Q4 2021 Great Lakes Dredge & Dock Corp Earnings Call

February 16, 2022

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Good day, and thank you for standing by.

To the Great Lakes, Q4, and full year 2021 earnings conference call.

At this time all parties.

Listen only mode. After the speaker's presentation question and answer session to ask a question during that session you will need to press star one on your telephone.

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I would now like to handle conference over to your speaker today Ms. Tina <unk>. Please begin.

The floor is yours.

Good morning, and welcome to our fourth quarter Conference call. Joining me on the call. This morning is our president and Chief Executive Officer lots of Patterson, and our Chief Financial Officer, Scott Kornblau Lastly, we'll provide an update on the events of the quarter and the year then.

Scott will continue with an update on our financial results for the quarter and the year Lastly will conclude with an update on the outlook for the business end market. Following their comments there will be an opportunity for questions. During this call. We will make certain forward looking statements to help you understand our business. These statements involve.

A number of risks uncertainties and other factors that could cause actual results to differ materially from our expectations certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2020 Form 10-K and subsequent filings during this call we.

Also refer to certain non-GAAP financial measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA 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 Lisa.

Thank you Tina.

So during 2021, we face continuing challenges from operating in an environment impacted by the unprecedented COVID-19 pandemic.

As vaccines became readily available in the second quarter last year, we started.

Sensitive communications and education program with the goal of having all great Lakes dredge and dock team members vaccinated and protected from severe coolness due to the virus.

We continued to adjust operating procedures to minimize the risk of infections and allow us to continue to keep projects on track and vessels operations.

I'm very proud of.

Meeting our target of 100% of vaccination of all team members in the third quarter last year.

Due to a vaccination efforts, we have experienced less severe impacts from the virus infections.

Throughout the year, we avoided.

Team members to be hospitalized and no team member tested positive for COVID-19 from September through early December .

To mitigate severe.

Severe impacts from the virus, we started to make crew rotations quarantining on testing onboard visitors.

Disinfection of vessels mobilization of additional crew with team members tested positive.

And in doing so we incurred a $9 9 million dollar cost related to COVID-19 testing vessel dissimilar.

Crude quarantine and replacement pumps that we have.

Impacts to project performance due to the crew shortages vessel dry dock delays and rescheduling and substitution of vessels on projects.

Estimates indicate that the direct production costs incurred this year is close to if not higher than the costs mentioned earlier.

And we believe firmly that without of our actions to the impacts on our operations or financial results would have been much more severe.

With our.

<unk> now a 100% vaccinated against COVID-19, we were able to return to normal operations during the fourth quarter, even with new strains of the virus emerging late November .

The vessels continue to follow the plan schedules and with increased direct oversight and supervision on projects and on vessels. We saw overall operational performance improvements on the majority of our projects.

We finished the fourth quarter of 2021 strong delivering quarterly net income of $24 7 million and adjusted EBITDA of $48 2 million.

And in spite of the challenges from COVID-19, we ended the year with an adjusted EBITDA.

$127 4 million.

Which is the third best year in company history.

In addition to delivering respectable financial results in Q4, we saw a new milestone in our positioning for the new offshore wind generation market by issuing a $197 million contract for the construction of the first Jones Act compliant rock installation vessel.

Delivery of the vessel is planned for 2024.

During the year, we continued to safely perform essential and critical infrastructure projects and domestic dredging market as the market for new projects remained relatively strong in 2021.

Throughout the year, we performed major port deepening works in the board so Portsmouth.

Boston, Charleston, Jacksonville, mobile Sabine Freeport and Corpus Christi.

We also saw increased demand for coastal protection projects Renourishment coastal beaches.

That's from the major hurricane so that during the year.

Additional wetlands restoration projects to help protect the coastline from additional storm damage.

Climate change continues to impact our nation.

Coast continues to see damage that as a result of severe storms and rising water such as we saw for Paragon Ida in late August .

The first quarter of 2022.

We have already seen to bomb cyclone setup brought heavy snow and coastal flooding in the northeast East, which caused some project delays for us.

Although these weather events of short term impacts on our operations, the resulting damage adds to the recurring nature of increased long term demand for dredging services.

All the work that we performed on projects continued to meet and exceed the established environmental and safety standards.

2021, ESG report is suspected to be published in the second quarter of 2022.

And we will provide an overview of the initiatives that we undertook and the progress we achieved in <unk>.

Environmental protection and improvements the safety and wellbeing of our employees and business partners.

Unity contribution some partnerships create improvements government practices and a rapid and thorough response to the global pandemic.

During 2021, we completed a materiality assessment that will allow us to identify and prioritize ESG issues that are more.

Critical to all organization I must stakeholders.

I'll now turn the call over to Scott to discuss them.

Also in the quarter and the year and I will provide a further commentary around the market and business outlook.

Our remarks.

Thanks, a lot and good morning, everyone.

Let me start by giving some color on our fourth quarter results for the fourth quarter of 2021 revenues were $210 million net income was $24 $7 million and adjusted EBITDA was $48 2 million.

Contract revenues of $210 million for the fourth quarter of 2021 increased $37 $9 million or 22% from the fourth quarter of 2020.

The increase was a result of more revenue days and higher domestic capital and coastal protection revenue, partially offset by lower maintenance rivers and lakes and foreign rapidly.

Fourth quarter revenue came in at $15 million below the low end of the guidance given on the last earnings call, mostly due to lease late starts on a few northeast projects due to inclement weather pushing the revenue into future periods.

Current quarter gross profit increased to $53 million from $33 $4 million in the fourth quarter of 2020, driven by the increased revenue and strong job performance.

Gross profit margin this quarter was 25, 2% compared to 19, 4% in the prior quarter and was a few points higher than the guidance given on our last call due to the previously mentioned strong project execution and minimal COVID-19 impacts for the fourth quarter we.

Covid expenses of approximately $500000 and virtually no COVID-19 related impacts to operations.

During the fourth quarter of 2021, the majority of our vessels were working as the Terrapin Island and reached 53 returned to work after their scheduled dry dock, while the dredge 54 started regulatory drydocking in the latter part of the fourth quarter.

Operating income for the current quarter was $36 $5 million, which more than doubled the prior year quarter due to the increase in gross margin and a decrease in G&A expenses fourth quarter 2021, G&A of $16 $4 million came in slightly below guidance.

And $1 $1 million lower than the prior year's fourth quarter net interest expense of $4 1 million for the fourth quarter 2021 came in at guidance and was down from $6 $5 million in the fourth quarter of 2020, primarily due to the lower interest rate on the senior notes, which were <unk>.

Finance in the second quarter of 2021.

Income tax expense for the fourth quarter of 2021 was $8 million compared to $1 7 million for the same quarter of 2020 and net income for the fourth quarter of 2021 was $24 7 million up from $10 6 million in the prior year quarter.

