Great Lakes Provides an Update to Q4 2022
December 20 2022 - 4:02PM
Great Lakes Dredge & Dock Corporation (“Great Lakes” or the
“Company”) (NASDAQ: GLDD), the largest provider of dredging
services in the United States, announced an update on its
fourth quarter 2022 operations.
Revenues and gross profit margins for fourth
quarter 2022 are expected to be lower than previously anticipated.
These results were impacted by the earlier than expected retirement
of the Terrapin Island hopper dredge, significant weather delays on
several projects in the northeast and some project production
issues. Additionally, unexpected drydocking scope increases
resulted in additional costs and delays for the hopper dredges
Ellis Island and Padre Island. The Padre Island is now
out of drydock and in operation and the Ellis Island is
out of drydock and expected to be in operation before
year end.
General and administrative expense and net
interest expense are expected to remain relatively flat from the
prior quarter.
Lasse Petterson, President and Chief Executive
Officer at Great Lakes commented, “This has been a challenging year
driven by an extremely slow bid market in the first half of 2022,
rampant inflation, supply chain delays and more than the usual
number of differing site conditions on projects. We are proactively
taking steps to minimize the impact of these external factors as we
are rationalizing older assets like the previously announced
retirement of the Terrapin Island, cold stacking several of our
oldest and least productive dredges and aggressively reducing other
costs.
Looking forward to 2023, we expect bidding
activity to be more in line with previous years as several large
capital projects that were expected to bid in 2022 are now expected
to bid in the first half of the year and our LNG prospects are
moving toward final investment decisions. We are on track with
our fleet modernization program and our newbuild hopper dredge, the
Galveston Island, is on schedule to be operational in the second
quarter of 2023. As we see the bid market start to recover in 2023,
we can quickly reactivate the cold stacked vessels to take
advantage of the improving market. We believe we are proactively
taking the right steps adjusting to the current market conditions
and expect to see their positive effects as we go into next
year.”
The Company Great Lakes Dredge
& Dock Corporation (“Great Lakes” or the “Company”) is the
largest provider of dredging services in the United States. In
addition, Great Lakes is fully engaged in expanding its core
business into the rapidly developing offshore wind energy industry.
The Company has a long history of performing significant
international projects. The Company employs experienced civil,
ocean and mechanical engineering staff in its estimating,
production and project management functions. In its over 132-year
history, the Company has never failed to complete a marine project.
Great Lakes owns and operates the largest and most diverse fleet in
the U.S. dredging industry, comprised of approximately 200
specialized vessels. Great Lakes has a disciplined training program
for engineers that ensures experienced-based performance as they
advance through Company operations. The Company’s Incident-and
Injury-Free® (IIF®) safety management program is integrated into
all aspects of the Company’s culture. The Company’s commitment to
the IIF® culture promotes a work environment where employee safety
is paramount.
Cautionary Note Regarding
Forward-Looking Statements Certain statements in this
press release may constitute "forward-looking" statements,
including, but not limited to, the statements regarding revenue and
gross margin projections, as defined in Section 21E of the
Securities Exchange Act of 1934 (the "Exchange Act"), the Private
Securities Litigation Reform Act of 1995 (the "PSLRA") or in
releases made by the Securities and Exchange Commission (the
"SEC"), all as may be amended from time to time. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the
actual results, performance or achievements of Great Lakes and its
subsidiaries, or industry results, to differ materially from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Statements that are not historical
fact are forward-looking statements. Forward-looking statements can
be identified by, among other things, the use of forward-looking
language, such as the words “plan,” “believe,” “expect,”
“anticipate,” “intend,” “estimate,” “project,” “may,” “would,”
“could,” “should,” “seeks,” “are optimistic,” or “scheduled to,” or
other similar words, or the negative of these terms or other
variations of these terms or comparable language, or by discussion
of strategy or intentions. These cautionary statements are being
made pursuant to the Exchange Act and the PSLRA with the intention
of obtaining the benefits of the "safe harbor" provisions of such
laws. Great Lakes cautions investors that any forward-looking
statements made by Great Lakes are not guarantees or indicative of
future performance. Important assumptions and other important
factors that could cause actual results to differ materially from
those forward-looking statements with respect to Great Lakes
include, but are not limited to: the impact of the COVID-19
pandemic and related responsive measures, including productivity
impacts and increased expenditures; our ability to obtain and
retain federal government dredging and other contracts, which is
impacted by the amount of government funding for dredging and other
projects and the degree to which government funding is directed to
the Corps and certain other customers, which in turn could be
impacted by extended federal government shutdowns or declarations
of additional national emergencies; our ability to qualify as an
eligible bidder under government contract criteria and to compete
successfully against other qualified bidders in order to obtain
government dredging and other contracts; cost over-runs, operating
