Q3 2020 Great Lakes Dredge & Dock Corp Earnings Call
Ladies and gentlemen, please send by New York used to be 20 to any great Lakes Dredge and John Corporation Earnings Conference call will begin momentarily again, please stand by the conference call will begin in two minutes. Thank you.
[music].
Good morning, ladies and gentlemen, and welcome to the keys to each one each many great lakes dredge and dock Corp. earnings Conference call.
At this time all participants are in a listen only mode. Later, we will conduct a question and actually session and instructions will follow what that time, if anyone should require assistance. During the conference. Please sorry, then you know on the attached don't tell the tolling lead you reminded that this call is being recorded.
I would now like security conference over to your host Ms., Tina Baginski director of Investor Relations. Please go ahead.
Thank you.
Good morning, and welcome to our quarterly conference call. Joining me on the call. This morning is our Chief Executive Officer, and President lots of Patterson, and our Chief Financial Officer, Mark Marinko.
Lastly, I will provide an update on the events of the quarter then Mark will continue with an update on our financial results in the quarter.
I will conclude with an update on the outlook for the business end 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.
Certain risk factors inherent in our business are set forth in our earnings release and filings with the FTC, including our 2019 form 10-K and subsequent filings.
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 op.
Operating data with that I will turn the call over to Lhasa.
Thank you Deanna.
Great like had a solid third quarter financially and operationally.
Actually sell the product performance in the third quarter resulted in a strong increases when compared to last year's quarter income from continuing operations of $112.5 million and adjusted EBITDA from continuing operations of $32.2 million.
The company ended the third quarter with a strong cash position of $229.7 million I.
See I would draw on the revolver, resulting in a strong balance sheet and substantial liquidity.
Operationally, we saw strong improvements in our backlog.
The addition of several large projects, including including the continuation in Jacksonville, winning the contract see $405 million getting nervous about third quarter backlog of $661 million.
Our new Hopper dredge fill program remains on budget and on schedule the Conrad shipyard in Louisiana.
Finally, the announcement of our new operating model, which includes moving our corporate headquarters to Usten.
And opening regional offices in Jacksonville, Florida, and New York was well received by a blindside stakeholders the new model.
Outrage the company with the senior executive centrally in our current markets on the east coast and in the Gulf and positions the company for the growth we see in the Gulf of Mexico, but judging dredging projects related to oil and gas and LNG exports.
Overall, we believe with our improved natural position a new operating model, we are strategically well positioned for the future as we enter 2021.
Turning back to the quarter as we noted in my last earnings release, we continue to have vessels in drydock during the quarter, We had Ellis Island Liberty Island, Hardlines in Illinois, and New York in dry dock.
Hello, Todd has completed this drydocking has returned to work one the dry docks for the other dredges I expected to conclude in the fourth quarter.
The effect of these planned dry docks were offset by outstanding performance on the Jacksonville, Beep deepening project in Florida and the great.
Re nourishment board getting New Jersey.
That's expected bidding activity increased significantly with $926 million of projects bid in the third quarter.
Great Lakes were awarded 466 million or 50% of these projects.
Resulting in a third quarter backlog of 661 really.
One of the awarded projects I said was that the Jacksonville, Jacksonville called the contract that see deepening projects totaling 105 million.
Ethics effects that successfully competing Jacksonville contract be ahead of schedule, we look forward to continuing to support the expansion of the ship channel for the port congestion.
Oh.
To expand on my opening remarks, Great lakes continues to be well positioned to weather changes in the economic environment.
Given our strong cash flow and balance sheet.
Initiated a share repurchase program in August, which demonstrates our confidence in our future and our commitment to delivering value to all our shareholders.
I now turn the call <unk> Kumar.
The discuss the results for the quarter for more details on the offtake all backlog at all.
Great. Thank you locked so.
I will start with the quarterly results and then discuss some specifics related to our dredging business. Please.
Please remember that all results from our energy segment and 2019 were placed into discontinued operations and therefore not included in the results that I will discuss.
For the third quarter 2020 revenues were 175.8 million income from continuing operations was 12.5 million and adjusted EBITDA from continuing operations was 32.2 million.
Total company revenues for the third quarter of 2020 represented a $6 million or 3.5% increase compared to the third quarter of 2019.