Turning to our full year results for the year ended December 31, 2021 revenues were $726 $1 million net income was $49 $4 million and adjusted EBITDA was $127 $4 million. These results represent a seven.

$5 million decrease in year over year revenue a decrease in net income of $16 $7 million and a decrease of $23 $7 million and adjusted EBITDA.

In 2021, we incurred over $5 million in costs related to the relocation of our headquarters to Houston and nearly $10 million in expenses related to COVID-19. In addition to the performance impact lots of mentioned earlier, which are not easily quantified, but our estimate to be close to if not.

Then the expenses we incurred in 2021.

Next we turn to our balance sheet, where we ended 2021 with $145 million in cash no debt maturities until 2029, and our revolver remains undrawn.

2021 capital expenditures, excluding lease buyouts, where $100 million up from $48 million in 2020.

Current year Capex included $30 million for the construction of our new Hopper dredge $18 million for the design and build of the subsea rock installation vessel $12 million for the construction construction of the new scout and $11 million for the construction of the new multi cast in.

<unk> to $29 million in maintenance Capex.

Looking ahead to 2022, we anticipate revenues margins and EBITDA to be higher than 2021 due to our vaccination efforts, we are expecting a pickup in margins as COVID-19 related costs and disruptions should be at a minimum. However, this will be partial.

We offset by having six vessels in the shipyard for the regulatory dry dockings, including two of our higher margin vessels. The Liberty Island, which is currently in the yard and the Ellis Island, which is scheduled to undergo her first major dry dock during the second half of the year.

In addition, we expect G&A to increase between 7% and $9 million compared to 2021. The biggest drivers of the increase are attributed to the ongoing investment in our offshore wind business higher inflation in labor costs and additional office space in our Houston headquarters.

In 2022, we estimate our capital expenditures to be approximately $165 million, consisting of $35 million in maintenance and growth capex $5 million in upgrades to improve emissions $5 million for non dredging capex.

<unk> $52 million for the new Hopper $37 million for the offshore wind rock installation vessel and the final payment on the support vessels $17 million on the multi cast and $14 million on the scout.

I'll conclude with some commentary on Q1 2022, so far this quarter, we have experienced a major weather delays on project from the bomb cyclone in the northeast and currently have two vessels in the shipyard for the regulatory Drydocking.

Dredge 54, just leave VR towards the end of the first quarter, while the Liberty Island will remain in the yard until the middle of the second quarter. Also later this quarter. The Carolina will begin the emission upgrades mentioned earlier.

Assuming no further weather delays, we expect first quarter 2022 revenue to be between 165 and $175 million and margins to be in the low 20% range.

G&A expense should come in between 17 and $18 million for the reasons previously mentioned and net interest expense should be slightly down from the fourth quarter as we capitalize more interest with the progress of the hopper and wind vessels, new builds with that I'll turn the call back over to <unk> for his remarks.

On the outlook moving forward.

Thanks Scott.

During 2021 in the U S Army Corps of engineers continue to follow that schedule and prioritize all types of dredging instituting port deepening port maintenance and expansion and coastal protection on the restoration projects.

In the year the domestic market reached.

Approximately $1 8 billion in projects bid.

We expect that the 2000.

2022 bid market will be as strong as 2021, and we received bids from multiple new faces.

Deepening projects in Norfolk, Freeport mobile Sabine and additional phases of the.

Widening of the Houston ship Channel project that will continue for the next several years.

These major capital projects, our great Lakes can excel with our technical expertise experience safety performance in our large diverse fleet.

We saw continued support for much needed infrastructure projects and the dredging industry in the course of 2022 budget that was approved by the household representative as a record $8 66 billion.

An increase of 11% over the prior year level.

In the course budget the Harbor maintenance Trust fund would receive two points zero 5 billion, which is $370 million over the 'twenty to 'twenty one budget appropriations.

This allocation.

From the Harbor maintenance Trust fund as part of the cost budgets.

6 billion.

The U S governments, including the core are presently operating under a continuing resolution with budget approvals approval anticipated before the end of the first quarter of 2022.

In September of 2021, a supplemental bill was passed that included approximately $5 $7 billion for emergency funding as a result of hurricane hiatus impacts.

In addition to Congress passed the one two trillion dollar infrastructure Bill where the call will be granted 11 6 billion in funding to improve the nation's resilience to the textbook climate change, including flood control and waterways strategy.

We'll see projects related to the infrastructure build starting in 2023.

Overall, increasing funds increased funding will drive much needed infrastructure projects forward in the coming years.

Scott has already mentioned the fleet renewal projects, we have ongoing to meet the current and future market demands and then in addition, we are upgrading the cutter suction dredges, the Carolina and the company's largest booster station the Buster for the Houston ship channel widening project.

These upgrades.

We'll facilitate reductions the nox and particulate emissions by more than 85%.

During the fourth quarter, Great Lakes was awarded an additional $135 $4 million of new work, which included faced one of the Houston project 11 ship channel deepening and widening.

Resulting in a year end backlog of $551 6 million stated previously.

In addition to this backlog of awarded projects, we ended the quarter with $567 3 million in low bids and options pending award.

Included in our low bids pending two LNG projects that are still pending a notice to proceed by the client.

However, we understand that the EPC contract on one of the two projects will start construction of this export facility in the second quarter of 2022, so preparations for dredging will commence soon thereafter.

Dredging work estimated to start at the end of the year.

Potentially in the first quarter of 2023.

Post quarter end.

We're awarded next Nags head Beach.

<unk> project of $11 6 million and the Avon village in Boston Beach, Renourishment project for $25 9 million.

Both projects were included in low bids pending at the end of the year.

In addition, we bid and were awarded the Carolina and Cure a beach Renourishment projects for $20 3 million in the first quarter of 2022.

Now turning to the U S offshore wind power generation market, which we are confident will provide great lakes dredge and dock with a strong opportunity for growth.

In March 2021, the White House announced new initiatives that would advance the administration's goal of it.

Expanding the nations offshore wind energy capacity generation capacity in the coming decade by opening new areas for developing.

Accelerating environment.

And increasing public find financing for projects.

As part of that initiative the department for the interior energy and Commerce committed to a shared goal of installing 30 gigawatts of offshore wind power generation capacity in the U S waters by 2030.

In addition in January 2020 to the White House announced plans to auction more than 480000 acres in the New York flight for six new offshore wind energy leases with potential build out capacity of up to seven gigawatts.

Last quarter, we signed 197 million dollar contract with Philly shipyard to build the first U S. Flagged Jones Act compliant and find fault sofa subsea rock installation for wind turbine foundations.

This new vessel.

<unk> has been designed to meet the highest environmental specifications will be equipped with battery power sure Paul connection systems and be capable of burning biofuels, which will reduce the ships to you two footprints.

The signing on new vessels to the highest environmental standards.

Retrofitting existing fleet with emissions, reducing equipment demonstrates our commitment to improving our overall environmental impact.

