Q4 2020 Great Lakes Dredge & Dock Corp Earnings Call
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Ladies and gentlemen, this is the operator todays conference is scheduled to begin momentarily until then your lines will again be placed on music hold thank you for your patience.
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Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020, Great Lakes Dredge and Dock Corp earnings Conference call.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
I would now like to hand, the conference over to your Speaker today. Tina begins. Thank you and please go ahead.
Yeah.
Hello, 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 Marino.
Laughter will provide an update on the events of the quarter and year, then Mark will continue with an update on our financial results of the quarter and year Lassa will conclude with an update on the outlook for the business and market.
Following their comments there will be an opportunity for questions. During this call we will make certain forward looking statements to help you understand.
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 in filings with the SEC, 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 operating data.
With that I will turn the call over to LASA.
Thank you Deanna.
This year was full of changes and challenges that the COVID-19 pandemic presented us.
US with impacted all our lives.
We were fortunate to be able to continue working as a federally designated critical infrastructure company.
This unprecedented crisis.
Despite the challenges.
Great Lakes dredge and dock had another exceptional year as we continued to deliver improved financial results.
At the same time advancing on our strategic initiatives.
<unk> balance sheet.
Working on the renew what on what dredging fleet.
Proving project performance.
Decisioning for the upcoming U S offshore wind market.
We had a strong fourth quarter and a record full year results with net income from continuing operations for the year of $66 1 million.
On a full year adjusted EBITDA.
EBITDA from continuing operations of $151 1 billion.
These results reflect a net of 11, 4% increase over prior year EBITDA from continuing operations.
Our strong performance was a result of solid domestic dredging market and us.
Continued focus on product performance the.
<unk> ended the year with a strong cash position of 200 on $16 5 million.
On a net debt decreased by $28 6 million in 2020, which resulted in a healthy net debt to adjusted EBITDA from continuing operations ratio of <unk> seven.
Our strong cash flow on balance sheet allowed us to not only withstand the economic storm as a result from the pandemic, but positioned us well to invest in our future.
In 2020, we contracted for a new midsized Hopper dredge.
Upgraded several of our large cutter dredge is with.
We decided to move our headquarters to Houston to be closer to Mark as appliance.
We invested shareholders through us $75 million share repurchase program and.
And we invested in positioning for growth both on the trend domestic dredging market and four.
The upcoming U S offshore wind market.
Operationally, we ended the year with a backlog of $559 4 million.
And then in addition, we have low bids and options pending all $472 3 million.
Additionally in January 2021, Great Lakes was the successful bidder on 19, $90 3 million or <unk>.
Great work, which included the next phase of the Boston Harbor deepening project.
Our year on backlog includes the continuation of the Jacksonville deepening project with contract C for $105 million.
After successfully completes injectable contract be ahead of schedule. We now look forward to continuing to support the expansion of the shipping channel for the port of Jacksonville.
Yeah.
Ultimately the fourth quarter.
We were pleased to announce the signing of the largest contract in great Lakes dredge and dock history.
The next decades, Bronxville LNG projects will be placed at backlog once notice to proceed is received.
We expect the dredging market to remain strong in 2021, driven by project work.
Large scale port deepening projects, along the east and Gulf Coast.
Well as coastal protection projects, including basically nourishment of coastal beaches that have been impacted by the reach the major hurricane events and coastal barrier islands at Marsh constructions in Louisiana.
To support the strong domestic market demand.
The execution of a contract with con rods shipyard in Louisiana to build a new midsized Hopper dredge.
With expected delivery in the first quarter of 2023.
The Newbuild project is on budget and on schedule and we had the steel cutting ceremony in early February.
In addition to the Newbuild.
<unk> to upgrade our existing us domestic fleet with new equipment and technology to increase productivity.
Our upgraded on most powerful cutter dredge the Ohio.
And last year to the us market from the Middle East and has been busy working on several beach.
From an problem projects since then.
Investing in our fleet is paramount to maintaining strong project performance.
To compete.
Complete our projects on time and on budget.
With the new Hopper dredge and ongoing productivity upgrades to our existing domestic dredges. We believe our fleet is well equipped to meet the current demand and future growth in the dredging market.
Finally, we took the next step in our strategic plan with the announcement of our new operating model, which includes wishing to moving the corporate office to Houston.
Opening regional offices in Jacksonville, Florida, and New York.
The new model situated the company centrally in our traditional markets on the east coast and the Gulf.
<unk> the company from growth and we see as we see in the dredging projects related to oil and gas and LNG exports in the Gulf.
And for the upcoming U S offshore wind market on the East coast.
As stated in the opening remarks quite lakes dredging dock continues to be well positioned on changes in the current economic environment and for the future as we enter 2021.
I'll now turn the call over to Mark to further discuss the results of the quarter for an update on back on development.
Okay, great. Thank you lost share.
I will start with the quarterly results and then discuss some specifics related to our dredging business.
Please remember that all results from our Eni segment in 2019 were placed into discontinued operations and therefore not included in the results that I will discuss.
For the fourth quarter of 2020 revenues were $172 1 million income from continuing operations was $10 6 million and adjusted EBITDA from continuing operations was $29 4 million.
The Companys revenues for the fourth quarter of 2020 represented a seven 8 million or four 8% increase compared to the fourth quarter of 2019.
The increase was a result of higher domestic capital maintenance and rivers and lakes revenue.
Offset partially by lower lower coastal protection and foreign revenue.
Gross profit from continuing operations was $33 4 million compared to $34 6 million in the fourth quarter of 2019.
Gross profit margin was 19, 4% compared to 21% in the prior year quarter.
The small reduction in margin was primarily due to higher maintenance expense and an increase in marine insurance premiums.
The total company operating income was $17 3 million, which is a decrease of $4 9 million over the prior year quarter.
The decrease was primarily due to the $4 6 million loss abuse claims settlement that was received in the fourth quarter of 2019.
Additionally, the change in operating income was impacted by higher general and administrative expense offset partially by a gain from the sale of assets.
Income from continuing operations for the fourth quarter of 2020 was $10 6 million compared to $14 8 million in the prior year quarter.
The current quarter includes net interest expense of $6 5 million and income tax expense of $1 7 million.
Income from the fourth quarter of 2019 included $6 $5 million on net interest expense and 1 million income tax expense.
Adjusted EBITDA from continuing operations for the fourth quarter was 24 2020 was $29 4 million.
Compared to adjusted EBITDA from continuing operations of $32 6 million in the fourth quarter of 2019.
Two our full year results for the year ended December 31, 2020 revenues were $733 6 million net income from continuing operations was $66 1 million and adjusted EBITDA from continuing operations was $151 1 million.
These results represent a $22 1 million increase.
And year over year revenue.
On increase in net income from continuing operations of $10 4 million and an increase of $15 5 million and adjusted EBITDA from continuing operations.
For 2020, the company did have some additional expenses related to the COVID-19 pandemic relate.
Related to additional equipment and procedural changes to keep our employees safe.
The cost was approximately $3 2 million that were direct costs to our projects.
Next we turn to our balance sheet, where at December 31, 2020, we had $216 5 million in cash.
Throughout 2020, we continued to maintain a zero cash balance on our revolver.
Our net debt at December 30, 31, 2020 was $107 2 million.
Our capital expenditures for 2020 were $47 8 million. This compares to $44 4 million in capital expenditures during 2019.
