Q2 2020 Great Lakes Dredge & Dock Corp Earnings Call
Great Lakes dredging Dock Corp. earnings conference call.
At this time.
Our new listen only mode.
Later, we will conduct a question answer session and instructions will follow at that time.
If anyone should require assistance during the conference. Please press Star then zero on your Touchtone telephone.
As a reminder, this conference call is being recorded.
I would now like to turn the conference there, but to your hosts today Tina back again. Thank you. Please go ahead.
Good morning, and welcome to our quarterly conference call.
Joining me on the call. This morning is our Chief Executive Officer, President lots of Patterson, and our Chief Financial Officer, Mark Marinko.
Well, we'll provide an update on the quarter then Mark will continue with an update on our financial results of the quarter lots of will conclude with an update on the outlook for the business end markets for the remainder of 2020.
Following their comments there will be an opportunity for questions.
During this call people make certain forward looking statements to help you understand our business.
These statements involve a number risks uncertainties and other factors could cause actual results could differ materially from our expectations certain risk factors inherent in our business are set forth in our earnings release and filings with the FCC, including our 2019 form 10-K and stops.
And finally.
During this call. We also refer to certain non-GAAP financial measures, including adjusted EBITDA from continuing operations, which are explained in the net income to adjusted EBITDA from continuing operations reconciliation attached to our earnings release and posted on our Investor Relations website, along with certain other operator.
King data with that I will turn the call over to Lhasa.
I can do you know.
Great legs trends you talk we've been fortunate to be able to continue working predatory designated critical infrastructure company.
That's all.
This unprecedented cobot 19 pandemic, we remain focused on performing all projects that actually.
Well, ensuring the safety and continued spectrum all by employees.
The results for the second quarter, 2020, well less than previous year.
Net income continuing operations I know you.
Versus 11.5 million use tolls in second quarter 2019.
For the first half of the year net income from continuing operation.
Was 42.9 million homes, which was an increase of 34%.
Prior year.
And year to date adjusted EBITDA from continuing operation was 89.5 million.
Third from 6 million or 18% increase or what 2019.
In addition, a net debt decreased by 46.8 million from year end 2019 to 89.8.
Resulting in a healthy net debt to adjusted EBITDA from continuing operations ratio.
Oh, I see real 0.6.
As we noted last earnings release.
Plan Drydockings sub certain vessels had an expected impact on second quarter results as we pushed dry dock ace from the first quarter into the second quarter.
During the quarter.
We had to help a dredges Hell asylum Dodge Island.
[laughter] concentrate your Illinois.
The mechanical dredge 58 and dreidel.
We expect the Atlas sided dog Shanda dredge appreciates, we'll all be returning to work in the third quarter, and Illinois would fall to win the pool.
The effects of the dry docks for offsets better than it did productivity on ongoing projects.
Yes, the west Oceanic Cook Inlet project Jacksonville deepening project, an additional work on the Delaware River reach be deepening project.
During the second quarter out 2020, the domestic bid market was.
The prior year with 20, <unk> with 428 million Untold project bid.
Which we won 92.5 million.
Comprised <unk> capital maintenance and coastal protection projects.
And subsequent to the quarter it.
We were awarded 63.1 million in project work.
And then an additional 32 million and low bids pending award.
Please remember that already built in contract wins from quarter to quarter.
We have two years and all the usual and the wind right. There is not indicative all the with great. The company is likely to achieve this year.
That said.
Great Lakes dredging dog continues to be financially well positioned for potential changes in the current economic environment.
Can you to activity updates or safety and operational procedures supplies.
That would those updates I told the call over to Mark to discuss the results for the quarter for an update on backlog do though.
Thank you also.
I will start with a quarterly results and then discuss some specifics related to our dredging business. Please remember that all results from our Ian I segment, and 2019 were placed into discontinued operations and therefore not included in the results that I will discuss.
For the second quarter of 2020 revenues were 167.9 million income from continuing operations was 9 million and adjusted EBITDA from continuing operations was 28.1 million.
Total company revenues for the second quarter of 2020 represented a 16.9 million or 9.1% decrease compared to the second quarter of 2019.
