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spk01: Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Great Lakes Dredge and Dock Corp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Tina Baginski. Thank you, and please go ahead.
spk02: Hello, good morning and welcome to our quarterly conference call. Joining me on the call this morning is our Chief Executive Officer and President Lhasa Pedersen and our Chief Financial Officer Mark Marinko. Lhasa will provide an update on the events of the quarter and year. Then Mark will continue with an update on our financial results of the quarter and year. Lhasa will conclude with an update on the outlook for the business and market. Following their comments, there will be an opportunity for questions. During this call, we will make certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2019 Form 10-K and subsequent filings. During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA from continuing operations, which are explained in the net income to adjusted EBITDA from continuing operations reconciliation attached to our earnings release and posted on our investor relations website, along with certain other operating data. With that, I will turn the call over to Lhasa.
spk06: Thank you, Tina. This year was full of changes and challenges that the COVID pandemic presented us with and that impacted all our lives. We were fortunate to be able to continue working as a federally designated critical infrastructure company throughout this unprecedented crisis. Despite the challenges, Great Lakes Dredge and Dock had another exceptional year as we continued to deliver improved financial results and at the same time, advancing on our strategic initiatives, strengthening our balance sheet, working on the renewal of our dredging fleet, improving product performance, and positioning for the upcoming U.S. offshore wind market. We had a strong fourth quarter and a record full-year results with net income from continuing operations for the year of 66.1 million, and a full-year adjusted EBITDA from continuing operations of $151.1 million. These results reflect an 11.4% increase over prior year EBITDA from continuing operations. A strong performance was a result of solid domestic dredging market and a continued focus on product performance. The company ended the year with a strong cash position of $216.5 million and a net debt decreased by $28.6 million in 2020, which resulted in a healthy net debt to adjusted EBITDA from continuing operations ratio of 0.7. A strong cash flow and balance sheet allowed us to not only withstand the economic storm as a result of the pandemic, but positioned us well to invest in our future. In 2020, we contracted for a new midsize hopper dredge we upgraded several of our large cutter dredges. We decided to move our headquarters to Houston to be closer to markets and clients. We invested in our shareholders through a $75 million share repurchase program, and we invested in positioning for growth, both in the domestic dredging market and for the upcoming U.S. offshore wind market. Operationally, we ended the year with a backlog of $559.4 million In addition, we have low bids and options pending of $472.3 million. Additionally, in January 2021, Great Lakes was the successful bidder on $90.3 million of project work, which included the next phase of the Boston Harbor Deepening Project. A year-end backlog includes the continuation of the Jacksonville Deepening Project with Contract C, for $105 million. After successfully completing Jacksonville contract B ahead of schedule, we now look forward to continuing to support the expansion of the shipping channel for the Port of Jacksonville. Also in the fourth quarter, we were pleased to announce the signing of the largest contract in Great Lakes dredging docks history, the next decade's Brownsville LNG project, will be placed in backlog once notice to proceed is received. We expect the dredging market to remain strong in 2021, driven by project work that will include large-scale port deepening projects along the East and Gulf coasts, as well as coastal protection projects, including the re-nourishment of coastal beaches that have been impacted by the recent major hurricane events. and coastal barrier islands and marsh constructions in Louisiana. To support the strong domestic market demand, we announced the execution of a contract with Conrad Shipyard in Louisiana to build a new midsize hopper dredge with expected delivery in the first quarter of 2023. The new build project is on budget and on schedule, and we had the steel cutting ceremony in early February. In addition to the new build, we continue to upgrade our existing US domestic fleet with new equipment and technology to increase productivity. Our upgraded and most powerful cutter dredge, the Ohio, returned last year to the US market from the Middle East and has been busy working on several beach re-nourishment projects since then. Investing in our fleet is paramount to maintaining strong product performance to complete our projects on time and on budget. With the new hopper dredge and ongoing productivity upgrades to our existing domestic dredges, we believe our fleet is well equipped to meet the current demand and the future growth in the dredging market. Finally, we took the next step in our strategic plan with the announcement of a new operating model. which includes moving the corporate office to Houston and opening regional offices in Jacksonville, Florida, and New York. The new model situates the company centrally in our traditional markets on the East Coast and the Gulf, positioning the company for growth as we see in the Dredgen Market projects related to oil and gas and LNG exports in the Gulf and for the upcoming U.S. offshore wind market on the East Coast. As stated in the opening remarks, Great Lakes Dredging Dock continues to be well-positioned for changes in the current economic environment and for the future as we enter 2021. I now turn the call over to Mark to further discuss the results of the quarter and for an update on backlog development.
