Great Lakes Dredge & Dock Corporation Q3 2024 Earnings Report

Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD) has announced a robust Q3 2024, with net income reaching $8.9 million and adjusted EBITDA at $27 million on revenues of $191.2 million, marking a significant increase from the previous year. The company secured new contracts worth $543 million, including the $235 million Sabine-Neches Contract 6 Deepening project, contributing to a record backlog of $1.2 billion. With additional pending awards of $465 million, Great Lakes Dredge & Dock Corporation is set for continued revenue growth with visibility extending into 2026.

Key Takeaways

• Strong Q3 performance with net income of $8.9 million and adjusted EBITDA of $27 million on revenues of $191.2 million.
• Secured new contracts totaling $543 million, contributing to a record backlog of $1.2 billion.
• Launched the Galveston Island hopper dredge and continued construction of the Acadia vessel.
• Gross profit margin improved to 19%, with total capital expenditures for Q3 at $38.4 million.
• Ended the quarter with $12 million in cash and no debt drawn on the $300 million revolver.
• Anticipates increased activity in Q4, with strong funding from the U.S. Army Corps of Engineers and growth in the offshore wind market.

Company Outlook

• Increased utilization and revenues expected in Q4 2024.
• Revenue visibility into 2026 with a solid backlog and pending awards.
• Strong bipartisan support for the Water Resource Development Act (WRDA) 2024 to finance Corps projects.
• U.S. offshore wind sector growth, with 80.5 gigawatts potential capacity by 2025.

Bearish Highlights

• The company is awaiting the finalization of the U.S. Army Corps of Engineers' fiscal 2025 budget by December 20.
• Discussions about the Empire Wind and Orsted (CSE:ORSTED) Sunrise projects are ongoing, potentially affecting future vessel utilization.

Bullish Highlights

• Record appropriations for the U.S. Army Corps of Engineers in 2024, indicating a robust budget for 2025.
• Massachusetts awarded 2.7 gigawatts in Power Purchase Agreements, boosting the offshore wind market.
• High project performance and vessel utilization leading to a robust backlog for fleet utilization through 2025 and into 2026.

Misses

• No specific misses mentioned in the earnings call summary.

Q&A Highlights

• Lasse Petterson discussed the Acadia vessel's reservations, projecting U.S. market operations from 2028 onwards.
• Adam Thalhimer inquired about potential LNG project opportunities, anticipating progression from a low bid to a contract by late next year.
• Scott Kornblau projected strong Q4 revenue, with full vessel utilization and stable capital project revenues extending into next year.

Great Lakes Dredge & Dock Corporation has demonstrated significant operational improvements in 2024, characterized by high project performance and vessel utilization. The record backlog ensures fleet utilization through 2025 and into 2026. Management anticipates continued revenue growth, particularly in the offshore wind sector, as the fleet modernizes and operations expand. The competitive landscape remains stable despite some vessel retirements. With strong Q3 performance and a positive outlook, Great Lakes Dredge & Dock Corporation is well-positioned for success in the dredging and offshore wind markets.

InvestingPro Insights

• Great Lakes Dredge & Dock Corporation's (NASDAQ: GLDD) strong Q3 2024 performance is supported by recent InvestingPro data.
• Market cap stands at $823.74 million, reflecting its robust position in the dredging industry.
• Revenue growth has been impressive, with a 33.74% increase over the last twelve months.
• Profitability shows an operating income margin of 11.24% and a gross profit margin of 19.94%.
• Analysts expect sales to grow this year, consistent with the company's backlog.

Full transcript – Great Lakes Dredge & Dock (GLDD) Q3 2024:

Operator:

Good day and thank you for standing by. Welcome to the Q3 2024 Great Lakes Dredge & Dock Corporation Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Tina Baginskis, Director of Investor Relations. Please go ahead.

Tina Baginskis: Thank you. Good morning, and welcome to our third quarter 2024 conference call. Joining me on the call this morning is our President and Chief Executive Officer, Lasse Petterson; and our Chief Financial Officer, Scott Kornblau. Lasse will provide updates on events of the quarter, then Scott will follow up with the financial results. Following their comments, there will be an opportunity for questions. During this call, we will make certain forward-looking statements regarding our business. These statements involve a number of risks and uncertainties. With that, I will turn the call over to Lasse.

Lasse Petterson:

Thank you, Tina. Great Lakes had a strong third quarter, demonstrating excellent product performance and significant wins in the bid market. For Q3, we achieved net income of $8.9 million, with adjusted EBITDA of $27 million. We secured $543 million in new contracts, capturing several key projects. By the end of the quarter, our backlog reached $1.2 billion. Operations have commenced for two large LNG port deepening projects, and we are optimistic regarding our offshore wind strategy.

Scott Kornblau:

Thank you, Lasse. For Q3, we saw revenues of $191.2 million—an increase of $74 million year-over-year. Our gross profit improved to 19%. We maintained a strong liquidity position, concluding the quarter with $12 million in cash. Looking forward, we expect increased utilization and revenues for Q4, ultimately leading to strong earnings for the year.

Operator:

Thank you. [Operator Instructions] Our first question comes from the line of Joe Gomes from NOBLE Capital. Your line is now open.

The remainder of the transcript features a detailed Q&A session covering project updates, market dynamics, gross margins, and operational insights.