Great Lakes Dredge & Dock Q2 2024 Earnings Report

Great Lakes Dredge & Dock EPS Results

• Actual EPS: $0.11
• Consensus EPS: $0.03
• Beat/Miss: Beat by +$0.08
• One Year Ago EPS: $0.03

Great Lakes Dredge & Dock Revenue Results

• Actual Revenue: $170.09 million
• Expected Revenue: $165.00 million
• Beat/Miss: Beat by +$5.09 million
• YoY Revenue Growth: N/A

Great Lakes Dredge & Dock Announcement Details

• Quarter: Q2 2024
• Date: 8/6/2024
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 6, 2024
• Conference Call Time: 10:00AM ET

Great Lakes Dredge & Dock (NASDAQ:GLDD) (NASDAQ: GLDD) is a leading provider of dredging and maritime construction services in the United States. The company specializes in the excavation and removal of sediment from waterways, harbors, ports and coastal areas to maintain navigability and support commercial shipping. Its operations encompass both maintenance dredging—removing accumulated material to restore channel depth—and new work projects such as land reclamation and harbor deepening.

In addition to traditional dredging, Great Lakes Dredge & Dock offers a range of complementary marine construction services. These include beach nourishment and coastal restoration, wetland mitigation, environmental remediation and sediment management. The company’s fleet features hopper dredges, cutterhead dredges and water injection dredges, enabling it to tackle projects of varying scale and complexity. Its technical capabilities are underpinned by in-house design, project management and hydrographic survey teams.

Founded in the late 19th century and headquartered in Oak Brook, Illinois, Great Lakes Dredge & Dock has a long history of supporting federal, state and local governments, as well as private-sector clients. The firm’s project footprint spans major U.S. waterways and coastal zones—from the Gulf of Mexico and Atlantic seaboard to the Pacific Northwest—where it helps safeguard maritime commerce, protect coastal communities and restore valuable ecosystems.

The company is led by President and Chief Executive Officer Eric Macie, who has guided Great Lakes through expansions in environmental and coastal services. Under his leadership, the firm continues to invest in modernizing its fleet and advancing dredging technologies. As a publicly traded corporation since 2004, Great Lakes Dredge & Dock remains focused on delivering sustainable, large-scale marine infrastructure solutions while adhering to stringent environmental and safety standards.

Great Lakes Dredge & Dock Q2 2024 Earnings Call Transcript

Key Takeaways

• Great Lakes delivered a net income of $7.7 million and adjusted EBITDA of $25.8 million in Q2 on revenues of $170.1 million, driven by strong project execution and cost control.
• The company’s firm dredging backlog is $807.9 million (85% capital projects), with an additional $273.1 million in low bids and options pending, and $181.6 million of new bids post-quarter end.
• Full mobilization on two major LNG channel-improvement projects commenced for Port Arthur and Brownsville, with main dredging activity ramping in Q3 and extending into 2025–2026.
• Fleet modernization continued with the record-time commissioning of the 6,500 CY hopper dredge Galveston Island, sister ship Amelia Island under construction (due H2 2025), and the Jones Act-compliant rock installation vessel Arcadia progressing toward a 2025 start.
• Liquidity remains strong with $23.1 million in cash, undrawn $300 million revolver, and a new $150 million second-lien credit facility, supporting ongoing CapEx and newbuild programs.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Q2 2024 Great Lakes Dredge & Dock Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference to your first speaker today, Tina Baginskis, Director of Investor Relations. Please go ahead.

[Tina Baginskis, Director of Investor Relations at Great Lakes Dredge & Dock]

Thank you. Good morning, and welcome to our second quarter 2024 conference call. Joining me on this call this morning is our President and Chief Executive Officer, Lasse Petterson, and our Chief Financial Officer, Scott Kornblau. Lasse will provide an update on the events of the quarter, then Scott will continue with an update on our financial results for the quarter. Lasse will conclude with an update on the outlook for the business and market. Following their comments, there will be an opportunity for questions. During this call, we will make certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations.