This increase was caused by higher domestic capital and maintenance revenue office.
Offset partially by lower coastal protection rivers and lakes and foreign revenue.
Gross profit from continuing operations was 36.4 million compared to 31.8 million in the third quarter of 2019.
Gross profit margin was 20.7% compared to 18.7% in the prior year quarter.
For year to date 2020, the company did have some additional expenses related to the COVID-19 pandemic related to additional equipment and procedural changes to keep our employees safe.
But it did not have a material impact on our results.
Total company operating income was 23.2 million, which is an increase of 4.8 million over the prior year quarter.
This increase is a result of higher gross margin yeah.
And again from a loss to abuse claims.
Our general and administrative expense is 1.4 million higher in the current year third quarter than prior year quarter.
Primarily due to office rental expense and higher technical and consulting expenses.
Income from continuing operations for the third quarter of 2020 was 12.5 million compared to 8.8 million in the prior year quarter.
The current quarter income includes net interest expense of 6.7 million and an income tax expense of 4.1 million.
In comparison income for the third quarter of 2019 included 6.3 million and net interest expense and 3.2 million income tax expense.
Adjusted EBITDA from continuing operations for the third quarter of 2020 was 32.2 million compared to adjusted EBITDA from continuing operations up 27.1 million in the third quarter of 2019.
Next we turn to our balance sheet. We're at September Thirtyth 2020, we had 229.7 million in cash.
During the quarter, we continued to maintain or zero cash balance on our revolver.
Our net debt at September Thirtyth, 2020 was 93.8 million.
Our total capital expenditures for the quarter were 7.4 million.
This compares to 6.9 million and capital expenditures during the third quarter of 2019.
The company continues to exceed <unk> or.
Where the company expects to have total capital expenditures to be about 45 million for 2020, excluding the capital spending for the new Hopper dredge.
Also to date, we've repurchased $3.9 million of Great Lakes common stock related to our previously announced repurchase program.
Current backlog at September Thirtyth, 2020 totaled 661.3 million, an increase of 238 million from June Thirtyth 2020.
Backlog at September Thirtyth, 2019 was 653.7 million.
In addition at the ended the quarter the company had 177.9 million and low bid and options pending award.
With that I will turn the call back over to Lhasa for his remarks on the outlook moving forward.
<unk>.
Last thing are you there.
Say in New York.
Thank you for that Mark [laughter] [noise].
As a country is facing the challenges of course did 19 dredging industry being death and the central. So this continues to operate and work on critical and needed infrastructure projects.
The U.S. Army Corps of Engineers oversees the majority of these infrastructure projects I know this capacity has continued to pull on the bid schedule and prioritize all types of dredging, including Port Deepenings.
Maintenance and expansion and coastal protection and restoration projects that are necessary to avoid or minimize potential storm damage during the hard part, okay and winter seasons.
As the projects move forward.
He Ltd remains committed to maintaining the health and safety all our team members through a incident and injury free safety management program.
This value based approach that's allowed us to respond quickly and effectively to the cold and 19 pandemic and any challenges as a result of the time that.
The third quarter several projects way impacted by cool that Ninetym positive cases, where they know sidestep and vessel cruise.
Thankfully all.
Okay says were mild and all personnel have returned to work.
The vessels work on decontaminated and replacement crews were brought on board to recommence dredging operations.
Although some projects were impacted by the COVID-19 outbreak to date they might Giorgio a project award has remained largely on interrupted by the time that Mike and the U.S. Army Corps of engineers, just continuing to advertise new projects as evidenced by the large big market in the third quarter.
In the third quarter, a strong hurricane or storm season began.
Which has extended into the fourth quarter, although these storms impacted all ongoing projects in the Gulf and on the East Coast.
So sad it to the recurring nature, all business and the need for more extensive coastal protection and poor maintenance projects.
Moving to the big markets at the end of the third quarter the domestic bid market for Twentytwenty reached 1.6 billion.
Great Lakes was awarded 636 or 30 point Sixmillion in projects, yet probably does he have to date comprised of capital maintenance and coastal protection projects.
Projects coming to the market pipeline in the fourth quarter includes two large Marshall creation projects in Louisiana, The Spanish Ridge Lake ball going and the Boston Harbor improvement project is bidding the third phase of the deepening project.