The decrease was caused by lower foreign coastal protection and rivers and lakes revenue.
Offset partially by higher maintenance and domestic capital revenue.
Gross profit from continuing operations was 33 million compared to 37.5 million in the second quarter of 2019.
Gross profit margin was 19.7 per cent compared to 20.3% in the prior year quarter.
The slight drop in gross profit margin is due to a change in project mix and 2020 versus 2019.
And strong performance on the Jacksonville deepening project last year.
During the first half of the year. The company did have some additional expenses related to cope with the Golden 19 pandemic related to additional equipment and procedural changes to keep our employees safe.
But it does not have a material impact on our first half results.
The total company operating income was 18 point Threemillion, which is a decrease of 4.5 million over the prior year quarter.
Decreased.
Lower gross margin.
Our gionee expenses remained flat between current year second quarter and prior year corridor.
Income from continuing operations for the second quarter of 2020 was 9 million compared to 11.5 million in the prior year corridor.
The current quarter income includes net interest expense of 6.8 million and an income tax expense of 3.1 million.
Income for the second quarter of 2019 included 7.2 million in net interest expense and 4.2 million income tax expense.
Adjusted EBITDA from continuing operations for the second quarter of 2020, which 28.1 million compared to adjusted EBITDA from continuing operations up 32 million in the second quarter of 2019.
Next we turned for balance sheet, where Q3 as 2020, we had 233.5 million in cash.
During the quarter, we continue to maintain a zero cash balance on a reasonable.
Our net debt at June Thirtyth, 2020 was 89.8 million.
Our total capital expenditures for the quarter were 12.1 million. This compares to 19.2 million capital expenditures during the second quarter of 2019.
The company continues to expect total capital expenditures to be 40 million for Twentytwenty, excluding the capital spending for the new Hopper dredge.
Contracted backlog at June Thirtyth, 2020, Onee 423.4 million.
Paired with backlog.
At June Thirtyth 2019 of 498.1 million.
This decrease was expected as the company achieved below its historical bid marketshare and the second half from 29 team and the company earn additional revenue during the first half of 2020.
With that I will turn the call back over the last shippers remarks on the outlook moving forward.
Thank you Bob.
That's a country is still facing the challenges so cool indeed dredging industry being done a central service continue to operate and work on critical and needed infrastructure projects.
You US Army Corps of engineers overseas. The majority of these infrastructure projects and then this capacity that's continued to follow their bid schedule.
Huh prioritized all types of dredging, including port deepening what makes sense, an expansion and coastal protection and restoration projects that are necessary to avoid potential storm damage during the upcoming hurricane season.
Turning to the safety and our to go teen response.
Great Lakes trades and dog remains committed to maintaining a the health and safety audits team members.
<unk> incident that injury Creed safety management program.
This is valuable state value based approach that's allowed us to respond quickly and effectively and cold in 19 pandemic.
And the challenges that's a result all dependent.
Crew the first six months. So Twentytwenty 19 pandemic has not had a material impact on our operations.
Any future impact from dependent eye to eye employees clients supply chain or shipyard squid, which we contract prolonged may lead to delays or cancellations and projects.
Experts, so being a second a potential new covert 19 way in the fall off should talk Twentytwenty and we continue to be proactive in preparing a drought contingency planning should this occur.
Moving to the good markets, we expect the twentytwenty bid market to be similar to 29.
Similar to last year.
We expect the remained over the years bid activity to be substantially more active than the first half from here.
Upcoming bids in the second half with a year.
Include additional phases of Charleston, Jacksonville, and Corpus Christi Port deepening projects.
Well as new deepening projects for the ports in will be yield in Boston and then so be noxious.
We've seen support for the dredges dredging in street in the care sector, which includes a provision that limits caps in the hobbled made.
One.
And in the Twentytwenty, one house appropriation Bill.
Introduced in July 2020.
But showed an increase of $1.7 billion above the President's budget request for the U.S. Army Corps of engineers.
In addition, water engineers recently signed the Chiefs report for the Houston ship Channel widening project.
This major expansion project will include.
We'll be included in the Garda Twentytwenty legislation, which went past will allow the project to proceed to construction.