The 2020 capital expenditures included $13 6 million related to the construction of the new midsized Hopper dredge.
Also to date, we repurchased three $9 million of Great Lakes common stock related to our previously announced repurchase program.
Contracted backlog at December 31, 2020 totaled $559 4 million compared to a backlog of $589 4 million at December 31 2019.
With that I will turn the call back over to <unk> for his remarks on the outlook moving forward.
Yeah.
Yeah us.
Our country is still facing the challenges of COVID-19.
Reggie industry deemed us on essential service continues to operate on work on critical and needed infrastructure projects.
U S Army Corps of engineers, so overseas. The majority of these infrastructure projects and US continue to follow the bid schedule and prioritize all types of dredging, including port deepening port maintenance and expansion coastal protection on our exploration projects that are necessary to avoid storm damage during the coastal hurricane season.
As the projects move forward, Great Lakes, dredge and talk remains committed to maintaining the health and safety of all of our team members through an incident and injury free safety management program.
This value based approach has allowed us to respond quickly and effectively to the COVID-19 pandemic.
And any challenges as a result, all depends on us.
As we experienced COVID-19 positive cases on several projects.
We continue to fall low safety procedures on Decontaminating the vessels on having replacement crews brought aboard to recommence dredging operations.
As of December 31 on the company's business has not been significantly impacted by COVID-19.
Due to the uncertainty that surrounds us swap virus the company, we'll be continuing evaluating safety and operational plans.
The potential future impact.
Evolving environment has on the company's employees business financial condition.
Results of operations.
Moving to the mid markets at the end of the year. The domestic bid market for 2020 reached $1 8 billion in projects of which Great Lakes was awarded 690 to $2 $8 million comprised of capital maintenance on coastal protection projects, resulting in an annual 39% with <unk>.
<unk> from $4 2020.
So the domestic dredging market.
Remains strong.
And continued to be driven by the large scale port deepening projects, along the east and Gulf Coast.
'twenty 'twenty, one we'll see bids from multiple project basis per port deepening and Corpus Christi.
Bill.
On the Houston ship channel.
It will continue for the next several years. Additionally.
Additionally, strong hurricane or storm seasons.
Faulted and an increase in erosion and other damages, which adds to the recurring nature of our business and the need for more frequent coastal protection on port maintenance projects.
These projects on either side.
To reduce the risk of future damage from flood on installment loans.
And important and providing resilience to coastal.
From the entities in ecosystems, as well as driving job creation and economic development.
We continue to be confidence in the market. We anticipate the 2021 total bid market to be as strong as 2020.
Our confidence in the market is reinforced by the support we have seen for the dredging industry.
In the U S Army Corps of Engineers 'twenty to 'twenty, one budget that was approved at a record high of seven 3 billion.
In addition, the water resource Development Act was signed into law and includes some additional reforms to the Harbor maintenance Trust fund that will allow Congress to for the first time draw.
Draw down on the 9 billion surplus which is in addition to having the annual caps lifted on the fund earlier in the year index.
Corona virus aid relief on economy Security Act.
It also there to also include significant language encouraging more beneficial us put dredge material and naturally infrastructure on both important environmental issues on language, Great Lakes was particularly active in advocating.
Looking to the future offshore wind represents an exciting new opportunity for great Lakes.
We believe this renewable energy resource will gain significant momentum in the us.
And Great Lakes announced in December the design the development of the first US flagged Jones Act compliant and claw inclined full pipe vessel for subsea rock installation for Windows foundations.
This vessel.
Would represent a significant critical advancements in building the future.
The U S offshore industry. We believe this is the optimal time for us to leverage existing and extensive specialized vessel expertise to enter this exciting market now coming to the us.
As the timelines for these offshore wind projects are being developed we are continuing to engage with developers and partners on these projects to use us on U S. Built on us operated equipment enhancing the local value creation and content both on the construction basis on during operations.
Yes.
To help lead to Great lakes and our efforts in this market. The company has appointed Lanny Baker.
US SVP of offshore wind she will be responsible for developing our offshore wind operations center moving strategy or business development tendering on project execution.
We are excited to have Delaney on board to assist us in seeking opportunities in the.
Emerging market.
In conclusion, we are pleased with our strong 2020 performance and look forward to implementing on new operating operational model to capitalize on the opportunities that lies ahead.
We also recognize that we must continue to actively investigate safety and operational contingency plans to be able to respond to potential changes in the evolving COVID-19 pandemic on its potential impact on the economic environment.
Entering 2021, we will continue to maintain a sharp focus on employee safety and product performance, while continuing to advance our long term strategy of investing in our fleet on strengthening our balance sheet with us I'll turn the call over for questions.
Ladies and gentlemen, as a reminder, if you would like to ask an audio question. Please press Star then the number one on your telephone keypad again that is star wanted to ask a question.
You do have a question from the line of John <unk>.
Okay.
Hi, Good morning, everyone can you hear me.
Yes, Hi, John.
How're you doing great. Thanks for taking my questions.
If you could start maybe just talk about what was unusual in the quarter for you compared to your internal expectations.
There was weather events, but was there anything else I think you mentioned, maybe a higher insurance rates, but was there any unexpected maintenance or COVID-19 impacts.
Tell me how it played out compared to what Youre thinking when you last.
Reported.
Right. When we did the I can handle that like I said, when we in the quarter.
They actually the project performance was our overall was a little bit better than we expected.
What we did have though we did have two vessels that had some unplanned downtime and thats what drove the maintenance expense that I referred to on the on.
On my comments today, so that was really the debt piece those two vessels being down from plant maintenance was really the the offset there.
Got you and the weather impact was within I guess Youre range given the project.
Correct.
Okay, great. Okay, and then as we look into Q1 that theres been a lot of winter weather I read on some of the industry Journal that you did have some COVID-19 delays on some of your ships.
How should we be thinking about your ability to drive revenue on liquidating backlog.
Those on.
Constraints.
Yeah.
Yes, yes, and yes.
And as I.
Said on my remarks.
Safety.
Graham on safety.
Safety is evaluating the company prepared us for this situation.
And we have very strong.
Program in place to ensure that our employees on tested before they leave hold on to come to our project sites.
Again, COVID-19 tested before we mobilized on vessels, but unfortunately some of the cases are then not protected and we haven't had some upgrades.
I'm confident in.
On the policies and procedures to take care of our employees, but.
Unfortunately, we do see.
Some of these cases.
Our payroll on the vessels and it impacts operations.
I am confident that we will be able to execute on our projects as we go into 2021, but.
It will take some effort and we'll just.
I have to see how the situation evolves.
Mark you want to fill it on on that.
Yes, I know I do we've had a.
I think less is exactly right. When we do have a vessel that does become.
On outbreak on a vessel, we do obviously bring the vessel in habit.
Disinfected, we bring the crew out, bringing a new crew and if we've talked about before so and usually when that happens the vessels down less than a week, but it does have an impact but the procedures we've put in place of.
Minimize that to the extent that we can.
Okay, great. Thank you.
Wanted to drill down into the little bit hanging award number that you had out there which has been pretty large can you just talk about the projects that are in there.
The next decade, one is in there, but I think Mark that you mentioned you won the Boston one two what else does that comprise on what's left to bid in Q1, maybe that was.
Scheduled for Q4 might have been pushed out.
