Company Backlog of $593 Million
Rivers & Lakes and Environmental & Remediation Backlog at Record Level
OAK BROOK, Ill.--(BUSINESS WIRE)--
Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest
provider of dredging services in the United States and a major provider
of environmental and remediation services, today reported financial
results for the quarter ended March 31, 2014.
For the quarter ended March 31, 2014, Great Lakes reported Revenue of
$174.4 million, Net loss from continuing operations of $2.5 million, and
Adjusted EBITDA from continuing operations of $12.0 million.
Jon Berger, Chief Executive Officer, commented, "The dredging segment
delivered $162.0 million in revenue and 12.9% gross profit margin in the
first quarter of 2014. The first two months of the quarter were impacted
by severe weather, which both contributed to longer project durations
and equipment downtime for maintenance, resulting in reduced gross
profit margin. The margin contraction also was driven by minimal
dredging activity in the Middle East. Our fleet located in the Middle
East was essentially idle in the quarter; however, work has begun on a
project in Saudi Arabia and the Company is pursuing strong possibilities
to put the fleet to work in the second half of the year. Increases in
coastal protection revenue particularly along the East Coast and
maintenance revenue were offset by decreases in domestic and foreign
capital revenue and rivers & lakes dredging revenue.
"Despite the slow start in January and February, we have already
experienced an improvement in March and are optimistic that this
momentum will continue throughout the year. The severe weather delays
will result in revenues to be earned in future periods as the work on
the underlying projects is completed.
"Terra, which comprises our environmental & remediation segment,
continues to demonstrate a solid performance, reporting a $6.5 million
increase in Revenue over first quarter 2013 to $12.7 million in the
first quarter of 2014, even while experiencing its own downtime due to
the severe weather."
Katie Hayes, Interim Chief Financial Officer stated, "As was previously
announced, on April 23, 2014, we completed the sale of two subsidiaries
that comprised the historical demolition business, NASDI, LLC and Yankee
Environmental Services, LLC. Great Lakes retains the right to collect on
outstanding accounts receivable and work in process at the date of
close, as well as any outstanding claims.
"Despite the slow start to the year, we were able to decrease our
investment in working capital, and keep debt levels fairly constant with
year-end. The Company continues to focus on driving higher operating
cash flows and to critically evaluate spending priorities on our
investment in equipment."
First Quarter 2014 Highlights
Total Company
-
Revenue decreased to $174.4 million in the first quarter of 2014, down
3.2% from a very strong first quarter of 2013 largely related to lower
dredging revenues. Our dredging segment recorded lower revenues in the
current year quarter on lower capital dredging and rivers & lakes
revenues, partially offset by higher maintenance and coastal
protection revenues.
-
Gross profit margin declined to 12.0% in the first quarter of 2014
from 17.1% in the prior year first quarter driven by tightening
margins in certain of our dredging contracts due to severe weather and
equipment downtime, partially offset by higher profit margins on our
projects in the current year within the rivers & lakes and
environmental & remediation businesses.
-
Operating income was $2.9 million for the quarter, down $11.6 million
from the prior year quarter, primarily due to lower coverage of fixed
costs.
-
Net loss from continuing operations was $2.5 million in the quarter,
down from the prior year quarter due to the items noted above. Net
loss (which includes both continuing and discontinued businesses) was
$5.2 million, on the lower results in the dredging business and losses
in our discontinued operations compared to Net Income of $0.4 million
in the comparable quarter of the prior year.
-
Adjusted EBITDA from continuing operations was $12.0 million, down
from $25.4 million in the first quarter of 2013 on lower operating
income.
-
Total contracted backlog at quarter end was $592.5 million.
Dredging
-
Dredging earned revenues of $162.0 million in the first quarter,
decreasing from $174.0 million in the first quarter of the prior year.
Severe weather and mechanical downtime were the primary drivers of the
domestic revenue shortfall. A slowdown in the Middle East resulted in
unfavorable foreign revenue compared to the 2013 first quarter. First
quarter 2013 was an exceptionally strong quarter for dredging as the
majority of the domestic and international fleet was utilized and
there were minimal weather impacts.
-
Gross profit margin was 12.9%, versus 18.0% in the same quarter last
year. As noted above, weather and mechanical delays, along with lower
fixed costs coverage drove margin down. Dredging ended the first
quarter with $515.1 million of backlog, essentially unchanged from the
backlog at year-end.
Environmental & Remediation
-
The segment recorded $12.7 million of revenue in the quarter, a $6.5
million increase over the first quarter of the prior year, as a result
of working on more projects in the current quarter.
-
Gross profit margin of 0.4% compared to a loss of 8.4% in the prior
year quarter. Better fixed cost coverage allowed for improvement in
gross profit, but severe weather partially offset the improvement in
contract margins.
