Great Lakes Dredge & Dock Corporation (GLDD) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture: strong financial performance with increased revenue and net income, but challenges like regulatory dry docks and paused projects. The share repurchase program is positive, yet project delays and competitive pressures temper optimism. The Q&A reveals management's lack of clarity on certain issues, adding uncertainty. Overall, the neutral sentiment reflects balanced positives and negatives, with no strong catalysts for significant stock price movement.
Key Financial Performance
Revenue $242.9 million, an increase of $44.2 million (22.3%) from Q1 2024, driven by high asset utilization and strong project performance.
Net Income $33.4 million, an increase from $21 million in Q1 2024, attributed to improved project performance and higher revenues.
Adjusted EBITDA $60.1 million, with an adjusted EBITDA margin of 24.7%, reflecting strong project performance and higher gross profit.
Gross Profit $69.5 million, up from $45.6 million in Q1 2024, with a gross profit margin increase to 28.6% due to improved utilization and project performance.
Operating Income $49.9 million, an increase of over 58% from $31.5 million in Q1 2024, driven by higher gross profit, partially offset by increased general and administrative expenses.
Net Interest Expense $4.5 million, up from $3.9 million in Q1 2024, primarily due to interest on the second lien credit agreement.
Net Income Tax Expense $11.7 million, increased from $7 million in Q1 2024, due to improved results.
Total Capital Expenditures $11.4 million, including $2 million for the hopper dredge Amelia Island and $3.9 million for the subsea rock installation vessel Acadia.
Cash $11.3 million at the end of the quarter, with nothing drawn on the revolver.
Net Leverage Ratio 2.7x, with a weighted average interest rate on total debt under 7%.
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Operating Highlights
New Hopper Dredge: The newest hopper dredge, the Amelia Island, is expected to be delivered in the third quarter of this year and will go straight to work on projects already in backlog.
Subsea Rock Installation Vessel: The Acadia, the first U.S.-flagged Jones Act compliant subsea rock installation vessel, is currently under construction with a scheduled delivery in the first quarter of next year.
Dredging Backlog: The dredging backlog remains strong at $1 billion, with capital and coastal protection projects accounting for 95% of the backlog.
Bid Market Outlook: The 2025 bid market is expected to normalize at approximately $2 billion, focusing on coastal protection projects funded by the 2023 Disaster Relief Supplemental Appropriation Act.
Safety Performance: In the first quarter of the year, the company had 0 recordable injuries, reflecting a strong safety culture.
Financial Performance: First quarter revenues were $242.9 million, with adjusted EBITDA of $60.1 million, marking the second highest revenue quarter in company history.
Share Repurchase Program: The Board approved a $50 million share repurchase program, with $10.4 million spent on repurchasing 1.2 million shares.
Expansion into Offshore Wind: The strategic outlook for the Acadia has been adjusted to include international markets for offshore wind projects, expanding the offshore energy business.
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Risk or Challenges
Regulatory Challenges: 2025 is a heavier-than-normal regulatory dry dock year, impacting revenues due to four vessels undergoing dry dock at various times.
Project Delays: Temporary pause on Equinor's Empire Wind 1 project, which is included in the offshore energy backlog, with unknown duration and impact.
Economic Factors: The bid market for 2025 is expected to normalize at approximately $2 billion, focusing on coastal protection projects, influenced by prior fiscal year's budget.
Competitive Pressures: The company is adjusting its strategic outlook for offshore wind projects due to early signs of potential delays in the U.S. offshore wind market.
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Guidance & Outlook
Dredging Backlog: The dredging backlog remains strong at $1 billion, with capital and coastal protection projects accounting for 95% of the backlog.
Newbuild Program: The newest hopper dredge, the Amelia Island, is expected to be delivered in Q3 2025, and the Acadia, a subsea rock installation vessel, is scheduled for delivery in Q1 2026.
Share Repurchase Program: A $50 million share repurchase program was approved, with $10.4 million spent to repurchase 1.2 million shares as of April 30.
Expansion into Offshore Wind: The strategic outlook for the Acadia includes international markets for offshore wind projects and rock protection for critical subsea infrastructure.
Revenue Expectations: Full year 2025 results are expected to exceed 2024, which was the second highest in company history.
CapEx Guidance: Full year CapEx guidance remains unchanged at between $140 million and $160 million.
Bid Market Outlook: The 2025 bid market is expected to normalize at approximately $2 billion, focusing on coastal protection projects.
Cash Flow Expectations: The company expects to be cash flow positive starting in 2026.
