Great Lakes Dredge & Dock Corporation, the largest provider of dredging services in the United States and a major provider of environmental and remediation services, today reported financial results for the quarter and year ended December 31, 2014, including record backlog of $670 million.
Chief Executive Officer Jonathan Berger said: “During 2014, the Company achieved several accomplishments that are critical pieces of our strategy to profitably grow and deliver results to our shareholders. We began the construction phase on the ATB hopper dredge, completed the Magnus Pacific (“Magnus”) acquisition in November, divested our historic demolition business and continued to execute our strategy of exiting non-core businesses through the sale of New York Sand & Stone and the sale of the real estate owned jointly by our Amboy Aggregates and Lower Main joint ventures (“Amboy Land”).
“For the three months ended December 31, 2014, Great Lakes reported revenue of $245.5 million, income from continuing operations of $20.3 million and adjusted EBITDA from continuing operations of $31.8 million. For the year ended December 31, 2014, Great Lakes reported revenue of $806.8 million, income from continuing operations of $20.7 million and adjusted EBITDA from continuing operations of $77.1 million.”
Mr. Berger continued: “Our dredging segment recorded record annual revenue in 2014, successfully executing projects in the United States, Australia, Brazil and the Middle East. Conclusion of Great Lakes’ participation on the Wheatstone LNG project had a positive impact on dredging’s results for the year. Results were adversely impacted by an underutilized fleet in the Middle East for much of the year and the delay in several tenders related to Superstorm Sandy work until the fourth quarter 2014, which led to lower utilization of our domestic fleet in the first part of the year.
“In December, we began work on the $140.5 million Suez Canal deepening project, which will keep a significant portion of our Middle East fleet utilized through the end of the third quarter of 2015. The dredging segment’s backlog at December 31, 2014 is $594.2 million, with an additional $113.5 million in options and low bids pending award.”
Year Ended December 31, 2014 Highlights
– Revenue increased 10.3% to $806.8 million for the year ended December 31, 2014, compared to $731.4 million for the year ended December 31, 2013. Magnus contributed $15.3 million in revenue to 2014.
– Gross profit margin decreased to 11.5% for the year ended December 31, 2014, compared to 13.7% for the year ended December 31, 2013. Substantially lower gross profit margin in the environmental & remediation segment was partially offset by higher contract margin in the dredging segment. Magnus recorded a negative gross profit of $1.7 million due to seasonality in its business.
– Operating income was $23.9 million, down from $51.4 million in the prior year. In addition to the higher gross profit margin, 2013 operating income is impacted by the $13.4 million settlement from the loss of use claim that was received during that period.
– Income from continuing operations was $20.7 million in 2014 compared to $19.9 million in the prior year. Net income (which includes both continuing and discontinued businesses) was $10.3 million in 2014, compared to a net loss of $35.0 million in the same period in the prior year. The current year included a $11.5 million tax benefit, while the prior year included a $10.5 million income tax provision.
– Adjusted EBITDA from continuing operations was $77.1 million, a decrease of 22.0% from $98.8 million over the same period in the prior year primarily due to losses in the environmental & remediation segment. The prior year included $13.4 million settlement from the loss of use claim and $5.8 million gain on equipment sales.
– Revenue increased 8.6% to $697.7 million for the year ended December 31, 2014, driven by an increase in domestic capital, maintenance and foreign capital revenue partially offset by lower coastal protection and rivers & lakes revenue.
– Gross profit margin for the year ended December 31, 2014 was 12.9% compared to 13.3% for the year ended December 31, 2013. Strong contract margin on the Wheatstone LNG project was offset by higher overhead costs and lower absorption of the fixed costs due to lower utilization of the fleet.
– Operating income was $41.6 million for the year ended December 31, 2014 versus $54.7 million in the prior year. The results for the same period last year include the $13.4 million in settlement from the loss of use claim as well as $5.8 million gain on sale of assets.
– The Company won 38%, or $569.9 million, of the 2014 domestic dredging bid market of $1.5 billion at December 31, 2014, with an additional $113.5 million in low bids and options pending awards.