[Tina Baginskis, Director of Investor Relations at Great Lakes Dredge & Dock]

Certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2023 Form 10-K and subsequent filings. During this call, we also refer to certain non-GAAP financial measures, including Adjusted EBITDA, which are explained in the net income to Adjusted EBITDA reconciliation attached to our earnings release and posted on our investor relations website, along with certain other operating data. With that, I will turn the call over to Lasse.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Thank you, Tina. Great Lakes Dredge & Dock delivered solid, solid second quarter results, driven by excellent project performance, well-executed dry dock program, and disciplined cost control. For the second quarter, we achieved net income of $7.7 million and adjusted EBITDA of $25.8 million. This is a very strong result, considering we had three dredges in dry dock in preparation for the new capital LNG projects, which have commenced in, in full now in the third quarter. With a record 2024 U.S. Army Corps of Engineers budget of $8.7 billion, the bid market has been robust for the first half of the year and is expected to remain so for the rest of the year, particularly in our prime markets for capital port deepenings and coastal protection projects.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

The robust bid market has enabled us to keep our dredging backlog strong, replacing most of the revenue burn off in the first half of the year. At the end of the quarter, our firm dredging backlog stood at $807.9 million, with 85% of that in capital projects. In addition, we had $273.1 million in low bids and options pending award. Post-quarter end, we have continued to be the low bidder on new dredging projects, with pending awards for approximately $181.6 million. Additionally, for offshore wind, our backlog was $44.6 million, with an additional $12.7 million in options pending award.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

On the LNG-related projects, the Port Arthur LNG Phase 1 Channel Improvement Project and the Brownsville Ship Channel Project for NextDecade Corporation, so Rio Grande LNG project, we are fully mobilized, and the main dredging work will now be in full swing in third quarter and continue into 2025 and 2026. The Biden administration's temporary pause on approving new LNG export licenses has not had an impact on our two awarded projects. There has also been minimal impact on the large number of projects that the Department of Energy has already approved and on which we continue to tender bids. The continuation of these private sector projects greatly support our dredging business by diversifying and expanding our client base.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Modernizing our fleet is a key factor in staying a competitive market leader for the long term, and we have made significant progress on our new building program with the first quarter delivery of our newest 6,500 cubic yard capacity hopper dredge, the Galveston Island. The vessel went from shipyard through commissioning and sea trials to being in full operation in record time, and she contributed strongly to the solid project performance in the second quarter. Her sister ship, the Amelia Island, is currently under construction and is expected to be delivered in the second half of 2025. These dredges have been specially designed to operate on projects that redevelop and improve our beaches and shorelines, which are subject to the continual damage due to storms and rising sea levels.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

The first and only U.S. flag Jones Act compliant inclined fall pipe subsea rock installation vessel, the Acadia, is currently under construction at the Philly Shipyard. The Acadia is contracted to install rock foundations for Equinor's Empire Wind 1, scheduled for a 2025 start, and to perform rock placement to protect subsea cables on the Ørsted Sunrise Wind project scheduled for 2026. In addition to the U.S. offshore wind market, there are several other markets opportunity that the Acadia is well suited for. She can work in the international offshore wind market, she can work in the oil and gas and carbon capture market, and the telecommunications and power cable markets, installing rock protection over pipelines and cables. We have pre-qualified and tendered on a number of rock placements projects for the Acadia, both in the U.S. and internationally. With work planned for 2026 and beyond.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

In the second quarter, we entered into a $150 million second lien credit agreement for an aggregate principal amount of $100 million, and a delayed draw term loan facility in the aggregate amount of $50 million, to provide additional liquidity to support our new build program and provide financial flexibility to pursue other financing alternatives, including MARAD's Title XI. I will now turn the call over to Scott to further discuss the results of the quarter, and then I'll provide further commentary around the market and our business.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Thank you, Lasse, and good morning, everyone. I'll start by walking through the second quarter, which resulted in revenues of $170.1 million, net income of $7.7 million, and adjusted EBITDA and adjusted EBITDA margin of $25.8 million and 15.2%, respectively. Revenues of $170.1 million in the second quarter of 2024 increased $37.4 million from the prior year's second quarter, primarily due to higher capital and coastal protection project revenues, which together made up over 80% of our total revenues, and the addition of the Galveston Island, which worked the entire second quarter of 2024, offset partially by a decrease in maintenance project revenue.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Current quarter gross profit and gross profit margin increased to $29.8 million and 17.5%, respectively, compared to $17.9 million and 13.5%, respectively, in the second quarter of 2023. The quarter-over-quarter increase in gross margin is primarily due to improved project performance and higher capital and coastal protection revenue, which typically yields higher margins. Second quarter 2024 G&A of $16.2 million is $1.7 million higher than the same quarter last year, primarily due to higher employee benefit and incentive costs, and consistent with G&A expense in the first quarter of 2024.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Net interest expense of $4.2 million for the second quarter 2024 was up from $3.2 million in the second quarter 2023, primarily due to interest related to the term loan, which closed earlier in the second quarter. Second quarter 2024 net income tax expense of $2.8 million increased $2 million compared to the same quarter of 2023, driven by the higher current quarter income. Rounding out the P&L, net income for the second quarter 2024 was $7.7 million, up from $1.7 million in the prior year quarter, and adjusted EBITDA increased $9.2 million to $25.8 million.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Turning to our balance sheet, we ended the second quarter with $23.1 million in cash and nothing drawn on our $300 million revolver, which doesn't mature until the third quarter of 2027. Total liquidity at the end of the quarter was just over $325 million, and we have no debt maturities until 2029, putting us in a great position to complete our new build program with ample liquidity. Total capital expenditures for the second quarter, 2024, were $51.3 million, made up of $29.7 million for the construction of the subsea rock installation vessel, the Acadia, $14.8 million for the hopper dredge, Amelia Island, $700,000 for the final payment of the Galveston Island, and $6.1 million for maintenance CapEx.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