Mark in your take on Yeah, Yeah sure so in our low bid pending awards.
Yeah.
December 31, 2020, so there's two large.
LNG projects energy clients in there and obviously the next decade, one is the big chunk of that there are some smaller numbers related to what we historically have options that are on current projects. We're working on but the two energy clients make up the bulk of the number and us.
<unk> go now into.
2021, whats occurred really in the first quarter, so far lesser mentioned we have.
$90 million of low bids pending award so that would be on top of the December 31, 2020 number with the.
The larger one being the Boston.
Additional phase of the Boston deepening that was the project that we were originally anticipating to bid.
In 2020, but it didn't bid until January so very pleased to have that in low bid pending award.
Okay got it.
And just in terms of the Capex you extended this year youre expecting to spend this year just on the new dredging vessel the.
The offshore wind ship.
I think you mentioned you are investing.
Investing to other vessels that are not judge us.
And between capital just maintenance spending.
Give us a picture of how much you're expecting to spend this year as we cash.
Sure sure so from a let's call it a regular capex, which is maintaining our fleet and a little bit of growth in there for our fleet as we improve the fleet that's about $35 million per.
For 2021, we're expecting.
For the.
New Hopper dredge the schedule of payments I believe we've said this before is about $35 million for this year in 2021 and then.
Two we have the two multi catch that we talked about that are not dredges that should be a little bit about $18 million. We expect this year, so a little bit south of 20, Theres really nothing on the offshore rather small amount on the offshore wind if we're just doing the design construct.
And yet so that's in the neighborhood of $1 million millions on a half dollars for 2021.
Got it thank you and last one from me Youre getting close to the ability to refinance your debt. So what's the right level for you in terms of absolute debt as a company is that sort of funded investments in on your business and number two what kind of coupon rates are you looking at in the market right now.
Yeah. So.
And as we.
Think about the the call date at par is may 15th So we are eyeing that date.
<unk> is still attractive much more attractive than the 8%.
That is currently our coupon.
We are.
Well as the market is us is still very good for high yield.
We expect that coupon to be much better than the 8% the market will dictate a lot of that as we get into may.
And that so that coupon right now if you looked at it it could be 6% or better.
Of course, the market can move so but if we.
We expect so good movement off of where we are today and depending upon where that rate is.
If it gets more attractive we could upsize it a little bit but right now we're expecting to kind of refinance at the same rate on it.
I am on Mt.
Got it understood. Thank you guys.
Sure. Thanks, John.
Your next question comes from the line of Deforest Hinman.
Alright, thanks for taking my call.
My questions have been asked and answered.
Can you give us a little bit more color on the SG&A expense number in the.
The fourth quarter I know we.
Had some office moves.
Share prices moved favorably.
Can you help us just think about where does that number kind of fallout.
In the first part of the.
2021 from a dollar perspective.
Yeah. So yeah. So in the quarter it was a little bit higher than you would seen in the prior quarters of the year and that was really driven actually by severance expense of about 900000.
So you can call that a one time.
Of that was related to the move.
And but some of it was also we had a small early retirement program just impacted a few people, but that severance was 900000 in the quarter. So that would be one time. So if you take that out we would have been a lot closer to where we were on the previous quarters.
Okay, and I know, we had we brought on some more leases for small offices. So is it really just a function of the 75 minus 900000, that's kind of the new.
Run rate.
Yes from that from from that status quo, but what youll see that the new leases.
As you go move into next year.
You have a couple of other things going on so the Houston lease wasn't there in 2020 per the headquarters so you'll have that will have.
Really the relocation of people.
And those impacts.
Those would be obviously, one times in 2021, but as we look at G&A for.
2021, we're expecting it to be about $3 million higher than it was in 2020.
And I talked a little bit about that on the on my comments. So we're looking at.
Obviously, the things around the Houston move some of those one times, except for the office lease and then we are making some investments in some it did.
Digitization so.
Those those impact Thats why youll have this overall $3 $3 million increase next year, we're expecting.
Okay very helpful. Thank you and then.
When we're thinking about the.
The debt refinancing it's coming.
Closer and closer by the day.
We do have the share repurchase authorization.
Can you just give us an update in terms of the.
The board's thinking as it relates to.
Share repurchase activity and then the potential for our initiatives and are a restatement of the dividend.
As we get a.
Maybe a more permanent capital structure, if you're comfortable using that that word it'd be very helpful to understand the thinking there.
Yeah.
Lastly, you like me to take that one.
Do that sure yes sure so.
Right.
So on the overall on the dividend side so.
With between the.
The change in the refinancing these notes to see where we are.
We have the share repurchase program, where from a board perspective, we do discuss dividends and all of these different options on the capital structure.
They kind of that's fallen.
I would say out of priority versus the share repurchase program wanted to see how effective that would be.
As well as waiting for the final where this.
On let's call it the refinance and size of our notes, but I would tell you, it's a lower priority than the other items because we're also obviously looking at the.
The investing on our fleet with the.
The new Hopper dredge some of the other pieces of equipment, we mentioned like the multi cat and the offshore wind vessel. So theres a number of other things that I would say our priorities from us.
From the managements and boards perspective before dividends, but we do discuss it we definitely do know that's an option for us.
Okay very helpful. And then maybe just last question can you.
Talk about.
The ability to turn backlog can you talk about some of those pending low bids into revenue if we look back in time.
You have had some.
Large backlog numbers in the past when you had moved.
<unk> realized revenues.
In excess of $800 million in certain years, most recently in 2015.
Now we have a situation where.
Just put the two numbers together pending little bit backlogs over $1 billion.
Hopefully very busy this year hopefully the weather but.
Is it a reasonable expectation to think that we can.
Generate over $800 million of revenue was in 2021.
So the one comparing to 2015 there do you do have to take out you at Eni Eni business in there. So you have to take that out.
And I don't recall, the number off top my head, but I'm sure. It was north of $100 million. So when youre looking at the backlog that we have.
At $559 million, we do expect 90% of that.
To be earned in 2021, when we file our K in a week or so youll see that.
Which is very similar to where we were.
Coming into it.
2020, but.
But yes, we do have a lot of low bid pending award and yeah. So we do actually expect revenue to increase next year from the.
2020 number.
Okay. That's helpful and thanks for catching me on that I was looking at the.
I said, if I look at the segment numbers versus the Oh No no no no problem no problem alright. Thanks, Mark Thanks for taking the question I appreciate it.
Sure.
Your next question comes from the line of Po Frac.
Alright, good morning, I just wanted to clarify Mark you said backlog, 90% in 2021 can you do the same thing for your low bids pending award.
Right now it looks like that number is $560 million.
And could you give us sort of an idea of what you would expect to be in realized standard that low bid pending awards in 2021.
Yes, Unfortunately, I can't yet since with the.
The LNG projects being a large chunk of that.
That is as we wait for.
As we stated before final investment decision and then no.
Notice to proceed and we don't have a solid timing on that yet so I can't give you a number there but on on Boston, We will work.
Some of Washington, this year, but some of that will go into 'twenty two so yes.
Yes, Unfortunately, I can't give you a number yet until those LNG projects get.
L. A notice to proceed so I can't I don't have that yet for you.
Okay.
And then when you talk about they would know the next decade.
Confidentiality can't talk about that but I haven't seen.