spk04: Okay, great. Thank you, Lhasa. I will start with the quarterly results and then discuss some specifics related to our dredging business. Please remember that all results from our E&I segment in 2019 were placed into discontinued operations and therefore not included in the results that I will discuss. For the fourth quarter of 2020, revenues were $172.1 million, income from continuing operations was $10.6 million, and adjusted EBITDA from continuing operations was $29.4 million. The company's revenues for the fourth quarter of 2020 represented a 7.8 million or 4.8% increase compared to the fourth quarter of 2019. The increase was a result of higher domestic capital maintenance and rivers and lakes revenue offset partially by lower coastal protection and foreign revenue. Gross profit from continuing operations was 33.4 million compared to 34.6 million in the fourth quarter of 2019. Gross profit margin was 19.4% compared to 21% in the prior year quarter. The small reduction in margin was primarily due to higher maintenance expense and an increase in marine insurance premiums. The total company operating income was 17.3 million, which is a decrease of 4.9 million over the prior year quarter. The decrease was primarily due to the 4.6 million loss of use claim settlement that was received in the fourth quarter of 2019. Additionally, the change in operating income was impacted by higher general administrative expense, offset partially by a gain from the sale of assets. Income from continuing operations for the fourth quarter of 2020 was $10.6 million compared to $14.8 million in the prior year quarter. The current quarter includes net interest expense of $6.5 million and income and tax expense of $1.7 million. Income from the fourth quarter of 2019 included $6.5 million of net interest expense and $1 million income tax expense. Adjusted EBITDA from continuing operations for the fourth quarter of 2020 was $29.4 million, compared to adjusted EBITDA from continuing operations of $32.6 million in the fourth quarter of 2019. Turning to our full year results, for the year ended December 31, 2020, revenues were $733.6 million. Net income from continuing operations was $66.1 million. and adjusted EBITDA from continuing operations was 151.1 million. These results represent a 22.1 million increase in year-over-year revenue, an increase in net income from continuing operations of 10.4 million, and an increase of 15.5 million in adjusted EBITDA from continuing operations. For 2020, the company did have some additional expenses related to the COVID-19 pandemic related to additional equipment and procedural changes to keep our employees safe. The cost was approximately 3.2 million that were direct costs to our projects. Next, we turn to our balance sheet. We're at December 31, 2020. We had 216.5 million in cash. Throughout 2020, we continued to maintain a zero cash balance on our revolver. Our net debt at December 31, 2020 was $107.2 million. Our capital expenditures for 2020 were $47.8 million. This compares to $44.4 million in capital expenditures during 2019. The 2020 capital expenditures included $13.6 million in related to the construction of the new mid-size hopper dredge. Also to date, we repurchased $3.9 million of Great Lakes common stock related to our previously announced repurchase program. Contracted backlog at December 31, 2020 totaled $559.4 million compared to a backlog of $589.4 million at December 31, With that, I will turn the call back over to Lhasa for his remarks on the outlook moving forward.
