Great Lakes Reports First Quarter Results
The following is the introduction to the report.
OAK BROOK, Ill., May 02, 2018 (GLOBE NEWSWIRE) — 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 for the quarter ended March 31, 2018.
For the three months ended March 31, 2018, Great Lakes reported revenue of $146.6 million, net loss from continuing operations of $9.3 million and Adjusted EBITDA from continuing operations of $11.7 million. Excluding the charges relating to our previously announced restructuring, for the three months ended March 31, 2018, Great Lakes reported net loss from continuing operations of $4.6 million and Adjusted EBITDA from continuing operations of $15.1 million. These results compare to revenue of $170.6 million, net loss from continuing operations of $4.6 million and Adjusted EBITDA from continuing operations of $11.7 million for the same quarter in 2017.
Chief Executive Officer Lasse Petterson commented, “We are now seeing that our restructuring plan is starting to yield significant results with first quarter 2018 Adjusted EBITDA excluding restructuring increasing to $15.1 million from the prior year quarter of $11.7 million even though revenues were down quarter over quarter. During the first quarter, we completed the run in period for the Ellis Island hopper dredge and she is now performing at her full designed capacity. She has contributed $14 million of revenue on the Mississippi Coastal Improvement Program (MSCIP) project during the first quarter and is on track to deliver her expected annualized EBITDA results. With the addition of the Ellis Island to the Great Lakes’ fleet, we are solidifying our position as the leading U.S. dredging company. Awards during the quarter included $65 million of options on the Charleston II project which at $278 million is now fully awarded. We have mobilized on the project and rock dredging work is underway. The first quarter bid market was active and we currently have $151 million in pending awards that we expect to add to backlog during the second quarter. We continue to be optimistic about the domestic bid market for 2018 and expect bids to be issued for the first phase of the Corpus Christi deepening, the Tampa Big Bend Channel deepening and the MSCIP II coastal protection project in the next few months. Further phases of the Jacksonville, Savannah, Charleston and Corpus Christi port deepenings are expected to tender later this year.
“During the first quarter we did experience one major unplanned mechanical delay in our domestic fleet which negatively impacted our results for the quarter, decreasing revenue and gross profit by approximately $12.3 million and $4.3 million, respectively. The dredge is back to work and we expect this revenue timing delay to be recovered throughout the remainder of 2018.
“In the environmental & infrastructure (“E&I”) segment, based on the seasonality of the business, the first quarter is consistently the slowest of the year and the segment finished as planned.
“In the third quarter of 2017, we announced a company-wide restructuring plan to rationalize under-performing assets and reduce our overhead costs. During the first quarter of 2018, we recognized a restructuring charge of $6.4 million and are on track to realize the announced savings related to these initiatives.”
Chief Financial Officer Mark Marinko commented, “As Lasse noted, financial results during the first quarter were in line with our expectations with the exception of the impact of one major mechanical delay. We are pleased with the growth in operating income and EBITDA excluding restructuring over the prior year quarter and the positive changes on our balance sheet since year end 2017. We have reduced our revolver balance by $4 million and our overall net debt by $14 million since December 31, 2017. We expect to continue aggressively paying down debt over the next 12 – 18 months while continuing to maintain our fleet with prudent capital investments.”
Consistent with our 2017 year-end 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.
Beginning in 2018, the Company has chosen to account for plant and overhead in the same period in which costs were spent as opposed to the accrual/deferral method previously used. As required by guidance, the Company has recast the prior year as if this accounting standard had always been in place for all periods presented.