Great Lakes Dredge & Dock Corporation Reports 2007 First Quarter Results; Makes Good Start on 2007 Year
09 Mai 2007 - 2:00PM
Business Wire
Great Lakes Dredge & Dock Corporation
(NASDAQ:GLDD)(NASDAQ:GLDDW) - the largest provider of dredging
services in the United States and a major provider of commercial
and industrial demolition services, today reported financial
results for the quarter ended March 31, 2007. The financial results
for the Company are compared with the results for the equivalent
periods of GLDD Acquisitions Corp., which merged with a subsidiary
of Aldabra Acquisition Corporation (�Aldabra�) on December 26,
2006. Following a holding company merger, the surviving company was
renamed Great Lakes Dredge & Dock Corporation. The merger was
accounted for as the acquisition of Aldabra and was treated as a
recapitalization. Accordingly, the Company�s core operating
activities were not affected by the merger. Other matters,
primarily relating to share and per share data, affecting
comparability resulting from the merger with Aldabra are
highlighted below. Revenue for the quarter ended March 31, 2007 was
$126.7 million, a 17% increase from first quarter 2006 revenue of
$108.4 million. Results in the first quarter were driven primarily
by maintenance projects and work in the Middle East. The Company
began work on another project in Bahrain while continuing its large
Diyaar land reclamation project, among others. Throughout the
quarter, the Company experienced good utilization of its fleet,
both domestically and internationally, although inclement weather
along the East Coast of the United States negatively impacted
margins on several of the Company�s projects. Gross profit growth
in the first quarter of both 2007 and 2006 was hindered by
increases in self-insured claims reserves. Despite these two
factors, gross profit grew by more than 18% from a year ago
producing a slight increase in the gross profit margin to 10.8%.
Strong revenue growth enabled the Company to effectively leverage
its operating expenses resulting in more than a 46% increase in
operating income during the first quarter of 2007. Interest expense
was $4.3 million for the first quarter of 2007, a decrease of $1.9
million from the first quarter 2006 primarily due to the pay down
in the fourth quarter of 2006 of the Company�s term debt. In
addition, non-cash adjustments to the market value of the Company�s
interest rate swap were favorable between the quarters. EBITDA of
$12.4 million for the 2007 quarter was up over 20% from $10.2
million in the previous year. Net income was $1.0 million in the
first quarter of 2007 compared with a net loss of $1.5 million in
the first quarter of 2006. Prior to the Aldabra transaction, GLDD
Acquisitions Corp. had shares of preferred stock outstanding on
which dividends were accrued semiannually. In connection with the
merger, those shares were exchanged for common stock of the
Company; therefore there are no preferred dividends in 2007. In
2006, the net loss available to common stockholders, after accruing
$2.0 million of preferred stock dividends, was $3.5 million. With
the funds received in connection with the Aldabra merger, the
Company paid down its senior bank term debt of approximately $51
million. The Company�s $175 million of 7�% Senior Subordinated
Notes due in 2013 remain outstanding. At March 31, 2007, the
Company also had $3.0 million in revolver borrowings outstanding
with $29.1 million of remaining availability. Total debt was $195.1
million, of which $2.0 million was current. The Company was in
compliance with all the financial covenants in its senior credit
and surety agreements. At quarter end, outstanding performance
letters of credit totaled $46.3 million, and total cash and
equivalents were $0.3 million. At the beginning of the second
quarter, the Company signed definitive agreements to purchase two
dredges from two domestic dredging service providers. The increase
in capacity will enhance the Company�s competitive position in
capital and beach dredging and enable it to take on additional
domestic and foreign work. The first quarter domestic bid market
produced approximately $116.5 million of contract awards, higher
than the first quarter of 2006 but less than the average quarterly
bid markets over the last few years. However, during the quarter
the Company was low bidder on a $64 million capital project in New
Jersey that has not yet been awarded and is not included in the
quarter�s bid market. Although the Corps did put out a number of
projects in the first quarter, most were smaller maintenance and
rental projects. A combination of a smaller market and strong
revenue generating quarter resulted in the Company reducing its
backlog in the first quarter. At March 31, 2007, dredging backlog
was $267.2 million compared with $204.1 million a year ago and
$352.6 million at December 31, 2006. Demolition services backlog
was $15.2 million, compared with $16.6 million at December 31,
2006. The Company�s March 31, 2007 recorded backlog does not
reflect approximately $256 million of low bids pending award and
additional phases (�options�) pending on projects currently in
backlog. For example, contract options of approximately $156
million are expected to be awarded for the second phase of the
Diyaar land reclamation contract in the next 12 to 18 months.
