Great Lakes Dredge & Dock Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 6, 2025
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Operator

Good day, and thank you for standing by. Welcome to the Q1 twenty twenty five Great Lakes Dredge and Dock Corp Earnings Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

Operator

You will then hear an automated message advising that your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Eric Birge, Vice President of Investor Relations. The floor is yours.

Eric Birge
Eric Birge
VP - Investor Relations & Finance at Great Lakes Dredge & Dock

Thank you, Gerald. Good morning, welcome to Great Lakes Dredgen Dock's first quarter twenty twenty five results conference call. Joining me on the call this morning is our President and Chief Executive Officer, Lasse Pedersen and Chief Financial Officer, Scott Kornbla. Lasa will provide an update of the events of the quarter, then Scott will continue with an update on our financial results for the quarter. Lasa will conclude with an update on the outlook for the business and market.

Eric Birge
Eric Birge
VP - Investor Relations & Finance at Great Lakes Dredge & Dock

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 and uncertainties and other factors that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in our filings with our Securities and Exchange Commission. During the call, we will refer to certain non GAAP measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA reconciliation attached to our earnings release and posted on the Investor Relations website, along with other certain operating data.

Eric Birge
Eric Birge
VP - Investor Relations & Finance at Great Lakes Dredge & Dock

With that, I will turn the call over to Lasse.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Thank you, Eric. Following strong financial results in 2024, Great Lakes started 2025 with a great first quarter, driven by high asset utilization and strong project performance, executing complex port deepening and coastal restoration projects, leveraging the capabilities of our extensive fleet. We ended the quarter with revenues of $242,900,000 and adjusted EBITDA of 60,100,000.0 Good results also come from safe operations. In the first quarter of the year, we had zero recordable injuries, a testament to the strong safety culture we have in Great Lakes. Safe work is a core value in our company, and we firmly believe also good safety is also good business.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Our dredging backlog remains strong at 1,000,000,000 with capital and coastal protection projects accounting for 95% of the backlog, plus an additional $265,000,000 in low bids and options pending award. Our successful bid strategy from last year resulted in a number of large project wins and a quality backlog, which will support high asset utilization and a solid revenue year for the remainder of 2025, as well as providing a good base and revenue visibility for 2026. After the quarter ended, we received notice to proceed on the Woodside Louisiana LNG project. The awarded work will be added to our backlog in the second quarter along with two options that will be added to our options pending award. Dredging operations are expected to commence early twenty twenty six.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

This, along with our two current LNG projects that started dredging activities in the third quarter in twenty twenty four, are capital projects which fit well with our core strength to perform large and complex projects. Our strong 2024 and first quarter of twenty twenty five results contributed to our Board of Directors approving in March a $50,000,000 share repurchase program, as we believed our share price did not reflect the company's financial performance and long term outlook. As of April 30, we have repurchased 1,200,000.0 shares with a total spend of $10,400,000 under this program. And post quarter end, we upsized our revolving credit facility to $330,000,000 which Scott will provide more details on later. Moving on to our newbuild program, our newest hopper dredge, the Amelia Island is expected to be delivered in the third quarter of this year, and we'll go straight to work on projects already in backlog.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

The Amelia Island and our sister ship, the Galveston Island, have been carefully designed for shallow and narrow waters along The U. S. Coastlines and are efficient tools for us to work on coastal protection projects such as beach restoration, wetlands improvements and barrier island construction. The Arcadia, the first U. S.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Flight Jones second compliant subsea rock installation vessel is also currently under construction with a scheduled delivery in first quarter of next year. The target markets for the Acadia include domestic and international offshore wind projects, as well as projects protecting critical subsea infrastructure, such as oil and gas pipelines and power and telecommunication cables. I'll 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
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Thank you, Lasse, and good morning, everyone. I'll start by walking through the first quarter, which resulted in revenues of $242,900,000 net income of $33,400,000 and adjusted EBITDA and adjusted EBITDA margin of $60,100,000 and 24.7% respectively. Revenues of $242,900,000 in the first quarter of twenty twenty five increased $44,200,000 from the prior year's first quarter as every active dredge was working for the majority of the quarter. Despite having one dredge in the shipyard for half the quarter performing her regulatory dry dock and two others beginning the regulatory dry dock later in the first quarter, the first quarter of twenty twenty five was the second highest revenue quarter in company history. Current quarter gross profit and gross profit margin increased to $69,500,000 and 28.6 percent respectively compared to $45,600,000 and 22.9% respectively in the first quarter of twenty twenty four.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

