Great Lakes Dredge & Dock Corporation (GLDD), the largest provider of dredging services in the U.S. reported first quarter results that included net income of $8.8 million and adjusted EBITDA of $26.8 million compared to the record first quarter of 2020 that ended with $34 million of net income and $61.4 million in adjusted EBITDA.
President & CEO Lasse Petterson commented, “During 2020 as the COVID-19 pandemic hit our nation, Great Lakes was able to adjust and navigate the difficulties and challenges the pandemic posed to our operations. However, as the third wave of the pandemic spread through our population, we started to see significant additional direct costs and operational interruptions in the first quarter of 2021. Several of our vessel crews were infected despite our extensive testing and isolation protocols. Vessels were required to go to shore for crew changes and the vessels had to be disinfected before returning to work. This impacted the vessels’ scheduling and availability, which impacted our productivity on several projects and led to delays which pushed revenue from the first quarter into remaining quarters of 2021. Today the projects and vessels that were impacted are back in operation and with our solid backlog, vaccinations increasing, and stronger performance expectations in the third and fourth quarters, we do not see adjusting our full year expectations at this time. Approximately twenty three revenue days were lost due to COVID outbreaks. Downtime for the vessels impacted directly by COVID delays equated to $3.9 million of revenue and $1.2 million of gross margin. The direct COVID costs of at home and on site testing and costs of quarantining were $4.3 million in the quarter. We have initiated an extensive vaccination effort of our crews and staff and as of today we have approximately 20% of our staff either fully vaccinated or partially vaccinated. Our target is to have the majority of all staff and crew vaccinated in the second quarter of 2021, which we hope will greatly reduce or even potentially eliminate further impacts on our operations.
“We ended the quarter with net income of $8.8 million and Adjusted EBITDA of $26.8 million compared to the first quarter of 2020 that ended with $34 million of net income and $61.4 million in Adjusted EBITDA. The first quarter of 2020 was a record breaking quarter for Great Lakes, driven by robust performance on several projects and no vessels in drydock, therefore comparison to this quarter was expected to be difficult. In addition to the COVID related impacts, in the first quarter of 2021 we experienced some extended drydocks and equipment failure which impacted project schedules.
‘We expect the domestic bid market to be just as strong this year as it was in 2020. In the first quarter, Great Lakes announced awards for the Boston Phase 3 Deepening Project and the Panama City beach renourishment totaling $90.3 million. We also were the low bidder on the Mobile Deepening Phase 3 project that was pending award for $53.9 million at the end of the first quarter, but has since been awarded. In addition, in April of this year we were awarded the Golden Triangle Marsh Creation Project in Louisiana for $32.4 million and we were the low bidder on the Captiva Island Project for $15.6 million.
“In the offshore wind market, the Biden administration has pushed to accelerate wind energy development and has set a target to install 30GW of offshore wind energy by 2030. This target confirms our plans and determination to evaluate future investments in the offshore wind market. In December of last year, we announced the design and development of the first U.S. flagged Jones Act compliant, inclined fall-pipe vessel for subsea rock installation for wind turbine foundations and in March we awarded the integration engineering and detail design package to Ulstein. This vessel would represent a significant critical advancement in building the U.S. logistics infrastructure to support the future of the new U.S. offshore wind industry. Delivery of the vessel is expected in late 2023.”