Q2 2021 Great Lakes Dredge & Dock Corp Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the Great Lakes second quarter earnings 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 1 on your telephone.
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Now I'd like to hand, the conference over to your Speaker today 18 up against US. Please go ahead.
Thank you good morning, and welcome to our quarterly conference call. Joining me on the call. This morning is our president and Chief Executive Officer lots of Patterson, and our Chief Financial Officer, Mark Mark out lots of the will provide an update on the events of the quarter and Mark will continue with an update on our financial results for the quarter lots of us.
I'll conclude with an update on the outlook for the business and market.
Following their comments, there will be and 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.
And our business are set forth and our earnings release, and and filings with the SEC, including our 2020 form 10-K and subsequent filings.
During this call and 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 debt.
With that I will turn the call over to lots of.
Thank you Tina.
And the first half of 'twenty to 'twenty, 1 of our operations source of sexual impact US a result of the COVID-19 pandemic.
That's the third wave of the pen that makes spread through a population we started to see significant additional direct cost and operational interruptions and the first quarter of 2020.1.
Several of the vessel crews were infected despite extensive testing and isolation protocols.
In order to mitigate continued outbreaks.
In the second quarter, we initiated and extensive vaccination of effort of our crews and stuff and its vaccines PK and the became available and set an ambitious target to have a majority of all of my employees vaccinated by the end of the quarter.
Thus far we have been successful and.
On a company wide vaccination currently stands at 71 per cent DAU of stuff being fully vaccinated all partially vaccinated.
We are now implementing new protocols, including requiring all of new projects to have 100% vaccination price 2 startup.
And all the vessels coming back into operation from dry docks to have 100% vaccinated crews.
Additionally, we have of cryo, we require proof of vaccination to access and the all of the main offices.
Unfortunately vaccines for not readily available until later in 2008 and Q2, hence we continue to incur of Covid related costs and experienced increased operational challenges on several projects during the second quarter of this year.
The direct COVID-19 costs, all of that home and on site testing disinfecting of vessels and the cost of quarantine infected crew and bringing per day. You spent crews were $4.3 million and the first quarter with an additional 3 million incurred in the.
The second quarter.
Direct cost can be easily tracked but the impact on projects and operational performance related to Covid, we're not us easily quantified, but could be seen and lower than expected margins on several jobs.
The majority of the project worst affected and now being completed which included on the International project to coastal Beach project in the South East 1 Beach project and the northeast and 1 capsule product and the Gulf of Mexico.
We expect to see positive effects of the vaccination of initiative, which reduced with reduced COVID-19 impact on our operation and the remainder of the year.
We ended the quarter with adjusted EBITDA of $20.2 million and.
Net income of $2.1 million.
Our first half.
All of the 2021results did not meet the expectations due to the COVID-19 impacts and related project performance mentioned.
Given project activity. We are currently engaged and coupled with backlog of new projects Awards and few of vessel dry docks for the remainder of the year.
We expect the third and fourth quarter of 2021 to be stronger outperforming the third and fourth quarter of 2020.
However, we do not expect the stronger second half to fully allow us to achieve all of original expectations for 2020.1.
I will now turn the call over to Mark to further discuss the results for the quarter and for an update on backlog development.
Okay, great. Thank you lost share.
I will start with the quarterly results and the discuss some specifics related to our dredging business.
For the second quarter of 2021 revenues were $169.9 million net income was $2.1 million and adjusted EBITDA was $20.2 million.
Total company revenues for the second quarter of 2021 represented a $2 million or 1.2% increase compared to the second quarter of 'twenty 'twenty 1.
The increase was caused by higher domestic capital and rivers and lakes revenue offset partially by lower maintenance coastal protection and foreign revenue.
Gross profit was $22.9 million compared to $33 million and the second quarter of 2020.
Gross profit margin was $13.5 per cent compared to 19, 7% in the prior year Corp.
Direct COVID-19 costs had an unfavorable impact of the $3 million on gross profit during the second quarter and roll and related productivity impacts and delays affected several projects.
As stated previously the majority of those projects effective have now completed.
During the second quarter of 2021, we had the New York, Alaska, Texas, Liberty and Terrapin and.
Right.
All vessels, except the terrapin are returning to work in the third quarter.
Total company operating income was $8.8 million, which is the Greek decrease of $9.5 million over the prior year Corp.
The decrease is a direct result of lower gross margin.
