives. to of revenue. fourth and million XX.X%, lower compared million respectively, quarter partially quarter Fourth and million million year $XX.X the of income to XXXX, in Revenues Rivers wind to coastal higher $XX.X project Lakes million EBITDA of $XXX.X year and due million. profit performance, $XX.X gross protection, quarter in million in and quarter respectively, profit continued fourth a gross utilization to quarter $XX gross higher and revenues to $XX.X million due offshore efficiencies. in due and than cost-cutting of and primarily maintenance was million and fourth prior million. our $XX.X adjusted is to by $X $XX.X quarter project year, cost incentive severance XXXX. and same increase fourth XX%, offset costs the higher primarily last improved of and primarily quarter continued pay reductions XXXX revenues

loss increase income Current up hopper she in $X.X offshore by primarily the and to million higher offset by from quarter quarter the $X.X net recently $XX.X an P&L, driven in interest $XX.X after wind to fourth expense tax million, profit, discussed income quarter quarter's million new prior terminated offset of million the from to million driven in year XXXX improved interest of million capitalized operating Rounding operating partially the interest the the by quarter. $XX.X million improved was the income retired, prior expense. the the quarter year's out current G&A. the contract expense compared fourth net XXXX our same million income. Net a fourth gross of down XXXX the $XX.X related $X.X due of benefit gain $X.X increase build Fourth write-down program the loss nonrepeating Terrapin quarter fourth Island XXXX was partially quarter income quarter from of quarter net for for previously quarter million, XXXX, XXXX to in current in was the of dredge is million $XX.X a tax $X.X of net related revolver by an of

$XX Net and for driven $XX results. adjusted was year now million increased XXXX XX.X%. X.X% increased million to $XX Despite from revenue, stronger million. $XX.X profit increased decrease was income Revenue year-over-year EBITDA EBITDA our was full million adjusted in to Turning efficiencies. gross and million, $XX.X project improved net performance income million, by a $XXX.X margin and

in sheet. $XXX on Turning with the ended million doesn't to third XXXX. revolver, balance of million our and million cash XXXX drawn until We our mature $XX which quarter $XX.X

million So against this drawn we the million have down $XX currently far have $XX and revolver. year, paid

the $XX the various capital of bringing quarter, on million, of for sale recently expenditures which maintenance ] million CapEx. fourth the for million includes $XXX.X XXXX Total our of cash. for closed $XX.X million million During rock leaseback equipment for construction in million Acadia, Island, were $XX Subsea we the for multi-cat and the the Island installation Galveston support $XX.X [ delivered for $XX vessel, approximately a Amelia

wind As the progress MARAD our or headlines, previously PPAs ago, a offshore little discussed, the for including Title we Title slowed earlier, our of new Administration year XX on has a the application. canceled over discussed Acadia. down lose applied recent The Maritime financing vessel the XI with

loan build that a or actively can support we conversations shifted have bridge and program. our a While primary Title to our XX our other new we source continue pursuing funding MARAD, be complete either financing to focus and the are with

to These soon. and discussions path appropriate. confident I am provide quickly, secure good as are progressing additional the a are future in financing I updates we will on

quarter schedules XX% as currently always, the dockings can This or $X XXXX, fluctuate planned third in converted year. as subject Looking the plan second XXXX, dry and is higher expect forward to year. the our billion throughout revenue backlog We the to into of year. adjust during we be lower have approximately vessel But regulatory dry timing starting a the to and for of with for first change. two half dockings the of number three

includes to builds, be approximately million certain year. the and million between are expect of The year of on maintenance reached million, full in expenditures occur to of We milestones timing $XX dependent heaviest but the expect we these the the $XXX which spend middle XXXX CapEx. $XXX on when payments capital new

Island, on of the second operations the outlook regulatory will offsetting that, first docking into towards month. quarter, beginning dry Galveston turn two call the addition dredges moving the back down forward. With the this Partially began I'll is those the days that to for continue remarks his Looking we Lasse earlier have quarter. which the

Lasse Petterson

won projects port that was at record you, market which capital $XXX bid for Great Lakes million for Lakes XX%. developments includes of awarded. This $X.X LNG Thank dredging U.S. billion, The of Great XXXX over deepening was a the Scott.

