Posted on February 18, 2025
Fourth quarter net income of $19.7 million
Fourth quarter Adjusted EBITDA of $40.2 million
Full year net income of $57.3 million
Full year Adjusted EBITDA of $136.0 million
Dredging backlog of $1.2 billion at December 31, 2024
HOUSTON, Feb. 18, 2025 (GLOBE NEWSWIRE) — Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) (Nasdaq: GLDD), the largest provider of dredging services in the United States, today reported financial results for the fourth quarter and year ended December 31, 2024.
Fourth Quarter 2024 Highlights
- Revenue was $202.8 million
- Total operating income was $30.0 million
- Net income was $19.7 million
- Adjusted EBITDA was $40.2 million
Full Year 2024 Highlights
- Revenue was $762.7 million
- Total operating income was $92.8 million
- Net income was $57.3 million
- Adjusted EBITDA was $136.0 million
Management Commentary
Lasse Petterson, President and Chief Executive Officer, commented, “Great Lakes had an outstanding 2024, with strong project performance and exceptional financial results. We capped off the year with another strong quarter and ended 2024 with revenue of $762.7 million, net income of $57.3 million, and Adjusted EBITDA of $136.0 million, the latter two metrics being the second-highest in Great Lakes’ history. The bid market for 2024 hit a historic level of $2.9 billion of which Great Lakes won 33%. This further added to our substantial dredging backlog which as of the end of 2024 stood at $1.2 billion, with an additional $282.1 million in low bids and options pending award, providing expected revenue visibility well into 2026. At the end of the year, capital and coastal protection projects accounted for 94% of our backlog, which typically yield higher margins. The largest capital project bid in the year was the Sabine-Neches Contract 6 Deepening project, won by Great Lakes, with awarded base and open options totaling $235 million.
Also included in our backlog are two Liquified Natural Gas (“LNG”) projects that were awarded in 2023, the Port Arthur LNG Phase 1 project and the Brownsville Ship Channel project for Next Decade Corporation’s Rio Grande LNG project, which is the largest project undertaken in Great Lakes’ history. Dredging began on both capital projects in the third quarter of 2024. We continue to tender bids on several pending LNG projects in an effort to diversify and expand our client base.
We remain steadfast in our commitment to executing a long-term strategy that maximizes growth opportunities for the Company. The Acadia, the first U.S.-flagged Jones Act compliant subsea rock installation (“SRI”) vessel, is currently under construction and has secured offshore wind rock placement contracts for Equinor’s Empire Wind 1 and Ørsted’s Sunrise Wind projects to protect foundations and cables. In addition, during the fourth quarter, we signed a vessel reservation agreement for the Acadia for another wind project in the United States. All three of these projects are fully permitted and we believe will not be directly impacted by the President’s Executive Order pausing issuance of new offshore wind leases and permits.
The Acadia is also well suited for work outside of U.S. offshore wind and over the past year we have been broadening our target markets for the Acadia to include international offshore wind projects, as well as protecting critical subsea infrastructure such as oil and gas pipelines and telecommunication and power cables. These additional markets pave the way for the rebranding of our offshore wind division to Offshore Energy.
In the second quarter, Great Lakes entered into a $150 million second-lien credit agreement which provides Great Lakes with additional liquidity which we expect will help us complete our new build program. In the third quarter, S&P Global Ratings upgraded Great Lakes’ credit rating to “B-” from “CCC+”, which further demonstrates the improvements we have made this past year to our balance sheet, cash flows and overall performance.
The Company had an exceptional 2024, and with our enhanced fleet, strong project performance, sustainable cost savings initiatives and strategic growth initiatives, we believe we are well prepared for the future.”
Operational Update
Fourth Quarter 2024
- Revenue was $202.8 million, an increase of $21.1 million from the fourth quarter of 2023. The higher revenue in the fourth quarter of 2024 was due primarily to higher capital and coastal protection project revenues, offset partially by a decrease in rivers and lakes and maintenance project revenue.
- Gross profit was $48.9 million, an improvement of $10.2 million compared to the gross profit from the fourth quarter of 2023. Gross margin percentage increased to 24.1% in the fourth quarter of 2024 from 21.3% in the fourth quarter of 2023 due to improved project performance and higher capital and coastal protection revenue in the current year quarter.
- Operating income was $30.0 million, which is slightly down compared to operating income of $30.5 million in the prior year fourth quarter. The year over year decrease is primarily due to a $7.4 million gain from a terminated offshore wind contract in the fourth quarter of 2023 and higher incentive pay in the current year quarter as a result of improved operational performance. These were mostly offset by the $10.2 million improvement in gross profit in the current year quarter.
- Net income for the quarter was $19.7 million, which is a $1.9 million decrease compared to net income of $21.6 million in the prior year fourth quarter. The decrease is mostly driven by an increase in net interest expense partially offset by a decrease in income tax provision.
Full Year 2024
- Revenue was $762.7 million, an increase of $173.1 million from 2023. The higher revenue in 2024 was due primarily to higher capital and coastal protection project revenues, offset partially by a decrease in rivers and lakes and maintenance project revenue.
