Great Lakes Dredge & Dock (NASDAQ: GLDD) reported Q4 EPS of $0.23, $0.09 better than the analyst estimate of $0.14. Revenue for the quarter came in at $164.3 million versus the consensus estimate of $184.05 million.

Fourth Quarter 2019 Highlights

• Revenue was $164.3 million in the fourth quarter, a decrease of $8.9 million compared with the prior year fourth quarter.
• Gross profit margin percentage increased to 21.0% in the fourth quarter compared with 20.6% in the prior year fourth quarter.
• Total operating income from continuing operations was $22.2 million, an increase of $5.5 million over the prior year fourth quarter.
• Net income from continuing operations was $14.8 million, an increase of $9.8 million over the prior year fourth quarter.
• Adjusted EBITDA from continuing operations was $32.6 million, an increase of $4.2 million over the prior year fourth quarter.

Management Commentary

Chief Executive Officer Lasse Petterson commented, “2019 was an exceptional year at Great Lakes. Our record financial performance was a result of a strong domestic dredging market and the continued effectiveness of our 2018 asset rationalization and cost reduction program. In the second quarter, Great Lakes successfully completed the sale of the Environmental & Infrastructure business which allowed our team to focus on our core dredging business. We saw an increase of $44.7 million in net income from continuing operations and $35.2 million in adjusted EBITDA from continuing operations over the prior year. Due to the significant improvement in the Company’s credit profile and cash position, we were able to reduce the size of our revolving credit facility in the second quarter of the year to $200 million, extend the term five years, improve both the upfront pricing and interest rates, and gain more flexibility to execute on the Company’s strategy over the next five years. Our net debt to adjusted EBITDA ratio at December 31, 2019 was 1.00x. Our continued strong operational performance is a validation of our positioning in the dredging marketplace as well as the tremendous efforts and focus turned in by our outstanding employees. Hand in hand with the strong operational and financial results, our drive to an Incident and Injury Free® (IIF®) work environment continued to progress with a 30% decrease in recordable injuries year-over-year.

As we finished the fourth quarter of 2019, port deepening projects in Charleston, Jacksonville and Corpus Christi were in full operation with work continuing into 2020. Operationally, 2019 had lower dredging activity as compared to prior year, due to several planned vessel dry dockings. The impact of the increased dry dockings was partially offset by strong performance on the San Jacinto flood prevention project in Houston, Texas and the Jacksonville port deepening project in Florida. Although the bid market was lower than expected in the fourth quarter, the total bid market finished strong at $1.8 billion. We expect the dredging market to remain strong for the next two to three years. Our focus remains on port deepening projects as well as coastal protection projects which include the renourishment of coastal beaches that have been damaged after the heavy hurricane seasons of the past three years. Some of these projects are expected to bid in the first half of 2020. We look forward to working closely with the United States Army Corps of Engineers to ensure safe and successful execution and completion of these projects that are critical to protecting our Nation’s coastlines and strengthening our infrastructure. We remain confident in our strategy and will continue to utilize our strengths to drive greater shareholder value and returns. ”

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