Did I Miss the second LNG project that you announced or is that the Sabine pass or can you just sort of give us a night.
Highlight which one that is and then also maybe color on the size of that.
Yes, so that one was actually one that's been in low bid for actually a long time, so when we put it at a low bid pending on where we signed the contracts that's been out there.
Since 19, so it's the same on it but that has not moved forward yet still in discussions with them, but it's south of us it's south of a $100 million. So just to give you a little bit of perspective, but yes, again I cant give you a number on that.
Okay.
And then if we could look at the buyback program I missed on.
Let's see amount on the stock that you bought that bought back in fourth quarter.
Yeah, not not much in the fourth quarter. It was really all on the third quarter.
It's a.
Like a regular <unk> five one plan so we set parameters that.
Grid with price.
Price targets that have a ceiling and the grid has amounts that even limits on each one of those so each one of those grids us.
Limit that we would spend in each one of us grids and with where the stock price is today, it's above our ceiling on that.
On that repurchase program. So we didn't we didn't buy any additional on Q4.
Okay.
So when you look at it I think originally when you implemented the stock buyback program.
All of us to get that completed by the end of the third quarter of 2021 or within a year.
That doesn't seem likely unless youre just to see loans at this point in time, it's that's fair.
Yes, you are technically you wouldn't adjust them.
Net plan would stay in place, though what you what we could do is to another plant.
Would you just would you would you would leave the old plan on doing additional one.
Okay, and then can you do.
If you wouldn't mind doing us.
Cash flow walk on 2000, and the fourth quarter.
You had.
The one thing I'm missing maybe as the working capital changes.
You can figure out what operating cash flow before working capital was.
Working capital and then potentially.
Potentially any other cash flow items to that.
Pushed that resulted in the $13 2 million decline in cash quarter to quarter.
Yeah, so really the biggest the biggest Dick's.
Decline in cash for the quarter was related to paying the interest on the senior notes.
So that's really the.
The big move which is about $13 million so.
There were some obviously, some pluses and minuses we paid money.
About.
<unk> 9 million for the day.
The new Hopper dredge. So you know in the fourth quarter. So we actually had some.
Wasn't that much movement on the normal working capital items in the quarter.
Okay, Yes, because capex was it looked like 17 or almost $18 million of self yep Yep.
And then just looking at your cash outlays in 2021 can you just clarify that 3 billion higher G&A is that exclusive of the <unk>.
900000 of severance or is is that inclusive. So the net I guess, what's the net net is that a net number of $2 $1 million or is it $3 million.
No.
$3 million increase is what we're expecting on G&A year over year.
Not adjusting for the severance so.
Correct.
Okay.
And then when you look at the Capex for 2021 that you highlighted do quick math, you're almost at $80 million.
Moving to final investment decision on the rock Dumper barge impact that number and then also can you talk about the option for the second Hopper barge I think that you have until June of this year to execute on our exercise.
Yes, we actually.
We actually got an extension on that on the second Hopper dredge for another 12 months to make that decision.
So we do have more time to decide on that if we need to.
And then on that question. So don't won't won't have any impact and don't expect any impact in 2021 from a cash flow perspective related to that but on the offshore wind vessel.
At this point, we don't expect any impact outside of the number I quoted earlier on the design that we're already doing related to the vessel.
We will make in.
Net investment decision on the back half of this year on that.
You could have maybe a very minimal amount upfront when you sign the contract but.
Otherwise it really shouldnt have a material impact in 2021.
Okay, Great and then lots of.
You talked about the the bid market being as strong in 2021 is on <unk>.
2022.
<unk> 2021 revenue is going to be a little bit higher than 2020 can you talk about sort of how you're feeling.
Competitive landscape at this point in time, it seems like others are.
Or adding capacity added capacity.
I was just wondering if theres any.
And you've lost some of that.
Some bigger jobs out there, but I was just wondering if you could just give us a flavor for or color on the competitive landscape and if you're seeing any pressure from.
The average equipment that's <unk>.
<unk> advantage and then also if you could sort of talk about potentially.
No.
Where is the business mix shift into little shorter term projects or more call on them.
Or is it.
Sure.
Or do you think that you are.
Youre looking at larger jobs in 2021 I guess.
Well first of all day.
Yes first of all the markets, we believe will be strong in 2021 and onwards as I've said.
The U S Army Corps of engineers are having record budgets year over year, and we think that will continue because the need for on marine in the maritime infrastructure.
On the investments is just increasing we do have.
Climate change us we were reminded us here in Houston, the last couple of days with the Big freeze.
And we.
We had a record hurricane hurricane season last year, so the need for investing into the infrastructure in the marine and the.
Coastal areas is just increasing so we think this market will be stronger as we go forward.
Also the funding from Congress is getting stronger, let's say very strong support for this as you saw with the.
Probably maintenance Trust fund that.
We are now getting up to a 100% of the annual receipts being used for.
How about maintenance dredging and we also saw an act, which will be potentially could open up the.
The fund itself for us going forward.
The.
Competitive landscape in the stock market, you will see that our competitors are investing into new equipment sales as we do.
We are looking at a strong market, which these competitors would like to be part of so we've seen our.
Competitors, adding new equipment, which is good on you see the <unk>.
U S dredging industry meeting the challenges on building new.
To service the U S Army Corps of engineers programs.
Yes, we saw a couple of projects.
Projects, which were awarded two new entrants on new equipment and that happens when new equipment comes to the market.
Our competitors and we are making sure that we have backlog for that equipment. Once it enters the market to have the initial case on the.
The dredge being covered.
With backlog. So you can then optimize its performance.
This is nothing new and we think that the market will be able to support the investments that are happening in the industry and is good for the market us.
Most of the.
Equipment that we do have us getting a little long in the tooth and maintenance cost goes up.
Eventually.
Yeah.
The size of the projects.
No I don't see the size of the projects being reduced.
Pays us all of the deepening projects.
Hum.
Actually been fairly large over the last couple of years.
Had the record award for for Charleston back in 2017.
2017.
But.
On a general note the port deepening and also the beach Renourishment projects, staying the same or larger than what we've seen before.
And also the contracting model for the US Army Corps of engineers is changing to more regional jobs, which then gives us a better view too.
On the.
<unk> per need for these.
For our equipment as we respond to emergencies, particularly in Louisiana.
Great.
We can just one last one if you wouldn't mind on the it seems like the infrastructure stocks have been moving up on <unk>.
Some hopes of getting us to.
And there was legislation that's infrastructure oriented coming out of Washington.
Can you just highlight whether your comments about the bid market in 2021 are influenced by.
Potential legislation at all.
Well what impacts on our market is is the <unk>.
Funding for the U S Army Corps of engineers, which.
Has been record high for the last couple of years and also for 2021.
So with the focus in Congress for improving infrastructure in general is supportive all broad dredging operations.
In channel and then.
Great.
We do see the.
Funding from the Harbor maintenance Trust fund coming forward in addition.
This just supports the markets and it is a strong market and gives us opportunity to actually you have seem to generate good product performance and also then renew our fleet.
Great. Thank you so much lesser.
Thank you.
There are no further questions at this time I would like to turn the call back over to Tina for any additional or closing remarks.
Thank you we appreciate that as part of our shareholders employees and business partners and we thank you for joining us on this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion. Thank you.
Ladies and gentlemen, this does conclude today's conference call you may now disconnect.