We are lowering our full year CapEx guidance from between $170 million and $195 million to between $130 million and $150 million due to the projected timing of certain milestone payments pushing from late 2024 to early 2025. Looking forward to the third quarter, we expect utilization and revenue to increase from the second quarter as both LNG projects commence. While we have no regulatory dry dockings planned for the rest of the year, we will have a few vessels down for a short period of time during the third quarter for planned maintenance, including one that was originally planned for the second quarter, but will now occur in the third. With that, I'll turn the call back over to Lasse for his remarks on the outlook moving forward.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Thanks, Scott. The dredging industry continues to see strong support from both the White House and Congress. On March the ninth, President Biden signed the Energy and Water Appropriations Bill into law, which allocates $8.7 billion in total funding for the U.S. Army Corps of Engineers for fiscal year 2024. This includes $5.6 billion for the Corps' operations and maintenance, of which $2.8 billion came from the Harbor Maintenance Trust Fund to enhance our nation's waterways, $2.2 billion for flood and storm damage reduction, and $18 million for beneficial use of dredged material. Furthermore, the Disaster Relief Supplemental Appropriations Act for fiscal year 2023, which has been approved, includes $1.5 billion for the Corps to make necessary infrastructure repair post hurricanes and other natural disasters, as well as beach renourishment initiatives to bolster coastal resilience.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

This increased budget and additional funding have supported a very strong bid market for 2024. Looking forward to what is expected for 2025, the Corps' budget is expected to be another record appropriation. On June 28, the House of Representatives Energy and Water Appropriations Subcommittee passed their 2025 appropriations bill, providing the Corps with $9.96 billion. 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, the Senate Appropriations Committee approved its draft of the 2025 energy and water spending bill, which included $10.3 billion in total funding for the Corps. The passing of these appropriations set up 2025 to be another strong bid market for the dredge industry.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Looking forward, further ahead, the Water Resources Development Act, or WRDA, is a 2-year renewal cycle and includes legislation that authorizes the financing of the Corps' projects in the next 2 to 5 years. WRDA 2024 has seen strong bipartisan support and has already been approved by the Senate Environment and Public Works Committee and the House Transportation and Infrastructure Committee. On the 22nd of July, the U.S. House of Representatives approved the WRDA 2024, moving the bill one step closer to full congressional approval. The U.S. offshore wind market reached historic milestones in the first half of 2024, with 2 commercial-scale offshore wind farms becoming operational and supplying power to the grid in New York and Massachusetts.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

We also saw New Jersey awarding 3.7 gigawatts of power purchase agreements and the tri-state, Massachusetts, Rhode Island, and Connecticut, solicitation for 6 gigawatts of offshore wind are expected in third quarter. The latest Bloomberg offshore wind market outlook show global offshore wind expected to grow tenfold by 2040, with a forecasted installed capacity of approximately 742 gigawatts, with the United Kingdom and the United States to be two of the top three offshore wind energy producers, which provides us with a very strong long-term market outlook, supporting a revenue growth opportunity. In my view- It is my view that Great Lakes is now well positioned in a very exciting time. We have a strong dredging backlog consisting of large, flexible capital port deepening and LNG projects. We have a robust bid market in 2024 and expect the same for 2025.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

And this will support improved year-over-year revenue growth and greatly improve our position to continue to deliver solid results, which again, supports the generation of higher free cash flow to continue to modernize and upgrade our fleet with more productive dredges and support our expansion into the high growth, high margin offshore wind market. And with that, I turn the call over for questions.