spk06: As our country is still facing the challenges of COVID-19, the dredging industry, deemed as an essential service, continues to operate and work on critical and needed infrastructure projects. The U.S. Army Corps of Engineers oversees the majority of these infrastructure projects and has continued to follow the bid schedule and prioritize all types of dredging, including port deepening, port maintenance and expansion, coastal protection and restoration projects that are necessary to avoid storm damage during the coastal hurricane season. As our projects move forward, Great Lakes Dredging Dock remains committed to maintaining the health and safety of our team members. through an incident and injury-free safety management program. This value-based approach has allowed us to respond quickly and effectively to the COVID-19 pandemic and any challenges as a result of the pandemic. As we experience COVID-19 positive cases on several projects, we continue to follow safety procedures of decontaminating the vessels and having replacement crews brought aboard to recommence dredging operations. As of December 31, the company's business has not been significantly impacted by COVID-19, but due to the uncertainty that surrounds this virus, the company will be continuing evaluating safety and operational plans, and the potential future impact that this evolving environment has on the company's employees, business, financial condition, and results of operations. Moving to the bid market, at the end of the year, the domestic bid market for 2020 reached $1.8 billion in projects, of which Great Lakes was awarded $692.8 million, comprised of capital, maintenance, and coastal protection projects, resulting in an annual 39% win rate for 2020. The domestic gear dredging market remain strong and continue to be driven by the large-scale port deepening projects along the East and Gulf Coast. 2021 will see bids for multiple project phases for port deepenings in Corpus Christi, Mobile, and the Houston Ship Channel that will continue for the next several years. Additionally, strong hurricane and storm seasons have resulted in an increase in erosion and other damages which adds to the recurring nature of a business and the need for more frequent coastal protection and port maintenance projects. These projects are needed as they help to reduce the risk for future damage from flood and storm events and are important in providing resilience to coastal communities and ecosystems as well as driving job creation and economic development. We continue to be confident in the market, and we anticipate the 2021 total bid market to be as strong as 2020. Our confidence in the market is reinforced by the support we have seen for the dredging industry in the U.S. Army Corps of Engineers 2021 budget that was approved at a record-high $7.3 billion. In addition, the Water Resource Development Act was signed into law and includes some additional reforms to the Harbor Maintenance Trust Fund that will allow Congress to, for the first time, draw down on the $9 billion surplus, which is in addition to having the annual caps lifted on the fund earlier in the year in the Coronavirus Aid, Relief, and Economic Security Act. It also includes significant language encouraging more beneficial use for dredge material and natural infrastructure, both important environmental issues and language Great Lakes was particularly active in advocating. Looking to the future, offshore wind represents an exciting new opportunity for Great Lakes. We believe this renewable energy resource will gain significant momentum in the U.S. Great Lakes announced in December the design and development of the first U.S. flag-jones set-compliant inclined four-pipe vessel for subsea rock installation for windmill foundations. This vessel would represent a significant critical advancement in building the future of the U.S. offshore industry. We believe This is the optimal time for us to leverage our existing and extensive specialized vessel expertise to enter this exciting market now coming to the US. As the timelines for these offshore wind projects are being developed, we are continuing to engage with developers and partners on these projects to use US-owned, US-built, and US-operated equipment, enhancing the local value creation and content both on the construction phases and during operations. To help lead Great Lakes in our efforts in this market, the company has appointed Eleni Baker as SVP of Offshore Wind. She will be responsible for developing our offshore wind operations, including strategy and business development, tendering, and project execution. We are excited to have Eleni on board to assist us in seeking opportunities in these emerging markets. In conclusion, we are pleased with a strong 2020 performance and look forward to implementing a new operational model to capitalize on the opportunities that lies ahead. We also recognize that we must continue to actively investigate safety and operational contingency plans to be able to respond to potential changes in the evolving COVID-19 pandemic and its potential impact on the economic environment. Entering 2021, we'll continue to maintain a sharp focus on employee safety and product performance. We'll continue to advance our long-term strategy of investing in our fleet and strengthening our balance sheet. With that, I turn the call over for questions.
spk01: Ladies and gentlemen, as a reminder, if you would like to ask an audio question, please press star, then the number one on your telephone keypad. Again, that is star one to ask a question. You do have a question from the line of John Tantwangam.
spk05: Hi. Good morning, everyone. Can you hear me?
spk04: Yes. Hi, John.
spk05: How are you doing? Thanks for taking my questions. If you could start, maybe just talk about what was unusual in the quarter for you compared to internal expectations. You know, I gathered that there was weather events, but was there anything else? I think you mentioned maybe higher insurance rates, but was there any unexpected maintenance or COVID impacts? You know, just tell me how it played out compared to what you were thinking when you last reported.
spk04: Right. When we did the – I can handle that. Like I said, when we – in the corridor, actually the project performance was – overall was a little bit better than we expected. What we did have, though, we did have two vessels that had some unplanned downtime, and that's what drove the maintenance expense that I referred to on the – you know, on my comments today. So – That was really that piece, those two vessels being down front playing main. This was really the offset there.
