Great Lakes Dredge & Dock Corporation

Good day, everyone, and thank you for standing by. Welcome to the third quarter of 2021 Great Lakes Dredge and Dock Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's 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. If you require any further assistance, please press star 0. And please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, the Director of Investor Relations, Ms. Tina Beginskis. Please go ahead.

Thank you. Good morning and welcome to our quarterly conference call. Joining me on the call this morning is our President and Chief Executive Officer, Lassa Pettersson, and our Chief Financial Officer, Scott Kornblau. LASA will provide an update on the events of the quarter, then Scott will continue with an update on our financial results for the quarter. LASA will conclude with an update on 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 2020 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 websites. along with certain other operating data. With that, I will turn the call over to Laksa.

Thank you, Tina. Before we start on the results of the quarter, I'd like to introduce Scott Kornblau, who has joined Great Lakes as our Chief Financial Officer. Scott will oversee our financial operations, including maintaining the financial integrity of our strategic plan and working closely with me as a member of the executive leadership team. He comes to us with nearly 25 years of financial industry experience and was most recently the CFO at Diamond Offshore Drilling. Now I'll discuss the quarter and then turn it over to Scott for an update on financial results. We ended the third quarter with improved results and a solid backlog. For the first half of 2021, operations saw substantial negative impacts from COVID-19 pandemic. A priority has been and always will be to ensure the safety and health of all our people. And we believe that in this current situation, vaccination is an important tool in achieving this goal. As vaccines became widely available in the second quarter, we set a target to have all parts of our organization vaccinated. And we have now reached our target. Although our vaccination efforts were successful, we did experience some lingering COVID-19 related costs in the third quarter. Direct COVID-19 costs for at-home and on-site testing and quarantining of crews were 4.3 million in the first quarter, 3 million in the second quarter, and an additional 2.1 million in third quarter, for a total of 9.4 million in the year to date. Indirect costs are not easily quantified. However, we saw a decrease in our realized project margins, which we attribute largely to inefficiencies caused by COVID-19. Today, our safety protocols and vaccination efforts allow project management to increase their supervision and inspection frequency on projects and vessels, and we have seen performance improving, and we are confident that our vaccine efforts will ensure reduced COVID-19-related impacts to operations going forward. In addition to the COVID-19 impacts, we experienced project delays due to Hurricane Ida. Several of our projects in the Gulf and on the East Coast were impacted, and we experienced delays returning to work due to damage and debris in the ports. One of our vessels, the Terrapin Island, was damaged in the storm, and that resulted in a six-week unplanned write-off. All affected vessels are back at work in the fourth quarter. We ended the quarter with net income of $13.8 million and adjusted EBITDA of $32.2 million. Given project activity in which we are currently engaged, coupled with our backlog, new project awards, our COVID-19 mitigation efforts, and fewer vessels in dry dock for the remainder of the year, we expect improved results in the fourth quarter of 2021. Unfortunately, even with improving results, we do not expect to achieve our original expectations for 2021. I will now turn the call over to Scott to further discuss the results of the quarter, and then I'll provide some further commentary around the market.