cost inflation and potential claims for liquidated damages,
particularly with respect to our fixed cost contracts; the timing
of our performance on contracts and new contracts being awarded to
us; significant liabilities that could be imposed were we to fail
to comply with government contracting regulations; increasing costs
to operate and maintain aging vessels and comply with applicable
regulations or standards; increasing costs of fleet improvements to
remain competitive; equipment or mechanical failures; impacts to
our facilities and suppliers from pandemics, epidemics or outbreaks
of infectious disease affecting our markets; market or supply chain
disruptions as a result of war or insurrection; impacts to our
supply chain for procurement of new vessel build materials: our
international dredging operations; instability and declining
relationships amongst certain governments in the Middle East and
the impact this may have on infrastructure investment, asset value
of such operations, and local licensing, permitting and royalty
issues; capital and operational costs due to environmental
regulations or extreme weather events; market and regulatory
responses to climate change; contract penalties for any projects
that are completed late; force majeure events, including natural
disasters, pandemics and terrorists’ actions; changes in the amount
of our estimated backlog; significant negative changes to large,
single customer contracts; our ability to obtain potential
financing for the construction of new vessels, including our new
offshore wind vessel; potential inability to secure contracts to
utilize new offshore wind vessel; unforeseen delays and cost
overruns related to the construction of new vessels, including
potential mechanical and engineering issues and unforeseen changes
in environmental regulations; any failure to comply with Section 27
of the Jones Act provisions on coastwise trade, or if those
provisions were modified or repealed; fluctuations in fuel prices,
particularly given our dependence on petroleum-based products;
impacts of nationwide inflation on procurement of new build
materials; our ability to obtain bonding or letters of credit and
risks associated with draws by the surety on outstanding bonds or
calls by the beneficiary on outstanding letters of credit;
acquisition integration and consolidation, including transaction
expenses, unexpected liabilities and operational challenges and
risks; divestitures and discontinued operations, including retained
liabilities from businesses that we sell or discontinue; potential
penalties and reputational damage as a result of legal and
regulatory proceedings, including a pending criminal proceeding in
Louisiana; any liabilities imposed on us for the obligations of
joint ventures, partners and subcontractors; increased costs of
certain material used in our operations due to newly imposed
tariffs; unionized labor force work stoppages; any liabilities for
job-related claims under federal law, which does not provide for
the liability limitations typically present under state law;
operational hazards, including any liabilities or losses relating
to personal or property damage resulting from our operations; our
ability to identify and contract with qualified MBE or DBE
contractors to perform as subcontractors; our substantial amount of
indebtedness, which makes us more vulnerable to adverse economic
and competitive conditions; restrictions on the operation of our
business imposed by financing covenants; impacts of adverse capital
and credit market conditions on our ability to meet liquidity needs
and access capital; our ability to maintain or expand our credit
capacity; limitations on our hedging strategy imposed by statutory
and regulatory requirements for derivative transactions; foreign
exchange risks, in particular, as it relates to the new offshore
wind vessel build; losses attributable to our investments in
privately financed projects; restrictions on foreign ownership of
our common stock; restrictions imposed by Delaware law and our
charter on takeover transactions that stockholders may consider to
be favorable; restrictions on our ability to declare dividends
imposed by our financing agreements and Delaware law; significant
fluctuations in the market price of our common stock, which may
make it difficult for holders to resell our common stock when they
want or at prices that they find attractive; changes in previous
recorded net revenue and profit as a result of the significant
estimates made in connection with our methods of accounting for
recognized revenue; maintaining an adequate level of insurance
coverage; our ability to find, attract and retain key personnel and
skilled labor; disruptions, failures, data corruptions, cyber-based
attacks or security breaches of the information technology systems
on which we rely to conduct our business; and impairments of our
goodwill or other intangible assets. For additional information on
these and other risks and uncertainties, please see Item 1A. “Risk
Factors” of Great Lakes' Annual Report on Form 10-K for the year
ended December 31, 2021.1
Although Great Lakes believes that its plans,
intentions and expectations reflected in or suggested by such
forward looking statements are reasonable, actual results could
differ materially from a projection or assumption in any
forward-looking statements. Great Lakes' future financial condition
and results of operations, as well as any forward-looking
statements, are subject to change and inherent risks and
uncertainties. The forward-looking statements contained in this
press release are made only as of the date hereof and Great Lakes
does not have or undertake any obligation to update or revise any
forward-looking statements whether as a result of new information,
subsequent events or otherwise, unless otherwise required by
law.
For further information
contact: Tina BaginskisDirector,
Investor Relations630-574-3024
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