spk05: Gotcha. And the weather, in fact, was within, I guess, your range, given the project execution. Correct. Okay, got it. Okay. And then as we look into Q1, that there's been a lot of winter weather. I read in some of the industry journals that you did have some COVID delays in some of your shifts. How should we be thinking about your ability to drive revenue and liquidating backlog, you know, within those constraints?
spk06: Yeah, as I said on my remarks, our safety program and safety as a value in our company prepared us for this situation. And we have a very strong program in place to ensure that our employees are tested before they leave home and to come to our product sites. They are again COVID tested before we mobilize on our vessels. but unfortunately some of the cases are then not detected and we have had some outbreaks. I'm confident in our policies and procedures to take care of our employees, but unfortunately we do see that some of these cases appear on our vessels and it impacts operation. I'm confident that we will be able to execute our projects as we go into 2021. But it will take some effort and we'll have to see how this situation evolves. Mark, do you want to fill in on that?
spk04: Yeah, no, I do. We've had a, I think Les is exactly right. When we do have a vessel that does become, we have an outbreak on a vessel, we do obviously bring the vessel in, have it, you know, disinfected, we bring the crew up, bring a new crew in, as we talked about before. And usually when that happens, the vessel's down less than a week, but it does have an impact. But the procedures we put in place have, you know, minimized that to the extent that we can.
spk05: Okay, great. Thank you. I wanted to drill down into the low-bit hemming award number that you had out there, which is pretty large. Can you just talk about the projects that are in there? I guess the next decade one is in there, but I think, Lasse, you mentioned you won the Boston one, too. What else does that comprise of and what's left to bid in Q1 maybe that was scheduled for Q4 and might have been pushed out? Yeah, Mark, can you take that?
spk04: Yeah, sure. So in our low bid pending awards, you know, at December 31, 2020, so there's two large LNG projects, you know, energy clients in there, and obviously the next decade one is the, you know, big chunk of that. There are some smaller numbers related to what we historically have, you know, options that are on current projects we're working on, but the two energy clients make up the bulk of the number. And as you go now into 2021, what's occurred really in the first quarter so far, Lhasa mentioned, we have a 90 million of low bids pending awards. So that would be on top of the December 31, 2020 number with, you know, the larger one being the Boston additional phase of the Boston deepening. That was the project that we were originally anticipating to bid, you know, in 2020, but it didn't bid until January. So yeah, very pleased to have that in low bid pending award.
spk05: Okay, got it. And just in terms of the capex you're expecting to spend this year just on the new dredging vessel, the offshore windship, I think you mentioned you're investing in two other vessels that are not dredges. And between capital, just maintenance spending, give us a picture of how much you're expecting to spend this year.
spk04: Yeah, sure. Sure. So, you know, from what let's call it the regular CapEx, which is, you know, maintaining our fleet and, you know, a little bit of growth in there for our fleet as we improve the fleet, that's about 35 million for 2021. We're expecting for the new hopper dredge, the schedule of payments. I believe we've said this before is, you know, about 35 million for this year in 2021. And then the, We have the two multi-cats that we talked about that are not dredges. That should be a little bit about $18 million we expect this year, so a little bit south of $20 million. There's really nothing on the offshore. There's a small amount on the offshore wind. We're just doing the design, no construction yet, so that's in the neighborhood of $1.5 million for 2021. Okay.
spk05: Got it. Thank you. And last one for me, you're getting close to the ability to refinance your debt. Just what's the right level for you in terms of absolute debt as a company to start fund your investments and run your business? And number two, what kind of coupon rates are you looking at in the market right now? Yep.
spk04: So as we think about the call date at par, you know, it's May 15th, so we are eyeing that date. The market is still attractive, much more attractive than the 8% that is currently our coupon. The market is still very good for high yield. We expect that coupon to be much better than the 8%. The market will dictate a lot of that as we get into May. And So that coupon, you know, right now, if you looked at it, it could be 6% or better. Of course, the market can move, but we expect, you know, a good movement off of where we are today. And depending upon where that rate is, you know, if it gets more attractive, we could upsize it a little bit. But right now, we're expecting to kind of refinance at the same rate, same amount.