- Gross profit for the full year 2024 was $160.6 million, an improvement of $82.9 million compared to the prior year’s gross profit. Gross margin percentage increased to 21.1% for the full year 2024 from 13.2% for the full year 2023 partially due to improved project performance and more capital and coastal protection revenue, which typically yield higher margins.
- Operating income for the full year 2024 was $92.8 million, which is a $64.6 million improvement from the prior year. The year-over-year increase is primarily a result of the $82.9 million increase in gross profit, which was partially offset by a $7.4 million gain from the terminated offshore wind contract in 2023 and by higher general and administrative expenses in the current year primarily due to higher incentive pay as a result of improved operational performance this year.
- Net income for the full year 2024 was $57.3 million, which is a $43.4 million improvement compared to $13.9 million for the full year 2023. This increase is primarily a result of the improved operating income, partially offset by an increase in net interest expense and income tax provision.
Balance Sheet, Dredging Backlog & Capital Expenditures
- At December 31, 2024, the Company had $10.2 million in cash and cash equivalents and total long-term debt of $448.2 million including $35 million outstanding against our $300 million revolver.
- At December 31, 2024, the Company had $1.2 billion in dredging backlog as compared to $1.04 billion at December 31, 2023. Dredging backlog does not include approximately $282.1 million of low bids and options pending award and approximately $44.9 million of performance obligations and $12.7 million in options pending award related to offshore energy.
- Total capital expenditures for 2024 were $135.7 million compared to $144.8 million for 2023. The 2024 capital expenditures included $72.7 million for the construction of the subsea rock installation vessel, the Acadia, $41.0 million for the Amelia Island, $5.4 million for the completion of the Galveston Island, and $16.6 million for maintenance and growth.
Market Update
We continue to see strong support from the Administration for the dredging industry. The 2024 Energy and Water Appropriations Bill provided a record $8.7 billion to the U.S. Army Corps of Engineers (the “Corps”). Additionally, the 2023 Disaster Relief Supplemental Appropriations Act allocated $1.5 billion for infrastructure repairs and beach renourishment projects. The year ended with a record bid market of $2.9 billion, which included a robust beach renourishment market and 13 capital projects.
The 2025 Corps’ budget is expected to be another record appropriation. On June 28, 2024, the U.S. House of Representatives Energy and Water Appropriations Subcommittee passed their 2025 Appropriations Bill providing the Corps with a budget of $9.96 billion, which is $2.7 billion above the President’s Budget request. The bill includes $5.7 billion for Operations and Maintenance projects, of which $3.1 billion is from the Harbor Maintenance Trust Fund. On August 1, 2024, the Senate Appropriations Committee approved its draft of the 2025 Energy and Water spending bill which provides $10.3 billion in total funding for the Corps. On December 20, 2024, U.S. Congress approved a continuing resolution through March 14, 2025, for the Corps’ Fiscal 2025 budget.
The Water Resources Development Act (“WRDA”) is renewed every two years and authorizes funding for Corps’ projects related to flood protection, dredging, and ecosystem restoration. WRDA 2022 included funding for deepening New York and New Jersey shipping channels to 55 feet and the Coastal Texas Protection and Restoration Program, which aims to protect the Texas Gulf Coast from hurricanes. On January 4, 2025, President Biden signed WRDA 2024 into law which includes several capital projects and projects designed to enhance flood protection, improve coastal resilience, and support ecosystem restoration.
We continue to be confident about our growth and diversification plans via our subsea rock installation initiative. As stated previously, we are broadening our targeted SRI markets to include oil and gas pipeline and telecommunications cable protection, and international offshore wind.
We continue to pursue SRI vessel projects with work planned for 2026 and beyond. Included in the subsea rock installation opportunities are global offshore wind projects. The latest BloombergNEF offshore wind market outlook shows global offshore wind expected to grow tenfold by 2040 with a forecast exceeding 700GW. In addition, market expectations for telecommunication and oil and gas scour protection projects globally are estimated on average to require approximately 2,000 SRI vessel days annually. We believe there is an undersupply of rock placement vessels and we are pursuing opportunities in all the above mentioned markets which are expected to provide the Acadia with work planned for 2026 and beyond.
Conference Call Information
The Company will conduct a quarterly conference call, which will be held on Tuesday, February 18, 2025, at 9:00 a.m. C.S.T (10:00 a.m. E.S.T.). Investors and analysts are encouraged to pre-register for the conference call by using the link below. Participants who pre-register will be given a unique PIN to gain immediate access to the call. Pre-registration may be completed at any time up to the call start time.
To pre-register, go to https://register.vevent.com/register/BI3ee71908023c466fb83abf345f36e0ca
The live call and replay can also be heard at https://edge.media-server.com/mmc/p/oqt4ireo or on the Company’s website, www.gldd.com, under Events on the Investor Relations page. A copy of the press release will be available on the Company’s website.
The Company
Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States, which is complemented with a long history of performing significant international projects. In addition, Great Lakes is fully engaged in expanding its core business into the offshore energy industry. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 135-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.