'XX, Congress We the Biden XXXX 'XX, and the developments, Engineers is the above for projects billion of for precedent Omacor President's to Core The for provide Senate in a quarter. 'XX, Committee maintenance budget, the year support our of X.X of for in [ which Houston million phases deepening, including proposed preparations of House This requiring Executive. omni [ record to for And increased Engineers have appropriations in which the port to budget is proposed the improvement June port XXXX XXXX And billion of a pass fiscal a to several U.S. ports previously of strong capital widening year maritime funding administration is includes July projects, March delayed billion, new expected XXXX. the bid which half see for from X.X expected we of the ] Mobile, is President strong first of amount the of the an and dredging. the amount our X.X XXXX. quarter, budget including market infrastructure and support fiscal the expect and $XXX for budget. budgeted for of proposed In bid Sabine was for released which ] and U.S.

continuing a is is year. government resolution in March hope continuing is we the which the Currently, is until of under budget operating this done approved, --

the pains. As end XXXX, to stated wind earlier, see offshore growing towards started market of the

generation XXX in offshore it capacity from However, opportunity the chains supply reach with be to the the as existing gigawatts These operation U.S., the international provides long-term U.S. of are targets it market targets, global power and outlook by gigawatts same XXXX, strong continues XX challenge up XX growth XXXX. for in in will by in off offshore installed targeted gigawatts the time at to and wind the XXXX. wind industry. the strong the And for ambitious

fourth the projects to gigawatts PPAs, power in Although additional X offshore announced bid rejected in continues XXXX. step awarded take early and a October new state forward a to wind for approximately last developers goals the meeting of the was for New round with three for adjustments PPAs the York generation request accelerated energy their for new announcement of renewable year existing

commercial January completed farm installation the wind of first grid. the year, which of to Coast, [indiscernible], on scale on this the New began England the offshore first delivering East offshore X recently turbine, the power wind

generation XX And be state will in currently two recently, two for one of York offshore planned is the to Fork New operational of installation Public state. first to the wind its to now deliver wind Jersey power also January, in South January. offshore Utility addition, Board wind, X.X supply has farm on In the which power of completed of New the gigawatts projects which turbines, selected of the

now to a goal position of Great domestically rock installation and gigawatts market, on wind contracted for offshore XX With to the out unique as we internationally in tender these by the an its X.X Lakes, and has only XXXX. pursue business projects gigawatts of awards, U.S. Jersey continue New first offshore Act-compliant niche subsea the multiple and Acadia, wind vessel. bids, dublished both Jones international

year-over-year We our address co-invest that offshore us, this is And the And that call record this will this ambition that fleet delivered well. market. to as are share with over backlog, assets 'XX questions. also that, wind, year-over-year a channels various year to results turn cost market seeking through improved deliver we partners improved growth and company improved the bid to for slimmer believe I'll successfully was enter actively for main with rapidly a In we as conclusion, results. presented and and year our delayed we focus new in in positioned keep managing year growing for the structure, the

Operator

[Operator our question Instructions]. from is with And line of Thalhimer going Adam the Thompson to Davis. first come

Adam Thalhimer

great I start How wanted kind me about that see. does actually couple of kind Congrats to timing shift? strong I surprised did that? the the that, there. That MARAD that was that PPAs why why QX. start, curious matter a let's -- about would on the of from much. Well, that of was to

Scott Kornblau

Yes. Adam. morning, Good

you a saw know, So ago, application months year, with for to the you as did progressed. we as talking has get few now And been -- to a final state. our and we've over MARAD

work were a It today at path they at diligence general get now. it look continuing not us headlines, as some these something negative there is their for However, change that us. they how market during of done just to terms did in is for the

going working a eggs transparent to been in of number not all Marriott of along. things all put So I've very the We were in our and we're basket, parallel.

those. now action will We

in We I to will to with If at MARAD. and But be position do path in meantime, soon. MARAD. secure able ultimately think take it very we'll the some our comfortable not, to good going is out continue be point dialogue liquidity a with there. that liquidity we're there a the very hopefully get we're

Adam Thalhimer

it. Got

Okay. That's fine.

That characterize unaffected payments. XX% margin, The The -- Just their margins Scott, surprising a -- was little on how completely from by cancellation would you are the -- perspective. gross margins. the in QX.

that's a real number. you So do think trends that How going forward?