General and administrative expenses were slightly lower than the prior year by <unk> 6 million.
Net income for the second quarter of 2021 was $2.1 million compared to $9 million and the prior year Corp.
The current quarter income includes net interest expense of $6.7 million and income tax expense of <unk> 8 million.
Income for the second quarter of 2020 included $6.7 million and net interest expense and $3.1 million income tax expense.
Approximately $1 million of extinguishment of sub debt is included in the interest expense for the current quarter, which was related to the refinancing of our senior notes.
Adjusted EBITDA for the second quarter of 2021 was $20.2 million compared to adjusted EBIT of $28.1 million and the second quarter of 2020.
Next we turn to our balance sheet.
At June 32021, we had 188 million and cash.
During the second quarter of 2021, we continued to maintain of zero cash balance arm of wallboard.
Our capital expenditure for the second quarter of 2021 were 27.5 million, which.
Which included $8.1 million related to the construction of the new midsized Hopper dredge.
And $5.4 million for the build of the new multi GAAP vessels.
And <unk> 6 million related to the design of the rack installation vessel.
And May 2021.
We sold 325 million of unsecured.
And I point to 5% senior notes with the term of 8 years pursuant to a private offering.
The 2029 notes were priced to investors at par and mature on June 1 of 2020.9.
The company used the net proceeds from the offering together with cash on hand to redeem all 325 million aggregate principal amount of its outstanding 8% senior notes that were due in 2020.2.
These new more favorable terms give the company of stable debt structure for a longer term and result in approximately $9 million and interest expense savings on an annual basis.
With that I will turn the call back over the last shot for his remarks on the outlook moving forward.
Thank you Mark.
As we and our country and I still facing the continued challenges and impacts of COVID-19, the dredging industry deemed us and the Central service has continued to execute critical and needed infrastructure projects.
The U S. Army Corp of Engineers has continued to fall over the bid schedule and prioritize all types of the dredging, including for deepening support maintenance and expansion and coastal protection on the restoration projects.
And 2020, the domestic market reached 1.8 billion and project bid and we are confident that the 2021 domestic market will remain as strong as 2020 day.
Driven by work that will include large scale for deepening projects, along the east and the Gulf Coast.
We expect the 2021, we'll see bids for multiple project faces for port deepening projects and Corpus Christi, Norfolk, Freeport and in Houston, and the Houston ship channel that would continue for the next several years.
In addition on <unk>.
<unk> coast are subject to the climate change, increasing severe weather events and sea level rise, which results in an increase and beach erosion and other damage that add to the recurring nature of all of our business and the need for more frequent coastal protection and port maintenance projects.
And the second quarter, Great Lakes announced awards all of the $112.8 million of the new work that adds 2 of 2021 backlog, resulting in a 34 and find market share for the first half of 2021.
Backlog at June 32021 was $454.4 million versus $423.4 million in June of last year.
After the second quarter and.
We were awarded the Cape May Beach, Renourishment projects for $12.1 million.
And we were low bidder on the Timbale show Steepening and Renourishment projects for 39 point for.
$5 million.
On July 30th Great.
Great Lakes for the successful low bidder on the Corpus Christi pace 3 deepening project at the $152 million, which will commence in late Q4 of this year.
Our confidence and the market is reinforced by the support that we have seen for the dredging industry and the U S. Army Corps of Engineers 2021 budget that was approved at another record high level.
And July of this year. The house of Representatives approved of course of 2022 proposed brought budget that is slated to be $8.6 6 million, which is an 11% increase over this years levels.
And this bill the hub of maintenance run would receive 2.05 billion, which is $370 million over the 'twenty to 'twenty 1 budget appropriations.
This record funding is and in addition to the annual cap being lifted on the Harbor maintenance Trust funds and 2020 and the 2020 of water Resource Development Act, which included some additional reforms to the hub of mentioned trustful and that will allow congress to draw down on the $9.3 billion.
Plus in the in the fund.
To support the domestic market demand and 2020.
Great Lakes announced the execution of a contract with the Conrad ship the yard and Louisiana to build of new midsized Hopper dredge with expected delivery in the first quarter of 2020.3.
The new Hopper dredge build remains on the budget and on schedule.
In addition to the Newbuild, we continued to upgrade 60 and existing us domestic fleet with new equipment and technology to increase productivity and believe our fleet is well equipped to meet current and future the growth in the market.