We continue to be confident in the market for the remainder of the year and onwards, and we anticipate the 2020 total bid market even exceed 2090.
The dragich and dredging industry and market has seen support in the care sector, which includes a provision that you live.
On the Harbor maintenance Trust fund and the Twentytwenty One house appropriation Bill introduced in July Twentytwenty showed an increase of $1.7 billion above the President's budget request for the U.S. Army Corps of engineers.
Although the upper <unk> appropriation Bill was passed before the close of the fiscal year and is expected to be two passed by the end of this calendar year.
This is not unusual and that's a result, the core is working on the temporary funding called the continuing resolution continue they'll work with minimal impact to our marketplace.
[noise] 2020 election campaigns on both sides. So that's been positive industry issues as both candidates.
Indicated support for the Jones Act as well less continued major investments in infrastructure, including ports and dredging.
As we have stated previously we continue to support the domestic tragic and market demand by investing enough fleet.
Such we continue to responsibly upgrade existing U.S. domestically with new equipment and technology to increase productivity and improves improve safety and efficiency on a project.
In June we announced the execution of a contract with Conrad shipyard in Louisiana to build a medium size 606.
6500 cubic yard Hopper dredge.
With expected delivery in the first quarter 2023.
This project is moving forward as scheduled.
To further improve our operations, we all building to multi cat support vessels to improve project efficiencies and improved the working situation for a cruise what placing submerged pipelines on the coastal protection projects.
These vessels are the first of the kind in the United States and our target to talk at it to be in operation and Twentytwenty two.
As discussed on prior earnings calls we are excited about the potential opportunities in the offshore wind market internationally. This market has been very strong and developing over the last 20 years.
This market is now opening up in the U.S. and offshore wind power generation is anticipated to be installed Bolden 30, gigawatts of power generation capacity on the east coast over the next 10 years.
That's the timeline for these projects are being developed we all continuing to engage would develop or some partners on these projects to use U.S. alone U.S. Bill you. This operated equipment enhancing the local value.
Value creation and content both into construction phases and during operations.
In conclusion.
We remain confident in our Twentytwenty outlook and look forward to implement a new operating model and capitalize on the opportunities that lie ahead.
We also recognize that we must continue to adjust and develop a safety and operational contingency plans to be able to respond to potential changes and they've all been COVID-19 pandemic and its potential impact to the economic environment.
We continue to maintain a sharp focus on employee safety and project performance, while continuing to advance our long term strategy all been all investing in our fleet and strengthening our balance sheet and with that I'll turn the call over to questions.
Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchtone telephone if.
If your question has been answered are you wish to remove yourself from the queue. We press the pound key.
Your first question comes from the line of Gen 10, one team from TD Securities. Your line is open.
Hi, Good morning, gentlemen, thank you for taking my questions and nice quarter, considering the storms and everything happening.
My first one here.
How much backlog is expected to liquidate in Q4, especially with more storms in the quarter, we've had a number.
In October we've got something possibly hitting in November how does that flow through to your revenue and gross margin in.
In conjunction with the dry docking that's going on.
Yeah. So I can answer that John So you talked you will go out Tonight.
Tonight, and so about 28% of the backlog.
We will be recognized through the end of the year.
Okay, and as you kind of look forward to Q4.
<unk> gross margin percentage perspective.
I expect Q4 to be similar to Q3 from a gross margin percentage, we'll have fewer dry docks.
In Q4.
But we did have some exceptional performance in Q3 on.
On a couple of projects Jacksonville be in particular, it'll be difficult to replicate that possible, but you know without that rep. You know that are called that replication, there or the margin will be margin percentage will be about the same as Q3.
[laughter].
Got it that's helpful and then I noticed that.
Lastly, you mentioned that there was a a couple of big.
On projects that you're really looking to land in Q4 on Spanish ridge. Another one I didn't quite catch the name for Boston Harbor, how much of that is in a little bit number that 177.9 million that you mentioned.
Oh, we haven't did those projects a yet so does nothing all that in that number.
Got it so those would be incremental and the SEC, yeah could be very big got one quarter. If you got that okay understood [laughter].