-
Backlog was $77.4 million at the end of the first quarter, primarily
related to a brownfield development project in New Jersey and several
environment remediation projects, including a new phase of remediation
on the long term Enbridge project in Michigan.
Outlook
Mr. Berger stated, "In the first quarter of 2014, our dredging segment
won $140 million in dredging contracts, largely driven by the $89
million award for our rivers & lakes dredging unit's Lake Decatur
contract as well as additional capital work, including the award of the
last phase of the PortMiami deepening. We were awarded 100% of the
coastal protection work put out to bid during the first quarter, but
this sector of the dredging market saw few opportunities in the quarter.
As stated previously, we expect more coastal protection projects to be
funded by special appropriations committed after Superstorm Sandy, and
we continue to expect the timing of these contracts to occur later in
2014. Subsequent to the end of the quarter, the Company was low bidder
on three additional contracts collectively totaling $51 million that
will be included in future backlog when awarded.
"Moving into the second quarter, we will utilize our fleet on a mix of
capital projects, including the PortMiami deepening, coastal protection
projects and maintenance dredging. Internationally, we are pursuing
several bidding opportunities, especially in the Middle East, which
would allow for strong utilization of our internationally deployed fleet.
"We remain optimistic that the Senate and House will agree on a final
version of the Water Resources Reform and Development Act for
passage by the end of the second quarter. The bill provides for
important reforms to the Harbor Maintenance Trust Fund, which will add
to funding available for dredging projects, and to the Corps of
Engineers planning process, which will help expedite projects. This bill
also provides authorization for specific port deepening projects, such
as the Port of Jacksonville, Lake Worth and Port Everglades in Florida.
Clearly, this bill is positive news for the dredging industry.
"Finally, the environmental & remediation segment has a very strong
backlog of $77 million, with the $35 million Enbridge job being a
significant driver. Terra also will be executing a portion of the Lake
Decatur project, again validating our combined service offerings'
attractiveness to the market. We expect the majority of the
environmental & remediation segment's backlog to be completed in 2014.
To ensure successful execution on its expanding workload, Terra has
proactively aligned its project management to the upcoming growth, and
we are confident that this work will be executed well."
The Company will be holding a conference call at 9:00 a.m. C.D.T. today
where we will further discuss these results. Information on this
conference call can be found below.
Conference Call Information
The Company will conduct a quarterly conference call, which will be held
on Tuesday, May 6, 2014 at 9:00 a.m. C.D.T. (10:00 a.m. E.D.T.). The
call in number is 877-377-7553 and Conference ID is 39800450. The
conference call will be available by replay until Wednesday, May 7,
2014, by calling 800-585-8367 and providing Conference ID 39800450. The
live call and replay can also be heard on the Company's website, www.gldd.com,
under Events & Presentations on the investor relations page. Information
related to the conference call will also be available on the investor
relations page of the Company's website.
Use of Adjusted EBITDA from Continuing
Operations
Adjusted EBITDA from continuing operations, as provided herein,
represents net income attributable to common stockholders of Great Lakes
Dredge & Dock Corporation, adjusted for net interest expense, income
taxes, depreciation and amortization expense, debt extinguishment,
accelerated maintenance expense for new international deployments and
goodwill or asset impairments. Adjusted EBITDA from continuing
operations is not a measure derived in accordance with accounting
principles generally accepted in the United States of America ("GAAP").
The Company presents Adjusted EBITDA from continuing operations as an
additional measure by which to evaluate the Company's operating trends.
The Company believes that Adjusted EBITDA from continuing operations is
a measure frequently used to evaluate performance of companies with
substantial leverage and that the Company's primary stakeholders (i.e.,
its stockholders, bondholders and banks) use Adjusted EBITDA from
continuing operations to evaluate the Company's period to period
performance. Additionally, management believes that Adjusted EBITDA from
continuing operations provides a transparent measure of the Company's
recurring operating performance and allows management to readily view
operating trends, perform analytical comparisons and identify strategies
to improve operating performance. For this reason, the Company uses a
measure based upon Adjusted EBITDA from continuing operations to assess
performance for purposes of determining compensation under the Company's
incentive plan. Adjusted EBITDA from continuing operations should not be
considered an alternative to, or more meaningful than, amounts
determined in accordance with GAAP including: (a) operating income as an
indicator of operating performance; or (b) cash flows from operations as
a measure of liquidity. As such, the Company's use of Adjusted EBITDA
from continuing operations, instead of a GAAP measure, has limitations
as an analytical tool, including the inability to determine
profitability or liquidity due to the exclusion of accelerated
maintenance expense for new international deployments, goodwill or asset
impairments, interest and income tax expense and the associated
significant cash requirements and the exclusion of depreciation and
amortization, which represent significant and unavoidable operating
costs given the level of indebtedness and capital expenditures needed to
maintain the Company's business. For these reasons, the Company uses
operating income to measure the Company's operating performance and uses
Adjusted EBITDA from continuing operations only as a supplement.
