Great Lakes Reports First Quarter Results

  Great Lakes Reports First Quarter Results

                       Company Backlog of $593 Million

    Rivers & Lakes and Environmental & Remediation Backlog at Record Level

Business Wire

OAK BROOK, Ill. -- May 6, 2014

Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest provider of
dredging services in the United States and a major provider of environmental
and remediation services, today reported financial results for the quarter
ended March 31, 2014.

For the quarter ended March 31, 2014, Great Lakes reported Revenue of $174.4
million, Net loss from continuing operations of $2.5 million, and Adjusted
EBITDA from continuing operations of $12.0 million.

Jon Berger, Chief Executive Officer, commented, “The dredging segment
delivered $162.0 million in revenue and 12.9% gross profit margin in the first
quarter of 2014. The first two months of the quarter were impacted by severe
weather, which both contributed to longer project durations and equipment
downtime for maintenance, resulting in reduced gross profit margin. The margin
contraction also was driven by minimal dredging activity in the Middle East.
Our fleet located in the Middle East was essentially idle in the quarter;
however, work has begun on a project in Saudi Arabia and the Company is
pursuing strong possibilities to put the fleet to work in the second half of
the year. Increases in coastal protection revenue particularly along the East
Coast and maintenance revenue were offset by decreases in domestic and foreign
capital revenue and rivers & lakes dredging revenue.

“Despite the slow start in January and February, we have already experienced
an improvement in March and are optimistic that this momentum will continue
throughout the year. The severe weather delays will result in revenues to be
earned in future periods as the work on the underlying projects is completed.

“Terra, which comprises our environmental & remediation segment, continues to
demonstrate a solid performance, reporting a $6.5 million increase in Revenue
over first quarter 2013 to $12.7 million in the first quarter of 2014, even
while experiencing its own downtime due to the severe weather.”

Katie Hayes, Interim Chief Financial Officer stated, “As was previously
announced, on April 23, 2014, we completed the sale of two subsidiaries that
comprised the historical demolition business, NASDI, LLC and Yankee
Environmental Services, LLC. Great Lakes retains the right to collect on
outstanding accounts receivable and work in process at the date of close, as
well as any outstanding claims.

“Despite the slow start to the year, we were able to decrease our investment
in working capital, and keep debt levels fairly constant with year-end. The
Company continues to focus on driving higher operating cash flows and to
critically evaluate spending priorities on our investment in equipment.”

First Quarter 2014 Highlights

Total Company

  *Revenue decreased to $174.4 million in the first quarter of 2014, down
    3.2% from a very strong first quarter of 2013 largely related to lower
    dredging revenues. Our dredging segment recorded lower revenues in the
    current year quarter on lower capital dredging and rivers & lakes
    revenues, partially offset by higher maintenance and coastal protection
    revenues.
  *Gross profit margin declined to 12.0% in the first quarter of 2014 from
    17.1% in the prior year first quarter driven by tightening margins in
    certain of our dredging contracts due to severe weather and equipment
    downtime, partially offset by higher profit margins on our projects in the
    current year within the rivers & lakes and environmental & remediation
    businesses.
  *Operating income was $2.9 million for the quarter, down $11.6 million from
    the prior year quarter, primarily due to lower coverage of fixed costs.
  *Net loss from continuing operations was $2.5 million in the quarter, down
    from the prior year quarter due to the items noted above. Net loss (which
    includes both continuing and discontinued businesses) was $5.2 million, on
    the lower results in the dredging business and losses in our discontinued
    operations compared to Net Income of $0.4 million in the comparable
    quarter of the prior year.
  *Adjusted EBITDA from continuing operations was $12.0 million, down from
    $25.4 million in the first quarter of 2013 on lower operating income.
  *Total contracted backlog at quarter end was $592.5 million.

Dredging

  *Dredging earned revenues of $162.0 million in the first quarter,
    decreasing from $174.0 million in the first quarter of the prior year.
    Severe weather and mechanical downtime were the primary drivers of the
    domestic revenue shortfall. A slowdown in the Middle East resulted in
    unfavorable foreign revenue compared to the 2013 first quarter. First
    quarter 2013 was an exceptionally strong quarter for dredging as the
    majority of the domestic and international fleet was utilized and there
    were minimal weather impacts.
  *Gross profit margin was 12.9%, versus 18.0% in the same quarter last year.
    As noted above, weather and mechanical delays, along with lower fixed
    costs coverage drove margin down. Dredging ended the first quarter with
    $515.1 million of backlog, essentially unchanged from the backlog at
    year-end.