I was wondering if you could discuss the headquarters and corporate moves you're doing are there any hard cost or savings that might be associated with it and if not what are the I guess the intangible benefits that you guys are looking at.
[noise], Oh, I get an answer that's a [noise].
I started out with we're saying this is the next phase of the transformation that we started for the company back in 2017 and.
And as you know, we rationalized some more than 100 pieces, so large equipment I'm dredges.
We reduced staff at the corporate headquarters.
We divested all loss, making operations Oh, we improved our run rate with more than 40 million a year.
We reduced debt <unk> equity from a factor offset them to below one we now have 200, almost 230 million of cash on the balance sheet, we are investing enough fleet.
So the next step here is to ensure that we have at the company and its executive positions in markets and those two lines and operations to make sure that the operational improvements that we are targeting for the future are being implemented and color.
So it it's the next step in Big companies development, Mark you may want to comment a bit on the costs involved.
Yeah sure. So yeah, we're actually working through a process now was if you saw our press release.
We'll have these regional offices some have been already previously set up.
Before this quarter.
And we'll have still have a presence in oak Brook terrorists, Illinois show, what we will have in the short run okay I'll call it onetime items.
You know potential relocation expense.
Potential recruitment fees those things, we don't know that yet until we finish our broad our process, which will be at the end of the year because we'll also be looking at.
People working remote.
We will have for the short term duplication of office rent as we have you know a new headquarters so an additional piece in Houston. So I don't know, we don't know the numbers until we complete the thought process of who exactly is going to move who exactly is gonna work remote.
But that'll be finished by the end of the year.
Okay got it and are expecting to save anything as you move from from Chicago to Houston, You know maybe more people work from home you have little over space to move rents come down it I don't know if there's anything associated with that.
Well the exciting stuff. We are looking for is really in the improvements in the operating model where.
Where we are making sure that we have decision, making powers close to the projects. We can coordinate both the projects I'm talking tens of basis as we go forward.
Understood. Thank you and then just lastly from me last one are you expecting offered to actually make a meaningful impact to European Ellen kind of it.
The trajectory will that take.
Yes, I think the timeline for the offshore wind is continues to lead in.
Evolving and as you can read in the press there are changes that are happening right now so.
So we are looking at construction starts are either in 2023 or 20 to 24 and as things are developing is 2020 four is more likely.
Great. Thank you so much.
[laughter].
Your next question comes from the line of before I came back some on how soon and company. Please go ahead.
Hi, Thanks for taking the questions I think I missed this can you.
Say again, what the repurchase activity was in the quarter and then give us an update on.
The pacing of the repurchase activity going forward I think the previous commentary was.
An expectation that the repurchase authorization would be exhausted in 12 months is that still the case.
Yep, so in the quarter, we we repurchased about $3.9 million.
And it was approximately 425000 shares.
She can work out the average price was about nine $9 or nine cents a share.
And they'll be more all the details will be in tables and Oh.
10-Q that that goes out Tonight, or we expect to go out Tonight.
Okay. That's helpful.
And then the low bids pending.
Announcement.
It's the ones I think you said 177.
Is that a handful of smaller projects or are there some bigger projects in there and is there any private market awards in that number that we should be aware of.
Yeah, there's a <unk> it it's.
There's about.
1234, low bids pending one of them is a large private client job.
[noise], just south of 100 million.
And then there's a.
Four or five options.
Options pending.
Which total about 40 million on the options pending so those are bids we've won but there's options to them that have not been awarded yet. So that's the breakdown. So the largest one is the private client when I mentioned.
Okay, and I I think I don't know if I heard it right you you talked about new vessels multi cat was that the term you used.
Yes that is correct.
I can explain the operations as we are doing.
Doing all our beach construction work, we are pumping the sign through pipelines from the dredge and to the beach and those pipelines needs to be connected and that connection today is happening out in the open water.
And in order to make that connection work more efficient we.
We are constructing two multi cuts which are vessels that have cranes on them. So that we can pull the pipeline is up and do the connection on a drive profit pool, which makes it safer and much faster.
So that's an investment both in productivity on projects and also in a in safe operations.
Okay. That's helpful can you help us understand the cost of a vessel like that.
Yeah, we are looking at Uh huh.