spk05: Got it. Understood. Thank you, guys.
spk04: Sure. Thanks, John.
spk01: Your next question comes from the line of DeForest Hinman.
spk07: Hi. Thanks for taking my call. A few of my questions have been asked and answered. Can you give us a little bit more color on the SG&A expense number in the fourth quarter? I know we had some office moves, share prices moved favorably. can you help us just think about where does that number kind of fall out in the first part of 2021 from a dollar perspective?
spk04: Yeah. So in the quarter, it was a little bit higher than you've seen in the prior quarters of the year. And that was really driven actually by severance expense of about $900,000. So you can call that a one-time cost. Some of that was related to the move, but some of it was also we had a small early retirement program, just impacted a few people, but that severance was $900,000 in the quarter, so that would be one time. So if you take that out, we would have been a lot closer to where we were in the previous quarters.
spk07: Okay, and I know we brought on some more leases for some offices, so is it really just the function of the $17,500 minus $900,000? That's kind of the new run rate?
spk04: Yes, from that status quo, but what you'll see, the new leases, as you move into next year, Um, you have a couple of other things going on. So the, you know, the Houston lease wasn't there in 2020 for the headquarters. So you'll have that we'll have really the, the relocation of people. Um, And those impacts, you know, those would be obviously one times in 2021, but as we look at GNA for 2021, we're expecting it to be about $3 million higher than it was in 2020. Um, And I talked a little bit about that on my comments. So we're looking at, obviously, the things around the Houston move, some of those one-times, except for the office lease. And then we are making some investments in some IT digitization. So those impacts, that's why you'll have this overall $3 million increase next year we're expecting.
spk07: Okay, very helpful. Thank you. And then when we're thinking about the – The debt refinancing is coming closer and closer by the day. We do have the share repurchase authorization. Can you just give us an update in terms of the board's thinking as it relates to share repurchase activity and then the potential for initiation or restatement of the dividend as we get a maybe a more permanent capital structure if you're comfortable using that word to be very helpful to understand the thinking there.
spk04: Last, do you like me to take that one?
spk06: Yeah, do that.
spk04: Sure. Yeah, sure. So, right. So on the overall on the dividend side, so with between the change in the, you know, refinancing these notes to see where we are, We have the share repurchasing program. From a board perspective, we do discuss dividends and all these different options on the capital structure. They kind of – that's fallen, I would say, out of priority versus the share repurchase program. We want to see how effective that would be, as well as waiting for the final – where this – Let's call it the refinance in size of our notes. But I would tell you it's a lower priority than the other items because we're also obviously looking at the investing in our fleet with the new hopper dredge, some of the other pieces of equipment we've mentioned like the multi-cats. and the offshore wind vessel. So there's a number of other things that I would say are priorities from the management's and board's perspective before dividends. But we do discuss it. We definitely do know that's an option for us.
spk07: Okay, very helpful. And then maybe just last question. Can you talk about the ability to turn backlog and you talk about some of those pending low bids into revenue? If we look back in time, You have had some, you know, large backlog numbers in the past and you had moved, you know, realized revenues, you know, in excess of $800 million in certain years, most recently 2015. Now we have a situation where, you know, I just put the two numbers together, pending low bids and backlogs over a billion dollars. You know, hopefully very busy this year, you know, hopefully good weather, but Is it a reasonable expectation to think that we can generate over $800 million of revenues in 2021?
spk04: So the one, you know, comparing to 2015, you do have to take out, you had E&I, the E&I business in there, so you have to take that out. And I don't recall the number off the top of my head, but I'm sure it was north of $100 million. So when you're looking at the backlog that we have today, At $559 million, we do expect 90% of that to be earned in 2021. When we file our K in a week or so, you'll see that. Which is, you know, very similar to where we were coming into 2020. But yes, we do have a lot of low bid pending award. And yeah, so we do actually expect revenue to increase next year from the 2020 number.
spk07: Okay, that's helpful. And thanks for catching me on that. I was looking at the – I should have been looking at the segment numbers versus the – No, no, no, no problem. No problem. All right, thanks for taking the question. I appreciate it. Sure.
