Great Lakes Dredge & Dock (GLDD) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net income of $8.9 million for Q3 2024, compared to a net loss of$6.2 million in the same quarter of the previous year [15] - Adjusted EBITDA for the quarter was $27 million, up from$5.3 million year-over-year [15] - Revenues increased to $191.2 million, a rise of$74 million from Q3 2023, primarily driven by the Galveston Island's project activity and higher capital and coastal protection project revenues [12][13] - Gross profit reached $36.2 million with a gross profit margin of 19$9 million and 7.7% in Q3 2023 [14] Business Line Data and Key Metrics Changes - The company secured $543 million in new contracts during the quarter, including significant wins in beach renourishment and port deepening projects [5] - The backlog reached a record$1.2 billion, with an additional $465 million in pending award low bids and options [6] - Offshore wind backlog stood at$44.6 million, with $12.7 million in options pending award [9] Market Data and Key Metrics Changes - The U.S. offshore wind development pipeline expanded by 53$8.7 billion to the U.S. Army Corps of Engineers, supporting a strong bid market [20] Company Strategy and Development Direction - The company is focused on entering the U.S. offshore wind market, with the Acadia vessel under construction and contracted for significant projects [8][9] - The company aims to modernize its fleet with efficient dredges and expand into the growing offshore wind market, generating value for shareholders [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong bid market for 2024 and anticipated solid funding for the U.S. Army Corps of Engineers in 2025 [21][22] - The company expects utilization and revenues to increase in Q4 2024, with margins also projected to rise due to favorable environmental windows [18][19] Other Important Information - The company ended Q3 2024 with $12 million in cash and total liquidity of over$318 million, with no debt maturities until 2029 [16] - Capital expenditures for Q3 2024 totaled $38.4 million, with guidance for the full year remaining between$130 million and 150 million [17] Q&A Session Summary Question: What is the award environment for the fourth quarter? - Management indicated that 90 million of low bids pending at the end of Q3 were already awarded, with expectations for more awards in Q4 [29][30] Question: Are there any delays in the Acadia project due to the Philly Shipyard sale? - Management confirmed that the sale is expected to proceed positively, with no current delays in the Acadia project timeline [32] Question: What is the competitive environment like? - The competitive environment remains stable, with some competitors retiring older dredges, which helps maintain capacity [34] Question: Can you provide insights on dredging gross margins? - The gross margin of 19% was solid, with an expedited dry docking costing approximately $2 million to$2.5 million impacting Q3 margins [37] Question: What are the expectations for Q4 top line revenue? - Management expects a very strong revenue quarter, with all active vessels working and a significant portion of the backlog to be earned [47]