[Operator]

Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Joe Gomes from Noble Capital. Please go ahead.

[Joe Gomes, Analyst at Noble Capital]

Good morning. Very nice quarter, and thanks for taking my questions.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Good morning, Joe.

[Joe Gomes, Analyst at Noble Capital]

Wanted to start out, I don't know if you guys can, you know, provide us some of the, you know, the market statistics for the quarter, kind of like your bid share, your win share of the quarter. Were there any particular projects out there that you won that you weren't expecting to win? And/or on the flip side, any particular projects that you thought that you were in the driver's seat and ended up not being in the driver's seat?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

No, as I said, in general, the bid market has been very strong in 2024, and we are very happy to see that now the deepening, port deepening projects in the Gulf are moving forward in particular, and also, the beach restoration market on the East Coast is moving forward. That has been delayed over the last two years, and that market has come back strongly. That is typically a market where we perform well.

[Joe Gomes, Analyst at Noble Capital]

Okay. Then, you mentioned last, you know, some of the other potential opportunities for the Acadia. You point out oil and gas, telecom, power cable, protection markets. These are things that, you know, at least I don't recall you speaking about previously. Is that, you know, more of a just kind of looking for what else can be done in the US or offshore, if the offshore wind market doesn't take off as anticipated in the US? Or is this, you know, some of the participants in these industries, you know, coming to Great Lakes and saying, "Hey, we could make use of that vessel"? I'm just trying to get a little more color on those potential opportunities.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Yeah. The vessel can do all these things which I had described. It places rock over in support of offshore wind installations, the monopiles, the substations, and also it places rock over pipelines. There are a number of pipelines being installed that needs that protection now, cable need that protection, and so a very large market for cable protection worldwide. So when the offshore wind markets kind of hit a bump here last year, we looked at, well, what do we—where do we look and where's the opportunities for the vessel in the short term?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

It's very clear for us that there's a strong offshore wind market internationally, and there's a very large cable protection market internationally, and also the oil and gas sector requires rock over pipelines, which we also can address. So it's all these markets are open for the Acadia. Acadia was targeted, the offshore wind market in the U.S., as a prime market, but we can compete internationally on all these sectors.

[Joe Gomes, Analyst at Noble Capital]

Okay. And then just one more for me, I'll get back in queue. So, you know, you mentioned the Galveston Island, you know, up and running full quarter. You know, is that all up to expectations? Any hiccups on the Galveston Island? Or how pleased are you with the performance of the vessel in the quarter?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

No, we are very pleased with the performance. As you know, we had some delays in getting the vessel delivered, so we put a lot of effort into commissioning as much as we could when the vessel was being built. And she went through sea trials and commissioning in record time for us and has performed very well since she was delivered.

[Joe Gomes, Analyst at Noble Capital]

Great. Thanks, again, for taking the questions and great quarter.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Thank you.

[Operator]

Thank you. One moment for our next question. Our next question comes from Julio Romero, from Sidoti & Company. Please go ahead.

[Julio Romero, Analyst at Sidoti & Company]

Thanks. Hey, good morning. Can you talk about maybe demand for coastal protection and, and give us a sense of how much coastal work is expected to be bid over the back half of 2024, and then, and then when that could be reflected in, in your backlog?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Yeah. As we've been talking about before, for the last two years, the coastal protection market, particularly on the East Coast, has been very slow. And that market has now come back, and there is, particularly on the East Coast, there is a number of projects which we are now bidding and addressing. It's, where we are looking, it's in the range of more than $500 million in coastal protection, kind of maybe in the high end of that. So that market has come back with a vengeance, and that's great to see, because a lot of these communities along the East Coast and in Florida are dependent on the tourist industry.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

And with the lack of funding and also project approvals for these projects over the last two years, that has suffered, and now we see a great uptick in that market.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Julio, I'll add, you know, we mentioned the second half looks very strong. July was a very busy month, and, you know, we've mentioned on the call, we won over $180 million of just the July work. There was about $75 million-$80 million just in that sector, just for the month of July, with a lot more to come.

[Julio Romero, Analyst at Sidoti & Company]

Got it. That's helpful. And, you know, it was good to see the mix of backlog continue to hold up well with capital projects and, you know, being a big part of that mix. Can you talk about how the mix of the backlog should trend for the next two quarters?