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Great.
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Ladies and gentlemen, thank you for standing by and welcome to the Q4, 'twenty 'twenty, Great Lakes Dredge and Dock Corp earnings Conference call at.
At this time all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
I would now like to hand, the conference over to your speaker today Teen up again, Thank you and please go ahead.
Okay.
Hello, Good morning, and welcome to our quarterly conference call. Joining me on the call. This morning is our Chief Executive officer in person on lots of Patterson, and our Chief Financial Officer, Mark Lorenzo.
Lots of will provide an update on the events of the quarter and year, then Mark will continue with an update on our financial results of the quarter, India Lassa 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 us.
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 in filings with the SEC, 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 operating data.
With that I will turn the call over to LASA.
Thank you Deanna.
This year was full of changes and challenges that the Covid pandemic presented us us.
US with and that impacted all of our lives.
We were fortunate to be able to continue working NASA religious on that.
He made it critical infrastructure company.
This unprecedented crisis.
Despite the challenges.
Great Lakes dredge and dock had on.
Another exceptional year as we continued to deliver improved financial results.
At the same time advancing on our strategic initiatives.
Strengthening our balance sheet.
Working on the renewal on dredging fleet.
Proving product performance.
Decisioning for the upcoming U S offshore wind market.
We had a strong fourth quarter and a record full year results with net income from continuing operations for the year.
$66 1 million.
On a full year adjusted.
EBITDA from continuing operations of $151 1 billion.
These results reflect a net 11, 4% increase over prior year EBITDA from continuing operations.
Our strong performance was a result of solid domestic dredging market and ocwen.
<unk> focus on product performance. The company ended the year with a strong cash position.
Ala 200 on $16 5 million.
And on net debt decreased.
By $28 6 million in 2020.
Which resulted in a healthy net debt to adjusted EBITDA from continuing operations ratio.
Seven.
Our strong cash flow on balance sheet allowed us to not only withstand the economic storm as a result from the pandemic, but positioned us well to invest in our future.
Okay.
In 2020, we contracted for a new midsized Hopper dredge, we upgraded several of our large cutter dredges.
We decided to move our headquarters to Houston to be closer to Mark as an appliance.
Invested in us shareholders through us $75 million share repurchase program and.
And we invested in positioning for growth.
And the trend domestic dredging market and for the upcoming U S offshore wind market.
Operationally, we ended the year with a backlog of $559 4 million.
And then in addition, we have low bids and options pending all $472 3 million.
Additionally on January 2021, Great Lakes was the successful bidder on 19, $90 3 million or <unk>.
Great work, which included the next phase of the Boston Harbor deepening project.
Our year on backlog includes the continuation of the Jacksonville deepening project with contract to see $405 million.
After successfully completes injectable contract be ahead of schedule. We now look forward to continuing to support the expansion of the shipping channel for the port of Jacksonville.
Yeah.
Ultimately the fourth quarter.
We're pleased to announce the signing of the largest contract in great Lakes dredge and dock history.
The next decades Bronxville LNG project will be placed at backlog once notice to proceed is received.
We expect the dredging market to remain strong in 2021, driven by project work that we include large scale port deepening projects, along the east and Gulf Coast.
Well as coastal protection projects, including basically nourishment of course, the beaches that have been impacted by the reach that major hurricane events and coastal barrier islands at Marsh constructions in Louisiana.
To support the strong domestic market demand, we announced the execution of a contract with <unk> shipyard in Louisiana to build on new midsized Hopper dredge.
With expected delivery in the first quarter of 2023.
The Newbuild project is on budget and on schedule and we had the steel cutting ceremony in early February.
In addition to the Newbuild, we continue to upgrade our existing U S domestic fleet with new equipment and technology to increase productivity.
Oh, great on most powerful cutter dredge, the Ohio returned last year to the us market from the Middle East and has been busy working on several beach Renourishment projects. Since then.
Investing enough fleet is paramount to maintaining strong profit performance.
Two.
Complete our projects on time and on budget.
Yeah.
With the new Hopper dredge and ongoing net productivity upgrades to existing domestic dredges. We believe our fleet is well equipped to meet the current demand and future growth in the drilling market.
Finally, we took the next step in our strategic plan with the announcement of our new operating model, which includes wishing to moving the corporate office to Houston.
On opening regional offices in Jacksonville, Florida, and New York.
The new model situated the company centrally in traditional markets on the east coast and the Gulf.
Positioning the company for growth and we see as we see in the dredge market projects related to oil and gas and LNG exports in the Gulf and for the upcoming U S offshore wind market on the East coast.
As stated in the opening remarks quite lakes dredging dock continues to be well positioned on changes in the current economic environment and for the future as we enter 2021.
I'll now turn the call over to Mark to further discuss the results of the quarter F on update on backlog development.
Okay, great. Thank you LASA.
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 Eni segment in 2019 were placed into discontinued operations and therefore not included in the results that I will discuss.
For the fourth quarter of 2020 revenues were $172 1 million income from continuing operations was $10 6 million and adjusted EBITDA from continuing operations was $29 4 million.
The company's revenues for the fourth quarter of 2020 represented a seven 8 million or four 8% increase compared to the fourth quarter of 2019.
The increase was the result of higher domestic capital maintenance and rivers and lakes revenue.
I've said, partially by lower lower coastal protection and foreign revenue.
Gross profit from continuing operations was $33 4 million.
Per to $34 6 million in the fourth quarter of 2019.
Gross profit margin was 19, 4% compared to 21% in the prior year quarter.
The small reduction in margin was primarily due to higher maintenance expense and an increase in marine insurance premiums.
The total company operating income was $17 3 million, which is a decrease of $4 9 million over the prior year quarter.
The decrease was primarily due to the $4 6 million loss of US claim settlement that was received in the fourth quarter of 2019.
Additionally, the change in operating income was impacted by higher general and administrative expense offset partially by a gain from the sale of assets.
Income from continuing operations for the fourth quarter of 2020 was $10 6 million compared to $14 $8 million on the prior year quarter.
The current quarter includes net interest expense of $6 5 million and income tax expense of $1 7 million.
Income from the fourth quarter of 2019 included $6 $5 million on net interest expense and 1 million income tax expense.
Adjusted EBITDA from continuing operations for the fourth quarter was 24 2020 was $29 4 million.
Paired to adjusted EBITDA from continuing operations of $32 6 million in the fourth quarter of 2019.
Turning to our full year results for the year ended December 31, 2020 revenues were $733 6 million net income from continuing operations was $66 1 million and adjusted EBITDA from continuing operations was $151 1 million.
These results represent a $22 1 million increase.
And year over year revenue.
On increase in net income from continuing operations of $10 4 million and an increase of $15 5 million and adjusted EBITDA from continuing operations.
For 2020, the company did have some additional expenses related to the COVID-19 pandemic relate.
Related to additional equipment and procedural changes to keep our employees safe.
The cost was approximately $3 2 million that were direct costs to our projects.
Next we turn to our balance sheet, where at December 31, 2020, we had $216 5 million in cash.
Throughout 2020, we continued to maintain a zero cash balance on our revolver.
Our net debt at December 30, 31, 2020 was $107 2 million.
Our capital expenditures for 2020 were $47 8 million. This compares to $44 4 million in capital expenditures during 2019.
The 2020 capital expenditures included $13 6 million related to the construction of the new midsized Hopper dredge.