The increase in gross margin is primarily due to improved utilization and project performance and a larger number of capital and coastal protection projects, which typically yield higher margins. During the first quarter of twenty twenty five, over 87% of our revenue came from these types of projects. Current quarter's operating income of $49,900,000 increased over 58% compared to the prior year's quarter's operating income of $31,500,000 The year over year increase is driven by higher gross profit, partially offset by higher general and administrative expenses, mostly due to increased incentive compensation resulting from the strong current year first quarter. Net interest expense of $4,500,000 for the first quarter twenty twenty five was up from $3,900,000 in the first quarter of twenty twenty four, primarily due to interest on the second lien credit agreement entered into during the second quarter of twenty twenty four, partially offset by decreased borrowings under our revolver. First quarter twenty twenty five net income tax expense of $11,700,000 increased from $7,000,000 in the same quarter of twenty twenty four due to the improved results, and net income for the first quarter twenty twenty five was $33,400,000 compared to $21,000,000 in the prior year's quarter.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Total capital expenditures for the first quarter were $11,400,000 made up of $2,000,000 for the hopper dredge Amelia Island, Dollars 3 Point 9 Million for the subsea rock installation vessel, the Acadia, with the remaining $5,500,000 coming from maintenance and growth. Our previous full year CapEx guidance of between 140,000,000 and $160,000,000 remains unchanged. Turning to the balance sheet. We ended the quarter with $11,300,000 in cash and nothing drawn on our revolver, which doesn't mature until the third quarter of twenty twenty seven. And as Lasse mentioned earlier, on May 2, we executed an amendment to our credit facility, upsizing our revolver by $30,000,000 to $330,000,000 further enhancing our liquidity, which now stands above $300,000,000 Our balance sheet is in great shape with a trailing twelve month net leverage ratio of 2.7 times, a weighted average interest rate on our total debt under 7% and no debt maturities until 2029.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

As our newbuild program will be substantially complete at the end of this year, we expect to be cash flow positive starting in 2026. As I discussed on the year end earnings call, 2025 is a heavier than normal regulatory dry dock year for us and the second quarter will be most impacted as we will have four vessels at the dock at various times, which will result in lower revenues than the first quarter. Utilization will remain strong on the other vessels and we should see another solid quarter. Our expectation is that full year 2025 results will exceed 2024, which was the second highest in company history. With that, I'll turn the call back to Lasse for his remarks on the outlook moving forward.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Thank you, Scott. The Trump administration and Congress continued to demonstrate strong and consistent support for the dredging industry. The U. S. Army Corps of Engineers is operating in fiscal year twenty twenty five under a continued resolution through September 30, which sustains the record funding levels established in the prior fiscal year's budget.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

