Great Lakes Dredge & Dock Corporation (GLDD), the largest provider of dredging services in the United States and a major provider of commercial and industrial demolition and remediation services, today reported financial results for the quarter ended March 31, 2013.
Jonathan Berger, Chief Executive Officer stated, “For the three months ended March 31, 2013, Great Lakes reported Revenue of $188.8 million, Net Income of $0.4 million and Adjusted EBITDA of $18.1 million. Our first quarter results reflect excellent performance in the dredging segment and challenges in the demolition segment. We continue to strive for strong execution and growth in all of our operations, with a particular focus on improvements required in demolition.
“Our new Terra Contracting Services business is integrating well into Great Lakes and is driving new opportunities. As we had planned, Terra Contracting and our Rivers & lakes group are teaming together on a project in the Midwest valued at approximately $25 million that will combine Terra Contracting’s services and Rivers & lakes’ dredging abilities. This significant win should contribute to both groups’ revenues as we mobilize late in the second quarter and execute in the field for the reminder of the year. Also, our environmental joint venture company, TerraSea, is in final negotiations for an environmental project in New Jersey. ”
William Steckel, Chief Financial Officer stated, “Dredging had an outstanding quarter with $174 million in revenue and 18% gross margin. Gross margin improved as a result of a better mix of projects that resulted in stronger contract margins, better execution on projects in backlog and minimal downtime related to weather and mechanical delays.
“With regard to our demolition segment, we continue to focus on improving execution and internal controls to deliver better results. The first quarter was negatively impacted by delays in three projects resulting in a shift of $7 million of revenue into the remainder of 2013. In addition, another project experienced unexpected cost overruns. We are dedicating significant corporate resources and working with division management to improve execution and results of this segment.
“We are making progress in discussions with our customers on the pending change orders that we were unable to record in 2012. We were able to record approximately $2 million of that revenue in the first quarter and continue to work diligently to have the remaining items resolved.”
First Quarter 2013 Highlights
– Revenue increased 22% to $188.8 million in the first quarter of 2013 compared to the first quarter of 2012.
– Gross profit margin increased to 13.7% from 12.9% in the first quarter of 2012.
– General & Administrative expenses increased $5.9 million, year over year. Additional G&A expense in the quarter primarily related to the revenue recognition issues discovered at year-end, as well as the addition of Terra Contracting.
– Net Income was $0.4 million in the quarter, versus $1.1 million in the prior year quarter.
– Adjusted EBITDA increased 23.1% to $18.1 million from $14.7 million in the prior year quarter.
– Operating income was $6.6 million, slightly down from $6.8 million in the prior year quarter.
– Total contracted backlog at quarter end was $418 million. Excluded from this number is $18 million in domestic dredging low bids and options pending award.
– Dredging revenues were $174.0 million for the quarter, an increase of 41% from the prior year quarter, driven by coastal protection revenue as well as domestic and foreign capital revenue.
– Gross profit margin was 18%, versus 13% in the same quarter last year, driven by an increase in revenue and more favorable weather and better production compared to the prior year.
– Operating income increased 288% to $19.0 million compared to $4.9 million in the prior year quarter, driven by increased gross profit, partially offset by an increase in G&A expenses, primarily related to increases in payroll, legal and professional fees.
– The Company won 52%, or $118 million, of the domestic dredging bid market in the quarter.
– Demolition revenue decreased 54.2% to $14.9 million versus $32.5 million in the prior year quarter. The revenue in 2013 includes $6.1 million of Terra Contracting revenue.
– Demolition recorded negative gross profit margin of 36.8% compared to gross profit margin of 12.5% in the prior year quarter, driven by the decrease in revenue and cost overruns on certain projects.
– The demolition segment recorded an operating loss of $12.4 million versus an operating profit of $1.9 million in the prior year, a result of the negative gross profit and additional G&A expenses, primarily related to bad debt as well as the addition of Terra Contracting at the end of 2012.
– Backlog was $56.7 million at the end of the first quarter, down slightly compared to year-end.
Press Release, May 7, 2013