Also to date, we repurchased three $9 million of Great Lakes common stock related to our previously announced repurchase program.
Contracted backlog at December 31, 2020 totaled $559 4 million compared to a backlog of $589 4 million at December 31 2019.
With that I will turn the call back over to Lhasa for his remarks on the outlook moving forward.
Yeah.
Yes, yes.
Our country is still facing the challenges of COVID-19.
<unk> industry deemed us on essential service continues to off price on work on critical in needed infrastructure projects.
U S Army Corps of engineers, so overseas. The majority of these infrastructure project and has continued to follow the bid schedule and prioritize all types of dredging, including port deepening port maintenance and expansion coastal protection on restoration projects that are necessary to avoid storm damage during the coastal hurricane season.
As the projects move forward, Great Lakes, dredge and talk remains committed to maintaining the health and safety of all of our team members through an incident and injury free safety management program.
This value based approach has allowed us to respond quickly and effectively to the COVID-19 pandemic.
And any challenges as a result, all depends on us.
Okay.
As we experienced COVID-19 positive cases on several projects.
We continue to fall low safety procedures on decontaminating to vessels and having a replacement crews brought aboard to recommence dredging operations.
Yeah.
As of December 31, the company's business has not been significantly impacted by COVID-19.
But due to the uncertainty that surrounds us walk virus. The company, we'll be continuing evaluating safety and operational plans and potential future impact that this evolving environment as on the company's employees business financial condition and for us.
It's also a operations.
Moving to the mid markets at the end of the year. The domestic bid market for 2020 reached $1 8 billion in projects of which Great Lakes was awarded $692 8 million.
On prized capital maintenance on coastal protection projects, resulting in an annual 39% win rate from for 2020.
So the domestic dredging market.
Remained strong and.
<unk> continued to be driven by the large scale port deepening projects, along the east and Gulf Coast.
'twenty 'twenty, one we'll see bids from multiple project basis per port deepening and Corpus Christi.
Deal.
On the Houston ship channel.
We'll continue for the next several years. Additionally.
Additionally, strong hurricane or storm seasons.
Faulted and an increase in erosion and other damages, which adds to the recurring nature of our business and the need for more frequent coastal protection on port maintenance projects.
These projects on either side.
To reduce the risk of future damage from flood installment loans.
And important and providing resilience to coastal.
From the entities in ecosystems, as well as driving job creation and economic development.
We continue to be confidence in the markets. We anticipate the 2021 total bid market to be as strong as 2020.
Our confidence in the market is reinforced by the support we have seen for the dredging industry.
In the U S Army Corps of Engineers 2021 budget that was approved at a record high of $7 3 billion.
In addition, the water resource Development Act was signed into law and includes some additional reforms to the Harbor maintenance Trust fund that will allow Congress to for the first time draw.
Draw down on the 9 billion surplus which is in addition to having the annual caps lifted on the fund earlier in the year index.
Corona virus aid relief on the economy Security Act.
It also there to also include significant language encouraging more beneficial us put dredge material and naturally infrastructure on both important environmental issues on language, Great Lakes was particularly active in advocating.
Looking to the future offshore wind represents an exciting new opportunity for great Lakes.
We believe this renewable energy resource will gain significant momentum in the us.
And Great Lakes announced in December the design the development of the first US flagged Jones Act compliant and claw inclined full pipe vessel per sub sea rock installation for Windows foundations.
This vessel.
Would represent a significant critical advancement in building the future of the U S offshore industry that we believe this is the optimal time for us to leverage existing and extensive.
The last vessel expertise to enter this exciting market now coming to the us.
As the timelines for these offshore wind projects are being developed we are continuing to engage with developers and partners on these projects to use us owned U S. Built on us operated equipment enhancing the local value creation and content both on the construction phase and during operations.
Yes.
To help lead quite lakes in our efforts in this market the company has appointed Lanny Baker.
<unk> SVP of offshore wind she will be responsible for developing offshore wind operations center, moving strategy or business development tendering on project execution.
We are excited to have the Lady on board to assist us in seeking opportunities in the emerging markets.
In conclusion, we are pleased with our strong 2020 performance I look forward to implementing on new operate operational model to capitalize on the opportunities that lies ahead.
We also recognize that we must continue to actively investigate safety and operational contingency plans to be able to respond to potential changes same day evolving COVID-19 pandemic on this potential impact on the economic environment.
Entering 'twenty 'twenty, one we will continue to maintain a sharp focus on employee safety and product performance, while continuing to advance our long term strategy of investing in our fleet on strengthening our balance sheet with us I'll turn the call over for questions.
Ladies and gentlemen, as a reminder, if you would like to ask an audio question. Please press Star then the number one on your telephone keypad again that is star wanted to ask a question.
You do have a question from the line of John <unk>.
Sure.
Hi, Good morning, everyone can you hear me.
Yes, Hi, John.
How are you doing thanks for taking my questions.
If you could start and maybe just talk about what was unusual in the quarter for you compared to your internal expectations.
There was weather events, but was there anything else I think you mentioned, maybe a higher insurance rates, but was there any unexpected maintenance or COVID-19 impacts.
Just tell me how it played out compared to what Youre thinking when you last reported.
Right. When we did the I can handle that like I said, when we are in the quarter.
They actually the project performance was our overall was a little bit better than we expected.
What we did have though we did have two vessels that had some unplanned downtime and thats what drove the maintenance expense that I referred to on the on my comments today, So that was really the.
That piece those two vessels being down from planned maintenance was really the the offset there.
Gotcha and the weather impact was within I guess Youre range given the project.
Correct.
Correct, Okay, and then as we look into Q1 that theres been a lot of winter weather I read on some of the industry Journal that you did have some COVID-19 delays on some of your ships how should we be thinking about your ability to drive revenue on liquidating backlog within those on.
Constraints.
Okay.
Yes, yes, yes.
Sure.
Said on my remarks.
Safety program safety is evaluating the company prepared us for this situation and we have very strong.
A program in place to ensure that.
Our employees are tested before they leave us and to come to our project sites.
Again, COVID-19 tested before we mobilized on vessels, but unfortunately some of the cases are then not protected and we haven't had some upgrades.
I'm confident in.
On the policies and procedures to take care of our employees, but on.
Unfortunately, we do see.
Some of these cases.
Our payroll on the vessels and it impacts operations.
I am confident that we will be able to execute on our projects as we go into 2021, but.
It will take some effort and we'll just.
You have to see how the situation evolves.
Mark do you want to fill it on on that.
Yes, I know I do we've had a.
I think less is exactly right. When we do have a vessel that does become.
On outbreak on of US So we do obviously bring the vessel in habit.
Disinfected, we bring the crew on bringing new crew and if we've talked about before so and usually when that happens the vessels down less than a week, but it does have an impact but the procedures we've put in place of.
Minimize that to the extent that we can.
Okay, great. Thank you.
Wanted to drill down into the low bid pending award number that you had out there which has been pretty large can you just talk about the projects that are in there.
The next decade wanted them there, but I think Mark you mentioned you won the Boston one two what else does that comprise on what's left to bid in Q1, maybe that was.
Scheduled for Q4 might have been pushed out.
Yeah, Mark on your take on Yeah, Yeah sure. So in our low bid pending awards.
December 31, 2020, so there's two large.