spk01: Your next question comes from the line of Poe Fratt.
spk03: Good morning. Good morning. I just wanted to clarify, you know, Mark, you said, you know, backlogged 90% in 2021. Can you do the same thing for your low bids pending award? You know, right now, it looks like that number is 560 million. And can you give us sort of an idea of what you would expect to be and, you know, realized out of that low bid pending awards in 2021?
spk04: Yeah, no, unfortunately I can't yet since with the, you know, the LNG projects being a large chunk of that, that as we wait for, as we stated before, you know, final investment decision and then notice to proceed, we don't have a solid timing on that yet. So I can't give you a number there, but, you know, on Boston, we will work some of Boston this year, but some of that we'll go into, you know, the 22. So, yeah, unfortunately I can't give you a number yet until those LNG projects get a notice to proceed. So I can't, yeah, I don't have that yet for you.
spk03: Okay. And then when you talk about the, you know, we know the next decade, you know, confidentiality, you can't talk about that, but I hadn't seen a, did I miss the second LNG project that you announced or is that the Sabine project? or can you sort of give us a highlight which one that is and then also maybe cover on the size of that?
spk04: Yeah, so that one was actually one that's been in low bid for actually a long time. So when we put in a low bid pending award, we sign the contracts that's been out there since 19. So it's the same one, but that has not moved forward yet. Still in discussions with them, but it's south of $100 million. So just to give you a little bit of perspective, but yeah, again, I can't give you a number on that.
spk03: Okay. And then if we could look at the buyback program, I missed the amount of stock that you bought back in fourth quarter.
spk04: Yeah, not much in the fourth quarter. It was really all in the third quarter. It's a, you know, like a regular 10B51 plan. So we set parameters at, a grid with price targets that have a ceiling and the grid has amounts that even limits on each one of those. So each one of those grids has a limit that we would spend in each one of those grids. And where the stock price is today, it's above our ceiling on that repurchase program. So we didn't buy any additional in Q4.
spk03: Okay. Okay. And so when you look at it, you know, I think originally when you implemented the stock buyback program, you know, the goal was to get that completed by the end of the third quarter of 2021 or within a year. That doesn't seem likely unless you adjust the ceilings at this point in time. Is that fair?
spk04: Yeah, technically you wouldn't adjust them. You know, that plan would stay in place. So what we could do is do another plan.
spk03: is what would would be you just you would you would leave the old plan and do an additional one okay and then can you do you know if you wouldn't mind doing a cash flow walk on 2000 the fourth quarter you know you had the one thing I'm missing maybe is the working capital changes you can figure out what operating cash flow before working capital was but working capital and then potentially any other cash flow items to that, you know, pushed or that resulted in the 13.2 million decline in cash quarter to quarter?
spk04: Yeah. So really the biggest, the biggest decline in cash for the quarter was related to paying the interest on the senior notes. You know, so that's really the, the big move, which is, you know, about 13 million. So that's, there were some, obviously some pluses and minuses. We paid money, uh, about, uh, 9 million for the, uh, the new copper dredge. So, you know, in the fourth quarter, so we actually had some, there wasn't that much movement on the normal working capital items in the quarter.
spk03: Okay. Yeah. Cause CapEx was, it looked like 17 or almost 18 million or so.
spk04: Yeah.
spk03: What, um, And then just looking at your cash outlays in 2021, can you just clarify the $3 million higher G&A, is that exclusive of the $900,000 of severance, or is that inclusive? So I guess what's the net? Is that a net number of $2.1 million, or is it $3 million?
spk04: No, it's a $3 million increase is what we're expecting on G&A year over year.
spk03: not adjusting for the severance so correct okay um and then when you look at the capex for 2021 that you highlighted i do a quick math you're almost at 80 million what would moving the final investment decision on the rock uh dumper barge impact that number and then also can you talk about the option for the second hopper barge I think that you have until June of this year to execute on or exercise.
