Workflow
Great Lakes Dredge & Dock (GLDD) - 2024 Q4 - Earnings Call Transcript
GLDDGreat Lakes Dredge & Dock (GLDD)2025-02-18 23:05
Filings
Slide

Financial Data and Key Metrics Changes - Great Lakes Dredge & Dock Corporation reported Q4 2024 revenues of 202.8millionandadjustedEBITDAof202.8 million and adjusted EBITDA of 40.2 million, marking a significant increase from the previous year [7][16] - Full year 2024 revenues reached 762.7million,withadjustedEBITDAincreasingto762.7 million, with adjusted EBITDA increasing to 136 million, the second highest in the company's history [7][20] - Net income for Q4 2024 was 19.7million,downfrom19.7 million, down from 21.6 million in Q4 2023, while full year net income increased over four times to 57.3million[19][20]BusinessLineDataandKeyMetricsChanges−Thecompanyfocusedonlargeandcomplexportdeepeningandcoastalprotectionprojects,whichnowaccountfor9457.3 million [19][20] Business Line Data and Key Metrics Changes - The company focused on large and complex port deepening and coastal protection projects, which now account for 94% of the backlog [8][9] - Capital and coastal protection revenue significantly increased, contributing to the overall revenue growth [20] - Gross profit for the full year more than doubled to 160.6 million, driven by higher margin projects [20] Market Data and Key Metrics Changes - The bid market reached a historic level of 2.9billion,withGreatLakeswinning332.9 billion, with Great Lakes winning 33% of this market, resulting in a dredging backlog of 1.2 billion [8][26] - The U.S. Army Corps of Engineers budget for 2025 is expected to be nearly 10billion,supportingstrongmarketconditionsfordredgingprojects[27][28]CompanyStrategyandDevelopmentDirection−ThecompanyisbroadeningitstargetmarketfortheArcadiavesseltoincludeinternationaloffshorewindprojectsandsubseainfrastructureprotection[12][29]−Astrategicfocusoncoastalprotectionprojectsisexpectedtodrivefuturegrowth,withastrongbacklogprovidingrevenuevisibilityinto2026[10][31]−Thecompanyplanstoenhanceitsfleetwithnewvesselsdesignedforspecificprojectneeds,suchastheAmeliaIslandandArcadia[11][22]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthebacklogandprojectexecutionfor2025and2026,despitepotentialdelaysinthebidmarketduetogovernmentfundingprocesses[39][28]−TheoutlookforLNGprojectsintheU.S.ispositive,withexpectationsforstrongdemandfollowingtheliftingofexportpermittingfreezes[90]−Thegeopoliticalsituationisseenasadriverforgrowthinsubseaprotectionmarkets,particularlyinEuropeandAsia[75][29]OtherImportantInformation−Thecompanyenteredintoa10 billion, supporting strong market conditions for dredging projects [27][28] Company Strategy and Development Direction - The company is broadening its target market for the Arcadia vessel to include international offshore wind projects and subsea infrastructure protection [12][29] - A strategic focus on coastal protection projects is expected to drive future growth, with a strong backlog providing revenue visibility into 2026 [10][31] - The company plans to enhance its fleet with new vessels designed for specific project needs, such as the Amelia Island and Arcadia [11][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the backlog and project execution for 2025 and 2026, despite potential delays in the bid market due to government funding processes [39][28] - The outlook for LNG projects in the U.S. is positive, with expectations for strong demand following the lifting of export permitting freezes [90] - The geopolitical situation is seen as a driver for growth in subsea protection markets, particularly in Europe and Asia [75][29] Other Important Information - The company entered into a 150 million second lien credit agreement to support its new build program, enhancing its financial position [13][22] - S&P Global Ratings upgraded the company's credit rating to B minus, reflecting improvements in cash flows and overall performance [14] Q&A Session Summary Question: Impact of DoD efforts on Corps and work awards - Management indicated that the strong backlog is funded and will be executed in 2025, with minimal impact expected from potential delays in the bid market [38][39] Question: Adverse court ruling on non-Jones Act vessels - Management clarified that the ruling does not change their position regarding the Jones Act and that they are evaluating next legal steps [42][46] Question: Update on Arcadia construction and delivery - The Arcadia is expected to be delivered towards the end of 2024 or early Q1 2025, with strong international market opportunities available if U.S. contracts are canceled [53][56] Question: Expected backlog liquidation in Q1 - Management expects Q1 to be a strong revenue quarter, with high utilization from ongoing projects [60] Question: Guidance on revenue and margins for 2025 - Management indicated that 60% of the backlog is expected to convert into revenue, with additional opportunities for revenue growth throughout the year [65][71] Question: Opportunities in subsea protection markets - Management highlighted significant growth potential in protecting critical infrastructure, particularly in Europe and Asia, driven by geopolitical factors [75][74]