Great Lakes Dredge & Dock Corporation reported earnings per share of 1 cent in the fourth quarter of 2012, falling way short of the Zacks Consensus Estimate of 18 cents and the year-ago quarter’s earnings of 12 cents per share.
Sales increased 31% year over year to $207.1 million in the quarter, ahead of the Zacks Consensus Estimate of $195 million. Dredging revenue surged 54% to a record $190 million while demolition revenue declined 52% to $16.6 million in the quarter.
Gross profit during the quarter increased 19% to $237 million. However, gross margin contracted 100 basis points to 10.6% in the quarter, due to costs incurred in excess of revenue related to pending change orders on certain demolition projects, which was partially offset by an increase in revenue in the dredging segment, specifically higher margin capital projects.
General and administrative expenses surged 42% to $17 million. Operating income was $5.1 million; a 66% decline from the year-ago quarter’s operating income of $15.2 million. Operating margin plunged 180 basis points to 2.3% in the quarter. Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) was $21.3 million, down 17.4% from $25.8 million in the prior-year quarter.
Fiscal 2012 Performance
Great Lakes reported loss per share of 5 cents in 2012 compared with earnings per share of 28 cents in 2011. Revenues increased 10% year over year to $687.6 million.
As of 2012 end, Great Lakes had cash and cash equivalents of $24.4 million, down from $113.3 million as of 2012 end. The decline was due to continued investments in working capital on long-term projects, including the $60 million invested in the Wheatstone and Scofield projects, as well as investments in fleet and new equipment. Furthermore, costs incurred on pending change orders for demolition segment projects also led to the decline. Total debt increased to $263 million as of 2012 end from $256 million as of 2011 end.
Total backlog as of 2012 end was at $449 million compared with $370 million as of 2011 end.
In Dec 2012, Great Lakes purchased the assets of Terra Contracting, a provider of essential services for environmental, maintenance and infrastructure-related applications. The acquisition will enable Great Lakes to broaden the service offerings of its demolition and environmental businesses and expand their market reach.
Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. Great Lakes is also one of the largest U.S. providers of commercial and industrial demolition and remediation services, mainly in the Northeast. The company owns a 50% interest in a marine sand mining operation in N.J. 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 owns and operates the largest and most diverse fleet in the U.S. industry, comprising over 200 specialized vessels.
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