Great Lakes Dredge & Dock Corporation’s GLDD shares lost over 4% in a day after the company announced withdrawal of previously announced adjusted EBITDA guidance for the year ending Dec 31, 2015. The company has decided not to provide any adjusted EBITDA outlook in the future.
The guidance removal was due to unanticipated project losses, delays and lower-than-expected new business in the environmental & remediation segment during the third quarter of 2015. Continued uncertainties in the segment also remain matters of concern.
The environmental & remediation segment was impacted by a slower than anticipated escalation of its busy season in second-quarter 2015. In addition, project losses, some of which are due to timing issues related to change in orders and claims, impacted the segment's second-quarter performance.
Further, the largest provider of dredging services in the U.S. made some important declarations. Notably, Great Lakes Dredge & Dock has initiated a process to review potential strategic alternatives. The company’s board will conduct this review with the assistance of financial advisors.
In addition, the company announced that its Chief Executive Officer (CEO) and director of the company, Jonathan W. Berger intends to retire, effective from Apr 13, 2017 or a date chosen by the Board. The company is in the process of identifying a successor to fill the vacancy after his retirement.
Great Lakes Dredge & Dock has also reported several changes to its board of directors. Robert Uhler, president and owner of The Uhler Group, has been elected as a director on the company’s board, effective immediately.
Last week, Nathan D. Leight tendered his resignation as director and Chairman of the Board and Denise E. Dickins tendered her resignation as director and Chair of the Audit Committee of the company, both effective as of Oct 13, 2015. Great Lakes Dredge & Dock also appointed current director Major General (Ret.) Michael J. Walsh as Chairman of the Board, effective immediately.
Great Lakes Dredge & Dock has extensive dredging experience with energy sector clients and a track record for successful completion of huge projects. The company reported dredging backlog of $602.5 million at the end of second-quarter 2015, up from $594 million in the prior-year quarter.
In September, Great Lakes Dredge & Dock received a contract in Texas in association with Corpus Christi Liquefaction, a subsidiary of Cheniere Energy, Inc. LNG, an energy company. Per the contract, the company will dredge approximately 4.3 million cubic yards and the materials will be placed into an adjacent upland beneficial use site.
Great Lakes Dredge & Dock expects the addition of domestic dredging contracts during the second quarter to help in maintaining strong level of dredging backlog. However, the company will face strong competition and pricing pressures for any additional contract awards from the U.S. government and other domestic and foreign government agencies from its competitors like Dycom Industries Inc. DY and Chicago Bridge & Iron Company N.V. CBI.
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