Scott Kornblau

Yes.

during executing started we fourth capital the So on and coastal quarter. work the protection

We got dry also, though, by having any quarter. X first were benefited out docks during all the them the quarters. not We during

had structure. cost clean pretty we So

go two As and beginning we in mentioned, I the have dry quarter dockings quarter. this will do second

reset that expectation are and kind know, cost of have this during that cost the the double were you We've no how that's for the the of fleet. that. proper in mix we we last thought do been to to then saying this So the that's to year, whammy, in have time been execute normalcy addition and that path But exactly playing XXXX, has the it's our we as vessels revenue working out. and that on and along you on projects we done when all

Adam Thalhimer

will burn That's backlog for guys see. in -- then it XX-K, figure but percentage I good will a be that to you you in give And did of the guess, XX. did

Scott Kornblau

can left schedules said But roughly I move know, the XX%. year, but as again, XX%. we roughly you as that right throughout adjust it's Yes. to

Operator

Noble Instructions]. Joe next comes line Capital. our Gomes And of the question with [Operator from

Joseph Gomes

been the some good, light the have and the kind XX% in dredging there about might same fourth there, in was So seemed mean for of you I weather quarter, the Q, mentioned really million. side, on quarter. the burned had little which it some your on but issues to would a the of revenue backlog have you $XXX-plus been that of it at I get kind just wanted about Was time. delayed projects expectations

higher the would for growth on the rate kind might projects. was that run was segment? year-over-year. little looking sequentially. that there reduced about anything thinking It's have the million have we capital Was of particular On there I flat $X revenue been revenue a bit capital projects, maybe up in

Scott Kornblau

of No. And on is compared you're really is fourth by the now start that's some driven driver started project. underway. driving the what subcontractor in revenue The big We it the would to protection -- had relatively up, it. what's came capital also of were It is of backlog in work LNG work quarter. It over the thought right, really earlier backlog, just getting executed projects. of made was but and that And up now those capital was flat, coastal have way the the the $X solid will revenue very of billion so capital margins. start XX% the later

Joseph Gomes

I there? from the there you it got, all And $X.X Is the was Or million. get Okay. that at that that? determination Rock contract, obviously, on of more will you think anything is

Scott Kornblau

roughly you So been out project that we noticed, That related release of the there broke termination. revenue was press is to data Joe, that had on $X.X have engineering services performed million an the may additional in management when revenue. already to Empire and prior to

was we it once booked ahead and that. terminated, So went

termination There on all, we the do similar for $XX X, So have are it's previously we X lay and million. all our before And some constructs between two that other before, roughly services services contracts rock. related. do in the Empire occur

Joseph Gomes

one may, me, get last I'll one and queue. I in if And Okay. for back

some additional in asset against sales entered quarter. You the

you are sales? here you you through asset million of 'XX raised cash those $XX of you with kind think the see said do in I more of

Scott Kornblau

Yes. us pull, that. I Joe, can't lever we but foresee It's doing a don't

some newbuild quickly, financing rather progressing program. for As I longer-term we're mentioned, the

in us see more anything not like do XXXX. I that doing So

Operator

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

Jonathan Tanwanteng

guys of determined utilization you line how have us if if or to wondering still XX kind [ of tell that's you merit the ]. was I Acadia in sight a is that frame Last, scores be sinking could if internally the on quarter. Great and to full time little

Lasse Petterson

pushed the PPAs say, Yes, has cancellations that right. last, let's of revenue X to the of months, the these over some

an So these 'XX. into wind from and we be what are to we Empire be And 'XX projects for pushing when the product XXXX. delays are to remains looking out, is and the executed. contract comes going on the have developments 'XX X seen. then is at other opportunities 'XX Also vessel or But this revenues 'XX additional

and in 'XX. in of there for bidding a Europe And number installation, period. firm evaluating we projects looking rock this are good in market we that at commitments strong this at for participate no In a looking may in starting are There parallel, are but that is international work. is We and time. point we

Jonathan Tanwanteng

during Okay. Great. XX% to level and book book and this the that the Can bill of expect year. what relative you me what go the you And your years the of backlog year the just during or you revenue historical get and year. and to remind burn kind book of within

Scott Kornblau

this revenue have be we a right that large Jon, I going of XXXX now. year right with little $XXX backlog say that is in year just have the million the we would bank of because And a now. white atypical as would much Yes. entering to over typically we space don't

to we coverage, much lower draw do wouldn't like we say it's XX% prior backlog. years. would I have but typically, when now we of a roughly enter parallel honey a I So year, necessarily

different XXXX So white than it historically. much has looks space again, have in the we amount of

Jonathan Tanwanteng

on Great. be That's are fair. projects? settled any remaining Okay. claims And there to older