Environmental & Remediation

  *The segment recorded $12.7 million of revenue in the quarter, a $6.5
    million increase over the first quarter of the prior year, as a result of
    working on more projects in the current quarter.
  *Gross profit margin of 0.4% compared to a loss of 8.4% in the prior year
    quarter. Better fixed cost coverage allowed for improvement in gross
    profit, but severe weather partially offset the improvement in contract
    margins.
  *Backlog was $77.4 million at the end of the first quarter, primarily
    related to a brownfield development project in New Jersey and several
    environment remediation projects, including a new phase of remediation on
    the long term Enbridge project in Michigan.

Outlook

Mr. Berger stated, “In the first quarter of 2014, our dredging segment won
$140 million in dredging contracts, largely driven by the $89 million award
for our rivers & lakes dredging unit’s Lake Decatur contract as well as
additional capital work, including the award of the last phase of the
PortMiami deepening. We were awarded 100% of the coastal protection work put
out to bid during the first quarter, but this sector of the dredging market
saw few opportunities in the quarter. As stated previously, we expect more
coastal protection projects to be funded by special appropriations committed
after Superstorm Sandy, and we continue to expect the timing of these
contracts to occur later in 2014. Subsequent to the end of the quarter, the
Company was low bidder on three additional contracts collectively totaling $51
million that will be included in future backlog when awarded.

“Moving into the second quarter, we will utilize our fleet on a mix of capital
projects, including the PortMiami deepening, coastal protection projects and
maintenance dredging. Internationally, we are pursuing several bidding
opportunities, especially in the Middle East, which would allow for strong
utilization of our internationally deployed fleet.

“We remain optimistic that the Senate and House will agree on a final version
of the Water Resources Reform and Development Act for passage by the end of
the second quarter.The bill provides for important reforms to the Harbor
Maintenance Trust Fund, which will add to funding available for dredging
projects, and to the Corps of Engineers planning process, which will help
expedite projects. This bill also provides authorization for specific port
deepening projects, such as the Port of Jacksonville, Lake Worth and Port
Everglades in Florida. Clearly, this bill is positive news for the dredging
industry.

“Finally, the environmental & remediation segment has a very strong backlog of
$77 million, with the $35 million Enbridge job being a significant driver.
Terra also will be executing a portion of the Lake Decatur project, again
validating our combined service offerings’ attractiveness to the market. We
expect the majority of the environmental & remediation segment’s backlog to be
completed in 2014. To ensure successful execution on its expanding workload,
Terra has proactively aligned its project management to the upcoming growth,
and we are confident that this work will be executed well.”

The Company will be holding a conference call at 9:00 a.m. C.D.T. today where
we will further discuss these results. Information on this conference call can
be found below.

Conference Call Information

The Company will conduct a quarterly conference call, which will be held on
Tuesday, May 6, 2014 at 9:00 a.m. C.D.T. (10:00 a.m. E.D.T.). The call in
number is 877-377-7553 and Conference ID is 39800450. The conference call will
be available by replay until Wednesday, May 7, 2014, by calling 800-585-8367
and providing Conference ID 39800450. The live call and replay can also be
heard on the Company’s website, www.gldd.com, under Events & Presentations on
the investor relations page. Information related to the conference call will
also be available on the investor relations page of the Company’s website.