Well to domestic box market demand.
We continue to upgrade existing domestic free treat with new equipment and technologies to increase <unk> prior to the team.
Oh upgraded most powerful cardio dredge the Ohio has returned to the U.S. markets and as progressively working on the great Egg Beach Renourishment project.
In addition in June we announced the execution of a contracted conrad's shipyards in <unk>.
To build a 6500 cubic yard homepage rich.
With expected delivery and the first quarter of Twentytwenty <unk>.
This highly automated newbuilding vessel will increase the capabilities all property.
In the coastal protection and make a spot.
Well as address specific needs in the growing offshore wind markets [noise].
I stated last quarter, several liquefaction natural gas liquefaction petroleum petrochemical and crude oil export projects.
Being developed in the Gulf of Mexico.
Maybe you can that need to report developments and navigational channel deepening and widening to accommodate the larger vessels involved in this trade.
Well I just last week, the signing of a subcontract with back to oil and gas and chemicals sake.
For dredging <unk> third marine Berg at the Sabine pass liquefaction project.
This war and most complex dredging long distance pumping commencing in.
Third quarter, Twentytwenty and lasting for approximately 210 15 days.
That's it that's discussed on prior or any color offshore wind power generation is coming to the U.S. with more than 30, you got watts of power generation capacity plan put installation over the next day there's.
At the time timeline for these projects are being developed we're continuing to engage with developers and partners on these projects to use you. This.
U.S. built a U.S. operated equipment enhancing the local value creation and content both in the construction and your operations races.
Related to a strengthened financial position.
Threed enhancement and the strong market that.
We announced this morning that the board authorized share repurchase program by which the company may repurchase up to 55 million all of its common stock.
This repurchase program demonstrates the boards confidence future and our commitment to delivering value to shareholders.
In conclusion crude this spend that we have maintained the sharp focus on employee safety and project performance Wise and said, but I'd buttons on long term strategy of investing in upbeat on a straight getting about.
With that I turn the call over for questions.
Ladies and gentlemen, if you have a question at this time please press the star.
One key on your Touchtone telephone if your question has been answered or you wish to repeat yourself from the Q. Please press the pound key.
Your first question comes from Poe Fratt with noble capital markets.
Great. Good morning, Thank you.
I was hoping that look at just to be overall.
Your your ward subsequent could be ended the quarter. Its 63 million that you had in Nam and then 32 million of pending.
Can you.
I might weathered the Sabine pass LNG was in <unk> included in the awards two.
In the quarter.
[laughter].
Yeah.
Steps Paul.
You broke up a little bit, but yeah I apologize.
Okay. So yeah, the Sabine LNG project is actually.
In the quarter. It was awarded in the quarter. So it's in our backlog in the corner.
Okay, Great and then the 32 million had been little bit depending I was was that the award that was announced by the Geo de last late last week, the Great AG two Brigid Dean.
Or bring a team in Newark, New Jersey.
Now so.
Yeah. The announcement was 30 million 24 or that is awarded and 6 million of that is in low because there's a 6 million option there.
Okay.
So the one that you referenced in your press release as far as low bids pending award.
No, we haven't announced that yet so that's incremental.
Correct, Okay, Great and then when we look at the a wind market Lhasa you've highlighted.
The one or participate in the installation market.
There were some interesting announcement out to close yesterday, where Drybulk company is going to build installation vessels to the tune up what 270 million of so is that the segment of the market you intend to compete in or.
Is there another segment that you intend to competing.
Well when it comes to the offshore wind market, we are looking at which parts of that market that we can.
Expand into from our capabilities and our existing equipment.
And it is particularly the work that is going on under water.
We are not targeting the heavy lift installation.
And the investments needed to participates in that ball gets is.
Very very high and a it is also allowed for.
Currently internationally installation vessels to come into the U.S. and do that lifting operation. So we're not targeting on.
That's good news because it's fairly on disciplined in M. experience a competitor the two good center in that market. So.
Watch out there right.
When we look at Merck, if we can just hone in on some of the.
Mainly your ass DNA the run rate in the in the second quarter looked a little high relative to what it wasn't the first quarter.