This support, along with our $1,000,000,000 backlog, which includes a robust mix of large and complex projects in the beach renourishment and port deepening markets, enable us to continue to deliver on a very busy 2025 with sustained execution capacity and product visibility extending well into 2026. We expect the 2025 bid market to be a normalized volume of approximately $2,000,000,000 more focused on coastal protection projects funded by the 2023 Disaster Relief Supplemental Appropriation Act and regular maintenance dredging, coming off a very strong port deepening bid market in 2023 and 2024. Turning to the offshore wind market. In April, we saw a temporary pause on Equinor's Empire Wind one project, which currently is included in our offshore energy backlog. While the duration and impact of the temporary pause for the project are not known at this time, we remain in regular contact with our client Equinor, who is evaluating further steps.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Last year, recognizing early signs of potential delays in The U. S. Offshore wind market, we proactively adjusted our strategic outlook for the Acadia to include international markets in The UK, in EU and in Asia for offshore wind project as well as for rock protection for critical subsea infrastructure such as oil and gas pipelines and power and telecommunication cables, paving the way for the expansion of our offshore wind business into the broader range of service offerings that we now refer to as offshore energy. In conclusion, building a strong performance in 2024, the company entered 2025 with significant momentum, achieving outstanding results in the first quarter. This success is a result of excellent, safe project execution, the strength of our modernized fleet and a robust backlog.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

And with our strong first quarter, solid liquidity to support the remainder of our newbuild program and ongoing strategic initiatives, we are well positioned for the future. And with that, I'll 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 will need to press star one one on your telephone and wait for your name to be announced. Our first question comes from Joe Gomes of NOBLE Capital. The floor is yours.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

Good morning. Congrats on the quarter.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Thank you, Joe. Good morning.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

So I just wanted to touch base on the Equinor project, Empire One. Kind of just spitballing worst case scenario here, the project falls by the wayside. Just wondering, when did Equinor have contracted out time for the Acadia? And how quickly can you refill that time that would have gone to Equinor again in a worst case scenario type of situation?

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Well, first of all, the Equinor is in contact with the Trump administration to clarify the situation on the project. The project was fully funded, fully permitted. And in just starting the offshore construction activities with the vessels being on its way, with the monopiles also on its way and also with the rock installation already started. So the stop on the project or the temporary stop on the project was a very large surprise for everybody. So Equinor is now reached out to the Trump administration to try to see what is the issue and get that clarified.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

And that is what we know at this point in time.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

Right, I guess I'm more kind of, again, if it was a worst case scenario and the project got canceled for whatever reason, not anticipating that. But if it did, how quickly do you think you can repurpose that time slots that the Acadia is currently under contract to work for Equinor?

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Yes. The vessel will come out of the yard in Q1 next year. And the plan was then to go straight to work on the Empire Wind one project. It will be difficult to fill that time slot with other projects, but there is also our plans during 2026 to work on the projects for Ersted. There are cancellation arrangements in the contract.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

So the worst scenario, if the project gets canceled, we will I'll let Scott do the details, but we have cancellation fees in that contract that will take care of some of the costs that we incur on the project.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yes. And Joe, I'm not going to get into the details of the termination, but obviously, we can't with this contract. I will remind you when the other contract we had last year was terminated, we did get roughly 9,000,000 to $10,000,000 out of that. So termination provisions within these contracts are not unusual.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

Okay. Again, I'm just spitballing worst case scenario. Hopefully, able to Equinor is able to figure out whatever the Trump administration is doing and get forward and put project back on pace. That would be the best outcome.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yeah. And Joe, sorry, I'll also yesterday, the Attorney General of New York, along with a number of other states, have also put in a formal challenge to the current interpretation that these fully permitted projects should continue as planned. We'll see how it all plays out.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

Thanks for that. Appreciate it. Lastly, you talked about a $2,000,000,000 market you think for this year. Just wondering, given that we had that continuing resolution for a while, and I guess we're kind of operating under a full year continuing resolution, wondering what the pace of awards that you've seen so far here year to date.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Yes. The year has been slow when it comes to new port deepening projects. Fortunately for us, we had in our low bids and not yet awarded the Woodside LNG project, which is coming through, which is great news for us. The bid market, as I said, the visibility of large projects due to the fact that we are in a continued resolution is not that good. There is a number of coastal restoration projects that are that we have visibility to because they were funded back in 2023.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

