GLDD Reports Second Quarter Results

Great Lakes Dredge & Dock Corporation today reported financial results for the quarter ended June 30, 2015.

For the quarter ended June 30, 2015, Great Lakes reported revenue of $238.9 million, net income of $2.7 million, and adjusted EBITDA of $33.4 million.

During the second quarter, Great Lakes won $121 million, or 60%, of the domestic dredging bid market, with the $77 million Shell Island West coastal restoration project in the Gulf Coast being a significant portion of the Company’s awards.

“The dredging segment had an excellent quarter, delivering robust revenue, gross profit margin and operating income that was driven by an increase in fleet utilization and strong performance on several contracts. The environmental & remediation segment was impacted by a slower than anticipated escalation of its busy season, with more backlog expected to be worked off in the second half of the year. In addition, project losses, some of which are due to timing issues related to change orders and/or claims, impacted the segment’s second quarter performance. We made progress realigning the two environmental businesses during the second quarter, and this process will remain a focus for the rest of the year,” said Chief Executive Officer, Jonathan Berger.

“At June 30, 2015, our balance sheet remained solid and fairly similar to the prior quarter. As a result of failing to meet performance targets set forth in the seller note associated with the Magnus Pacific acquisition, we reduced the amount owed to the sellers under the note by $7 million during the second quarter. The note has been fully written off,” added Chief Financial Officer, Mark Marinko.

Second Quarter 2015 Highlights

Dredging

• Revenue increased significantly in the second quarter 2015 compared to the second quarter 2014, with higher foreign, domestic capital and maintenance dredging offset by slightly lower coastal protection and rivers & lakes dredging revenue;
• Gross profit margin increased during the second quarter 2015 compared to the same quarter last year, primarily as a result of improved utilization and project mix;
• Operating income was higher in the second quarter 2015 compared to the prior year quarter, primarily driven by the improvement in gross profit margin on higher revenues and increased fleet utilization;
• Dredging backlog was $602.6 million at the end of the second quarter, which is an increase of $8.3 million compared to backlog at December 31, 2014.

Total Company

• Net income was $2.7 million for the second quarter 2015 compared to $3.9 million of net income from continuing operations in the same period 2014. Equity in the losses of joint ventures – related to the two joint ventures currently being dissolved – is $2.6 million in the current quarter, compared to $1.4 million in the same period in 2014. Interest expense is $5.6 million in the current quarter compared to $5.0 million in the same period in 2014. Income taxes in the current quarter are $2.5 million compared to $2.1 million in the same period in 2014. The second quarter 2014 also included a $2.2 million gain on a business acquired by the environmental & remediation segment;
• Adjusted EBITDA from continuing operations was $33.4 million in the second quarter 2015, up from $19.8 million in the second quarter of 2014 on higher operating income, depreciation and amortization;
• Total contracted backlog at quarter end was a record $752.0 million.

Six Months Ended June 30, 2015 Highlights

Dredging

• Revenue increased in the first six months ended June 30, 2015 compared to the same period in the prior year, with higher foreign, domestic capital and maintenance dredging partially offset by lower coastal protection and rivers & lakes dredging revenue;
• Gross profit margin increased slightly during the first six months of 2015 compared to the same quarter last year, primarily as a result of higher utilization and project mix;
• Operating income increased in the first six months of 2015 compared to the prior year period, driven by higher gross profit on higher revenues and lower G&A expenses.

Total Company

• Net loss was $5.7 million for the first six months 2015 compared to $1.4 million in net income from continuing operations in the same period 2014. Included in the current period loss is $3.7 million of equity in the losses of joint ventures, compared to $3.3 million in the same period in 2014, and $11.2 million in interest expense, compared to $10.0 million in interest expense in the same period in 2014. The current period also includes a $3.6 million income tax benefit;
• Adjusted EBITDA for the first six months 2015 was $37.7 million, up from $31.8 million in the first six months of 2015 with lower operating income offset by higher depreciation and amortization expense;
• Total capital expenditures for the first six months 2015 were $46.6 million, including $15.6 million to purchase a vessel that was formerly leased, $12.1 million for the new ATB, and the remainder for improvements to the fleet. In the first six months of the prior year, total capital expenditures were $49.0 million, including $25.0 million for the ATB, and the remainder for improvements to the fleet and the addition of land equipment.