In parallel to the.

Full pipe vessel build we are bidding on a multiple of offshore wind farm projects with rock installations planned for late 2024 and beyond major wind farm developers like Ecuador Dominion.

And grid and U S. Wind has already issued RF queues and they were in the process of selecting suppliers for the wind farm developments.

Major project awards are expected this year.

Some potentially in this.

First quarter of this year for the wind farm development off the coast of New York.

In addition in December of 2021, Massachusetts awarded Commonwealth Wind.

To add on grid and Marilyn awarded momentum to win two U S wind <unk>.

Combined capacity buildup of two Gigawatts. Both projects are currently in the tendering phase with contracts Award expected later this year.

Additionally, as offshore wind and distribute developing here in the U S. The global offshore wind market.

Is booming.

With more than 200 gigawatts of offshore wind generation capacity expected to be installed globally in the next 10 years.

We expect we'll keep the large international heavy lift installation contractors very busy for the next years, keeping vessel and equipment demand high.

In conclusion, we are entering 2022 still uncertain to the challenges that 10 day pandemic what percent. However, we are confident in the decisions. We made the initiatives. We took lessons learned this last year.

I believe this has positioned us to perform well both financially and operationally.

Great Lakes dredge and dock continue to focus on strong project execution and believe strongly that a safe working environment for our crews and employees is a core value that results in positive returns to our shareholders.

We are optimistic that domestic dredging market will remain.

It remains strong in the coming years and the ongoing developments in the U S for offshore wind generation will provide an avenue for growth for our company and with that I'll turn it over for questions.

Thank you.

As a reminder to ask a question you will need to press star one telephone withdraw your question press the pound key.

Standby as we compile the Q&A roster.

Our first question comes from John King of CJS Securities. Your line is open.

Yes, hi, good morning, it's Pete Lucas for Jon.

You guys covered a lot and thank you very much for that.

Just a quick follow up question on the margins you guys did a fantastic job with Covid impact last quarter.

I'd mentioned that margins would be if I heard correctly margins down a bit this quarter, but up for the year. So just try.

To understand that and if we should think about 25% gross margins is sustainable going forward.

Yes.

Morning, Pete Yes, as I mentioned Q4 was a great great quarter minimal COVID-19 impacts and minimal shipyard stays as well. The reason Q1 will be down is because of the regulatory surveys that we have scheduled.

As I mentioned, there's two ongoing which will which will last the full quarter one of them being the liberty.

<unk>, which drives margin also mentioned that the Carolina will be down for a bit as well as we start the emission upgrades.

Later on this quarter, so even though we will see minimal COVID-19 impact in Q1, we will have lower margin just because of the timing of the shipyard and then I also mentioned the weather that we saw in the northeast in January we also would have an impact.

Great. Thanks, you did a great job of laying out your capex going forward can you just talk on a more high level about how inflation is in fact affecting the vessel pipeline and how we should think about that over the next year or two.

Yes, so the projects that we have right now the builds on the wind vessel in on the Hopper those are fixed price when it comes to inflation. So we're locked in there. We also have priced options on both of those so I think we're pretty well insulated.

Inflation on those.

It's something that we monitor on our ongoing maintenance capex and try to be strategic in how we order stuff, but the majority of the spend is on these fixed price contracts.

Great and the last one for me you went through a lot of the bills that have been passed in the impact.

Expected for you guys can you just talk about are there any bills that we should be watching that still need to be signed or is everything pretty much currently in the infrastructure build and the Army Corps budget.

Most of it is in the Army Corps budget.

As you know we have over the last year has been able to get to 100% of the revenues that goes into the harbor maintenance Trust fund.

Be made available for the core.

To execute judging maintenance dredging in the ports. So thats a great addition, so the course record both budget is where we see Atlanta for this year the Senate Bill.

Covering the corps of engineers budget was slightly higher than what was.

Suggested by Congress.

So all of this should be.

Got it.

<unk> come to a resolution here in the first quarter.

With the budget discussion ongoing in Congress.

Great very helpful. Thank you I'll jump back in the queue.

Thank you.

Our next question comes from Adam, Illinois of Thompson Davis.

It is open.

Hey, good morning, guys. Congrats on a strong Q4.

Good morning, Adam.

And lastly, I just wanted to pick up on.

On that last question you said the Senate Bill slightly higher than Congress clearly the funding is there I'm just curious what is the.

Backlog of.

Core projects like how quickly can they increase RFP activity.

Yes.

The projects that we are involved in it takes a while to get to the bidding stage.

You have to go through environmental permitting and also.

Assessment that the core due on the value projects bring to the economy.

So we are expecting that the projects.

Coming out from the one two trillion dollars of infrastructure Bill will not hit the streets for us until beginning of 2023.

So it takes a time lag.

But the core is very <unk>.

Discussions we've been having with the corps of engineers that are very focused on making sure that they are processing the projects on getting into projects to the dredging industry.

As quickly as they can and this is a high priority within the core.

Okay, and then your new.

Hopper dredge.

Which will come online Q1 of 'twenty three is that incremental or is it replacing an older vessel.

We see that as incremental.

So the timing could be good.

Timing is good.

And as you know we have an option to build one more of the Hopper dredges switch.

Which we will make a decision on in Q2 this year.

And Thats additional dredge.

It could be incremental capacity, but we do have three older Hopper dredges, which are coming up to there.

Really good revenue earner for us at this point in time, but as you know the.

When you go through <unk>.

Dry docking of older vessels the cost goes up.

At what point in time.

It comes time to retire these old ladies and very small compared to this new dredge that we were looking at.

Okay and that was for the off shore wind LASA or for this is for dredging is on additional hopper dredge, we have an option to build a copy of the one that is now being built the Galveston Island.

So we could build a sister vessel.

We have very good experience with operating system vessels, we have the Dodge and the parts when they work on a project very efficient.

And we can see the same happening here with these two vessels.

Got it Okay, and then last one for me I guess a question for Scott.

With the Rev.

Revenue deferral out of Q1 into Q2, and then the Drydocking schedule in the back half kind of feels like Q2 might be.

A strong quarter for you guys.

So.

You already gave Q1 guidance, maybe up a little bit in Q2, and then down a little bit in the back half to get to the full year guide is that fair.

Yes, I mean, a lot of it is going to depend on when we actually do the surveys. So I'm always a little leery to this far out kind of go quarter by quarter, because we'll be as efficient as possible.

When we bring the vessels into the yard so.

Let me give you some more color on the next call as we look to Q2 just to make sure that the cadence on the way that we see the surveys falling still still play through but that's really what's going to I think drive the ebbs and flows for this quarter will be the timing of the surveys.

Got it okay. Thank you guys.

Thank you.

And next we have to first kennan.

<unk> <unk> company.

Your line is open.

Hey, Thank you they got my name <unk> company around a little bit you guys know who it is.