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Shareholder Return Plan
Share Repurchase Program: The Board of Directors approved a $50 million share repurchase program in March 2025, believing the share price did not reflect the company's financial performance and long-term outlook. As of April 30, 2025, 1.2 million shares were repurchased for a total spend of $10.4 million under this program.
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Key Q&A
Q:When did Equinor have contracted out time for the Acadia? How quickly can you refill that time?
A:Equinor is in contact with the Trump administration to clarify the situation on the project. The project was fully funded and permitted, and the offshore construction activities had just started. The stop on the project was a surprise. The vessel will come out of the yard in Q1 next year, and it will be difficult to fill that time slot with other projects.
Q:What is the pace of awards seen year-to-date given the continuing resolution?
A:The year has been slow for new port deepening projects, but there are coastal restoration projects funded in 2023 that will come out to bid in Q2 and Q3. The maintenance market is expected to be strong this year.
Q:Are you seeing any increase in the competitive environment?
A:The competitive environment is similar to historical levels, with some dredges taken out of operation and new builds coming to the market.
Q:Can you quantify the dry dock effect in Q1? How many of the four dry docks in Q2 are hopper dredges?
A:The first quarter had one hopper dredge down for more than half the quarter. In Q2, one hopper will be down for most of the quarter, and three others are not hoppers.
Q:What part of the outperformance was due to project performance versus budget?
A:The outperformance was primarily driven by project performance on high capital jobs.
Q:When do you think the mix of capital and coastal work will normalize?
A:The visibility for large projects will likely come in the latter part of this year and early next year.
Q:What is your tariff exposure?
A:As a U.S. Jones Act company, most supplies are purchased in the U.S., so the impact from tariffs has been immaterial.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the exact dollar impact of dry docks in Q1 and the specific backlog scheduled to liquidate in Q2. Additionally, there was vague language regarding the timeline for project normalization and the potential impact of tariffs.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Acadia maintenance
Barrier Island
Birge Vice
Commission measure
Davis Julio
Directors share
Dock Birge
Dredging LNG
ET day
Exchange Commission
Gomes NOBLE
Island subsea
Island water
Jonathan Tanwanteng
Julio Romero
Kornblau Chief
Kornblau Lasse
Lasse update
Officer Kornblau
President Investor
Securities
Vice President
asset utilization
capital protection
core
credit facility
debt
history
newbuild program
project backlog
protection project
restoration
safety
utilization project
GLDD Transcript
Great Lakes Dredge & Dock Corporation (GLDD) Q3 2025 Earnings Call Transcript
Positive11-4
The earnings call reveals strong financial performance with record net income and gross profit, along with a robust backlog. The Q&A session highlights ongoing revenue visibility and strategic market expansion. While there are some uncertainties in bidding and non-wind contracts, the company's positive cash flow outlook and strategic focus on deleveraging suggest a promising future. Despite management's reluctance to provide specific guidance, the overall sentiment is positive, supported by optimistic revenue and net income projections for 2025.
Great Lakes Dredge & Dock Corporation (GLDD) Q2 2025 Earnings Conference Call Transcript
Positive8-5
The earnings call indicates strong financial performance with record high revenue, a solid dredging backlog, and strategic expansion into offshore wind markets. The share repurchase program and cash flow expectations are positive, despite some uncertainties in project bidding and LNG market insights. The Q&A reveals confidence in asset delivery and market expansion, with a focus on deleveraging post-newbuild program. Overall, the company's strategic plans and financial health suggest a positive stock price movement.
Great Lakes Dredge & Dock Corporation (GLDD) Q1 2025 Earnings Call Transcript
Unknown5-7
The earnings call presents a mixed picture: strong financial performance with increased revenue and net income, but challenges like regulatory dry docks and paused projects. The share repurchase program is positive, yet project delays and competitive pressures temper optimism. The Q&A reveals management's lack of clarity on certain issues, adding uncertainty. Overall, the neutral sentiment reflects balanced positives and negatives, with no strong catalysts for significant stock price movement.
Great Lakes Dredge & Dock Corporation (GLDD) Q3 2024 Earnings Call Transcript
Positive11-5
The earnings call summary shows strong financial performance with increased revenues, net income, and gross profit margins. The backlog and future revenue growth potential, particularly in offshore wind, are promising. However, there are supply chain and competitive pressures, but the overall sentiment remains positive. The Q&A section revealed a strong bid market and increased gross margins expected. Despite some uncertainties in project timelines, the company's financial health and strategic positioning suggest a positive stock price movement over the next two weeks.
GLDD Report
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