Could you give us an idea of whether they're in any unusual expenses and gionee.
And then and outlook for the second half of the here.
Yeah sure Yeah, what when we get to the second quarter, you know we re forecast for the year, we will where we are we adjust from there.
Where.
She N a is related to incentive pay things like that so what kind of true up through the air show. The yeah. We was we look forward for the rest of the or that'd be the only change really from first quarter would be additional incentive pay show as we look out through the rest of the year I expect you DNA to be close to that.
A number that we had in the second quarter.
Okay Clinton effect and then one last one and then I'll come back.
Me too, but on the buyback you know a positive announcement shows your confidence in the outlook, especially in the context the Newbuilding program.
Do you have any timing on when do you expect to execute that 75 billion warrants that opened 90.
We yeah, we'll we're going to.
Put that in place very shortly we just received board board authorization, you know, we'll do that it'll probably be a it's not finalized yet, but I expect it to be within a 12 month period.
Thank you.
Your next question comes from Deforest Hinman with won't hosting company.
Hey, Thanks for taking my questions are.
I think the share repurchase authorization as a.
Positive announcement.
Just so everyone understands you said expectation to use that until 12 months, that's under a tenbfive dash. One. So you can ER in theory Biotime blackout periods is that correct.
Correct.
Okay, that's very helpful.
Can you give everybody nothing on where we stand in terms of the refinancing outlook on our debt and give us an update in terms of where you think to the rate on the borrowings could fall.
Yeah sure. So we can it's you know actually kind of similar to where we were last quarter, maybe a touch better show. The we continue to monitor it everyday essentially and the.
Well you know, it's an 8% senior just to refresh everybody's memory, it's an 8%.
No. It's right now we can call them today, but at a one off for premium.
Next may of 2021, I can call under par and right now the rates are in if we were to refinance some today there in the middle Sixs, So I'd say in the six and a half range.
That was a little bit better than last quarter, maybe 25 basis points better Submarket is you know obviously better than it was in the Bill a called me, but still not as good as pre kovats show at the one all for premium.
Versus that that savings and the lower interest rate. It does at this point make you know sense to wait.
But we are continuing to monitor that looking at risk going forward.
But at this point the math would tell you to wait.
Okay that sounds good update.
You made mention of the house appropriations.
Bill and interesting there can you just help us think about that number it's it's a pretty sizable number the increase versus the request.
Do you have any thoughts around you know how that might trickle into the markets that you serve.
You know just generally.
Well the a request from the.
The executive branch or tends to be lower than what has been the traditionally appropriated for the corps of engineers. So what we see here is that the appropriation from the House Committee is putting the U.S. Army Corps of engineers that are the same ohio levels than what we had last year.
Sure.
Which then translates into the arms, a and funding all projects at the core is then contracting with us for so it gives us a very strong confidence in the bid market for the remainder over this year and into next year.
Okay. That's helpful and then.
Can you help us think about the cadence of the dry dockings and the in the third quarter.
Either months or days and how those would compare to the second quarter and how they wouldn't compared to the third quarter of last year.
Yeah sure can you take.
Sure sure. So yeah, we had four.
Vessels in Drydock in Q2.
We have two vessels in dry dock.
In Q3.
The.
Illinois and the pottery.
As we move into Q4.
We'll have those same two vessels in drydock for about half of Q4.
And when we look at yeah, I'm trying to remember how many we had in Q2 lashed or Q3 last year I believe it was too, but I would have to I have to double check that.
Okay can circle back on that.
I think that's I think that's it on the question. Thanks.
Thanks.
Again, ladies and gentlemen, if you have a question at this time. Please press the star and the number one key on your Touchtone telephone.
Your next question comes from <unk> Frat with noble capital markets. Yes. Thanks, I had a couple of follow ups. If you don't mind, what I'm on the Sabine pass LNG I notice you didn't quantify the <unk>. The award on that can you help and scream sort of what the potential is there.
And Mark and you though.
Sure so yeah.
For me agree pretty agreement I can't give you the.
Pricing and dollar value, but that's why we kind of big Ics are you. We use these 215 days of work so that's oh.