Can you.

I have a couple of different questions.

G&A expense increases.

Clearly not nominal can you can you just give us a little bit more color in terms of.

Who are hiring.

We hope to accomplish with these these new people that were.

That we're adding and maybe why it's necessary.

Yes, so the labor commentary.

It's two fold the biggest driver of it is we are going to be investing and building. The wind business. It was always in the plans now that we have.

Executed the contract to start building a vessel and are in conversations to actually put that to work we've got to start building up the team.

It's a something we wanted to wait to do until we had made the commitment to build it and started having some advanced conversations to put her to work. So that that is what's driving most of it and then the other piece of it it's not necessarily new hires. It is the labor market that we all hear about and on the front page.

Of every paper.

To retain talent.

There will be some increases so we just wanted to be very upfront and transparent.

We see in order to keep our good people and attract them onto the wind side, we're going to have to pay where the market is which we all know is increasing.

Okay. That's helpful and then just.

Help us understand.

We're entering in a new industry, it's new for the U S. I know there's been some pilot projects on offshore wind.

Is the is the talent there are these people like loss. So we've got to find in Europe and bring them into the U S. How are we approaching this.

Yes.

As you know we haven't hired Elaine.

Are there any vehicle.

Into our organization to develop this business for us she has.

Extensive offshore wind.

Project background from <unk>.

North Sea.

And.

We are partially taking people out of our dredging business on putting into this team.

Partially recruiting from the market.

Clearly to find people, who have offshore rock installation experience that activities happened in Europe . So we are looking at recruiting some expertise from Europe .

But we are also having a cooperation.

The first project that we have.

<unk>, we have a joint venture with <unk>.

World leading.

Rock installation contract of works.

We are going to make sure that we are learning from their experiences.

As we execute that project.

Okay. That's helpful. And then when we think about the capital deployment on the rock Hall vessels.

Alright.

Some time outlying.

It sounds like just a further increase in the development of offshore wind in the U S.

And then you spoke about.

Our.

Qs for these projects.

Those look different then.

Regular dredging contract.

And I know Theres, a private nurse the Army Corps piece, but.

Are these agreements.

Over the course of a whole project are they commitments for.

A certain amount of vessel capacity that would be exclusive can you just help us understand.

What those contracts are going to look like if we win them.

Yes.

We selected this segment of the offshore wind generation market because it has similarities to what we do in dredging.

For most parts bidding unit costs of installed tonnage on the seabed, which is similar to what we do in dredging, we are being paid on the unit ton.

<unk>, so cubic yards of material removed from the seabed.

So it is a contracting business.

The decline so difference.

Declines here are energy companies oil and gas companies.

We know how to contract with them we've done that before.

Our international business in behind them in Australia.

So the contract format is different but.

The way of contracting underway all the operating is similar to what we do in the dredging business.

Okay.

In terms of.

Thoughts around potentially a second vessel on the rock side.

Is there any interest from any of these developers.

TV on a vessel I believe dominion one of their list.

Vessel Theyre going to pay for that themselves is there any interest in a relationship like that or is this something we would consider to do only with our own capital.

The final.

Scott to discuss the financing of the <unk>.

The first and second and potentially the second vessel.

It is our plan to develop this capability owning the vessels and executing projects for the clients and not type of clients on the ownership side.

We had discussions.

On feelers out early in the market.

A year and a half ago.

We decided to go ahead with investing into vessel by ourselves the market is going to be very strong.

There is huge interest from the developers for using this vessel, which is built in the U S operated by Us citizens.

Owned by a U S company. So it's very strong stepping stone for us to be part of this market.

Okay.

Got it is there anything extra.

Yes, I mean, I would say from obviously, we've got a pretty robust Newbuild program right now, but we also have a robust balance sheet.

I think we're really good shape from liquidity standpoint, $145 million of cash and Undrawn revolver.

Do you have a very favorable payment schedule on the wind vessel about half the payments are due during the final 12 months of the bill.

So sit here today.

<unk> with our current liquidity and well just fund it with that and future cash flows that being said I have been exploring a whole bunch of different financing options I just want to know.

What's available, but I think its very unlikely.

At least for this year that we pull the trigger on doing any additional debt.

The only caveat to that is if we do decide to pull the trigger and do a second hopper or do a second wind vessel, but obviously have to re look at that.

Okay. That's helpful and then.

Incremental positive news obviously.

LNG projects.

You mentioned potentially a first quarter.

2023 star can.

Can you just delineate how much.

Revenue is tied to the project that you think you're going to start next year.

This project is.

Is dependent on the financial go ahead from the developer.

So they need to go through an RFP.

Our financing around that to make sure that the.

Secure the financing for the project in the meantime.

Have started out the EPC contractor, who is going to build the facility to start doing preparatory work.

And what follows very shortly after that as the dredging of the preparations for the dredging, which we anticipate will start in second half of this year and then with the dredging commencing early in 2023.

The rough roughly the size of the contract.

And the 100 to honor a 50 million dollar range.

And that revenue will happen, mostly in 2023 and May go into 2024.

Okay. Thank you for taking all my questions. Thank.

Thank you.

And again to ask a question. Please press star one on your telephone to withdraw your question. Please press the pound key.

Our next question comes from Paul Frac of Noble capital markets. Your line is open.

Good morning, Good morning, Scott Good morning Tina.

If you could just talk about the impact of the LNG.

Go ahead with the EPC contractor.

Would that mean that you would move a $100 million to $150 million out of low bids pending award in the backlog.

Can you just talked about sort of the mechanics of when you potentially would move that low bid pending award in the backlog.

Yes.

So it would be correct.

Once we get that contract issued which we dependent.

Judging from the developments on that's happening here would probably be second quarter.

Sorry, sorry third quarter event.

But as I said it is dependent on the.

The develop of making the final investment decision.

Okay and then.

Could you highlight.

Weather year.

Kind of large bids you have outstanding right now looking at sort of the first half of the year.

Sure.

I was thinking that the second phase for Houston would be potentially out and then I was hearing there might be some work in New York can you just maybe highlight what.

Sort of large bids you have outstanding right now that you think might materialize over the first half of the year.

Yes, I can do that so we today, we are submitting a bid for the Houston ship channel and the second phase.

Which is a large contract.

And then weakness in RFP. So we will go through as we did with the first phase of negotiations and discussions on options.

But hopefully we can get that to the contract into backlog late this quarter or maybe early next quarter.

The.

If we are successful.

Other projects that are coming.

On the capital side, we have the Norfolk Harbor deepening project that is continuing.

Which is coming up with further phases.

We expect that to bid in Q3.

We are looking at.

Some work in San Juan capital projects, maybe towards the end of the.

End of the year, it's a deepening lodge deepening project in San Juan.

Sean.

We have.

Okay.

The mobile deepening project is ongoing we are looking to bid the phase four of that project in Q2 late Q2, maybe.