So those projects, which are large and complex, will come out to bid now in Q2 and Q3. And then we expect the maintenance market to be strong this year. As you know, we prefer to do the port deepening projects and the coastal restoration projects because that's where we excel. But we also do a number of maintenance projects when we when those are coming out to bid.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

And Joe, the first quarter, as Lasse said, yes, was a slower bid market, but that's not unusual. As you know, it's the middle two quarters that have the most activity. So we did not see an impact from the continued resolution. Everything that we expected to come out in the first quarter did. And our expectation is Q2 and Q3 will also play out like that.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

Okay, great. And then just one more for me. The competitive environment given where we are, are you seeing any increase in the competitive environment is kind of stayed similar to what it historically has been.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

No, it's similar to what it has historically been. We have seen some dredges that has been taken out of operation, and then we have newbuilds that have come to the market from other competitors. And as I said on the call, we are getting the Amelia out now this year, but she goes straight to work. So we're in good shape. And I could also say that given the fact that we are fully booked here this year, we are selective with the bid opportunities that we are targeting.

Joe Gomes
Senior Generalist Analyst at Noble Capital Markets

Great. Congrats again on the quarter. Thanks. I'll get back in queue.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Thanks, Jeff.

Operator

Thank you for your question. One moment, please. Our next question comes from Adam Thalhimer from Thompson Davis. The floor is yours.

Adam Thalhimer
Director of Research at Thompson Davis & Co

Hey, good morning guys. Great quarter. I didn't even know $243,000,000 of revenue was possible. So congratulations.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Ready to go.

Adam Thalhimer
Director of Research at Thompson Davis & Co

Quick question on the Woodside job. Are the options already in low bid pending or just the base work?

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yeah. So, the base was in low bid pending. That will now go into backlog in Q2. The options were not in low bid pending, that will get added in, in the second quarter.

Adam Thalhimer
Director of Research at Thompson Davis & Co

Got it. Okay. And then Scott, can you just give a quick update on the two LNG jobs that are ongoing? How those are going and an update on when they're projected to wrap up?

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yeah, I mean, as we've been saying all along, this is the kind of work we like to do, these very large complex projects. They have high margins and we have historically outperformed even how we anticipated doing and these two projects are no exception. Our team is killing it on both projects. One of them should wrap up right at the end of the year. The larger one Rio Grande that goes well into next year.

Adam Thalhimer
Director of Research at Thompson Davis & Co

Got it. And then lastly for me, maybe just an update on the international conversations you're having for the rockfall vessel, how those are going?

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Yes, we have very good we are very well received by the developers in Europe. And as I said, last year, we saw a slowing down in The U. S, potentially coming in '27, '20 '20 '8. And so we started our business development activity in Europe and in Asia early. And we are having a number of bids outstanding in that market.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

The market is more mature than what we have here in The U. S. So the lead time between bidding and also the awards is shorter. So we are now bidding for work in '27 and '28 in Europe, and I'm very optimistic with that coming to a positive conclusion, but probably not project awards until the latter half of this year.

Adam Thalhimer
Director of Research at Thompson Davis & Co

Got it. Okay. Thank you both. Talk to you

Adam Thalhimer
Director of Research at Thompson Davis & Co

soon.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Adam.

Operator

Thanks your question. One moment, please. Our next question comes from the line of Julio Romero from Sidoti and Company. The floor is yours.

Julio Romero
Equity Analyst at Sidoti & Company, LLC

Great. Thanks. Hey, good morning, lots of Scott and Eric. Thanks very much. Really strong performance this quarter across the board.

Julio Romero
Equity Analyst at Sidoti & Company, LLC

Can you quantify the dry dock effect, if any, in the first quarter? And then before dry docks that are expected in the second quarter, how many are hopper dredges? And was the first quarter dry dock also a hopper dredge?

