• Revenue: $191.2 million for Q3 2024, an increase of $74 million from the prior year's third quarter.
• Net Income: $8.9 million for Q3 2024, compared to a $6.2 million net loss in the prior year quarter.
• Adjusted EBITDA: $27 million for Q3 2024, with an adjusted EBITDA margin of 14.1%.
• Gross Profit: $36.2 million for Q3 2024, with a gross profit margin of 19%.
• Backlog: Record backlog of $1.2 billion at the end of Q3 2024, with an additional $465 million in pending award low bids and options.
• New Contracts: $543 million in new contracts secured during Q3 2024.
• Cash and Liquidity: $12 million in cash and total liquidity of just over $318 million at the end of Q3 2024.
• Capital Expenditures: $38.4 million in Q3 2024, with full-year guidance between $130 million and $150 million.
• Interest Expense: $4.9 million for Q3 2024, up from $2.8 million in Q3 2023.
• Net Income Tax Expense: $3.2 million for Q3 2024, an increase of $5 million compared to Q3 2023.

• Warning! GuruFocus has detected 7 Warning Signs with GLDD.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Great Lakes Dredge & Dock Corp (NASDAQ:GLDD) achieved a net income of $8.9 million and adjusted EBITDA of $27 million for the third quarter.
• The company secured $543 million in new contracts, including significant wins in beach renourishment and port deepening projects.
• GLDD reported a record backlog of $1.2 billion, providing revenue visibility well into 2026.
• The company's newest hopper dredge, the Galveston Island, has shown strong project performance since its delivery.
• GLDD's offshore wind backlog stands at $44.6 million, with additional options pending, indicating growth potential in the renewable energy sector.

Negative Points

• The Biden administration's temporary pause on approving new LNG export licenses could pose future challenges, although current projects remain unaffected.
• Third quarter G&A expenses increased by $5.6 million compared to the previous year, driven by higher incentive pay.
• Net interest expense rose to $4.9 million from $2.8 million in the third quarter of 2023, primarily due to interest related to a term loan.
• The company faced an expedited dry docking of a dredge, impacting gross profit margins.
• The competitive environment remains unchanged, with some capacity reductions due to the retirement of older dredges by competitors.

Q & A Highlights

Q: Can you provide an update on the award environment for the fourth quarter, given the significant low bids and options pending? A: Scott Kornblau, CFO, mentioned that $90 million of low bids were already awarded, with expectations for more awards this quarter. There are also $140 million in options pending, some of which may be exercised in the fourth quarter or early next year. Lasse Petterson, CEO, added that the fourth and first quarters typically see lower bidding activity compared to the second and third quarters.

Q: Are there any delays or pushouts in the work on the Acadia due to the potential sale of Philly Shipyard? A: Lasse Petterson, CEO, stated that the sale has been announced, and the new owner has shown ambitions in the US shipbuilding market. Regulatory approvals are expected soon, and the transfer of responsibility will occur post-approval. No delays are anticipated at this time.

Q: Can you discuss the competitive environment and any changes in the dredging fleet capacity? A: Lasse Petterson, CEO, noted that the bid market has been strong, supporting full fleet utilization. One competitor retired two older dredges, reducing capacity. Great Lakes added the Galveston Island and plans to replace older vessels with new, modern equipment like the Amelia Island. The competitive environment remains stable.

Q: What impact did the expedited dry docking have on third-quarter margins, and what are the expectations for fourth-quarter margins? A: Scott Kornblau, CFO, explained that the expedited dry docking cost about $2 to $2.5 million. Fourth-quarter margins are expected to increase due to environmental windows opening up, allowing for higher-margin projects. Historically, the fourth quarter has been strong in terms of margins.

Q: What is the outlook for the Acadia's utilization in 2026 and 2027, and are there any reservation agreements in place? A: Lasse Petterson, CEO, mentioned that the Acadia has partial utilization secured for 2026 and 2027 through projects like Empire Wind and Orsted Sunrise. Additional options are being discussed, and reservation agreements are in place for projects starting in 2028, providing a solid foundation for future utilization.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.