Great Lakes Dredge & Dock Reports Strong Finish To 2021
Great Lakes Dredge & Dock Corporation (GLDD) reported a strong fourth quarter of 2021, but its full-year financial results fell short of the previous year’s.
In the February 16 announcement, the company reported net income of $24.7 million for the fourth quarter, a 133 percent increase over the $10.6 million for same quarter in 2020.
Revenue in the fourth quarter of 2021 was $210 million, up $37.9 million from a year earlier. Gross margin percentage was 25.2 percent, compared with 19.4 percent in the fourth quarter of 2020.
“We ended the year with strong fourth quarter results, which reflects solid project performance resulting in this year’s highest quarterly net income and adjusted EBITDA [earnings before interest, taxes, depreciation and amortization],” said Lasse Petterson, president and CEO. “As our organization was 100 percent fully vaccinated against COVID-19, with few accommodations at the start of the quarter, we were able to return to normal operations even with the emergence of a new strain of the virus in late November. The fourth quarter saw reduced COVID-19 related costs of $0.5 million, a significant decrease over the prior quarter and vessels returned to normal operations. With the ability to increase direct oversight and supervision on projects and on the vessels, we saw overall operational improvements on the majority of our projects.”
For the full year of 2021, net income was $49.4 million, down 25.3 percent from the $66.1 million for 2020. Revenue was $726.1 million, down 1 percent from the prior year, while the gross profit percentage decreased to 20 percent in 2021 from 23.3 percent in 2020.
Petterson noted that the annual adjusted EBITDA was the third highest in company history.
“Although our results did not meet our full-year expectations after our record year in 2020, we ended the year with a strong backlog and balance sheet, and we continued our growth strategy with our venture into the new U.S. offshore wind generation market by issuing a contract for the construction of the first Jones Act-compliant rock installation vessel with expected delivery in 2024,” he said.
“During this unprecedented pandemic, the health and safety of our employees was and continues to be our top priority. Great Lakes’ Incident & Injury Free safety management program enabled us to adapt and respond quickly to operational challenges caused by COVID-19. During 2021 we incurred $9.9 million of costs related to COVID-19 for items such as testing, vessel cleaning, crew quarantining and replacement staffing. In addition, we also had production impacts due to COVID-19, which, although not as easily quantified, we estimate were close to, if not higher than the costs. In spite of our efforts to keep operations continuing as normal, we had some severe impacts to project performance due to crew shortages, vessel drydock delays, and re-scheduling of vessels on projects.
“We are confident that our continued efforts, and an organization that is fully vaccinated against COVID-19 with few accommodations, will help to minimize the impacts to our operations in 2022.”
Petterson said the domestic dredging market for new projects remained relatively strong.
“Throughout 2021 we performed a significant amount of work in the ports of Portsmouth, Boston, Charleston, Jacksonville, Mobile, Sabine, Freeport and Corpus Christi,” he said. “We also saw increased demand for coastal protection projects, renourishment of coastal beaches that have been damaged after the major hurricane events of the past few years and wetland restoration projects. We ended the year with a solid backlog of $551.6 million and a full year bid market share of 40.4 percent.
“In 2021, we continued our fleet renewal program to meet increased demand. Our new 6,500 cubic yard mid-size hopper dredge remains on schedule and on budget with expected delivery in the first quarter of 2023. We also began the builds of two new multicat support vessels and three new scows which also remain on budget and on schedule for delivery in 2022. In addition, we are upgrading the cutter suction dredge the Carolina and the company’s largest booster station, the Buster, to improve nitrogen oxide and particulate emissions. These vessels will both commence work on the first phase of the Houston Shipping Channel Widening project in 2022.” Petterson said.
“Our fleet is well equipped to meet current market demand and with our fleet renewal program we expect to be well positioned to meet future market demands.”
GLDD reported a year-end backlog of $551.6 million, compared to a backlog of $559.4 million at the end of 2020. Low bids and options pending award totaled $567.3 million as of December 31, 2021, the company said.