A fairly large amount of work.
It'll it'll be done in.
There are some windows, where we won't be working on it we will finish that project, leaving but the first quarter of 2021.
So it's it's a very nice sized project for us, but that's a that's the extent of what I can give to you at this point in time.
And it's Mark is that a Ellis island type of job or is it over another.
No it's actually the Alaska, we'll be working on that Cottered tried to Alaska.
Okay.
And then when going back could drydocking activity it sounds like Ohio wasn't in the fleet at all in the second quarter and maybe is partially in the fleet in the third quarter.
Hi.
That it was a worked a little bit in the end of the second quarter. So yeah, and then just really fall in the third quarter that's correct.
Okay and then.
Looking at the cash flow statement, you know you generated want to cash in the quarter. You know net income depreciation we're pretty much inline with expectations that it seems like the big variance might have been on noncash items or working capital.
Can you give us a flavor on <unk> what happened at both those items in the quarter and sort of been outlook for the second half peak wouldn't mind.
Yeah, so yeah the way.
We had we talked about the same similar and this last year a little bit is the way some of our projects work depending upon how.
How the project is structured in terms of timing, we do have some movements on you know billings in excess of revenues or the other way around depending upon the time either project. So we don't expect.
Positives for the rest of the year like we did see more in the first half there. So some of that will reverse.
Oh, you know in the neighborhood of 10 to 20 million or just depends on the timing of the projects, but yeah. We wouldn't expect that same level of working capital increase for the back half of the or.
Okay do you happen to have been operating cash flow number before working capital changes or.
Or total operating costs were number it looks like you either one of those items or when do you expect to compile the Q.
But we're going actually filed is Q Tonight.
Okay, Great and then can you you know you highlighted the changes that you see as far as gets higher potentially appropriations I'm also you know the harbor maintenance Trust fund.
And the bid market over the second half of the your books you know if I do the math correctly could be over a billion.
Maybe more like a billion one can you maybe quantify you know the different opportunities from a revenue potential as far as you know, whether its Charleston, Jacksonville or corpus and somebody other deep means that you talked about in mobile and then also.
Isn't there as you know the Spanish rich it seems like a pretty big opportunity for you and that's more of a state opportunities is that included in that or is that exclusive.
Sort of when you look at the bid market.
Yeah.
I can comment on the markets in general when you look at Corps of Engineers announced a bid a marketed ranges.
The just to look at the major projects for the second half here.
We're looking at somewhere between a billion another billion fault or Oh bids and that is the rate at the core is giving for for their on their list. In addition, there are several other cost smaller projects that are kind of run Hulu plus knutsen not included.
In place and that's I said or there are some interesting opportunities coming up.
Please remember that for.
[music].
Core strength is when do.
Projects are getting not necessarily large, but I'd getting complex.
And as we've seen on Jackson real on the Charleston, That's where we excel Ah that's where the youre working offshore you're working in or in difficult to soil conditions and that is our sweet spot.
So that projects coming off the is for the chart.
Pages, so Charleston, which are mostly in London.
It is Ah the Jacksonville project. There is the movie you'll start to all the deepening of widening phase one.
And a continued work on Corpus Christi, and so forth. So it is a very active isn't for us.
Here, the next quarter or two quarters.
Great last <unk> it sounds like <unk>.
Most in may be more less complex, but are all the other once more complex and more or in your sweet spot.
Well as a general comments when when the soil conditions gets difficult complex. The old we're working offshore oil or you have a.
Impacts wrong, the environmental did weather when you go to very large complex pumping distances and so forth a that's when we excel due to a the flexibility going up lead to ability to to use specialized equipment for the special shortage conditions set or the de rating shorts conditions. So.
<unk>.
General rule difficult projects, it's where we excel and that's probably do stuff we target a there clearly also large project you have to use a lot of equipment.
But that May vary yes, we've seen for last two years that has been some larger projects that has been awarded to smaller local dredging contractors.
But typically that has been fairly.
Easy projects execute.
Hence or easier for them to target.
Okay, Great. That's helpful and work on the Capex number that 12.1 million for the quarter did that include any new build capex.