Use of Adjusted EBITDA from Continuing Operations

Adjusted EBITDA from continuing operations, as provided herein, represents net
income attributable to common stockholders of Great Lakes Dredge & Dock
Corporation, adjusted for net interest expense, income taxes, depreciation and
amortization expense, debt extinguishment, accelerated maintenance expense for
new international deployments and goodwill or asset impairments. Adjusted
EBITDA from continuing operations is not a measure derived in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”). The Company presents Adjusted EBITDA from continuing operations as
an additional measure by which to evaluate the Company’s operating trends. The
Company believes that Adjusted EBITDA from continuing operations is a measure
frequently used to evaluate performance of companies with substantial leverage
and that the Company’s primary stakeholders (i.e., its stockholders,
bondholders and banks) use Adjusted EBITDA from continuing operations to
evaluate the Company’s period to period performance. Additionally, management
believes that Adjusted EBITDA from continuing operations provides a
transparent measure of the Company’s recurring operating performance and
allows management to readily view operating trends, perform analytical
comparisons and identify strategies to improve operating performance. For this
reason, the Company uses a measure based upon Adjusted EBITDA from continuing
operations to assess performance for purposes of determining compensation
under the Company’s incentive plan. Adjusted EBITDA from continuing operations
should not be considered an alternative to, or more meaningful than, amounts
determined in accordance with GAAP including: (a) operating income as an
indicator of operating performance; or (b) cash flows from operations as a
measure of liquidity. As such, the Company’s use of Adjusted EBITDA from
continuing operations, instead of a GAAP measure, has limitations as an
analytical tool, including the inability to determine profitability or
liquidity due to the exclusion of accelerated maintenance expense for new
international deployments, goodwill or asset impairments, interest and income
tax expense and the associated significant cash requirements and the exclusion
of depreciation and amortization, which represent significant and unavoidable
operating costs given the level of indebtedness and capital expenditures
needed to maintain the Company’s business. For these reasons, the Company uses
operating income to measure the Company’s operating performance and uses
Adjusted EBITDA from continuing operations only as a supplement. Adjusted
EBITDA from continuing operations is reconciled to net income (loss)
attributable to common stockholders of Great Lakes Dredge & Dock Corporation
in the table of financial results. For further explanation, please refer to
the Company’s SEC filings.

The Company

Great Lakes Dredge & Dock Corporation is the largest provider of dredging
services in the United States and the only U.S. dredging company with
significant international operations. The Company is also a significant
provider of environmental and remediation services. The Company owns a 50%
interest in a marine sand mining operation in New Jersey that supplies sand
and aggregate for road and building construction and a 50% interest in an
environmental service operation with the ability to remediate soil and dredged
sediment treatment. Great Lakes employs over 150 degreed engineers, most
specializing in civil and mechanical engineering, which contributes to its
124-year history of never failing to complete a marine project. Great Lakes
has a disciplined training program for engineers that ensures
experienced-based performance as they advance through Company operations.
Great Lakes also owns and operates the largest and most diverse fleet in the
U.S. industry, comprised of over 200 specialized vessels.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking"
statements as defined in Section 21E of the Securities Exchange Act of 1934
(the "Exchange Act"), the Private Securities Litigation Reform Act of 1995
(the "PSLRA") or in releases made by the Securities and Exchange Commission
(the "SEC"), all as may be amended from time to time. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievements of
Great Lakes and its subsidiaries, or industry results, to differ materially
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Statements that are not historical fact are
forward-looking statements. Forward-looking statements can be identified by,
among other things, the use of forward-looking language, such as the words
"plan," "believe," "expect," "anticipate," "intend," "estimate," "project,"
"may," "would," "could," "should," "seeks," or "scheduled to," or other
similar words, or the negative of these terms or other variations of these
terms or comparable language, or by discussion of strategy or intentions.
These cautionary statements are being made pursuant to the Exchange Act and
the PSLRA with the intention of obtaining the benefits of the "safe harbor"
provisions of such laws. Great Lakes cautions investors that any
forward-looking statements made by Great Lakes are not guarantees or
indicative of future performance. Important assumptions and other important
factors that could cause actual results to differ materially from those
forward-looking statements with respect to Great Lakes, include, but are not
limited to, risks and uncertainties that are described in Item 1A. "Risk
Factors" of Great Lakes’ Annual Report on Form 10-K for the year ended
December 31, 2013, and in other securities filings by Great Lakes with the
SEC.

Although Great Lakes believes that its plans, intentions and expectations
reflected in or suggested by such forward-looking statements are reasonable,
actual results could differ materially from a projection or assumption in any
forward-looking statements. Great Lakes' future financial condition and
results of operations, as well as any forward-looking statements, are subject
to change and inherent risks and uncertainties. The forward-looking statements
contained in this press release are made only as of the date hereof and Great
Lakes does not have or undertake any obligation to update or revise any
forward-looking statements whether as a result of new information, subsequent
events or otherwise, unless otherwise required by law.