As I've talked about on previous earnings calls offshore wind power generation and represents an exciting new opportunity for great Lakes.
We see strong support for offshore wind power generation from the bite and administration.
And in March the White House announced new initiatives that will advance the administration's goal to expand the nation's offshore wind energy capacity in the coming decade by opening new areas for development, improving environmental permitting and increasing public financing for projects.
The administration and committed to the 2 of proving 16 offshore wind projects by 2025 and stated it would direct 230 million and federal transportation dollars to fund port infrastructure and ear, Mark 3 billion and loan guarantees from the the book Department of energy.
And the and the White House set an ambitious target of having 30 gigawatts of offshore generating power in place by 2030.
This all confirms our plans to enter this new market by building. The first US flagged Jones Act compliant and climbed full pipe the vessel for subsea rock installation for us.
Wind turbine foundations.
This vessel will represent a significant great critical advancement and building the U S logistics infrastructure to support the future of the new U S offshore wind industry.
We anticipate making on and disciplined investment decision and Q3 of this year.
And I expect delivery of the vessel and the first half of 2024.
Additionally, we are evaluating further steps to participate in this growing market and have re engaged with the Boston consulting group. This time to assist us and further defining and confirming our growth strategies with a special focus on the opportunities in the.
I'll show of wind markets.
In conclusion, we remain confident in the operational initiatives to see us through the short term Covid channel shifts of this year and US we have on teams members fully vaccinated C of the remainder of the year.
Through with the operational performance, Great Lakes dredge and dock is known for.
And we are optimistic that the market developments and the U S for offshore wind power generation will provide an avenue for revenue growth for our company.
And with that I'll turn the call over for questions.
Thank you as a reminder to ask a question you will need the press star 1 on your telephone to withdraw your question press the pound key please standby, while we compile the last day.
Yes.
Your first question comes from the line of Adam Thalheimer with Thompson Davis.
Hey, good morning, guys.
Good morning, Adam.
Can you give us any sense for I'm, new so sorry, if you don't want to kind of directly answered. This question, but any kind of sense for when you say Q3, and Q4 up year over year, and any kind of sense for magnitude.
Yes sure.
So as we look going forward.
First of all.
And when we file the Q.
Later this week or this week for.
First of all you'll see that for our backlog about from if we look at the revenue first.
About 93% of our backlog at June will be recognized as revenue for the rest of this year.
So that's over $400 million of revenue.
We expect.
The gross profit margin percentage for Q3, and Q4 to be similar to what full year.
2020 was and the reason for that as well as loss share earlier mentioned you know many a lot fewer vessels are on dry dock and Q3, and Q4 versus Q1 and Q2.
We do expect G&A to be a little higher and the second half due to the more activity and the back half of the year of pluses lots of just mentioned some money related to BCG.
And I, specifically talking about the dry dock days.
We expect Q3's dry dock days to be.
Less than half of what we had in Q2, and then almost down to zero in Q4. So we expect Q for it to me a little stronger than Q3.
Okay, that's great color actually and then the.
And for boats, you have returning and the back half can you give us a sense of where just because I'm trying to get to the.
To the revenue segments can you give us a sense of what kind of projects those boats of returning to.
That 1 and I'll have to.
That's the little bit more detail than I have in front of me here so well.
But we do have.
The number that we do have our port deepening is continuing to go on.
It's really across the board.
B not nothing on the international side, obviously, but on the domestic side.
Continued port deepening beach jobs and Q3, so it's really a cross board and maintenance.
Okay and then.
The last 1 for me is it too early to say that the core.
Bidding will be up and 2022.
So the core bidding at this point, we expect it to be close to where what and where has been the last couple of years with the exception of I would add with this infrastructure Bill.
And that could increase it from this kind of 1.8 billion debt. We've seen for the last you know 3 or 4 years, so that would be the piece that could increase the we it's too early to tell when those types of infrastructure Bill Bill projects for our industry the tie.
<unk> of those it's too early.
Okay. Thanks for the time.
Sure.
Your next question comes from the line of John <unk> 10 of <unk> with CJS Securities.
Hi, Good morning, guys. I was wondering if you could give us any insight as to how much lingering COVID-19 impact and expense there might be and Q3, if youre seeing that extending into July, especially with these on these.
The rates going up and across the country.
Yeah in terms of what we expected kind of I'd say slightly before this delta variant and we were expecting and we had for millions of the first quarter 3 million and the second quarter, we're expecting about 2 million and the third quarter.
