Great Lakes Dredge & Dock Corporation Q4 FY2024 earnings call

• 2024 was a strong year with fourth quarter revenues of $202.8M and EBITDA of $40.2M, full year revenues $762.7M and adjusted EBITDA $136M, second highest in 135-year history.
• Driven by executing complex port deepening and coastal restoration projects, leveraging fleet capabilities. New Hopper dredge Galveston Island contributed to 2024 results.
• Bid market hit $2.9B, Great Lakes won 33% of bid market, year-end backlog $1.2B with $282.1M in low bids and options pending. 94% of backlog from large and complex port deepening and coastal protection projects.
• New hopper dredge Amelia Island expected to be delivered in second half of 2024 and go to work on backlog projects. Arcadia, subsea rock installation vessel, being broadened to international offshore wind and other subsea infrastructure protection markets.
• Enhanced financial position with strong operational cash flow, $150M second lien credit agreement, S&P upgraded credit rating to B minus in Q2 2024.

Fourth quarter 2024 revenues were $202.8 million with EBITDA of $40.2 million. Full year 2024 revenues were $762.7 million and adjusted EBITDA was $136 million. Fourth quarter revenues increased $21.1 million from the prior year's fourth quarter, driven by addition of the Galveston Island and higher capital and coastal protection revenue, offset partially by decrease in maintenance and rivers and lakes revenue. Full year gross profits more than doubled to $160.6 million, net income increased over four times to $57.3 million, and adjusted EBITDA increased $63 million year over year. Capital and coastal protection revenue saw significant increases driving the full year revenue growth. Fourth quarter over 85% of revenue came from capital and coastal protection projects which typically yield higher margins.

• 2025 expected ~60% of $1.2B backlog converted to revenue, mostly from capital and coastal protection projects.
• 2025 capital expenditures expected between $140M and $160M, including capitalized interest for Amelia Island, Arcadia, etc.
• First quarter 2025 expected strong utilization, with seven regulatory drydockings planned, including four hopper dredges, mostly in second and third quarters.

• Government funding uncertainty due to continuing resolution, may impact bid market timing for 2026 backlog generation.
• Court ruling on Jones Act interpretation, though technicality, still evaluating legal steps. Impact on Arcadia's work scope still to be fully determined.
• Title XI funding on pause post change in administration, unclear when and if priority will be restored for related loan programs.

Q: How much left on new build program and cash flow expectations for 2025?

A: Roughly $110 - $120M left on new build program, final payment for Arcadia likely in first quarter 2025. Cash flow expected to be fairly cash flow neutral for 2025 even with big CapEx remaining to spend this year.