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yes. So, the one that was in and out during the quarter, so was down for a little more than half the quarter, that was a hopper. Moving forward to the second quarter, there is one hopper that will be down for most of the quarter performing her drydock and then the three others in the second quarter, they're not hoppers. I'm not going to give an exact dollar impact of the dry docks. And Q1 was somewhat of a normal dry docking, having one down for most of the quarter and then another two starting.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

But the difference this year is we are pulling vessels off of jobs because of all the backlog we have. So it's not hypothetical revenue that's lost. It is real revenue and then the cost of the dry docking. A typical dry dock is somewhere in that sixty day period and the cost of the dry dock itself, again, depending on what you have to do, could be in the $3,000,000 5 dollars 6 million dollars and then you take the revenue off. So, impactful.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

And that's why I pointed out Q2 will be the most impacted. And then hopefully the second half looks lighter on the dry docking schedule.

Julio Romero
Equity Analyst at Sidoti & Company, LLC

Really helpful. I appreciate that there. I'm just trying to think about the second quarter because we're coming off such a strong first quarter base rate. And I'm just looking at how do we think about the gross margin? Should that be the low point of the year for '25?

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yes. Second quarter should be the lowest on revenue and on margins, and then it'll look a lot more normalized in the second half of the year.

Julio Romero
Equity Analyst at Sidoti & Company, LLC

Okay, great. And I was hoping you could just talk a little bit high level about your tariff exposure and while you have a large percentage of your revenues come from publicly funded contracts. We've heard some other companies talk about index pricing in publicly funded contracts that sometimes can help. I was wondering if you have any index pricing within your contracts.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yes. Well, and let hit the tariff question first and I'll probably answer the second. So yes, as a U. S. Jones Act company, we purchased most of our supplies and equipment here in The U.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

S. So very little is purchased overseas. The impact so far in this first quarter was immaterial. We don't expect it to change moving forward. That being said, we have identified some of the larger items that we do procure internationally and we're actively looking to see if we can source it here in The U.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

S. Or from countries that have lower tariffs, but really don't anticipate a material impact to us at all. And on our new builds, the vast majority of the equipment that was coming from overseas is already sitting here in The US and paid for. So, very little exposure there as well.

Julio Romero
Equity Analyst at Sidoti & Company, LLC

Okay, great. I'll pass it on. Thanks very much.

Operator

Thanks. Thank you for your question. Our last question one moment please, I'm sorry. Our last question comes from John Tantoineng from CJS. The floor is yours.

Jonathan Tanwanteng
Managing Director at CJS Securities

Hi, guys. Thank you for taking my questions and congrats on a strong quarter. I was wondering, Scott, if you could break down maybe what part of the outperformance was over performance on projects versus what you budgeted and if there are any pull ins of projects or push outs of expenses if any?

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Yes, I mean the big number was driven by the project performance on these high capital jobs. We did have a couple of the two dry docks that started at the end of the quarter. They maybe went in about a week each later than we expected, but really the biggest driver here was just killing it on these big projects that we have in our backlog.

Jonathan Tanwanteng
Managing Director at CJS Securities

Okay, great. Thank you. And then what's actually scheduled to liquidate in Q2 with the four dry dockings you have?

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

What do you mean which? I didn't understand the numbers.

Jonathan Tanwanteng
Managing Director at CJS Securities

The backlog that's scheduled to liquidate in Q2.

Scott Kornblau
Scott Kornblau
Senior VP & Chief Financial Officer at Great Lakes Dredge & Dock

Oh, yeah. I mean, we don't give a quarter by quarter of how much is going to burn off each quarter. I will tell you when our Q comes out later today, we do say that 60% of our backlog right now will is estimated to be burned off for the remainder of the year.

Jonathan Tanwanteng
Managing Director at CJS Securities

Okay, great. Thank you. And then just I was wondering if you could talk about, you've had this strong mix of capital in coastal work. When do you think that mix starts to normalize? Number one.

Jonathan Tanwanteng
Managing Director at CJS Securities

And number two, just given the volume of trade declines today with the tariff impact, do you think that port budgets may fall the out years and quarters if there's continued disruption there for deepening specifically?