Then we have Sabine noxious.

The Anchorage basin, which has a large capital project in Q3.

Corpus Christi pace for coming.

Essentially in Q3 this year.

And.

And then we have some large coastal protection and maintenance projects throughout the northeast southeast region on the Gulf.

Great that's really helpful and then.

I missed the actual award number for the fourth quarter and then it sounds.

Mike You will you did list out a lot of the awards that have been.

So far in the fourth quarter do you have a running total for the first quarter.

Yeah, Hey, Paul It's Scott Yeah, so far for the fourth quarter, we have added $58 million.

For the first quarter.

Correct and in Q4, the awards were $135 million.

Okay great.

And then I guess.

Scott I'm not sure.

Your question.

I'll just ask you.

Quarter under your belt.

It was really good quarter.

It's fair.

Have you been surprised by anything as you.

As you've got time under your belt are there any areas that you'd like to highlight that.

Need improvement.

Anything anything sort of from a qualitative standpoint, you might want to.

Talked about as you start your CFO tenure at Great Lakes.

Yes.

They they didn't leave much room for me to clean up.

Came here.

The company has done a very good job.

Right siding right sizing the business and the balance sheet.

So.

Im not going to make.

Make changes just for the sake of making changes because I think I think we're in really good shape, where my focus is now is to be able to maintain the financial discipline, while we still grow this company.

<unk>.

Upgrade the fleet and explore and go into the wind business.

I didn't have.

Don't get as much fund cleaning something up as maybe other CFO coming into a company just because of the position.

Over when I came here.

Great. Thank you so much.

Thank you.

And then peanuts further questions in the queue I will turn the call back over to Tina.

For closing remarks.

Thank you we appreciate the support of our shareholders employees and business partners and we thank you for joining us in 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.

This concludes today's conference call. Thank you all participating you may now disconnect and have a pleasant day speakers. Please stay on your lines.

Okay.

Yes.

Sure.

Okay.

[music].

Okay.

Thanks.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

At this point.

Okay.

[music].

Good day, and thank you for standing by and welcome to the Great Lakes Q4, and full year 2021 earnings conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will question and answer session to ask a question during that session you will need to press star one on your telephone.

Please be advised that today's conference is being recorded and if you require any assistance during the call. Please press star zero.

I would now like to hand, the conference over to your speaker today, Ms Tina, but Qantas Mr. <unk> the floor is yours.

Thank you good morning, and welcome to our fourth quarter Conference call. Joining me on the call. This morning is our president and Chief Executive Officer lots of Patterson, and our Chief Financial Officer, Scott Kornblau.

Lastly, we'll provide an update on the events of the quarter and the year then Scott will continue with an update on our financial results for the quarter and the year.

Lastly, we will conclude with an update on the outlook for the business end market. Following their comments there will be an opportunity for questions. During this call. We will make certain forward looking statements to help you understand our business. These statements involve a number of risks uncertainties and other factors that could cause actual results to differ materially.

Really 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 2020 Form 10-K and subsequent filings. During this call. We also refer to certain non-GAAP financial measures, including adjusted EBITDA, which are.

Explain to the net income to adjusted EBITDA 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 Tina.

So during 2021, we face continuing challenges from operating in an environment impacted by the unprecedented COVID-19 pandemic.

As vaccines became readily available in the second quarter last year, we started right.

Sensitive communications and education program with a goal of having all great Lakes dredge and dock team members vaccinated and protected from severe illness due to the virus.

And we continued to adjust the operating procedures to minimize the risk of infections and allow us to continue to keep projects on track and vessel operations.

I'm very proud of meeting our target of 100% vaccination of all team members in the third quarter last year.

Due to a vaccination efforts, we have experienced less severe impact from the virus infections.

Throughout the year, we avoided.

Team members to be hospitalized.

No team member tested positive for COVID-19 from September through early December .

To mitigate.

Severe impacts from the virus, we started to make crew rotations quarantining on testing onboard. This tour spun disinfection of vessels mobilization on additional crew, but team members tested positive.

In doing so we incurred a $9 9 million dollar cost related to COVID-19 testing vessel distributed.

Crude quarantine and replacement of staff.

We have impacts to project performance due to the crew shortages vessel dry dock delays and rescheduling and substitution of vessels on projects.

Estimates indicate that the direct production impacts incurred this year is close to if not higher than the cost mentioned earlier.

And we believe firmly that without of our actions to the impacts on our operations or financial results would have been much more severe.

With our organization and our 100% vaccinated against COVID-19, we were able to return to normal operations during the fourth quarter, even with new strains of the virus emerging late November .

We finished the fourth quarter of 2021 strong delivering a quarterly net income of $24 $7 million and adjusted EBITDA of $48 2 million.

And in spite of the challenges from COVID-19, we ended the year with an adjusted EBITDA.

$127 4 million.

Which is the third best year in company history.

Delivery of the vessel is planned for 2024.

During the year, we continued to safely perform essential critical infrastructure projects and domestic dredging market as the market for new projects remained relatively strong in 2021.

Throughout the year, we performed major port deepening works in the ports of Portsmouth.

Boston Charleston, Jacksonville.

Deal Sabine Freeport and Corpus Christi.

We also saw increased demand for coastal protection projects Renourishment of coastal beaches that have been matched from the major hurricane so that during the year.

Additional wetlands restoration projects to help protect the coastline from additional storm damage.

Climate change continues to impact our nation.

<unk> continues to see damage that as a result of severe storms and rising water such as we saw from Paragon either in late August .

The first quarter of 2022.

We have already seen to bomb cyclone setup brought heavy snow and coastal flooding in the northeast East, which caused some project delays for us.

Although these weather events have short term impacts on operations, the resulting damage adds to the recurring nature of increased long term demand for dredging services.

All the work that we performed on projects continued to meet and exceed the established environmental and safety standards.

2021, ESG report is suspected to be published in the second quarter of 2022.

And we will provide an overview of the initiatives that we undertook and the progress we achieved in environmental protection and improvements the safety and wellbeing of our employees and business partners, our community contributions and partnerships create improvements government practices and a rapid and thorough response to the global pandemic.

<unk>.

During 2021, we completed a materiality assessment that will allow us to identify and prioritize ESG issues that are most critical to organization on our stakeholders.

I'll now turn the call over to Scott to further discuss the results for the quarter and the year and I will provide a further commentary around the market and business sector.

<unk>.

Thanks, a lot and good morning, everyone. Let me start by giving some color on our fourth quarter results for the fourth quarter of 2021 revenues were $210 million net income was $24 $7 million and adjusted EBITDA was $48 $2 million.

Contract revenues of $210 million for the fourth quarter of 2021 increased $37 $9 million or 22% from the fourth quarter of 2020.

The increase was a result of more revenue days and higher domestic capital and coastal protection revenue, partially offset by lower maintenance rivers and lakes and foreign revenue.