spk04: Uh, yeah, we actually, uh, we actually got an extension on that on the second hopper dredge for another 12 months to make that decision. Um, so, uh, we do have more time to decide on that if we need to. Um, and then on that question, so, you know, don't, won't have any impact in, don't expect any impact in 2021 from a cash flow perspective related to that. But on the offshore wind vessel, you know, at this point, we don't expect any impact outside of the number I quoted earlier on the design that we're already doing related to the vessel. You know, we'll make an investment decision in the back half of this year on that. You could have maybe a very minimal amount up front when you sign the contract, but otherwise, you know, it really shouldn't have a material impact in 2021.
spk03: Okay, great. And then, Lassa, you know, you talked about the bid market being as strong in 2021 as, you know, 2020. 2021 revenue is going to be a little bit higher than 2020. Can you talk about sort of how you're viewing, you know, the competitive landscape at this point in time? It seems like others are, you know, are adding, have added capacity. And I was just wondering if there's any, and you've lost some of the, you know, some bigger jobs out there, but I was just wondering if you could just give us a flavor for, or color on, you know, the competitive landscape and if you're seeing any pressure from, you know, the added equipment that's competitors have added. And then also, if you could sort of talk about potentially, you know, where is the business mix shifting to little shorter term projects or more call out? And, or is it or, you know, or do you think that you're, you know, you're, you're looking at larger jobs in 2021? I guess?
spk06: Well, first of all, the markets, we believe, will be strong in 2021 and onwards. As I said, the U.S. Army Corps of Engineers are having record budgets year over year, and we think that will continue because the need for marine and maritime infrastructure investments is just increasing. We do have... Climate change, as we were reminded of here in Houston the last couple of days with the big freeze. And we had a record hurricane season last year. So the need for investing into the infrastructure in the marine and the coastal areas is just increasing. So we think this market will be stronger as we go forward. Also, the funding from Congress is getting stronger. There's a very strong support for this. As you saw with the Harbor Maintenance Trust Fund, we are now getting up to 100% of the annual receipts being used for harbor maintenance and dredging. We also saw an act which potentially could open up the fund itself for use going forward. Competitive landscape. In a strong market, you will see that our competitors are investing into new equipment, the same as we do. And we are looking at a strong market, which these competitors would like to be part of. So we've seen some of our competitors adding new equipment, which is good. And you see the U.S. dredging industry meeting the challenges and building new equipment. to service the U.S. Army Corps of Engineers programs. Yes, we saw a couple of projects which were awarded to new entrants and new equipment, and that happens when new equipment comes to the market. Our competitors and we are making sure that we have backlog for that equipment once it enters the market to have the initial phase of the dredge being covered with backlog. so you can then optimize its performance. This is nothing new, and we think that the market will be able to support investments that are happening in the industry. And it's good for the market, as most of the equipment that we do have is getting a little long in the tooth, and maintenance cost goes up eventually. The size of the projects? No, I don't see the size of the projects being reduced. The phases of the deepening projects have actually been fairly large over the last couple of years. We had a record award for Charleston back in 2017. But on a general note, the port deepening And also the beach re-nourishment projects are staying the same while larger than what we've seen before. And also the contracting model for the U.S. Army Corps of Engineers is changing to more regional jobs, which then gives us a better view to the situation for need for our equipment as we respond to emergencies, particularly in Louisiana.
spk03: Great. If we could just, one last one, if you wouldn't mind. On the, you know, it seems like the infrastructure stocks have been moving up lately just with some hopes of, you know, stimulus legislation that's infrastructure-oriented coming out of Washington. Can you just highlight whether your comments about the bid market in 2021 are influenced by potential legislation at all?
spk06: Well, what impacts our market is the funding for the U.S. Army Corps of Engineers, which has been record high for the last couple of years and also for 2021. So with the focus in Congress for improving infrastructure in general is supportive of our dredging operations in general. And then as we do see the... The funding from the Harbor Maintenance Trust Fund coming forward in addition, this just supports the market. And it is a strong market and gives us opportunity to, as you have seen, to generate good product performance and also then renew our fleet.
spk03: Great. Thank you so much, Lasse. Thank you.
spk01: There are no further questions at this time. I would like to turn the call back over to Tina for any additional or closing remarks.
spk02: Thank you. We appreciate the support of our shareholders, employees, and business partners, and we thank you for joining us in this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion. Thank you.
spk01: Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.
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