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Yeah. So, you know, we're working all the capital projects now, including the commencement of both LNGs. So we'll start burning off, you know, quite a bit of capital over the second half of the year. There are some jobs coming up, though, in the second half. I mentioned the very strong July. We did win two capital projects in July, so we'll see that get added into our backlog next quarter. That was to about $90-$95 million. The larger segment of the market in the second half of the year is likely the coastal protection. There's just so much coming out with the supplemental bill, you know, $1.5 billion. We're starting to see that spent right now.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

I think that'll be the strongest piece, but there's still a number of capital projects that we're eyeing.

[Julio Romero, Analyst at Sidoti & Company]

... Okay, understood. And then last one for me is just on the, I appreciate the updated CapEx guidance you gave. Can you just quickly remind us, how much is left on the new build program and when that's expected to complete?

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Yeah. So with, you know, I think we have, you know, roughly $65-$85 million left in the second half of this year. You know, call that roughly $10 million of maintenance CapEx, so $55-$75 million. And then we have roughly an additional $80 million for the new build program in 2025. So, you know, all said and done, about $150 million, give or take, left on the new build program, and we should take delivery of both the Amelia Island and the Acadia in the third quarter.

[Julio Romero, Analyst at Sidoti & Company]

Very helpful. I'll pass it on. Thanks very much.

[Operator]

Thank you. One moment before our next question. Our next question comes from John Tanwanteng from CJS Securities. Please go ahead.

[Jon Tanwanteng, Analyst at CJS Securities]

Hi, good morning. Very nice quarter, and thank you for taking my questions. I was wondering if you could talk about how much white space you have left in the schedule for the remainder of the year, just given all the activity in July?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Yeah, we don't have much white space left in our program. We have a good utilization of the dredges. There are some opportunity for revenue generation on our cutter side of our fleet. But with the strong beach market that we see coming up, there are good opportunities here towards, let's say, fourth quarter and into next year.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

I will add, John, you know, one of the reasons we really like these, you know, large beach projects or capital projects, is they provide us a ton of flexibility. So even though we may have penciled in full utilization on a number of vessels this year, we can still bid work as we have, you know, opportunities to push some of the planned work from 2024 into 2025 if we find other opportunities.

[Jon Tanwanteng, Analyst at CJS Securities]

Got it. Thank you. And then how much of, how much was the impact of maintenance in Q2 being pushed out to Q3? And do you have any other, you know, planned maintenance, heading into Q4?

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Yeah, so it was... You know, we had a few vessels that we had planned to do in Q2. One of them had full backlog, and there was a delay in getting some of the parts we needed to the yard, so we just kept working, and we'll take her down. It'll be a couple of weeks that we had planned in Q2, that'll now happen in Q3. You know, we always have planned maintenance on these vessels, but nothing really of note that we have planned between, you know, now and the end of the year. We just have, you know, normal handful of vessels that will be taken out, you know, for a week or so, you know, just to do what needs to be done and get them back on payroll.

[Jon Tanwanteng, Analyst at CJS Securities]

Got it. Between the utilization and kind of the lighter, you know, or maybe no dry docking through the end of the year, is it reasonable to assume that you could approach the Q1 earnings performance in the third and fourth quarters, if not hit it?

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Q4, in particular, is shaping up to be extremely high utilization. Q1, we had extremely high margins. A lot of the projects that we were working on were grand slams. We typically do very, very well on capital projects. So, you know, we have the backlog and the mix of backlog to have a very solid second half of the year.

[Jon Tanwanteng, Analyst at CJS Securities]

Got it. Thank you. And then finally, just any movement in the opportunities for Acadia that could move into that open window in 2026? I think I recall last time you spoke about projects that were being delayed that actually might go into that window or maybe projects pulling in that might go into that window. Could you give us a little bit more update on the opportunities to fill the utilization as you approach that you know the end of the Ørsted project?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Yeah. We have options that could fill out 2026. And then we need some new awards coming to the end of 2026 and into 2027. But there are a number of projects that we have bid and where the clients are looking for reservation agreements. And we are negotiating these at this point in time. It's a fluid situation, as you can well imagine, with all the things going on in the market, both in the U.S. and also internationally. But we are confident to have the vessel well utilized back out in 2026 and 2027 and onwards. Particular 2028 and onwards is extremely strong, both in the U.S. and in Europe.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

We just need to fill in that short-term utilization that we are looking for there in 2026.