Fourth quarter revenue came in $15 million below the low end of the guidance given on the last earnings call, mostly due to late late starts on a few northeast projects due to inclement weather pushing the revenue into future periods.

Current quarter gross profit increased to $53 million from $33 $4 million in the fourth quarter of 2020, driven by the increased revenue and strong job performance.

Covid expenses of approximately 500000.

And virtually no COVID-19 related impacts to operations.

And $1 $1 million lower than the prior year's fourth quarter net interest expense of $4 1 million for the fourth quarter of 2021 came in at guidance and was down from $6 $5 million in the fourth quarter of 2020, primarily due to the lower interest rate on the senior notes, which were <unk>.

Refinance in the second quarter of 2021.

Income tax expense for the fourth quarter of 2021 was $8 million compared to $1 $7 million for the same quarter of 2020 and net income for the fourth quarter of 2021 was $24 7 million up from $10 $6 million in the prior year quarter.

Turning to our full year results for the year ended December 31, 2021 revenues were $726 $1 million.

Net income was $49 $4 million and adjusted EBITDA was $127 4 million. These.

<unk> represent a $7 $5 million decrease in year over year revenue a decrease in net income was $16 $7 million and a decrease of $23 $7 million and adjusted EBITDA in.

In 2021, we incurred over $5 million in costs related to the relocation of our headquarters to Houston and nearly $10 million in expenses related to COVID-19. In addition to the performance impact Lachlan mentioned earlier, which are not easily quantified but are estimated to be close to if not.

Then the expenses we incurred in 2021.

Next we turn to our balance sheet, where we ended 2021 with $145 million in cash no debt maturities until 2029, and our revolver remains undrawn.

2021 capital expenditures, excluding lease buyouts, where $100 million up from $48 million in 2020.

$9 million in maintenance Capex.

In 2022, we estimate our capital expenditures to be approximately $165 million.

Consisting of $35 million in maintenance and growth capex $5 million in upgrades to improve emissions $5 million for non dredging capex.

$2 million for the new Hopper $37 million for the offshore wind rock installation vessel and the final payment on the support vessels $17 million on the multi cast and $14 million on the scout.

I'll conclude with some commentary on Q1 2022 so.

So far this quarter, we have experienced a major weather delays on projects from the bomb cyclone in the northeast and currently have two vessels in the shipyard for the regulatory Drydocking. The dredge 54 should leave VR towards the end of the first quarter, while the Liberty Island will remain in the yard until the middle of the SEC.

<unk> quarter.

So later this quarter that Carolina will begin the emission upgrades mentioned earlier, assuming no further weather delays, we expect first quarter 2022 revenue to be between 165 and $175 million and margins to be in the low 20% range.

On the outlook moving forward.

Thanks Scott.

In the year the domestic market reached.

Approximately $1 8 billion in projects bid.

We expect that the 2000.

2022 bid market will be as strong as 2021, and we received bids from multiple new faces.

Deepening projects in Norfolk.

<unk> mobile <unk> and additional phases of the.

Widening of the Houston ship Channel project that will continue for the next several years.

These major capital projects, our great Lakes can excel with our technical expertise experience safety performance in our large diverse fleet.

We saw continued support for much needed infrastructure projects and the dredging industry in the course of 2022 budget that was approved by the household representative at a record $8 66 billion.

An increase of 11% over the prior year level.

In the course budget the Harbor maintenance Trust fund would receive 2.05 billion, which is $370 million over the 'twenty to 'twenty one budget appropriations.

This allocation.

From the Harbor maintenance Trust fund as part of the cost budget of $6 6 billion.

The U S governments, including the core are presently operating under a continuing resolution with budget approvals approval anticipated before the end of the first quarter of 2022.

In September of 2021, a supplement to Bill was passed that included approximately $5 $7 billion for emergency funding as a result of hurricane hiatus impacts.

In addition, the Congress passed the $1 two trillion dollar infrastructure Bill where the call will be granted a $11 6 billion in funding to improve the nation's resilience to the textbook climate change, including flood control and waterways strategy.

We'll see projects related to the infrastructure build starting in 2023.

Overall, increasing funds increased funding will drive much needed infrastructure projects forward in the coming years.

These upgrades.

We'll facilitate reductions the nox and particulate emissions by more than 85%.

During the fourth quarter, Great Lakes was awarded an additional $135 $4 million of new work, which included faced one of the Houston project 11 ship channel deepening and widening.

Resulting in a year end backlog of $551 6 million stated previously.

In addition to this backlog of awarded projects, we ended the quarter with $567 3 million in low bids and options pending award.

Included in our low bids pending two LNG projects that are still pending a notice to proceed by the client.

Dredging work estimated to start at the end of the year.

Potentially in the first quarter of 2023.

Post quarter end.

We're awarded the next <unk> had beach.

<unk> nourishment project of $11 6 million and the Avon village in Boston Beach, Renourishment project for $25 9 million.

Both projects were included in low bids pending at the end of the year in.

In addition, we bid and were awarded the Carolina anchor a beach Renourishment projects for $20 3 million in the first quarter of 2022.

Now turning to the U S offshore wind power generation market, which we're confident will provide great lakes dredge and dock with a strong opportunity for growth.

In March 2021, the White House announced new initiatives that would advance the administration's goal alright.

Expanding the nations offshore wind energy capacity generation capacity in the coming decade by opening new areas for development accelerating environment poverty and increasing public finance financing for projects.

In addition in January 2020 to the White House announced plans to auction more than 480000 acres in the New York Blight put six new offshore wind energy leases with potential build out capacity of up to seven gigawatts.

Last quarter, we signed 197 million dollar contract with Philly shipyard to build the first U S. Flagged Jones Act compliant implying for a sofa subsidy rock installation for wind turbine foundations.

This new vessel.

Which has been designed to meet the highest environmental classification will be equipped with battery power shore power connection systems and be capable of burning biofuels, which will reduce the ships to U two footprints.

Signing on new vessels to the highest environmental standards.

Retrofitting existing fleet with emissions, reducing equipment demonstrates our commitment to improving our overall environmental impact.

And in parallel to the.

Full pipe vessel build we are bidding on a multiple of offshore wind farm projects with rock installations planned for late 2024 and beyond major wind farm developers like Ecuador Dominion.

<unk> and grid and U S. Wind has already issued RF queues and they were in the process of selecting suppliers for the wind farm developments.

Major project awards are expected this year some potentially in this first quarter of this year for the wind farm development off the coast of New York.

In addition in December of 2021, Massachusetts awarded Commonwealth Wind.

To add on grid and Marilyn awarded momentum to win two U S wind <unk>.

Combined capacity Buildout of two Gigawatts. Both projects are currently in the tendering phase with contracts Award expected later this year.

Additionally, as the offshore wind industry is developing here in the U S. The global offshore wind market.

Moving.

