Great Lakes Dredge & Dock (GLDD) – Implications of a Miss

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Wednesday, November 02, 2022

Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q22 Operating Results Disappoint. Revenue totaled $158.3 million down from $168.6 million last year and below management’s guidance of $160-$170 million. Gross margin was a shocking 2.4%, down from 21.5% in the year ago period, and management’s lower teens guidance. Adjusted EBITDA for the quarter was $1.3 million versus $32.2 million last year and our $21.8 million estimate. The Company reported a loss of $9.9 million, or a loss of $0.15 per share, for the quarter, compared to our estimate of net income of $5.4 million, or $0.08 per share, and last year’s net income of $13.8 million, or $0.21 per share.

What Happened? Lack of “book and burn” business resulted in much lower utilization, pull forward spending on maintenance expenditures taking advantage of the idle vessels, skyrocketing diesel prices impacting the 20% of diesel costs not hedged, and site conditions that remained worse than anticipated.

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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 


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