[Jon Tanwanteng, Analyst at CJS Securities]

Got it. If I could sneak one more in there. Is there a lot of competition for that window of time?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

No, there's not. As you know, the Acadia is the only Jones Act compliant vessel. So, for the U.S. projects, we are in a very strong position. And then internationally, the activity levels are still high. And as I said, we are also looking at opportunities internationally in the oil and gas and cable protection market. So good outlooks for the Acadia, but a bit of a fluid situation due to the political situation here in the U.S.

[Jon Tanwanteng, Analyst at CJS Securities]

Great. Thank you.

[Operator]

Thank you. One moment before our next question. Our next question comes from Adam Thalhimer, from Thompson Davis. Please go ahead.

[Adam Thalhimer, Analyst at Thompson Davis]

Hey, good morning, guys. Congrats on the Q2 beat.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Thanks, Adam.

[Adam Thalhimer, Analyst at Thompson Davis]

The market looks pretty strong here. I'm just curious, what are you seeing in terms of the competitive behavior?

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Yeah, we saw some, let's say, interesting behaviors last year with the new entrants into the market and also our biggest competitor, Weeks, changing ownership. But as I said, the bid market is very strong, and everybody sees that. So there's no, let's say, extraordinary activity as we see it or behaviors in the market. The bid market is strong, and you can also see on the bids announcements when they come out, there's quite a big spread on the pricing, and that comes from the competition and we being quite busy at this time.

[Adam Thalhimer, Analyst at Thompson Davis]

That is good to hear. And then, I'm kind of blown away by the July low bids of $182 million. What's your sense for how you guys are gonna finish out the quarter?

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Yeah, actually, so $100 million, that's 5 awards, and, you know, they're all awardable. We actually had a sixth one of over $100 million. We were low bidder, but just slightly over the government estimate. So we're working with them to find a path to get that one awarded, so that July number can potentially grow, even higher than that. The third quarter is shaping up to be extremely strong, stronger than the second quarter. You know, again, July was a good indication, over $400 million. We think August will be a higher number than July. We have 17 projects that we have eyed for July that we are working on, potentially putting bids out.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

How many we put out will be dependent on availability and, you know, how many of those, earlier ones that we win. There is a lot of work coming out, in the second half of the year, but in particularly in the third quarter.

[Adam Thalhimer, Analyst at Thompson Davis]

I'm trying to think how to ask this, but my, my framework question is, like, how much is still in cold stack? Like, as we think about 25 versus 24, you know, what's the, what's the growth potential for 25 versus 24?

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Yeah, I mean, you know, we've said the vessels that we have had in long-term cold stack, they may, even in this market, not come out again. That's a decision, you know, that we need to make. There's a reason they haven't worked for a couple of years, and it would take quite a bit of money, you know, to come back. Where we're seeing, you know, the flux of work is in the beach work and in the capital work. The cold stack vessel that we have right now is a mechanical that, you know, may or may not be well suited for that kind of work. So I wouldn't expect, you know, even in this very robust market, that it gives us, you know, an opportunity to take that cold stack vessel out.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Now, I did mention on the last call, we did have a cold stack vessel that we are reactivating now because we did win a job. I think it's unlikely we see the other one follow the same path.

[Adam Thalhimer, Analyst at Thompson Davis]

Okay. But I guess as we think toward next year, I mean, you do have the earnings from Acadia, so that helps.

[Scott Kornblau, CFO at Great Lakes Dredge & Dock]

Yeah, Acadia will come on. But, you know, remember, Adam, we've always said it's possible that that will be replacement capacity instead of additional. Not a decision we need to make now. We can make it in the second half of the year as the Amelia Island comes on.

[Adam Thalhimer, Analyst at Thompson Davis]

Great. Thanks, guys.

[Lasse Petterson, CEO at Great Lakes Dredge & Dock]

Thank you.

[Operator]

Thank you. I am showing no further questions at this time. I will now turn it back over to Tina Baginskis for closing remarks.

[Tina Baginskis, Director of Investor Relations at Great Lakes Dredge & Dock]

Thank you. We appreciate the support of our shareholders, employees, and business partners, and we thank you for joining us in this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Lasse Petterson, CEO
• Scott Kornblau, CFO
• Tina Baginskis, Director of Investor Relations

Analysts

• Adam Thalhimer, Analyst at Thompson Davis
• Joe Gomes, Analyst at Noble Capital
• Jon Tanwanteng, Analyst at CJS Securities
• Julio Romero, Analyst at Sidoti & Company