With more than 200 gigawatts of offshore wind generation capacity expected to be installed globally in the next 10 years.

We expect we'll keep the large international heavy lift installation contractors very busy for the next years, keeping vessel and equipment demand high.

In conclusion, we are entering 2022 still uncertain to the challenges that 10 day pandemic what percent. However, we are confident in the decisions. We made the initiatives, we took and lessons learned this last year.

I believe this has positioned us to perform well both financially and operationally.

Great Lakes, dredge and dock continuing to focus on strong project execution and believe strongly that a safe working environment for our crews and employees is a core value that results in positive returns to our shareholders.

We are optimistic that domestic dredging market will remain.

Thank you.

As a reminder to ask a question you will need to press star one telephone to withdraw your question press the pound key.

Standby as we compile.

The Q&A roster.

Our first question comes from John Zang of CJS Securities. Your line is open.

Yes, hi, good morning, it's Pete Lucas for Jon.

You guys covered a lot and thank you very much for that.

Just a quick follow up question on the margins you guys did a fantastic job with Covid impact last quarter.

And mentioned that margins would be if I heard correctly margins down a bit this quarter, but up for the year. So just.

To understand that and if we should think about 25% gross margins is sustainable going forward.

Yes.

Ongoing, which will which will last the full quarter one of them being the liberty.

<unk>, which drives margin also mentioned that the Carolina will be down for a bit as well as we start emission upgrades.

Great. Thanks, you did a great job of laying out your capex going forward can you just talk on a more high level about how inflation is infected affecting the vessel pipeline and how we should think about that over the next year or two.

Inflation on those.

It's something that we monitor on our ongoing maintenance capex and try to be strategic in how we order stuff, but the majority of the spend is on these fixed price contracts.

Great and the last one for me you went through a lot of the bills that have been passed in the impact.

Most of it is in the Army Corps budget.

As you know we have over the last year has been able to get to 100% of the revenues that goes into the harbor maintenance Trust fund.

Be made available for the core.

To execute dredging and maintenance dredging in the ports. So thats a great addition, so the course record both budget is where we do see Atlanta for this year.

Bill.

Covering the corps of engineers budget was slightly higher than what was.

Suggested by Congress.

So all of this should be.

Okay.

<unk> come to a resolution here in the first quarter.

With the budget discussion ongoing in Congress.

Great very helpful. Thank you I'll jump back in the queue.

Thank you.

Our next question comes from Heather, Illinois of Thompson Davis.

Your line is open.

Hey, good morning, guys. Congrats on a strong Q4.

Good morning, Adam.

Hey, Ross I, just wanted to pick up on.

On that last question you said the Senate Bill slightly higher than Congress clearly the funding is there I'm just curious what is the.

Backlog of core projects like how quickly can they increase.

<unk> activity.

Yes.

The projects that we are involved in it takes a while to get to the bidding stage.

You have to go through environmental permitting and also.

Assessment of the core due on the value projects bring to the economy.

So we are expecting that the projects are.

Coming out from the one two trillion dollars of infrastructure Bill will not hit the streets for us until beginning of 2023.

So it takes some time lag.

But the core is very.

Discussions we've been having over the corps of engineers that are very focused on making sure that they are processing the projects on getting into projects to the dredging industry.

As quickly as they can and this is a high priority within the core.

Okay, and then your new.

Hopper dredge.

Which will come online Q1 of 'twenty three is that incremental or is it replacing an older vessel.

We see that as incremental.

So the timing could be good.

Timing is good.

And as you know we have an option to build one more of the Hopper dredges switch.

Which we will make a decision on in Q2 this year.

And Thats additional dredge could.

Could be incremental capacity, but we do have three older Hopper dredges, which are coming up to there.

Really good revenue earner for us at this point in time, but as you know the.

When you go through <unk>.

Dry docking our older vessels the cost goes up.

At what point in time.

It comes time to retire these old ladies and they are very small compared to this new dredge that we were looking at.

Okay and that was for the off shore wind LASA or for this is for dredging is unfortunate hopper dredge, we have an option to build a copy of the one that is now being built the Galveston Island.

So we can build a sister vessel now.

We have very good experience with operating system vessels, we have the Dodge and the parts when they work on a project very efficient.

And we can see the same happening here with these two vessels.

Got it Okay, and then last one for me I guess a question for Scott.

With the Rev.

Revenue deferral out of Q1 into Q2, and then the Drydocking schedule in the back half.

Feels like Q2 might be.

A strong quarter for you guys.

So.

You already gave Q1 guidance, maybe up a little bit in Q2, and then down a little bit in the back half to get to the full year guide is that fair.

Yes, I mean, a lot of it's going to depend on when we actually do the surveys. So I'm always a little leery to this far out kind of go quarter by quarter, because we'll be as efficient as possible.

When we bring the vessels into the yard so.

Let me give you some more color on the next call as we look to Q2 just to make sure that the cadence on the way that we see that survey falling still still plays through but that's really what's going to I think drive the ebbs and flows for this quarter will be the timing of the surveys.

Got it okay. Thank you guys.

Thank you.

And next we have deferred kennan.

<unk> <unk> company.

Your line is open.

Hey, Thank you Hey, got many even company around a little bit, but you guys know who it is.

Can you <unk>.

Give us a I have a couple of different questions.

G&A expense increases.

Clearly not nominal can you can you just give us a little bit more color in terms of.

Who are hiring.

And what we hope to accomplish with these these new people that were.

That we're adding and maybe why it's necessary.

Yes, so the labor commentary.

It's two fold the biggest driver of it is we are going to be investing and building. The wind business. It was always in the plans now that we have.

Executing the contract to start building a vessel and are in conversations to actually put that to work we've got to start building up the team.

It's a something we wanted to wait to do until we had made the commitment to build it and started having some advanced conversations to put it to work. So that that is what's driving most of it and then the other piece of it is not necessarily new hires. It is the labor market that we all hear about and it's on the front.

Every paper.

To retain talent.

There will be some increases so we just want to be very upfront and transparent that we see in order to keep our good people and attract them onto the wind side, we're going to have to pay where the market is which we all know is increasing.

Okay. That's helpful and then just.

Help us understand.

Entering in a new industry, it's new for the U S. I know there's been some pilot projects on offshore wind.

Is the <unk>.

There are these people like loss, so we got to find in Europe and bring them into the U S. How are we approaching this.

Yes.

As you know we haven't hired Elaine.

And then Deco.

Into our organization to develop this business for us she has.

Extensive offshore wind.

Project background from <unk>.

Let's see.

And.

We are partially taking people out of our dredging business and putting into this team, but we are partially recruiting from the market.

Clearly to find people, who have offshore rock installation experience that activity has happened in Europe . So we are looking at recruiting some expertise from Europe .

But we are also having a cooperation on the the first projects that we have.

One of US we have our joint venture with the world's leading.

Rock installation contract over an hour.