Adjusted EBITDA from continuing operations is reconciled to net income
(loss) attributable to common stockholders of Great Lakes Dredge & Dock
Corporation in the table of financial results. For further explanation,
please refer to the Company's SEC filings.
The Company
Great Lakes Dredge & Dock Corporation is the largest provider of
dredging services in the United States and the only U.S. dredging
company with significant international operations. The Company is also a
significant provider of environmental and remediation services. The
Company owns a 50% interest in a marine sand mining operation in New
Jersey that supplies sand and aggregate for road and building
construction and a 50% interest in an environmental service operation
with the ability to remediate soil and dredged sediment treatment. Great
Lakes employs over 150 degreed engineers, most specializing in civil and
mechanical engineering, which contributes to its 124-year history of
never failing to complete a marine project. Great Lakes has a
disciplined training program for engineers that ensures
experienced-based performance as they advance through Company
operations. Great Lakes also owns and operates the largest and most
diverse fleet in the U.S. industry, comprised of over 200 specialized
vessels.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements in this press release may constitute
"forward-looking" statements as defined in Section 21E of the Securities
Exchange Act of 1934 (the "Exchange Act"), the Private Securities
Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the
Securities and Exchange Commission (the "SEC"), all as may be amended
from time to time. Such forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could
cause the actual results, performance or achievements of Great Lakes and
its subsidiaries, or industry results, to differ materially from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Statements that are not historical fact are
forward-looking statements. Forward-looking statements can be identified
by, among other things, the use of forward-looking language, such as the
words "plan," "believe," "expect," "anticipate," "intend," "estimate,"
"project," "may," "would," "could," "should," "seeks," or "scheduled
to," or other similar words, or the negative of these terms or other
variations of these terms or comparable language, or by discussion of
strategy or intentions. These cautionary statements are being made
pursuant to the Exchange Act and the PSLRA with the intention of
obtaining the benefits of the "safe harbor" provisions of such laws.
Great Lakes cautions investors that any forward-looking statements made
by Great Lakes are not guarantees or indicative of future performance.
Important assumptions and other important factors that could cause
actual results to differ materially from those forward-looking
statements with respect to Great Lakes, include, but are not limited to,
risks and uncertainties that are described in Item 1A. "Risk Factors" of
Great Lakes' Annual Report on Form 10-K for the year ended December 31,
2013, and in other securities filings by Great Lakes with the SEC.
Although Great Lakes believes that its plans, intentions and
expectations reflected in or suggested by such forward-looking
statements are reasonable, actual results could differ materially from a
projection or assumption in any forward-looking statements. Great Lakes'
future financial condition and results of operations, as well as any
forward-looking statements, are subject to change and inherent risks and
uncertainties. The forward-looking statements contained in this press
release are made only as of the date hereof and Great Lakes does not
have or undertake any obligation to update or revise any forward-looking
statements whether as a result of new information, subsequent events or
otherwise, unless otherwise required by law.
|
|
|
|
|
|
|
Great Lakes Dredge & Dock Corporation
|
Condensed Consolidated Statements of Operations
|
(Unaudited and in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2014
|
|
2013
|
Contract revenues
|
|
$
|
174,382
|
|
|
$
|
180,153
|
|
Gross profit
|
|
|
20,907
|
|
|
|
30,734
|
|
General and administrative expenses
|
|
|
17,870
|
|
|
|
16,236
|
|
Loss on sale of assets—net
|
|
|
152
|
|
|
|
2
|
|
Operating income
|
|
|
2,885
|
|
|
|
14,496
|
|
Other income (expense)
|
|
|
|
|
|
|
Interest expense—net
|
|
|
(5,016
|
)
|
|
|
(5,733
|
)
|
Equity in loss of joint ventures
