Posted May 8, 2018
Thank you and good morning. ….. are now seeing that our restructuring plan is starting to yield results with the first quarter adjusted EBITDA, excluding restructuring increasing to $1 million from the prior year quarter of $11.7 million even though revenues were down quarter-over-quarter. As previously reported, we implemented last year our companywide restructuring plan to rationalize old underutilized and underperforming assets and to reduce our total overhead cost. As Mark would detail later, we continued to recognize some restructuring charges in the first quarter, but most importantly, we are on schedule with all the planned initiatives and have started to realize the associated savings.
The Ellis Island hopper dredge went into operation in December of 2017 and went through a run-in period during the first quarter, while generating revenue on the Mississippi Coastal Improvement project. She has contributed $40 million of revenues during this period and is on track to deliver our expected annualized EBITDA contribution as she is now performing at her design capacity. The addition of the Ellis Island to the Great Lakes fleet at a cost of $168 million is testament to our commitment to the domestic dredging market and has solidified our position as the leading U.S. dredging company. In this respect, we also have added the Carolina cutting dredge and the mechanical dredge 53 to our domestic fleet from their previous positions in the international market. We believe these actions will ensure that we have a strong capacity to undertake the new and challenging project that we have in backlog and see coming to bid in the next years in the ongoing domestic harbor deepening and coastal protection programs, while we are waiting the anticipated recovery in the international markets in 2019 and onwards.
We will also continue our CapEx program to upgrade and maintain our dredging fleet, keeping to our previously stated expected capital expenditure of $40 million for 2018. This expense is important as we see to maximize available revenue days in the fleet and support all our financial results. During the first quarter of 2018 we did experience one major unplanned mechanical delay in our domestic fleet which negatively impacted our results for the quarter decreasing revenue by $12.3 million and gross profits by $4.3 million. The dredge is now back to work and we expect this revenue and profit timing delay to be recovered throughout the remainder of 2018.
Awards during the quarter included $65 million of options on the Charleston Phase 2 project, which at $278 million is now fully awarded. We have mobilized on the project and rock dredging work is underway. The first quarter bid market was active and we currently have $151 million in pending awards that we expect to add to backlog during the second quarter. We continue to be optimistic about the domestic bid market for 2018 and expect bids to be issued for the first phase of the Corpus Christi deepening, at Tampa channel deepening and the second phase of the Mississippi coastal improvement program in the next few months. Further phases of the Jacksonville, Savannah, Charleston and Corpus Christi port deepenings are expected to tender later this year. ….
Source: Seeking Alpha