LNG projects energy clients in there and obviously the next decade, one is the big chunk of that there are some smaller numbers related to what we historically have options that are on current projects. We're working on but the two energy clients make up the bulk of the number and us.
<unk> go now into.
2021, whats occurred really in the first quarter, so far lesser mentioned we have.
$90 million of low bids pending award so that would be on top of the December 31, 2020 number with you.
The larger one being the Boston.
Additional phase of the Boston deepening that was the project that we were originally anticipating to bid.
In 2020, but it didn't bid until January so very pleased to have there.
That in low bid pending award.
Okay got it.
And just in terms of the Capex you extended this year youre expecting to send US here just on the new dredging vessel the.
<unk> offshore wind ship.
I think you mentioned you have investing.
Investing in two other vessels that are not judge us.
And between capital just on maintenance spending.
Give us a picture of how much you're expecting to spend this year as we cash.
Sure sure so from let's call. It a regular capex, which is maintaining our fleet and a little bit of growth in there for our fleet as we improve the fleet that's about $35 million per.
For 2021, we're expecting four.
For the.
New Hopper dredge the schedule of payments I believe we've said this before is about $35 million for this year in 2021 and then.
Two we have the.
Two multi catch that we talked about that are not dredges that should be a little bit about $18 million. We expect this year, so a little bit south of 20, Theres really nothing on the offshore there's a small amount on the offshore wind. It's we're just doing the design construction yet so that's in the <unk>.
He brought up a $1 million million and half dollars for 2021.
Got it thank you and last one from me if youre getting close to the ability to refinance.
So it's what's the right level for you.
On the absolute debt is it.
Companies that start from your vessels going on your business and number two what kind of coupon rates are you looking at in the market right Mark.
Yeah. So.
And as we.
Think about the the call day at par is may 15th So we are eyeing that date.
The market is still attractive much more attractive than the 8%.
<unk> is currently our coupon.
We are.
Well as the market is us is still very good for high yield.
We expect that coupon to be much better than the 8% the market will dictate a lot of that as we get into may.
And that so that coupon right now if you looked at it it could be 6% or better.
Of course, the market can move so but we.
We expect so good movement off of where we are today and depending upon where that rate is.
If it gets more attractive.
Could upsize it a little bit, but right now we're expecting to kind of refinance at the same rate on it.
Same amount.
Got it understood. Thank you guys.
Sure. Thanks, John.
Your next question comes from the line of Deforest Hinman.
Hi, Thanks for taking my call.
My questions have been asked and answered.
Can you give us a little bit more color on the SG&A expense number in the.
The fourth quarter I know we are.
Some office moves share.
Share prices moved favorably.
Can you help us just think about where does that number have had a fallout.
In the first part of two.
2021 from a dollar perspective.
Yeah. So yeah. So in the quarter it was a little bit higher than you would seen in the prior quarters of the year and that was really driven actually by severance expense of about 900000.
So you can call that a one time some of that was related to the move.
And but some of it was also we had a small early retirement program just impacted a few people but.
Net severance was 900000 in the quarter, so that would be a one time. So if you take that out we would have been a lot closer to where we were on the previous quarters.
Okay, and I know, we had brought on some more leases for small offices. So is it really just the function of the 17 five minus 900000, that's kind of the new.
Run rate.
Yes from that from from that status quo, but what youll see that the new leases.
As you go move into next year.
You have a couple of other things going on so the Houston lease wasn't there in 2020 per the headquarters so you'll have that will have.
Really the relocation of people.
And those impacts.
Those would be obviously, one times in 2021, but as we look at G&A for.
2021, we're expecting it to be about $3 million higher than it was in 2020.
And I talked a little bit about that on the on my comments. So we're looking at.
Obviously, the things around the Houston move some of those one times, except for the office lease and then we are making some investments in some it did.
Digitization so.
Those those impact Thats why youll have this overall $3 $3 million increase next year, we're expecting.
Okay very helpful. Thank you and then.
When we're thinking about the.
The debt refinancing that's coming.
Closer and closer by the day.
We do have the share repurchase authorization.
Can you just give us an update in terms of the <unk>.
Board's thinking as it relates to.
Share repurchase activity and then.
Potential for our initiatives and are a restatement of the dividend.
As we get a.
Maybe a more permanent capital structure, if you're comfortable using that that word it'd be very helpful to understand the thinking there.
Yeah.
Lastly, you like me to take that one.
Do that sure yes sure so.
Great.
So on the <unk>.
Overall on the dividend side so.
With between the.
The change in the refinancing these notes to see where we are we.
We have the share repurchasing program, where from a board perspective, we do discuss dividends and all of these different options on the capital structure.
They kind of that's fallen.
I would say out of priority versus the share repurchase program going on to see how effective that would be.
As well as waiting for the final where this.
Let's call it the refinance and size of our notes, but I would tell you, it's a lower priority than the other items because we're also obviously looking at the.
The investing on our fleet with the.
New Hopper dredge some of the other pieces of equipment, we mentioned like the multi cat and the offshore wind vessels. So there's a number of other things that I would say our priorities from us from the managements and boards perspective before dividends, but we do discuss it we definitely do know that's an option for us.
Okay very helpful. And then maybe just last question can you.
Talk about.
The ability to turn backlog can you talk about some of those pending a little bit into revenue. If we look back in time.
You have had some.
Large backlog numbers in the past when you had moved.
Realized revenues.
Excess of $800 million in certain years, most recently in 2015.
Now we have a situation where.
I'll just put the two numbers together pending low bit backlogs over $1 billion.
Hopefully very busy this year hopefully good weather, but.
Is it a reasonable expectation to think that we can generate.
Generate over $800 million of revenue was in 'twenty 'twenty one.
So the one comparing to 2015 there you do have to take out you at Eni Eni business in there. So you have to take that out.
And I don't recall, the number off top my head, but I'm sure. It was north of $100 million. So when youre looking at the backlog that we have.
At $559 million, we do expect 90% of that.
To be earned in 2021, when we file our K in a week or so youll see that.
Which is very similar to where we were.
Coming into it.
2020, but.
But yes, we do have a lot of low bid pending award and yes. So we do actually expect revenue to increase next year from the.
2020 number.
Okay. That's helpful and thanks for catching me on that I was looking at the.
I said, if I look at the segment numbers versus the Oh No no no no problem no problem alright. Thanks, Mark Thanks for taking the question I appreciate it.
Sure.
Your next question comes from the line of Po Frac.
Alright, good morning, I just wanted to clarify Mark you said backlog, 90% in 2021 can you do the same thing for your low bids pending award.
Right now it looks like that number is $560 million.
And could you give us sort of an idea of what you would expect to be in realized standard that low bid pending awards in 2021.
Yes, Unfortunately, I can't yet since with the.
The LNG projects being a large chunk of that.
That is as we wait for.
As we stated before final investment decision and then no.
Notice to proceed and we don't have a solid timing on that yet so I can't give you a number there but on on.
Boston, we will work.
Some of Washington, this year, but some of that will go into the.
'twenty two so.
Yes, Unfortunately, I can't give you a number yet until those LNG projects get.
L. A notice to proceed so I can't I don't have that yet for you.
Okay.
And then when you talk about the window the next decade.
Confidentiality can't talk about that but I haven't seen.
Did I Miss the second LNG project that you announced or is that the Sabine pass or can you just sort of give us a night.