|
|
|
(1,843
|
)
|
|
|
(591
|
)
|
Gain on foreign currency transactions—net
|
|
|
65
|
|
|
|
36
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(3,909
|
)
|
|
|
8,208
|
|
Income tax (provision) benefit
|
|
|
1,453
|
|
|
|
(3,456
|
)
|
Income (loss) from continuing operations
|
|
|
(2,456
|
)
|
|
|
4,752
|
|
Loss from discontinued operations, net of income taxes
|
|
|
(2,739
|
)
|
|
|
(4,341
|
)
|
Net income (loss)
|
|
|
(5,195
|
)
|
|
|
411
|
|
Net loss attributable to noncontrolling interest
|
|
|
-
|
|
|
|
22
|
|
Net income (loss) attributable to common stockholders of Great Lakes
Dredge & Dock Corporation |
|
$
|
(5,195
|
)
|
|
$
|
433
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share attributable to continuing operations
|
|
$
|
(0.04
|
)
|
|
$
|
0.08
|
|
Basic loss per share attributable to discontinued operations, net of
tax
|
|
|
(0.05
|
)
|
|
|
(0.07
|
)
|
Basic earnings (loss) per share attributable to Great Lakes Dredge &
Dock Corporation |
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
Basic weighted average shares
|
|
|
59,708
|
|
|
|
59,369
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share attributable to continuing
operations
|
|
|
(0.04
|
)
|
|
|
0.08
|
|
Diluted loss per share attributable to discontinued operations, net
of tax
|
|
|
(0.05
|
)
|
|
|
(0.07
|
)
|
Diluted earnings (loss) per share attributable to Great Lakes Dredge
& Dock Corporation |
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
Diluted weighted average shares
|
|
|
59,708
|
|
|
|
60,017
|
|
|
|
|
|
|
|
|
Great Lakes Dredge & Dock Corporation
|
Reconciliation of Net Income (Loss) attributable to Great Lakes
Dredge & Dock Corporation to Adjusted EBITDA from Continuing
Operations
|
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2014
|
|
2013
|
Net income (loss) attributable to common stockholders of Great Lakes
Dredge & Dock Corporation |
|
$
|
(5,195
|
)
|
|
$
|
433
|
|
Loss from discontinued operations, net of income taxes
|
|
|
(2,739
|
)
|
|
|
(4,341
|
)
|
Net loss attributable to noncontrolling interest
|
|
|
-
|
|
|
|
22
|
|
Income (loss) from continuing operations
|
|
|
(2,456
|
)
|
|
|
4,752
|
|
Adjusted for:
|
|
|
|
|
|
|
Interest expense—net
|
|
|
5,016
|
|
|
|
5,733
|
|
Income tax provision (benefit)
|
|
|
(1,453
|
)
|
|
|
3,456
|
|
Depreciation and amortization
|
|
|
10,885
|
|
|
|
11,451
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
11,992
|
|
|
$
|
25,392
|
|
|
|
|
|
|
|
|
Great Lakes Dredge & Dock Corporation
|
Selected Balance Sheet Information
|
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
Period Ended
|
|
|
March 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
Cash and cash equivalents
|
|
$
|
58,695
|
|
$
|
75,338
|
Total current assets
|
|
|
324,204
|
|
|
361,053
|
Total assets
|
|
|
825,790
|
|
|
852,645
|
Total current liabilities
|
|
|
173,328
|
|
|
193,899
|
Long-term debt
|
|
|
287,000
|
|
|
285,000
|
Total equity
|
|
|
237,700
|
|
|
242,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Great Lakes Dredge & Dock Corporation
|
Revenue and Backlog Data
|
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
Revenues
|
|
2014
|
|
2013
|
Dredging:
|
|
|
|
|
|
|
Capital - U.S.
|
|
$
|
34,475
|
|
|
$
|
45,508
|
Capital - foreign
|
|
|
16,470
|
|
|
|
38,385
|
Coastal protection
|
|
|
70,720
|
|
|
|
56,921
|
Maintenance
|
|
|
36,311
|
|
|
|
27,764
|
Rivers & lakes
|
|
|
3,984
|
|
|
|
5,381
|
Total dredging revenues
|
|
|
161,960
|
|
|
|
173,959
|
Environmental & remediation
|
|
|
12,730
|
|
|
|
6,194
|
Intersegment revenue
|
|
|
(308
|
)
|
|
|
-
|
Total revenues
|
|
$
|
174,382
|
|
|
$
|
180,153
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
Backlog
|
|
2014
|
|
2013
|
|
2013
|
Dredging:
|
|
|
|
|
|
|
|
|
|
Capital - U.S.
|
|
$
|
189,450
|
|
$
|
176,117
|
|
$
|
103,061
|
Capital - foreign
|
|
|
98,849
|
|
|
98,666
|
|
|
195,292
|
Coastal protection
|
|
|
76,583
|
|
|
143,498
|
|
|
33,978
|
Maintenance
|
|
|
38,826
|
|
|
70,633
|
|
|
2,211
|
Rivers & lakes
|
|
|
111,441
|
|
|
26,158
|
|
|
26,339
|
Total dredging backlog
|
|
|
515,149
|
|
|
515,072
|
|
|
360,881
|
Environmental & remediation
|
|
|
77,363
|
|
|
28,330
|
|
|
27,548
|
Total backlog
|
|
$
|
592,512
|
|
$
|
543,402
|
|
$
|
388,429
|

For further information contact:
Great Lakes Dredge &
Dock Corporation
Katie Hayes
Interim Chief
Financial Officer
630-574-3012
Source: Great Lakes Dredge & Dock Corporation
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