Great Lakes Dredge & Dock Corporation

Good day and thank you for standing by. Welcome to the Great Lakes Q4 and full year 2021 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any assistance during the call, please press star zero. I would now like to hand the conference over to your speaker today, Ms. Tina Baginkas. Ms. Baginkas, the floor is yours.

Thank you. Good morning and welcome to our fourth quarter conference call. Joining me on the call this morning is our President and Chief Executive Officer, Lassa Pedersen, and our Chief Financial Officer, Scott Kornblau. Lassa will provide an update on the events of the quarter and the year. Then Scott will continue with an update on our financial results for the quarter and the year. Lassa 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 2020 Form 10-K and subsequent filings. During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA 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 Lasse.

Thank you, Tina. During 2021, we faced continuing challenges from operating in an environment impacted by the unprecedented COVID-19 pandemic. As vaccines became readily available in the second quarter last year, We started an extensive communications and education program with a goal of having all Great Lakes Dredge and Dock team members vaccinated and protected from severe illness due to the virus. And we continued to adjust operating procedures to minimize the risk of infections and allow us to continue to keep projects on track and vessels operational. I'm very proud of meeting our target of 100% vaccination of all team members in the third quarter last year. And due to our vaccination efforts, we have experienced less severe impacts from the virus infections. Throughout the year, we avoided team members to be hospitalized, and no team member tested positive for COVID-19 from September through early December. To mitigate severe impacts from the virus, we started to make crew rotations, quarantining and testing, onboard visitor span, disinfection of vessels, mobilization of additional crew when team members tested positive. And in doing so, we incurred a $9.9 million cost related to COVID-19 testing, vessel disinfection, crew quarantine, and replacement of staff. And we had impacts to project performance due to the crew shortages, vessel dry dock delays, and rescheduling and substitution of vessels on projects. Our estimates indicate that the direct production impacts incurred this year is close to, if not higher than the cost mentioned earlier. And we believe firmly that without our actions, the impacts on our operations and financial results would have been much more severe. With our organization now 100% vaccinated against COVID-19, we were able to return to normal operations during fourth quarter, even with new strains of the virus emerging late November. Vessels continued to follow the planned schedules, and with increased direct oversight and supervision on projects and on vessels, we saw overall operational and performance improvements on the majority of our projects. We finished the fourth quarter of 2021 strong, delivering a quarterly net income of $24.7 million and adjusted EBITDA of $48.2 million. And in spite of the challenges from COVID-19, we ended the year with an adjusted EBITDA of $127.4 million, which is the third best year in company history. In addition to delivering respectable financial results in Q4, we saw a new milestone in our positioning for the new offshore wind generation market by issuing a $197 million contract for the construction of the first Jones Act compliant rock installation vessel. Delivery of the vessel is planned for 2024. During the year, we continued to safely perform essential and critical infrastructure projects in a domestic dredging market, as the market for new projects remained relatively strong in 2021. Throughout the year, we performed major port deepening works in the ports of Portsmouth, Boston, Charleston, Jacksonville, Mobile, Sabine, Freeport, and Corpus Christi. We also saw increased demand for our coastal protection projects renourishment of coastal beaches that have been damaged from the major hurricane events during the year, and additional wetlands restoration projects to help protect the coastline from additional storm damage. Climate change continues to impact our nation, and our coast continues to see damage that is a result of severe storms and rising waters, such as we saw from Hurricane Ida in late August. The first quarter of 2022 We have already seen two bomb cyclones that have brought heavy snow and coastal flooding in the northeast, which caused some project delays for us. Although these weather events have short-term impacts on operations, the resulting damage adds to the recurring nature and increased long-term demand for dredging services. All the work that we performed on projects continue to meet and exceed the established environmental and safety standards. Our 2021 ESG report is expected to be published in the second quarter of 2022, and we will provide an overview of the initiatives that we undertook and the progress we achieved in environmental protection and improvements, the safety and well-being of our employees and business partners, our community contributions and partnerships, fleet improvements, government practices, and our rapid and thorough response to the global pandemic. During 2021, we completed a materiality assessment that will allow us to identify and prioritize ESG issues that are most critical to our organization and our stakeholders. I now turn the call over to Scott to further discuss the results of the quarter and the year, and I will provide a further commentary around the market and business after remarks.