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Great Lakes Dredge & Dock Reports on Third Quarter – Dredging Business Doing Well

Posted on November 5, 2015

Great Lakes Dredge & Dock Corporation in the US has reported financial results for the quarter ended September 30, 2015 and nine month period to that date.

For the quarter ended 30 September 2015, Great Lakes reported revenue of US$220.8 million, net income of US$0.3 million, and adjusted EBITDA of US$23.1 million. During the quarter, Great Lakes won US$218 million, or 37 per cent of the domestic dredging bid market, with the Delaware River deepening and the Corpus Christi LNG projects representing a significant portion of the awards. At September 30, 2015, the company had a low bid pending award for a $103 million coastal restoration project in the Gulf Coast. The contract for this award was subsequently finalized and will be included in fourth quarter 2015 backlog.

Chief Executive Officer Jonathan Berger said: “The company’s core dredging business delivered another strong quarter, posting robust gross profit and operating margins. With favourable dredging tailwinds and record backlog, we remain confident in the continued elevated performance of this segment for the rest of the year.

“Performance in our environmental & remediation (E&R) segment, however, was weaker than expected due to a number of factors. We experienced project delays on two of our largest projects due to unforeseen circumstances, pushing the work into the fourth quarter and into 2016. The segment was also impacted by project losses, with one project accounting for US$4.3 million of the losses. In addition, the absence of anticipated large project awards adversely impacted this segment’s performance in the third quarter 2015.

“We remain focused on improving performance in this segment and are taking steps to improve financial and operational performance. In the quarter, we implemented initial cost reduction initiatives and are undertaking additional realignment and cost reduction efforts in the fourth quarter. To lead this process going forward, today we are announcing the addition of Christopher P Shea as President of the E&R segment. Mr Shea joins us from CH2M Hill where he was most recently President of the Environmental & Nuclear Business Group.

“As we noted in our press release on October 16, 2015, challenges within our environmental & remediation segment led us to withdraw our adjusted EBITDA guidance for the year. Given the ongoing uncertainties in this segment, we do not intend to reissue guidance for 2015.

Mr Berger concluded: “Our dredging segment delivered another excellent quarter, and we remain confident that it is well positioned to finish out the year with elevated fleet utilization and strong returns. With the robust bidding market and high win rate that we have experienced, we have more of our fleet currently scheduled out into the future than is normal for this time of year.

“Domestically, we expect to commence work on the deepening project on the Delaware River and the Corpus Christi LNG project this month. We will continue work on the Savannah Harbour deepening project, the Jesuit Bend project on the Mississippi River in Louisiana, several large Sandy-related coastal projection projects in New Jersey and New York, and other capital and maintenance projects. In the environmental & remediation segment, we will remain focused on our realignment, cost reductions and improved project execution.

“As indicated on 16 October 2015, the Board of Directors is conducting a review of potential strategic alternatives to enhance stockholder value. The company has retained Greenhill & Co LLC to serve as financial advisor in connection with this process.”

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