We'll kind of see how this for this new delta vary and it impacts us it's you.
It's moving up a little bit, but right now our expectation is $2 million.
Obviously, we're in the mix the mix of this 1 so we'll kind of see how it goes.
Got it and were there any.
The delays and stoppages the interruptions as a result and in the last month.
And the last month, we haven't had any vessels stopped or taken and because of the spirit yet.
Got it okay, great Great news.
I was just wondering as you looked at the first half of your win rate on the bid Mark and I recognize and was smaller than usual both from a total.
And market perspective, and also just the 35% versus your normal 40% win rate I'm, just thinking I'm wondering what's your thoughts on for the rest of the year in terms of your read of the bids that are out there and kind of the.
Projects that your best suited for.
Yeah sure John that's of Great question, we've looked at so the good news is.
Post post June 30th.
Lots of was mentioning we were low bidder on simple shoals.
We were.
Yes.
And were low bidder on corpus, which just happened on July 30th is the big $152 million and we were low bidder on the.
Freeport deepening, which is about 72 million, but we're over the government of estimates so we'll see how that kind of shakes out but.
3 bids are.
264 million that would be added to our backlog if awarded to us. So that's a big number and we talked about the back half of the year, but.
With 700 million bidding.
And the first half of the year, we expect about $1.1 billion to bid and the second half of the year to get us to this kind of 1 another $1.8 billion dollar market.
So we do have to win a little bit higher than I would say.
Let's say around 45% to get the backlog to wear.
It would be at the end of this year is similar to the end of 2020, but we're off to a great start with these 3 bids and the projects that have come up during the that are coming up here are well suited for us. So it's been a great start.
So this a back half of the year right out of the gate.
Got it thanks for that color and then just.
Any update on the on the LNG project and you've been awarded but aren't on the backlog yet.
Are they moving forward how should we think of those in terms of impact of this year and next June if theres been any progress.
Yeah, the the <unk>.
1 the smaller of the 2 on that.
We did we did expect at the beginning of the share total too.
Possibly start this year isn't going to start this year, but that is still moving along.
Have purchased.
Purchased some land.
To relocate roads to where that.
So that they can.
Work on the land there they and I just heard yesterday that they are beginning to sign some revenue contracts. So.
That looks like that could be a notice to proceed and 2022, but there's still a few more final hurt us gets it but there are some positive movement there the larger 1 that still further out still.
Still still still there, but the the.
Smaller 1 that we signed earlier is hopefully getting closer.
Yes.
Mark and the.
The decline too is now saying that they have sold the Oh got offtake contracts for the 2 first trains on on that LNG facility, which means that they can then get the victim to start construction early next year, that's what the claim and clients are estimating.
Got it thanks for that color and.
Just quickly on the BTG engagement that you were talking about well, what's the additional cost from that and number 1 and kind of what really is the the opportunities for expanding the business beyond the the 1 or 2 I guess.
The foundation vessels Youre thinking about.
Yeah, I'll start off the without a mark and fill and we we looked at the offshore wind market now for the last 2 years and us the opportunities in the market of being crystallized and we stopped bidding work.
And we wanted to have a independent on on joined with Us.
Review of the opportunities in the offshore wind market and on what that represent to us. So we have gone through and extensive analysis of the.
The opportunity that is there for the Iraq placement for the foundations and also other relate to the activities that are close to our competencies and our ability to perform.
As you know we have BCG engaged to some 4 years ago to do the restructuring that we did and they helped us out very successfully and we decided to re engaged with with them to do this analysis and.
I must say that I'm very optimistic about the opportunities that this let's say industry is presenting to us going forward.
Mark.
Yeah. So just on the specifics related to the cost us less than $2 million.
As I mentioned earlier, that's going to push our G&A up and the second half little growth versus the first step, but very excited about us they confirm what we're looking at and offshore windows.
And is also.
Kind of reaffirming and re looking at our other investments, we're making and the dredging business as well.
We look forward on the longer term basis.
Got it thank you.
Your next question comes from the line of the points Hyndman, which of Walt Hoffman and company.
Great. Thank you just clarity further on the outlook for offshore wind is.
Are we looking at other vessels.
Cranes service vessels or this is more along the lines of just confirming.
Thoughts around potentially doing.
On another rock the vessel.
Well it.
