Great Lakes Dredge & Dock Corporation

Good day and thank you for standing by. Welcome to the second quarter 2023 Great Lakes Dredge and DOC Corporation earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference has been recorded. I would now like to hand the conference over to our first speaker today, Tina Baginskis. Please go ahead.

Good morning and welcome to our second quarter 2023 conference call. Joining me on this call this morning is 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, then Scott will continue with an update on our financial results for the quarter. LAHSA will conclude with an update on the outlook for the business and the 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 2022 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 Lhasa.

Thank you, Tina. As we indicated in our last earnings call, The difficulties we faced in 2022 as a result of the severely delayed bid markets for capital and beach restoration projects is now slowly coming to an end. The second quarter EBITDA is a result of an improved bid market and our cost-saving initiatives, which resulted in improved project margins. All combined, these resulted in an adjusted EBITDA of $16.6 million, our highest EBITDA since the first quarter of 2022. Although not all of the challenges from 2022 are behind us, we continue to see positive developments in both a large number and a better mix of projects coming to bid, which provides us with confidence that we are on a path to return to normal operations and results towards the latter part of 2023 and into 2024. The total bid market through June 30, 2023, was $930 million. of which we won 310 million, or 33% of the total market bid. This is nearly three times the amount won by the next closest peer. The first half-year bid market saw several bids for port deepening and improvement projects, totaling 350 million, of which we won 56%, including the 160 million pre-port phase two projects, on which we will utilize a varied suite of dredging equipment that only Great Lakes can provide. We ended the quarter with $434 million of a dredging backlog, which does not include approximately $50 million of performance obligations related to offshore wind contracts and $487 million in low bids and options pending award. Included in the low bids pending award were two LNG projects that have been waiting notice to proceed from our clients. In July post-quarter end, we received notice to proceed on the Rio Grande LNG project, which will be now the largest project undertaking in a 133-year history. Work on establishing the dredged material containment areas is scheduled to start later this year, with the major dredging efforts starting in early 2024 and ongoing for the next two years. Additionally, as stated previously, we've seen an increase in bids coming to the market, and post-quarter end, we were low bidder on an additional $137 million of projects, which will likely be awarded an added two backlog during the third quarter together with the Rio Grande LNG project, resulting in a total backlog exceeding $900 million today when all these projects have been included for and awarded. As we stated, the company took swift and proactive action on cost reductions and fleet utilization adjustments. Last year, we retrieved a 42-year-old upper-dressed tariff in Ireland, and we currently have cold-stacked dredges and various support equipment in anticipation of an improved dredging market in the latter part of 2023 and onwards. As we previously stated, cold-stacked vessels can easily be reactivated as the market continues to improve. These initiatives have led to substantially reduced cost in 2023, which has allowed us to navigate impacts on the delayed 2022 bid market. Correspondingly, we have reduced our GMA and overhead cost structures by more than 15%, adjusting to the current box conditions. On July 20 this year, We were honored to have President Biden attend the steel cutting ceremony for Great Lakes Offshore Wind Rock Installation Vessel, the Acadia. President Biden was joined by Congresswoman Mary Gay Scanlon, Marad Administrator Rear Admiral Ann Phillips, Metal Trace Department AFL-CIO Jimmy Hart, and President of SIU Dave Heindem, SIU Crew of Hopper Dredges. also present for senior executives from our current and potential clients. Post quarter end, we signed the first ever subcontract for procurement of US source rock with Carver Sand and Gravel LLC from a quarry in the state of New York. Both milestones solidify our entry into the offshore wind market and will support Great Lakes awarded rock installation contract with Equinor for the Empire Wind 1 and 2 projects with installation windows in 2025 and 2026. As we continue to adjust to the current market situation, we remain optimistic in the long-term outlook for the dredging market and our ongoing fleet renewal program is fundamental in our strategy to continue to be the U.S. dredging industry leader. After decommissioning several of our oldest dredges back in 2017, we have invested in productivity upgrades to our best performing vessels, and our new hopper dredge, the Galveston Island, is expected to be operational in the third quarter of 2023. And her sister ship, the Amelia Island, is expected to be delivered in 2025. I now turn the call over to Scott to further discuss the results of the quarter, and then I'll provide further commentary around the market and our business.