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Great Lakes Reports Second Quarter 2012 Results

Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest provider of dredging services in the United States and a major provider of commercial and industrial demolition and remediation services, today reported financial results for the quarter and six months ended June 30, 2012.

Commentary

Chief Executive Officer Jonathan Berger said, “The dredging division performed well this quarter, after weather impacted results in the first quarter of 2012. Backlog remained at a high level, $455 million, at June 30, 2012, despite the slow domestic bidding during the second quarter. The demolition segment continues to perform on its projects in backlog. A large portion of the demolition backlog earned in the quarter relates to new management’s focus on large complex projects with higher margins, such as bridge demolition and industrial, municipal and utility buildings.

Mr. Berger added, “Adjusted EBITDA of $35.6 million for the first six months was in line with our internal expectations. With our current backlog and the projection of additional projects that we will win and perform this year, we feel we are well positioned to meet our Adjusted EBITDA guidance for 2012.”

Mr. Berger continued, “The last month has been very busy for us. Positive legislation was passed by Congress and signed into law by the President, bidding has been active in dredging and demolition and we announced we are building a new, world class hopper dredge. Great Lakes is well positioned to execute on our strategic plan of doubling the size of the Company in five years.”

2012 Second Quarter Operating Results & Highlights
 

Q2 2012
 

Q2 2011
Revenue $166.5 million $155.0 million
Increase 7.4%
 
Gross Profit $23.9 million $19.8 million
Gross Profit Margin 14.4% 12.8%
 
Operating Income $12.5 million $8.7 million
Increase 43.7%
 
Net Income attributable to Great Lakes $4.4 million $1.7 million
Per Diluted Share $0.07 $0.03
 
Adjusted EBITDA $20.9 million $17.3 million
Increase 20.8%
 

June 30, 2012

December 31, 2011
Total Debt $255.2 million $255.6 million
 
Net Debt (Debt less cash) $184.4 million $142.3 million
 
Cash and cash equivalents $70.8 million $113.3 million
 

Revenue & Gross Profit
  • Revenue increases included:
    • 43% increase in beach nourishment dredging revenue;
    • Demolition revenue increase of 6%, from bridge demolition work and a large site development project in New York;
    • Rivers & lakes posted a 17% improvement in revenue compared to the second quarter of 2011 on a larger number of active projects.
  • Gross profit margin (gross profit divided by revenue) improved due to:
    • Increased utilization resulting in higher fixed cost coverage;
    • Improved demolition results

Operating Income
  • Impacted by items noted above;
  • $1.3 million of Demolition legal expense related to the two subpoenas received in April of 2011 impacted prior year second quarter results;
  • The prior year also benefited from $2.5 million of gains related to assets sales, which did not reoccur in 2012.

Cash and cash equivalents
  • Cash and cash equivalents declined due to continued investments in working capital on long term projects.

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