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

Well, if I knew all that, that would be great. Just a comment on large projects. The reason why we are targeting the larger project is because we have this extensive fleet. And once we get into swing on a large project that is going over a year or one point years, we can then utilize the equipment that is specifically designed for the various phases of those projects. And that gives and when we get those projects, we perform very well, and that gives rise to the higher margins that we are able to realize on those projects.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

The coastal protection market was very slow, if you remember back in 2022 and beginning of 'twenty three, particularly in Florida. And that market came back now in 'twenty four and 'twenty five. And we see that also continuing going forward. Port deepenings was really a rush from the extension of the Panama Canal, which then triggered Savannah to start first, and then it's just been continuing along the coast of port deepenings. That will continue probably with the New York starting up in 'twenty seven.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

And to deepen the New York Port, that is a mega project, which would go over many years. And we are also looking at new large projects in Florida and also here in The Gulf. But the visibility for those projects will probably come as we go through the latter part of this year and beginning of next year. The general funding for the core to do dredging comes from the Habermintas Trust Fund to a large extent, and those fees that are collected goes to maintenance dredging and make sure that we maintain our waterways and our ports. And that funding has been very strong, and as you know, we are using 100% of the annual revenues that goes into that fund is then being used for dredging, and we do see that continuing.

Lasse Petterson
Lasse Petterson
CEO, President & Director at Great Lakes Dredge & Dock

There was a comment in the President's suggested budget for a reduction in the use of the Harbor Maintenance Trust Fund. But as we if you read it carefully, it says that the Trump administration is very focused on prioritizing the dredging portions, and the funds that were being reduced was for other uses of the Home Insurance Trust Fund. So as I see it, it will be a good budget for next year with the support that we both have from the administration and also in Congress.

Jonathan Tanwanteng
Managing Director at CJS Securities

Okay. Thank you.

Operator

Thank you for your question. This concludes the question and answer session. I would now like to turn it back over to Eric Birge, Vice President of Investor Relations for closing remarks. The floor is yours.

Eric Birge
Eric Birge
VP - Investor Relations & Finance at Great Lakes Dredge & Dock

Thank you, everybody. We appreciate the support of our shareholders, employees and business partners. And we thank you for joining us in the discussion about the important developments and initiatives of our business. We look forward to speaking to you during our next earnings call. If you have any questions, please feel free to reach out.

Operator

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

Executives
    • Eric Birge
      Eric Birge
      VP - Investor Relations & Finance
    • Lasse Petterson
      Lasse Petterson
      CEO, President & Director
    • Scott Kornblau
      Scott Kornblau
      Senior VP & Chief Financial Officer
Analysts
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Key Takeaways

  • Great Lakes delivered Q1 2025 revenues of $242.9 million and adjusted EBITDA of $60.1 million while reporting zero recordable injuries, driven by high asset utilization and strong project performance.
  • The company’s backlog stands at $1 billion (95% capital and coastal protection), plus $265 million in low bids/options pending, with the Woodside LNG project to commence early 2026 and bolster future revenues.
  • In March, the Board approved a $50 million share repurchase program (1.2 million shares bought for $10.4 million to date) and post-quarter the revolver was upsized to $330 million, leaving liquidity above $300 million and no debt maturities until 2029.
  • The newbuild fleet is expanding with the Amelia Island hopper dredge arriving in Q3 2025 for shallow‐water coastal projects and the Acadia subsea rock installation vessel due Q1 2026 to target offshore wind and subsea infrastructure work.
  • Management expects full‐year 2025 results to exceed 2024 despite a Q2 impact from four regulatory dry docks, and sees a normalized ~$2 billion bid market with strong U.S. Army Corps support and diversified offshore energy opportunities amid a temporary pause on Empire Wind One.
AI Generated. May Contain Errors.
Earnings Conference Call
Great Lakes Dredge & Dock Q1 2025
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