I think we can say that on the crane side, we're not going to get into the installation vessel business, but there are a lot of opportunities for rock installation of the we made our investment decision for the first vessel or the decision to go ahead with the design.
And pursue that business on the basis of 10, Gigawatts installed power generating capacity of 2030.
Last year.
And now the biden demonstrations of triple that targets the.
There will be supply chain issues, which is impacting how we reached the targets but there.
And there is definitely.
Good opportunities for more than 1 offshore rock installation vessel.
So we're looking at that in addition, there are additional services, which is performed on the and on the water, which is close to all the competencies in the company that we are look of that percent of and the opportunity for us to further invest into this new market segment.
But I just want to repeat that to build the offshore lifting installation the vessel is us.
The very large investment, which we are not considering.
Okay and then.
And then can you give us and updated lot of discussion on the Army Corps.
The market, but are there any.
Private market bids on projects that we're working on and we should be aware of.
While the private market bid stuff, we do have.
In the low bid not awarded categories for LNG developments.
So those projects are significant and the based upon the.
The final investment decisions by the clients are these projects could come to fruition and 2022 and 2023.
Mark I don't think we have all of the projects that are currently slated in that category.
That's correct. It's really just those 2 line on the private side, yes. Those 2 are and low bid pending award at this point and not in our backlog that's correct.
Okay very helpful and.
I've been asking this forever I can't talk about it anymore, but you got the of the debt.
Debt refinanced.
Can you just give us a refresh in terms of capital allocation priorities and we're spending a lot of money on the newco.
New vessels and potentially more money on new vessels.
Can you give us a rundown there.
Where does debt paydown all in.
From a priority perspective.
Dividends and potentially stock repurchases.
Yes, I'll take that 1 LASA.
Nothings.
The change too much so let me just refresh it at this point so.
And we're in the middle of building our.
The hopper dredge the midsized Hopper dredge, so that's 35 million this year.
The 45 next year and then another I think 5 and the last year and you know and 2020.
3.
Building. These 2 multi cats, the smaller vessels to help with our you know working on our pipelines more efficiently and safely.
No. That's the total of about 26 million of the 18 million this year.
The obviously the.
Priority then after that since those are already on slight being constructed now.
And this offshore wind the vessel.
That vessel, we still don't have buy and hold confirmed pricing, yet, but that's going to be.
Somewhere between $175 million to $200 million.
And so large vessel as big as the Ellis Island.
And on the.
So the start kind of the things we've talked about that haven't changed kind of confirmed but you know as we look forward longer term and these are some of the things we're talking about with BCG. For example on our dredging side, we have that option for the carbon copy of the Hopper dredge, but do we look at that versus the cutter dredge.
And so we'll look at that moving forward no true too early to tell of the outcome of that we've got another year you have to wait and make the decision on that second half Protract until next summer.
And then we will look at the.
The other whether the offshore wind market do we want to invest more there on a second offshore wind parcel or something else. So.
Don't have an update yet on that those are and the middle of where we are analyzing currently.
In terms of the share repurchase.
And as lash and like last year losses, and the board are very supportive of.
If we believe the stack to be undervalued.
Would put on a share repurchase program like we did last year. So that's still.
Out there too.
To do so we'll keep an eye on that and be ready to do that if the opportunity presents itself.
And the last part of the question was of the dividend.
Yeah, So I would say up all of those priorities dividend as you know that the probably.
Probably the last of those priorities relate.
Related to what we do have to do the obviously focus on growing the business and and then the share repurchase was a fair.
Fairly effect of last year, and so I would say of the priorities that it's definitely something we consider just and the priority looks like probably tell you. It's the at the ladder of of all of those other priorities.
Okay very helpful and just clarity on the option on the Hopper dredge the.
If we exercise the option and that of fixed price option or where does that price reflects the current.
Current environment as it relates to the steel, which has gone up quite a bit.
Yes, so that did so when we do these options you'll get a lower price. It was about 4 million lower than the current 1 we're building.
But right there is range of steel prices. So if steel prices are higher than the range, that's and that contract and it could be a little bit more.
But at this point, you know steel prices of kind of leveled off so.
You have to see how the market is.
Let's say next summer, if and how that impacts us, but I don't I don't see it to be.
The enormously material to us.
Based on where we are today.
Okay Perfect and then last question just help us understand the decision on the.
And the rock dumping the vessel as it relates to this.
Financing that's out there and you did referenced in your press release, but just being very specific on this would we be willing to make an investment decision on the.
