Great Lakes Dredge & Dock Corporation

Good day and thank you for standing by. Welcome to the Q4 2023 Great Lakes Dredge and Dot Corp 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 this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to introduce your host for today's conference, Ms. Tina Bagiskis, Director of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to our fourth quarter 2023 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 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 expected, 2023 was a year of positive transition from the difficult 2022, and we ended the year strong with improved performance, stronger financial results, and a record backlog of $1.04 billion, which does not include approximately $179 million of low bids and options pending award and approximately $44 million of performance obligations related to offshore wind contracts. The bid market gained momentum throughout the course of the year in our preferred port deepening and coastal protection markets. We ended the year with 71% of our backlog in capital projects with four major awards, including the Freeport Deepening Projects, the Shep V. Natchez Waterway Channel Improvement Project, and two large port deepening projects related to liquefied natural gas LNG projects, the Port Arthur LNG Phase I and the Next Decade Corporation Rio Grande LNG projects. The latter is the largest project ever undertaken by Great Lakes. These two projects are not impacted by the recent White House announcements regarding a pause on new LNG export projects permitting. As we have navigated the challenging market conditions in 2022 and 2023, we have remained focused on staying a competitive market leader for the long term. We have implemented cost reductions initiatives, including strong reductions in our G&A and overhead cost structures, and we are modernizing our fleet with our ongoing new build program and retirement of older, less productive dredges such as the Terrapin Island in 22 and the Dredge 53 in 23. We have now taken delivery on our newest 6,500 cubic yard capacity hopper dredge, the Galveston Island, and we did that in December last year. The sister ship, the Amelia Island, is expected to be delivered in 2025. Also in 23, we took delivery of our two multicast, the Cap Hatteras and the Cape Canaveral, which will now be efficient tools for mobilizing and demobilizing pipelines, as well as general operation support. And we took delivery of three new scows replacing older equipment last year. Towards the end of 2023, the offshore wind markets started to see growing pains. We saw several cancellations by developers of power purchase agreements, or PPAs, that were entered into in 2018 and 2019 before COVID, inflation, and interest rates increases were a reality. The East Coast states also continued to invite new bids for new PPAs, which included the opportunity to increase the base rates to the new realities and to include inflation adjustments going forward. A client, the Equinor BP joint venture, decided to reset the plan for Empire Wind 2, Wind Farm, and to cancel our rock installation contract scheduled for 2026. Equinor is continuing the Empire 1 development as previously planned, and we will have the opportunity to re-tender the Empire Wind 2 contract when Equinor rebids their PPA for this development. In December of 2023, we were awarded a new rock installation contract to perform rock protection over subsea power cables, a new utilization for this vessel on an offshore wind project off the east coast of the United States. Going forward, we continue to pursue and bid a number of other offshore wind farm projects, both domestically and internationally, with rock installations planned for 2026 and beyond. We believe the offshore wind market power generation market offers Great Lakes a strong opportunity for growth in a rapidly growing market, which also provides us with an opportunity to diversify our business and our client base. I'll now turn the call over to Scott to further discuss the results for the quarter, and I'll provide further commentary around the market and our business.