Great Lakes Reports Year-End Results Including $29.5M Charge for Restructuring Costs; Confirms Savings Initiatives on Track

Great Lakes Reports Year-End Results Including $29.5M Charge for Restructuring Costs; Confirms Savings Initiatives on Track

The following is the introduction to the report.

Oak Brook, Illinois – Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest provider of dredging services in the United States and a major provider of environmental and infrastructure services, today reported financial results or the quarter and year ended December 31, 2017.

For the three months ended December 31, 2017, Great Lakes reported revenue of $191.7 million, net loss from continuing operations of $8.8 million and negative Adjusted EBITDA from continuing operations of $8.4 million. Excluding the charges relating to our previously announced restructuring, for the three months ended December 31, 2017, Great Lakes reported net income from  continuing operations of $8.0 million and Adjusted EBITDA from continuing operations of $12.2 million. These results compare to revenue of $213.4 million, net loss from continuing operations of $7.0 million and Adjusted EBITDA from continuing operations of $11.6 million for the same quarter in 2016.

For the year ended December 31, 2017, Great Lakes reported revenue of $702.5 million, net loss from continuing operations of $18.6 million and Adjusted EBITDA from continuing operations of $34.7 million. Excluding the charges relating to our previously announced restructuring, for the year ended December 31, 2017, Great Lakes reported net loss from continuing operations of $0.5 million and Adjusted EBITDA from continuing operations of $57.3 million. These results compare to revenue of $767.6 million, net loss from continuing operations of $8.2 million and Adjusted EBITDA from continuing operations of $72.0 million in the prior year.

Company Update

Chief Executive Officer Lasse Petterson commented, “For the year ended December 31, 2017, we recognized a $29.5 million charge related to the previously announced restructuring. This charge was comprised of $23.0 million in cost of contract revenues, $1.8 million in general and administrative expenses and a $4.7 million loss on sale of assets. We expect to recognize an additional $13 – $18 million of restructuring charges during 2018. We are also pleased to confirm that our cost savings initiatives are on track, and we continue to expect to recognize approximately $20 million of cost savings in 2018 with the full run rate of $40 million in cost savings starting in 2019.

During the fourth quarter of 2017, we also successfully commenced operations of the Ellis Island which is currently working and earning revenue on the Mississippi Coastal Improvement Program project in the Gulf of Mexico. As stated in previous communications, we expect there to be a three month run in period for the Ellis Island to achieve her design production capacity. We continue to expect the Ellis Island to provide an incremental $20-$30 million of EBITDA on an annual basis.”

Chief Financial Officer Mark Marinko commented “The fourth quarter of 2017 remained consistent with the results we experienced in the first nine months of 2017. Additionally, the fourth quarter of 2017 was negatively impacted by additional costs on our smaller domestic inland projects as well as overall domestic weather delays. The fourth quarter of 2017 included final payments for the Ellis Island, yet net debt remained flat with the third quarter of 2017. With our increasing backlog over the last six months, the Ellis Island in operation and the restructuring plan in place, we expect our results to improve in 2018.”

Within this earnings release, the Company has chosen to exclude restructuring charges in certain comparisons to the prior year. This exclusion allows the user to better evaluate the Company’s financial results from operations and drivers of variances from the prior year without the impact of this special item. Restructuring items can include costs of contract revenues (depreciation and other), general and administrative expenses and loss on sale of assets. Reconciliations to results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) are provided throughout the earnings release and within the schedules attached. These non-GAAP measures are limited and should be considered in conjunction with GAAP measures herein provided.