Additionally, the capital project in New Jersey for $64 million is
expected to be awarded in this month. Douglas B. Mackie, President
and Chief Executive Officer, said, �We are pleased with our first
quarter operating results, particularly given the challenges that
inclement weather presented along the East Coast. While the weather
impacted margins, we did generate an 18% increase in gross profit
and a 46% increase in operating income. �Equally encouraging is the
increased capacity we will gain with the acquisition of two
existing dredges which had been operated in the domestic market by
competitors. We have enlarged our fleet while not increasing
overall market capacity, enhancing our competitive position
domestically.� EBITDA, as provided herein, represents net income
(loss), adjusted for net interest expense, income taxes,
depreciation and amortization expense. EBITDA should not be
considered an alternative to, or more meaningful than, amounts
determined in accordance with GAAP including: (a) operating income
as an indicator of operating performance; or (b) cash flows from
operations as a measure of liquidity. As such, the Company�s use of
EBITDA, instead of a GAAP measure, has limitations as an analytical
tool, including the inability to determine profitability or
liquidity due to the exclusion of interest expense and the
associated significant cash requirements and the exclusion of
depreciation and amortization, which represent significant and
unavoidable operating costs given the level of indebtedness and
capital expenditures needed to maintain the Company�s business. For
these reasons, the Company uses operating income to measure its
operating performance and uses EBITDA only as a supplement. EBITDA
is reconciled to net income (loss) in the table of financial
results. (For further explanation, please consult the Company�s SEC
filings.) The Company will conduct a quarterly conference call,
which will be held on Wednesday, May 9 at 10:00 a.m. C.D.T. The
call in number is 888-515-2235. The call can also be heard on our
website, www.gldd.com under Events and Presentations on the
investor relations page. The conference call will be available by
replay for two weeks, by calling 888-203-1112 and providing
passcode 6342322. Great Lakes Dredge & Dock Corporation is the
largest provider of dredging services in the United States and the
only U.S. dredging company with significant international
operations, averaging 18% of its dredging revenues over the last
three years. Great Lakes also owns an 85% interest in North
American Site Developers, Inc., one of the largest U.S. providers
of commercial and industrial demolition services. Additionally, the
Company owns a 50% interest in a marine sand mining operation in
New Jersey which supplies sand and aggregate used for road and
building construction. Great Lakes has a 117-year history of never
failing to complete a marine project and owns the largest and most
diverse fleet in the industry, comprising over 180 specialized
vessels. The matters discussed in this news release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Certain forward-looking
statements can be identified by the use of forward-looking
terminology, such as �believes�, �expects�, �may�, �will�, �could�,
�should�, �seeks�, �approximately�, �intends�, �plans�,
�estimates�, or �anticipates�, or the negative thereof or other
comparable terminology, or by discussions of strategy, plans or
intentions. In particular, any statements, express or implied,
concerning future operating results or ability to generate
revenues, income or cash flow to service debt are forward-looking
statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those projected. These include risks associated with Great
Lakes� substantial leverage, fixed price contracts, dependence on
government contracts and funding, bonding requirements and
obligations, international operations, government regulation,
restrictive debt covenants and fluctuations in quarterly
operations. In light of these and other uncertainties, the
inclusion of forward-looking statements in this news release should
not be regarded as a representation by Great Lakes that Great
Lakes� plans and objectives will be achieved. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. Great Lakes assumes no
obligation to update information contained in this news release.
Great Lakes Dredge and Dock Corporation Consolidated Statement of
Earnings (Unaudited and in thousands, except per share data) �
Three Months Ended March 31, 2007� 2006� (unaudited) � Revenues $
126,732� $ 108,427� � Gross profit 13,714� 11,611� � General and
administrative (7,992) (7,309) Amortization of intangible assets
(66) (76) Impairment of intangible assets -� -� Subpoena-related
expenses (2) (360) � Operating income 5,654� 3,866� � Other income
(expense) Interest expense- net (4,261) (6,201) Equity earnings in
joint ventures 262� 117� Minority Interest (9) (38) � Income (loss)
before income taxes 1,646� (2,256) � Income taxes (682) 722� � Net
income (loss) $ 964� $ (1,534) � Redeemable preferred stock
dividends1 -� (2,011) � Net income (loss) available to common
stockholders $ 964� $ (3,545) � BASIC Earnings (loss) per share $
0.02� $ (0.38) Basic weighted average shares 39,633� 9,288� �
DILUTED Earnings (loss) per share $ 0.02� $ (0.38) Diluted weighted
average shares 44,697� 9,288� � 1 The company accrued dividends on
its redeemable preferred stock in 2006. This reduced the net income
available to stockholders. The preferred stock and all accrued
dividends were exchanged for common stock in connection with the
December 2006 merger. � � � Great Lakes Dredge and Dock Corporation
Supplementary Financial Information (Unaudited and in thousands) �
Three Months Ended March 31, 2007� 2006� (unaudited) � Net income
(loss) $ 964� $ (1,534) Adjusted for: Interest expense, net 4,261�
6,201� Income tax expense (benefit) 682� (722) Depreciation and
amortization 6,481� 6,250� � EBITDA $ 12,388� $ 10,195� � Net cash
flows from operating activities $ 965� $ 4,115� (GLDD-G)
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