Rock vessel without the potential.
Potential.
Favorable financing through the D O E.
Or is it possible.
Debt that financing could come into play after we make an investment decision and kind of a weird question, but can you just help us understand that.
So the we have the ability looking at the capital allocation and looking at the cash flow that we've been able to generate debt we can do.
These items I've talked about including the offshore wind vessel, you know off our current balance sheet.
Necessarily need to take on new debt, if we did add additional items and I would or could show.
This point I don't have to if we stuck to kind of what we're committed to take any more debt, but yeah. We've got like I said earlier and the last call. We've had conversation with the department of energy and Thats attractive financing.
And it looks like it could be we would take advantage of that.
Do we have any understanding of what the debt you can share in terms of what potentially that cost of debt would be.
The cost of the vessel the.
Debt.
Yeah, So it's floating.
It's a floating rate.
It's based on your.
Credit rating.
Essentially LIBOR plus a number.
And based on your credit rating, but it would be and the.
Kind of and the 3% range today.
Okay. Thank you for taking my questions.
Sure.
Your next question comes from the line of Paul <unk> with noble capital markets.
Good morning, and lots of good morning, Mark.
First thing is Mark you had mentioned on the Freeport and it sounded like you were a low bid pending award on Shreveport, but you are above the core US estimate can you give us some color on that I think you said it might be $15 million. If you look at sort of the awards that you included in the.
The press release.
Okay, Freeport was about 73 million actually.
But again, we are above the government estimates so.
We're presently working with them to see if we can make that a workable.
How much of bump the estimate for you.
Oh right.
I'm going to say about Oh, I want to say 15 million, but that that number.
Recall outside of its something like that.
Okay like 25% above their estimate roughly.
Yeah.
And then typically you give the low bid pending award number you referred to 2 and a couple of times, but I didn't I didn't hear on actual number.
Oh sure it's for on low bid pending award at 630 was $447 million.
Okay and.
And then.
And just to confirm it sounds like Youre not seeing any indication that the U S Army Corp of engineers and point for it.
For the any projects based on increased funding.
Yeah.
I'm, sorry can you repeat debt.
Are you are you are you seen any indication that you know with the courts budget potentially going up that they are preparing the pull forward any projects.
And put them out to bid sooner than what you have rich kind of anticipated.
Oh, no I wouldn't say, there's anything earlier, yet you know great.
We're in the we're coming into the really busy season of bidding obviously for Q3 and Q4 here and those periods had been kind of set for a while right. So nothing yet that would be something we'd have to see probably more impact earlier 2022, but yes. At this point just kind of bid markets now set for <unk>.
<unk> year, you know remember their cash.
The fiscal year and send the September so that's all kind of fixed for this year. It was it would push late debt.
That would happen later, but haven't seen that yet.
Yes.
And I guess my point would be I mean, my view has always been net.
And of course budget has not been the issue of when more of the pipeline and their ability to handle the schedule and few projects and so you know it.
It may be extends the fairway of lot longer, but it doesn't really impact the the bid market year to year debt materially.
Yes, I mean, we haven't seen the army Corp of bids really slowed down and it's all been pretty much on us.
Great.
Much of what we expected.
And so but I hear you that yes, I think its all of positive for US obviously, it's just a little too early to tell.
And you know this feels kind of get past and.
Completed but.
With that.
And.
Potentially I think what youre asking US you know what it potentially overload the army corps of little bit.
I don't think so I mean, they've been able to handle everything up till now and those are important important projects that they want to get done right. So I think it's a positive.
Yes and.
Houston has been out on the horizon as far as a pretty significant project is can you give.
Give us an update on any timing that youre seeing from the standpoint of the Houston project the ship channel.
Yes, I can.
The last so we have the other stuff for.
For first level of first bidding of that is coming up in August.
Yes, potentially and the range of $100 million.
Okay, Great and then Mark you.
And you highlighted the 175 to 200 million for the could constitute the rock dumping charge.
Would that be mainly 2022, and 'twenty 3 capex or would you see.
And as you hit on debt investment decisions and more in 'twenty 1.
Yes.
It is there is the potential that we could.
You know looking at the market and when and what kind of tied to try and meet with the market right. When do we think these projects will commence and when will that vessel has to be ready. So there is a potential that we could have the first payment. This year. If we make the decision to do the investment and you know the b kind of near the end of this year.
Based on you know being ready and 2024, so that will just have to.