We haven't contracted for those vessels, yes, so details will come.
Come later, but it isn't an investment in the range of between 25 and 30 million for the two.
Okay.
[noise] and can you just give everybody an update on terms of how you're thinking about the outstanding notes a would be coming up.
A call.
It gets in May.
Yep.
Yeah same we're in the same position as we were last quarter, we talked about it we're monitoring the market, it's still a strong market, meaning [noise].
The yields are much better than our 8% even the tenor is potentially longer.
Meaning it could be a seven or eight your <unk> level, you know size note or tenor on the note.
As opposed to our five year, we have today we are.
As we look at the one off or premium, we would have to pay or $13 million.
Well at this time financially it's best to wait until May of next year to a.
Refinance those at par so that's Ah the position today, but we continue to monitor it.
In case, something changes and we need to react sooner than that.
Okay, and just a little more color on that May is Ah you know approaching its not.
You know incredibly far away.
Is there any potential or desire to do a.
A bond deal a redo the revolver.
Earlier than the call.
And then you know you have a little extra interest carry there, but if you know the planets align is that a possibility and then you know when they comes around you you called that Oh, yeah.
You know for that first I want to send the revolver. The revolver is a little over a year old now so it's got three and a half four years to go and that revolver.
The rates on the revolver are a lot better than the current market is so it's highly likely or I would expect you know not to change that revolver because it's.
It's better than what's in the market today.
But as we looked forward yeah. We are looking at you know the board has asked me to you know continue to look at things from a clean sheet of paper you know.
As we get closer to that date is there any other opportunities related to our debt structure. So we we are analyzing that but you know no no news on that yet.
Okay. Thank you for that and the last group questions can you give us any color on no dry docking activity over the next six months I think you had talked in the past on vessel basis Count Wise you know.
Got it.
Can you can you just give us any color there.
Yeah, So in Q4.
I think I mentioned, a little bit we'll have fewer dry dock days in Q4 than we did in Q3.
And then when you look forward to next year.
We will have a little less dry docks and 2021.
Then 2020.
We will have about the same number of vessels, but.
On a much shorter dry docks, we had the Illinois in Drydock was a big driver this year and Drydocking getting upgraded so we won't have that next year, so or it should be more of a positive impact from availability related to dry docks 2021 versus 2020.
Okay. Thanks for the color.
Sure.
Your next question comes from the line of Seoul, South from multiple capital. Your line is open.
Good morning lots of good morning, Mark couldn't wouldn't Tina I just had a couple of questions about the bid market you know.
You talked about the low bids pending award I think the number was 178 million.
Okay.
Correct.
Okay, and then can you give us a little more color on that private clients on the nature of that work I'm not sure I heard sort of the nature of that work.
Yeah. It's I can't you know for confidentiality job I can tell you is that say you know an energy client.
As I mentioned, it's a.
A little south of 100 million.
Show it so as we talk through these type of energy type clients on the way. It works is you signed a contract with them, but then you need to.
[noise] FERC approval you need.
Their final investment decision you need notice to proceed so we put it in low bid pending when we signed the contract. So that's where we are today.
Similar to what you know when we add the Sabine LNG type project that we won earlier this year, it's kind of in that same status subs and we have to we won't put it into backlog until we get notice to proceed.
Add.
So that was actually something that was signed in the quarter Mark.
It was signed before this quarter before okay. So it's been out there right yeah, Okay. Yeah.
And when we look at sort of the upcoming Louisiana beds, you know I think you've already been on Spanish rich. It's just the openings what November 18.
We know we have not bid on Spanish rate yet.
Okay.
The Spanish rich in late spring going Oh, my understanding is there in the range of combined about 225 million.
He said.
In line with your thinking and then also if you could sort of quantify what you think Boston three might be.
As far as the scope of work there.
Yeah, Yeah, So I would I would say the.
The expectation on the Spanish Ridge in Lake Youre in are in that you know 200 million range could be north of 200 million I, just pull that back a little bit maybe but yes. They are both large.
And on.
Boston that has a wide range publicly from the Army Corps between 102 hundred 50 million.
It's it's actually pretty complex project with potential drilling and blasting there so.
So that that that has a wide range, but yeah. Those three projects are all 100 million or north of that.
