Great Lakes Dredge & Dock Corporation

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.

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.

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.