We are going to make sure that we are learning from their experiences.

As we execute that project.

Okay. That's helpful and then when we think about the capital deployment on the rockfall vessels.

Right.

Some time outlying.

It sounds like just a further increase in the development of offshore wind in the U S.

And then you spoke about.

<unk>.

Qs for these projects.

Those look different then.

A regular dredging contract.

And I know Theres, a private nurse the Army Corps piece, but.

Are these agreements.

Over the course of a whole project are they commitments for.

A certain amount of vessel capacity that would be exclusive can you just help us understand.

What those contracts are going to look like if we win them.

Yes.

We selected this segment of the offshore wind generation market because it has similarities to what we do in dredging.

For most parts bidding unit costs of installed tonnage on the seabed, which is similar to what we do in dredging, where we are being paid on the unit ton.

<unk>, so cubic yards of material removed from the seabed.

So it is a contracting business.

The declines are difference <expletive> .

Declines here are energy companies oil and gas companies.

We know how to contract with them we've done that before.

Our international business in behind and in Australia.

So the contract format is different but the.

The way of contracting underway all the operating is similar to what we do in the dredging business.

Okay.

In terms of.

Thoughts around potentially a second vessel on the rock side.

Is there any interest from any of these developers.

JV ing on a vessel I believe dominion one of their list.

Russell Theyre going to pay for that themselves is there any interest in a relationship like that or is this something we would consider to do only with our own capital.

The final.

Scott to discuss the financing of the first or second potential second vessel.

It is our plan to develop this capability owning the vessels and executing projects for the clients and not tied to clients on the ownership side.

We had discussions.

Feelers out early in the market.

A year and a half ago, and we decided to go ahead with investing into vessel by ourselves.

<unk> is going to be very strong.

There is huge interest from the developers for using this vessel, which is built in the U S operated by U S citizens.

Owned by a U S company. So it's very strong stepping stone for us.

To be part of this market.

Okay, Scott is there anything extra.

Yes, I would say from obviously, we've got a pretty robust Newbuild program right now, but we also have a robust balance sheet I.

I think were really good shape from liquidity standpoint, $145 million of cash Undrawn revolver.

We do have a very favorable payment schedule on the wind vessel about half the payments are due during the final 12 months of the bill.

So sit here today.

<unk> with our current liquidity and we would just fund it with that and future cash flows that being said I have been exploring a whole bunch of different financing options I just want to know.

What's available, but I think its very unlikely at least for this year that we've pulled the trigger on doing any any additional debt.

The only caveat to that is if we do decide to pull the trigger and do a second hopper or do a second wind vessel, but obviously you have to re look at that.

Okay. That's helpful and then.

Incremental positive news obviously.

LNG projects.

You mentioned potentially a first quarter.

2023 star can.

Can you just delineate how much.

Revenue is tied to the project that you think is going to start next year.

This project is.

Is dependent on the financial go ahead from the developer.

So they need to go through an RFP.

Our financing around that to make sure that the.

Secure the financing for the project in the meantime.

Have started out the EPC contractor, who is going to build the facility to start doing preparatory work.

And what follows very shortly after that as the dredging of the preparation for the dredging, which we anticipate will start in second half of this year and then with the dredging commencing early in 2023.

The rough roughly the size of the contract.

<unk> and <unk>.

100 to honor our $50 million range.

And that revenue will happen, mostly in 2023 to May go into 2024.

Okay. Thank you for taking all my questions.

Thank you.

And again to ask a question. Please press star one on your telephone to withdraw your question. Please press the pound key.

Our next question comes from Paul <unk> of Noble capital markets. Your line is open.

Good morning lots of good morning, Scott Good morning Tina.

If you could just talk about the impact of the LNG.

Go ahead with the EPC contractor.

Would that mean that you would move a $100 million to $150 million out of low bids pending award in the backlog.

Can you just talked about sort of the mechanics of when you potentially would move that low bid pending award in the backlog.

Yes, Youre absolutely correct.

Once we get that contract issued which we dependent.

Judging from the developments on that's happening here would probably be second quarter, sorry third quarter event.

But as I said it is dependent on the.

Sure.

The develop of making the final investment decision.

Yes.

Okay, and then could you highlight.

Weather yet.

Kind of large bids you have outstanding right now looking at sort of the first half of the year.

Sure.

Good.

I was thinking that the second phase for Houston would be potentially out and then I'm just hearing there might be some work in New York can you just maybe highlight what.

Sort of large bids you have outstanding right now that you think might materialize over the first half of the year.

Yes, I can do that so we today, we are submitting a bid for the Houston ship channel and the second phase, which is a large contract.

And then weakness in RFP. So we will go through as we did with the first space in negotiations and discussions on options.

But hopefully we can get that to the contract into backlog late this quarter or maybe early next quarter.

If we are successful.

Other projects that are coming.

On the capital side, we have the Norfolk Harbor deepening project that is continuing.

As coming up with further phases.

Expect that to bid in Q3.

We are looking at.

Some work in San Juan capital projects, maybe towards the end of the.

The end of the year, it's a deepening lodge deepening project in San Juan.

We have.

Okay.

The mobile deepening project is ongoing we are looking to bid the phase four of that project in Q2 late Q2, maybe.

And then we have Sabine noxious.

The Anchorage basin, which has a large capital project in Q3.

Corpus Christi phase for coming.

Essentially in Q3 this year.

And.

And then we have some large coastal protection and maintenance projects throughout the northeast the southeast region on the Gulf.

Great that's really helpful and then.

I missed the actual award number for the fourth quarter and then it sounds like you well you did list out a lot of the awards that have been.

So far in the fourth quarter do you have a running total for the first quarter.

Yeah, Hey, Paul It's Scott Yeah, so far for the fourth quarter, we have added $58 million.

For the first quarter.

Correct and in Q4, the awards were $135 million.

Okay great.

And then I guess.

Scott I'm not sure that's a fair question.

I'll just ask you.

First quarter under your belt.

Really good quarter.

So there are.

Have you been surprised by anything as you.

As you've got time under your belt are there any areas that you'd like to highlight that.

Need improvement.

Anything anything sort of from a qualitative standpoint that you might want to.

Talk about his view.

Start your CFO tenure at Great Lakes.

Yes.

<unk>.

Hey.

They didn't leave much room for me to clean up when I came here.

He has done a very good job of.

Right siding right sizing the business and the balance sheet.

So.

Im not going to.

And.

<unk>, the fleet and explore and go into the wind business.

Yeah.

Didn't have.

Don't get as much fund cleaning something up as maybe other CFO coming into a company just because of the position that I took over when I came here.

Great. Thank you so much.

Thank you.

And then further questions in the queue I will turn the call back over to Tina.

For closing remarks.

This concludes today's conference call. Thank you all participating you may now disconnect and have a pleasant day.

Q4 2021 Great Lakes Dredge & Dock Corp Earnings Call

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