Yep 2 million Yep.
So 2 million so.
When we compared to 40 million.
<unk> exclusive.
Capex, we should back out that and 2 million in the second quarter.
And then what do you think capex will be for the new build for the year.
Yeah.
We have another 9 million at the end of the year. So you know about 11, 11 12 million for the year.
Okay. So that's on top of the 40 million roughly that you expect expand on your normal maintenance contracts.
Correct great great.
Thank you so much and congratulations.
Thanks, Paul.
Your next question comes from Rich glass wasn't glass capital.
Hey, guys, a nice boring quarter in a boring is good in this industry kind of way [laughter]. Thanks [laughter].
Lasik can you maybe help.
Define how we should think about the.
LNG and wind opportunities longer term army now these niche niche opportunities that well sizable will be in passing or.
You know these are potentially more legs on the stool before.
Buffeting, you know tougher times in other markets and maybe lending some more stability over time out where should we you know side, but these.
Yeah.
Turning first to the LNG opportunities of the developments in the in the Gulf.
What we have seen though.
Front is that when there's a additional train being added to an existing facility or LNG facility.
Those projects, so highly profitable for the operators and Oh very light highly likely to go ahead, as we saw and should be.
When it comes to Green field developments, the pictures, so little bit more difficult or because you didn't need both for permissions and financing for for the facility and with the oil price war, the solid enough with Saudi and Russia earlier this year.
And Uh huh.
Temporarily depressed LNG pricing and international market I anticipate that we will see about a year delay in India Greenfield.
LNG markets.
But I do think that this is something that will be erect at getting into 2021 and those projects are substantial when it comes to dredging and very interesting opportunities for us.
But it is a a traditional business.
With very high focus away from the oil and gas environment, a uncontracted <unk> and owners on our safety procedures, our track record our professionalism when it comes to executing these projects. So they are very good target for us to to get engaged in.
When it comes to the offshore wind markets.
Timing is somewhat.
I would say on certain are we seeing delays are happening in poor those developments, but now it looks but that bucket is taking off and if you take the view that as it's a 10 year market that's being developed.
The installation that 30, Gigawatts and you can just pick a nice number a 10 megawatts per turbine you can see that that is a very large.
Construction markets and it's a large maintenance parking from you know.
To participate in that bucket, we can modify our existing equipment or we gave new equipment to a target nishu solve that market.
Uh huh.
And that's how I look upon it to there's a clearly.
<unk> and interest from the international contractors to come into the U.S. and and do most of the work.
And they international contractors have spent 20 years in the North Sea.
Oh renewable energy prices to develop that techniques send their equipment.
So they are very efficient and experienced.
So it's a it's a market, which we have to approach or in that.
Well, we we have confidence.
And where we can.
Fine on Nish, and where we can the generate some good margins.
For our shareholders.
Okay that sounds good thanks a lot.
Your next question comes from Neil Mccabe.
Hi, guys. Thanks for answering for some quick one what are your efforts to I guess, the Sydney on the Q is coming out Tonight or just curious what your letters of credit.
Outstanding member was and then if you can comment on me.
Overall expected cost of new Hopper judge.
Yeah sure. So our outstanding letters of credit I, I'm going to give a round number.
It's in that about I think 36 38 million.
And then are or the cost of the new Hopper dredge was ordinary K, it's 97 million.
Thanks, a lot.
Sure.
Your next question comes from Jon Tanwanteng.
Yes security.
Good morning, Nice quarter, guys, My first kind I don't really.
Are you doing I don't recall this pretty mentioned, but can you talk about the impact of storms in the quarter first I guess Hana and you know the Texas area and a high this up on the Atlantic Coast right now.
Yeah, Yeah sure I can take that losses, so yeah, what this tropical storm going through it impacted.
Or will impact you know four of our projects.
Next Unbilled Charleston York Spirit.
Great Big.
Most of those projects are impacted by about four days. So we take you know for our the storm comes and we take it in and then after this or moves we take it out. So for example, a jacksonville.
I'm expecting that to be back at work today actually so it's already been in and out and these weather delays. We've obviously, we put these contingencies in our estimate so, especially when we know we're working you know at this time at the year in that area. During hurricane season. So we're covered from <unk> in our estimates on on these.