Okay, and then could you talk about just the tone of the competition you know how how you're you know how you think the the stars are aligning for just the competitive landscape is we as we look forward and if you could.
I'm not sure if you heard the same comment that the entity its administering the Spanish ridge and make were gone you know had a presentation from the.
<unk>.
U.S. Army Corps of Engineers Guy from from New Orleans, and he essentially was warning them, we're not warning that but cost screen them to expect higher dredging costs going forward is that.
Did you hear that and is that something that that you would agree with can you just give us a sort of a color on how.
The competition the competitive landscapes looks like over the next 12 to 18 months.
Yes, I can do that.
As we've been saying they we believe the treasury market will be strong and continues to be strong for the for a good number of years as we are seeing the port deepenings and the need for investment in them in the coastal infrastructure is developing so we believe that is a strong.
Dredging markets at the same time, the dredging industry in the U.S. just responding to this Ah strong dredging market by building new capacity and as you have seen over the last two years.
We have like lakes, we have the.
Commissioned the Ellis Island Hopper Dredges, we have put in operation launch mechanical dredge, we have taken to cut a dredge is back to the U.S. market from overseas and.
We are now building a new hopper dredge at the same time. Our competition is also building new Hopper dredges, and new cutter dredges and when we see the outcome on the bid results for the Army Corps of engineers typically the outcome of the bids are below the estimate that the corps of engineers, so putting out.
So it's a competitive market, but it's a strong market and the comment that came from the official form the Army Corps of engineers I must say I don't quite follow that.
Good idea.
If we could go back to Marty had a lot's abuse claim of 1.7 million that had a positive impact on you know operating results in the fourth quarter or third quarter was there any tax effect on that or do you have that you know how that impacted the earnings per share number.
Yeah. So yeah, you take though 1.7 million and tax effect that by 25%.
Don't get to your S.
Okay, and then we talk about Capex you know you you you've announced to the multi service cap vessels are kinda pencils that probably didnt hit the third quarter capex or fourth quarter Capex, but you know you said that you spent some.
Point 4 million in the quarter exclusive of new builds so did you spend any money on the new builds in the <unk> in the third quarter.
And then to get to 45 million noteworthy year, it looks like capex might be as high as 20 million in the fourth quarter.
Can you just talk about sort of where you think capex will be in the fourth quarter.
And then on <unk> tell us tell us sort of the timing on how much of the new build will be on top of that Capex. You. Yeah. You got it. So no there was no new build money in the third quarter and when I just stated the 45 million.
Excluding the Hopper dredge.
That included.
12 million for wanted the multi cats.
Okay. So we would have been I'll call. It normal capex of roughly 33 million to get plus 12 for the 45 million.
And then the new build.
For this year.
We'll have about a total of.
$12 million or we have about a little south of 10 million payment in Q4.
For the ordering of steel.
Okay. So no change there correct.
Correct, but I think.
So you think that you'll spend about half of the B you know the new announcement in the fourth quarter for the cat vessels.
Yeah that.
Yes.
That's in the 45 correct.
And but they're still coming on I think you said they'd be on line in the middle 2022.
That's correct.
Okay got it.
So more upfront costs and the other than the other Newbuilds and then went on that do you have an option for a second new build <unk> second.
Hopper dredge what what is your current thinking on that when do you have to decide on on executing that option.
Yeah that auction, we Oh, we have 12 months from that first.
Contract Award to.
Two announced that auction, a we're still considering that who haven't made any decisions.
Okay, and then lastly, if you could just expand on sort of the new operating model that you've been talking about the next days and just.
Well it maybe just walk us through how you chose the locations of a pure reaching wants is and then do you expect another.
Regional office to cover sort of that.
Other areas or sort of can you just sort of talk about sort of how that process went through and then also maybe a <unk> possible you know how many employees this will impact and Oh that'd be helpful.
Yeah. The process, we went through a very thorough over the last couple of years I looked at where do we execute a projects.
Where is that clients are located so where is the best Oh opportunities to both improve project execution and to have a good client interface to make sure that we are positioned for the new work that is coming up and and get our share of that.
We execute a lot of work on the East coast, the South East and Jacksonville was a natural choice.
Choice for for that operation.