                                                                
Great Lakes Dredge & Dock Corporation
Condensed Consolidated Statements of Operations
(Unaudited and in thousands, except per share amounts)
                                                                     
                                                     Three Months Ended
                                                     March 31,
                                                     2014          2013
Contract revenues                                    $ 174,382     $ 180,153
Gross profit                                           20,907        30,734
General and administrative expenses                    17,870        16,236
Loss on sale of assets—net                            152         2       
Operating income                                       2,885         14,496
Other income (expense)
Interest expense—net                                   (5,016  )     (5,733  )
Equity in loss of joint ventures                       (1,843  )     (591    )
Gain on foreign currency transactions—net             65          36      
Income (loss) from continuing operations before        (3,909  )     8,208
income taxes
Income tax (provision) benefit                        1,453       (3,456  )
Income (loss) from continuing operations               (2,456  )     4,752
Loss from discontinued operations, net of income      (2,739  )    (4,341  )
taxes
Net income (loss)                                      (5,195  )     411
Net loss attributable to noncontrolling interest      -           22      
Net income (loss) attributable to common
stockholders of Great Lakes Dredge & Dock            $ (5,195  )   $ 433     
Corporation
                                                                     
Basic earnings (loss) per share attributable to      $ (0.04   )   $ 0.08
continuing operations
Basic loss per share attributable to discontinued     (0.05   )    (0.07   )
operations, net of tax
Basic earnings (loss) per share attributable to      $ (0.09   )   $ 0.01
Great Lakes Dredge & Dock Corporation
Basic weighted average shares                          59,708        59,369
                                                                     
Diluted earnings (loss) per share attributable to      (0.04   )     0.08
continuing operations
Diluted loss per share attributable to                (0.05   )    (0.07   )
discontinued operations, net of tax
Diluted earnings (loss) per share attributable to    $ (0.09   )   $ 0.01
Great Lakes Dredge & Dock Corporation
Diluted weighted average shares                        59,708        60,017

                                                             
Great Lakes Dredge & Dock Corporation
Reconciliation of Net Income (Loss) attributable to Great Lakes Dredge & Dock
Corporation to Adjusted EBITDA from Continuing Operations
(Unaudited and in thousands)
                                                                    
                                              Three Months Ended
                                              March 31,
                                              2014               2013
Net income (loss) attributable to common
stockholders of Great Lakes Dredge & Dock     $   (5,195   )     $  433
Corporation
Loss from discontinued operations, net of         (2,739   )        (4,341  )
income taxes
Net loss attributable to noncontrolling          -               22      
interest
Income (loss) from continuing operations          (2,456   )        4,752
Adjusted for:
Interest expense—net                              5,016             5,733
Income tax provision (benefit)                    (1,453   )        3,456
Depreciation and amortization                    10,885          11,451  
Adjusted EBITDA from continuing               $   11,992        $  25,392  
operations

                                     
Great Lakes Dredge & Dock Corporation
Selected Balance Sheet Information
(Unaudited and in thousands)
                                            
                            Period Ended
                            March 31,   December 31,
                            2014        2013
Cash and cash equivalents   $ 58,695    $   75,338
Total current assets          324,204       361,053
Total assets                  825,790       852,645
Total current liabilities     173,328       193,899
Long-term debt                287,000       285,000
Total equity                  237,700       242,101

                                         
                                              
Great Lakes Dredge & Dock Corporation
Revenue and Backlog Data
(Unaudited and in thousands)
                                              
                              Three Months Ended
                              March 31,
Revenues                      2014          2013
Dredging:
Capital - U.S.                $ 34,475      $ 45,508
Capital - foreign               16,470        38,385
Coastal protection              70,720        56,921
Maintenance                     36,311        27,764
Rivers & lakes                 3,984       5,381
Total dredging revenues         161,960       173,959
Environmental & remediation     12,730        6,194
Intersegment revenue           (308    )    -
Total revenues                $ 174,382    $ 180,153

                                                     
                              As of
                              March 31,   December 31,   March 31,
Backlog                       2014        2013           2013
Dredging:
Capital - U.S.                $ 189,450   $   176,117    $ 103,061
Capital - foreign               98,849        98,666       195,292
Coastal protection              76,583        143,498      33,978
Maintenance                     38,826        70,633       2,211
Rivers & lakes                 111,441      26,158      26,339
Total dredging backlog          515,149       515,072      360,881
Environmental & remediation    77,363       28,330      27,548
Total backlog                 $ 592,512   $   543,402    $ 388,429

Contact:

For further information contact:
Great Lakes Dredge & Dock Corporation
Katie Hayes
Interim Chief Financial Officer
630-574-3012
 
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