Many of the gauged the market of when Theyre going to need that ready to do the you know.
On the construction.
But it is a pretty broadly you will get us there.
The Mark the projects up we are bidding today are having offshore construction season, starting in 2024.
And in order to meet those deliveries, we will have to make the investment decision as early as Q3 this year.
Okay and.
Maybe I should've asked.
Could you give us the 2021 full year Capex number.
The dredge is the first hopper barges 35 of the multi Katz 18.
Can you round out the capex numbers for 'twenty 1.
Yes sure sure so.
Exactly $35 million on the new Hopper.
On the multi cats.
The $2 million on the design of the offshore wind and vessel.
About $35 million and regular capex.
The what keeps our fleet going and.
We did separately from US we know we've done a couple of lease buyouts debt.
Paul on the capital expenditures when you look at the cash flow statement, we can see the the Qs and those are for the right now through the first half the share of about 16 million.
So.
You know that that total there is and then.
Neighborhood of a 100 million and that's true.
Does not include what lots of just mentioned if we made the call to to do the.
To start the construction on the offshore wind hustle.
And what a reasonable estimate of 10% of.
The project cost as far as the deposit and moving forward or would it be higher than that.
No I don't think of it would be higher than debt.
And it could be if you think about as we looked at the.
And of the 1 were like the Hopper dredge we're building.
It was I was about 10% so yes, it could be I don't think it would be higher I think it would be around 10% or maybe a little less.
Okay, Great and then just couple of last 1 just from the standpoint of I heard you lend cleared for us the stock buyback hasn't been revisited yet, but maybe there you could.
Illuminate where the last stock buyback matrix was the Florida, where you thought the stock was undervalued.
Or maybe sort of give us a little color on where you're thinking potentially stock buyback might kick in.
Hum.
I am not true.
Any color would be helpful.
Yeah, I mean, it was a different where and a little different situation back in September of last share.
For the stock, which I believe at $8.63, Central and we've made the call with the board at that point in time.
So.
We were not anywhere near that number but yeah, it's a little I don't I don't have.
I don't have a preliminary number but at this point and time would be of higher obviously of higher but we'll.
And I can't give you a number yet on where that would be but I just want to be clear of that.
We the board has been very supportive of lots of very supportive of doing reinstating a new 1 if we needed to based.
Based on just being undervalued so.
And that'll be based on what's are forward looking.
Well, we think the forward looking market us and.
Our performance and.
Where the stock prices.
Great and lots of day, if you could if you could address the plea agreement that was completed in June and just sort of how you went through and exercise of.
What <unk> seen the.
The risk on.
As the government contractor versus clean agreeing to that agreement.
Yes, as you know this is a very old case.
And then some.
6 years ago, we had and incident, where a subcontractor.
Punctured punch to hold and a pipeline that cost us.
Yeah.
The spill.
And we have been through.
A lot of discussions here with the.
With the client and also with the and.
The Rts on on the who's responsible and so forth. We believe that we were <unk>.
Not responsible for and are directly responsible for the spill. It was caused by a subcontractor. However, this case was the b drawing out and we spent a lot of resources and management time on on pursuing and discussing this this case.
So this.
This year, we decided that it was probably better for us as the company to to plead to a misdemeanor which of them and then the get on with our business.
So we agreed to pay a fine and the amount of $1 million.
And that came with us and they go to <unk> and then we have of.
Set aside $2 million, which is determined and by the conclusion of the civil trial that we are involved and on this on this matter.
And if we.
If we are successful and the claims.
Claims solve of not being a responsible for this the spill.
The time, the $2 million would not be.
And I expense for us.
Great and then Mark is there any of that has been recognized.
Was it was the find recognized and the second quarter.
And I.
And I guess.
Just simple question with the recognizing per second quarter.
Yeah, we've already we already actually recognize that and the first quarter.
So there wasn't a P&L impact the $2 million debt essentially satisfying called restricted cash debt.
Has not hit the P&L at this point and time and.
And we also believe that or expect to insurance to cover that if that if that was.
That was restitution was awarded to the to the.
The plaintiffs.
Perfect. Thanks for your time.
Sure. Thanks.
There are no further questions and would now like to hand, the call over to see now bogusky.
Thank you we appreciate the support of our shareholders employees and business partners and we thank you for joining us on this discussion about the important developments and initiatives and our business and 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 at this time, please and please please hold.
Sure.
Yeah.