As you know we are deepening the Jacksonville, John right now, they're doing the Charleston, and there is a lot of beach working in the area up in New York terrorists deepening project, so complex and difficult.
And it's also the potential hub for the offshore wind a once that gets going and then of course in Houston, the oil and gas and Oh products. The LNG exports a private clients are paying for a share of the channel deepening or baby.
You all have it on some projects there is a great opportunity in the years to come for all business in that area as well as Houston being close to Louisiana, and New Orleans for the Mississippi River Dolphin sometime deepenings. So we looked at where do we have a business as well as new business coming.
And starting with the regional offices in that respect.
And we are in the process here, all but not in those locations.
From what people from Oak Brook, and there will be some new hires and in the months and years to come.
Great. Thank you that's helpful. And then you got a very strong year for the you know for 2000 2020, and it looks like you know the fourth quarter.
Looks as strong as the third quarter, if maybe you can maybe potentially a little bit better that will land fueling 155 to 160 million per diems EBIT guidance for the year.
And can you just talk about next year and sort of looking into 2021, you talked about less downtime or less dry docking days, but can you is the bar can you just sort of talk about that for 2000 2020 and do you think you can improve on 2020.
20 in 2021 can you just sort of give us a couple of women are your thoughts on how you're thinking about 2021 yeah.
Yeah, I'll, let a mark <unk> question, but I have been a strong belief in the market going forward and our backlog is strong <unk> performance is strong. So I think the outlooks for both this year and next year and years to come it's good morning. Please.
The details on that.
Sure. So yet at this point yeah, we like the market next year, we expect it to be.
As good as this year.
You know what I think is going to be maybe.
Maybe important related to next year will be these bids that are coming up in Q4.
But you know on the on the tailwind side.
We have be fewer dry docks next year.
You have you know you have the ability of the Illinois to work next year, where it was in major drydocking upgrades this year.
You know from I would say a little bit from a tailwind perspective, we had some really phenomenal performance on jobs.
No Jacksonville B was really really strong first quarter and then this year and in the third quarter show.
It's it's difficult to replicate those but we have been the the the our field.
Performance has been really exceptional all year long, even with cold It show, but it it it's just the difficult comp, but you know they they have been overperforming on a fairly.
Consistent basis, so I think that the important thing to see as these bids that happened in the fourth quarter, you know and how they impact.
2021, such a little too early to tell.
Based on that so there's there's some good had good tailwinds in some some headwinds.
[noise] it sounds like though the tailwinds might be a little you know.
At least at least offsetting potentially more than offset the tail the headwinds that.
Fair.
It's it's pod that's possible it it's the it's Doug I think these like I said I think a couple of these fourth quarter projects are could have an important impact on 2021.
And I know the Q will be out mark that vacuum in Sydney, you know he'll be on Tonight, but backing into your Cas change for the quarter Yeah.
It looks like working capital might have been pretty significantly negative is that is that the plug and then sort of how do you. How do you look at the fourth quarter's floors working capital change yeah.
Yeah. So no good question, so you're right.
As I talked about earlier in the year you know the.
The on the liability side, we expected the you know.
Fillings.
Exceeding revenue is or deferred revenue or whatever you want to call. It.
Would would be we had very positives last year, we expected that to reverse it is reversing in the third quarter I'm. So that was down eight accounts receivable was up. So you know some of that Aer will come back, but that that billings in excess of of.
What's important there a and that did happen as we expected we spent the money on capex as well as the share buyback program. So that left you know our our cash for the quarter fairly flat with third quarter slightly down.
As we go into fourth quarter.
What you'll see is you know the capex for the.
The new Hopper dredge just south of 10 million, we have our interest payment on the senior notes of 13 million in the quarter. So from our standpoint, we should see cash come down a little bit.
More in fourth quarter would be our expectation boast based mostly on those two big items.
Great.
Thanks for the color.
Sure.
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Hi, I didn't get that about Gillentine guys. My question has already been answered, but nice work good, particularly go little to model that you're on the call.
Work.
Mark Lhasa, Thank you very much and we'll build touch.
Thanks, Max price spikes.
I'm showing no further question at this time I would now like you can't conference back to Mr. Nab against Kids go back to I think that's what the nation.
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