Other type delays.
Got it. Thank you and then just to talk about your annual expectations from an EBITDA perspective now that you.
Outperform for two quarters in a row. You've also then at the LNG project, which excluded from prior you know your prior flat to up outlook. How are you thinking about the year, you the compared to last year or an absolute or relative basis.
Yeah, Yeah stuff.
Give me a few few data points, so I'm not too different from from what we've talked about in the first quarter, but we expect you know revenues this year.
To be above 2019.
We expect our.
Gross profit margin I think last quarter, I said to be about the same as.
As 2019, now I'm expecting it to be a little bit better.
We expect DNA to be a slightly higher than.
Then the prior year and those are the you know data points I can give you at this point, so a little bit a little bit more positive than what we talked about in the first quarter.
Okay got it and then to in terms of the win rate that you've been showing over the last few quarters now it's been under your market share.
Can you just give us an update you know on.
How we should think about you know that the competitiveness of your project led into competitions is out there and the chances of you actually having a higher backlog by year end as I know, there's a lot of big projects coming up I is the next two quarters.
A lot <unk>, yeah, I can I can start up that so yeah sure. Yeah. We're really actually excited about you know the bid market, that's coming up as losses said.
It's between just the large projects are between a billion in a billion and a half if you look at the range. So that's kind of put our bid market close to 2 billion. You know this year. It's a way. This is walking you know so we're expecting it could be close to that and and one other thing to add the that.
That bid market does not include any of the LNG opportunities that you know Lhasa was talking about those really be 2021.
ER in that bid market. So a couple of these projects. These large deepening projects, whether you're talking about the Jacksonville project or Boston you know those are Boston for example complex real hard rock to.
Those are projects that we've done before that you know, we're well equipped to do and those are the larger ones in this bid market in the back half of the or so.
The opportunities look good for us.
And so that's why we're pretty excited about you know the back half the year.
Okay, great. Thank you very much.
Sure.
Your next question comes from Max answer with when capital.
Hi, guys. Thanks for taking the question.
Yes, I I heard you talking about the wind opportunity and foreign vessels, but it was my understanding that it's substantial portion of the.
Work is reserved for Jones Act vessels in Florida get vessels can't compete for.
And you didn't mention it I wondered if you tell us a little bit about what portion is reserved for Jones Act and what portion or.
ER isn't would be you have to be competed against sworn vessels.
Yeah I'm likes the.
So someone's uncertainty around this on US you know there are several questions set a in the the others into the administration to the customs and border <unk> ER to rule on some of these questions.
What seems to be very clear as at the.
Installation of the.
The foundation or the mono pile and installation of the towers blades turbines with heavy lift to equipment.
Is excluded from John sites. So there's no John insect protection. So the vessels can come in from the international markets and do that for it.
So.
If you remember that not just the U.S. boxes active but the European your market size also extremely active the next 10 years and offshore.
Wind generation installations.
So there will be competition for them for these vessels and there are several international and U.S. groups at all looking out to the segment.
The segment that we are looking out to is what goes on underwater. So we're looking after walk installation foundations, a installation looking at Pocs and all the trenching, which could be done by our equipment to for cable installation and so forth and car uncertainty.
Around digital insight protection around this or that clearly dredging.
This required it's the Joan insect protected so it's something we will compete for but we're looking at these other segments to see how we can compete making sure that we can maximize the local content requirements that the states are requiring.
And help the operators in achieving those goals for those content.
Oh launch I guess much like what was it was I understood that any there's trenching that was coming back to the U.S. can bring to power cables back from the east.
In U.S. waters would be a Jones act could check here.
At this stage is that correct or is that still I've been here.
It is my understanding that that is not clear.
Well, we hope to get square.
Are you.
No.
Thank you.
Thank you.
And at this time you have no further questions.
Thank you. We appreciate your support of ours. We appreciate the support of our shareholders employees business partners and we thank you for joining us in this discussion about the important about and initiative and our best match. We look forward to speaking with you during our next earnings discussion.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may disconnect.
[music].