A highlight which one that is and then also maybe a color on the size of that.
Yes, so that one was actually one thats been in low bid for actually a long time, so when we put it at a low depending on where we signed the contracts that's been out there.
Since 19, so it's the same on it but that has not moved forward yet still in discussions with them, but it's south of us it's south of a $100 million. So just to give you a little bit of perspective, but yes, again I cant give you a number on that.
Okay.
And then if we could look at the buyback program I missed on.
The amount of stock that you bought that bought back in fourth quarter.
Yeah, not not much in the fourth quarter. It was really all on the third quarter.
It's a.
Like a regular attendee five one plan so we set parameters.
Our grid with.
Price targets that have a ceiling and the grid has amounts that even limits on each one of those so each one of those grids as a law.
<unk> that we.
Would spend in each one of those grids in with where the stock price is today, it's above our ceiling.
On that.
On that repurchase program. So we didn't we didn't buy any additional on Q4.
Okay.
So when you look at it I think originally when you implemented the stock buyback program you book.
Goal is to get that completed by the end of the third quarter 2021 or within a year.
That doesn't seem likely unless you adjust to see loans at this point in time is that fair.
Yes, you are technically you wouldn't adjust them that plan would stay in place, though what you what we could do is to another client.
What would would be you just would you would you would leave the old plan on doing additional ones.
Okay, and then can you do.
If you wouldn't mind doing us cash flow walk on 2000, and the fourth quarter.
Had.
The one thing I'm missing maybe as the working capital changes.
You can figure out what operating cash flow before working capital was.
But working capital and then.
Potentially any other cash flow items, two that pushed that resulted in the $13 2 million decline in cash quarter to quarter.
Yeah, so really the biggest the biggest start.
Decline in cash for the quarter was related to paying the interest on the senior notes.
So that's really the.
A big move, which as you know about $13 million. So that there were some obviously some pluses and minuses we paid money.
About <unk>.
<unk> 9 million for the.
The new Hopper dredge. So you know in the fourth quarter. So we actually had some.
There wasn't that much movement on the normal working capital items in the quarter.
Okay, Yeah, because capex was it looked like 17 or almost $18 million yourself Yep Yep.
And then just looking at your.
Cash outlays in 2021 can you just clarify that 3 billion higher G&A is that exclusive.
900000 of severance or is is that inclusive. So the net I guess, what's the net net is that a net number of $2 $1 million or is it $3 million.
No its a $3 million increase is what we're expecting on G&A year over year.
Not adjusting for the severance so correct.
Okay.
And then when you look at the Capex for 2021 that you highlighted.
Matt you're almost at $80 million.
Moving to final investment decision on the rock Dumper barge impact that number and then also can you talk about the auction for the second Hopper barge I think that you have until June of this year to execute on our exercise.
Yes, we actually.
We actually got an extension on that on the second Hopper dredge for another 12 months to make that decision.
So we do have more time to decide on that if we need to.
And then on that question. So don't won't won't have any impact and don't expect any impact in 2021 from a cash flow perspective related to that but on the offshore wind vessel.
At this point, we don't expect any impact outside of the number I quoted earlier on the design that we're already doing related to the vessel.
We will make in.
A investment decision on the back half of this year on that.
You could have maybe a very minimal amount upfront when you sign the contract but.
Otherwise.
Shouldnt have a material impact in 2021.
Okay, Great and then lots of us.
You talked about the the bid market being as strong in 2021 is on <unk>.
2022.
<unk> 2021 revenue is going to be a little bit higher than 2020 can you talk about sort of how you are feeling.
Competitive landscape at this point in time, it seems like others are.
Or adding capacity, adding capacity.
I was just wondering if there was any.
And you've lost some of that.
Some bigger jobs out there, but I was just wondering if you could just give us a flavor for or color on the competitive landscape and if you're seeing any pressure from.
The average equipment that's <unk>.
Patterns advantage.
And then also if you could sort of talk about potentially.
No.
Where is the business mix shift into little shorter term projects or more callout.
Or is it.
Sure.
Or do you think that you are.
Youre looking at larger jobs in 2021 I guess.
Well first of all day.
Yes first of all the markets. We believe it will be strong in 2021 and onwards as I said.
The U S Army Corps of engineers are having record budgets year over year, and we think that will continue because the need for marine and the maritime infrastructure.
On investments is just increasing we do have.
Climate change us we were reminded us here in Houston, the last couple of days with the Big freeze.
And we.
We had a record hurricane hurricane season last year, so the need for investing into the infrastructure and the marine.
Coastal areas.
Just increasing so we think this market will be stronger as we go forward.
Also the funding from Congress is getting stronger and very strong support for this as you saw with the.
Probably maintenance Trust fund that.
We are now getting up to a 100% of the annual receipts being used for.
How about maintenance dredging and we also saw an act which will potentially.
Essentially it could open up the.
The fund itself for us going forward.
Competitive landscape in the stock market, you will see that our competitors are investing into new equipment sales as we do.
We are looking at a strong market, which these competitors would like to be part of.
So we've seen our.
Competitors, adding new equipment, which is good on youll see the <unk>.
U S dredging industry meeting the challenges and on building new.
To service the E U.
U S Army Corps of engineers programs.
Yes, we saw a couple of the projects.
Projects, which were awarded two new entrants on new equipment and that happens when new equipment comes to the market.
Our competitors and we are making sure that we have backlog for that equipment. Once it enters the market to have the initial case on the.
The dredge or being covered.
With backlog. So you can then optimize its performance.
This is nothing new and we think that the market will be able to support the investments that are happening in the industry and is good for the market us.
Most of the.
Equipment that we do have us getting a little long in the tooth and maintenance cost goes up.
Eventually.
The size of the projects.
No I don't see the size of the projects being reduced.
Pays us all of the deepening projects.
Hum.
Askington fairly large over the last couple of years.
Had the record award for for Charleston back in 2017.
But on.
On on a general note the port deepening and also the beach Renourishment projects, staying the same or larger than what we've seen before.
Also the contracting model for the US Army Corp of engineers is changing to more regional jobs, which then gives us a better view too.
The.
Situation per need for these.
For our equipment as we respond to emergencies, particularly in Louisiana.
Great.
Just one last one if you wouldn't mind on the it seems like the infrastructure stocks have been moving up late with some hopes of.
Stimulus legislation, that's infrastructure oriented coming out of Washington can you just highlight whether your comments about the bid market in 2021 are influenced by a potential legislation at all.
Well what impacts on market as is the.
Funding for the U S Army Corps of Engineers switch.
Has been record high for the last couple of years and also for 2021.
So with the focus in Congress for improving infrastructure in general is supportive all broad dredging operations.
In channel and then.
Great.
We do see the.
Funding from the Harbor maintenance Trust fund coming forward in addition.
This just supports the market and it is a strong market and gives us opportunity to actually you have seem to generate good product performance and also then renew our fleet.
Great. Thank you so much lesser.
Thank you.
There are no further questions at this time I would like to turn the call back over to Tina for any additional or closing remarks.
Thank you we appreciate that as part of our shareholders employees and business partners and we thank you for joining us on this discussion about the important developments and initiatives on our business. We look forward to speaking with you during our next earnings discussion. Thank you.
Ladies and gentlemen, this does conclude today's conference call you may now disconnect.