Scott Kornblau

previously out. cadence and pops material. the of that but the big say nothing note out ones normal really kind about, now to clear just we we it's Nothing of call that up, had talked I

Jonathan Tanwanteng

and Great. that. last it one leave at I'll Okay. for me, And

in year-over-year versus expect that Just be the how 'XX? I do dry a 'XX revenue the or what kind if and flows of that docks, you You've you disclosed know through. have comparator of number, EBITDA but impact to don't

Scott Kornblau

XXXX, to year. was comparable to No. this have that year three in -- going had what I mean we just we're last

versus marginally call it dry to any a I would when comes wash. I docking swings see 'XX 'XX. it big don't So

Operator

of Brian And Russo our with come to question is next Sidoti. the going from line

Brian Russo

fourth just the So quarter. on back

at a about If years for it XX%. the back And the fourth XXXX at you 'XX, gain, to look it over margin, the excluding XX% was the I quarter to EBITDA was little XX%. when look

XX% below smack -- in capital the of in So the XX% that's revenue which total quarters. only prior despite right to is the XQ of fourth XX% range. But middle that revenue, projects the of generating the

considered So -- normalized? backlog kind target in I'm you fourth still and guessing, this XXXX, guys just profile? we'll that it's likely see the optimal is of quarter it is given your XX-XX opinion, in Or mix the below below

Scott Kornblau

us we Yes. not if you have QX EBITDA of did But mix for I'll reiterate as docks. the know, what that that absolutely mid-teens any vessel dry would just to out backlog I margin quarter-over-quarter, normal to year cost. as -- to to at operating normal. does margins get. impact that have said aim margins, And opposed just back have whole up setting and strive to the before. return I and I teens that look for call that that to high a ourselves the always not And now take we we get additional what look the we we are

Lasse Petterson

are that, for that is offshore the I wind, excluded Or million the pending And guess, FID. backlog Okay. X? contract second of obligations does that for Great. is the that also performance $XX include Empire just

Scott Kornblau

to FID. end right it's who Right not we 'XX. finish the NDA X a contract. disclose of is we no, after But is in that It It that at now, signed do contract. is there. We'll under work included pending with. executed Empire It is

Brian Russo

offshore of of just projects. And terms Great. thoughts. seen project in curious on a developer of We've Okay. wind your lot ownership consolidation

last positioned the a of now fund. projects. better utility stake Lakes global of curious, to We vendor And also ownership preferred just infrastructure I'm consolidated Great sell these as is their night saw even

of kind Just your there. what wondering thoughts general are

Lasse Petterson

Wind parted a really to Wind seen install couple months. lot what of ownership and The sea general Equinor BP thought getting is But point decade. the is rock the behind the is is good is companies some and looking BP the the doing X, these developments. changing see capital we've It's such that over the to come to X Equinor that are wind for the the reevaluating that see has of continuing and them, It's are structure bottom, we probably developing with offshore ways. X strong to field. we Empire of is and BlackRock forefront and huge what Beacon end outlays And will as at the on they the

So when stronger companies are coming into the the market, know we we see that as developers. positive. But in general,

We with optimistic and have years. Acadia utilization the good contacts engagement Act-compliant with Jones all are of we the the the being them. And vessel, about coming very her throughout

Brian Russo

a your Okay. or profile lastly, just We towards at statement growing. into kind when -- next CapEx we of CapEx the end an and the vessel of kind the down, XXXX middle Great. fair inflection end towards is look right, be flow accelerate when inflection XXXX. winds we of should over to point, your winds to as point Is operating that cash as of the in the XX down, XXXX, new XX and months? seems just And and there start see then CapEx to that normalized look

Scott Kornblau

up Brian. CapEx, right, will Island, down. be and the said, as That's Acadia you Amelia 'XX be will but finishing winding Yes. the

that is we historically of down from having of it where CapEx maintenance were. your vessels, the keeps new advantages One

quickly big we'd outflow 'XX then we for down coffers That in cash building wind and this you're yes, the again. the as we said thinking start along, build had So right. would about that future. We've up all

Operator

you. closing to would And the conference remarks. Baginskis, to back Thank like Tina hand I for over

Tina Baginskis

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

Operator

This for conference Thank participating. call. today's you concludes

disconnect. You now may

Great Lakes Dredge & Dock (GLDD) 14 Feb 242023 Q4 Earnings call transcript