Earnings call transcript: Great Lakes Dredge & Dock Q3 2025 results beat EPS forecasts

Great Lakes Dredge & Dock (GLDD) reported its Q3 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.26, significantly higher than the forecasted $0.1675, marking a 55.22% surprise. Despite this, the company’s revenue slightly missed expectations, coming in at $195.2 million against a forecast of $200.39 million. The market reacted positively, with the stock rising 6.5% to $11.98 in pre-market trading.

Key Takeaways

• EPS beat forecasts by 55.22%, reaching $0.26.
• Revenue fell short of expectations at $195.2 million.
• Stock price surged 6.5% in pre-market trading.
• Strong performance in capital and coastal protection projects.
• Positive outlook with anticipated record EBITDA for 2025.

Company Performance

Great Lakes Dredge & Dock demonstrated robust performance in Q3 2025, with revenues increasing by $4 million compared to Q3 2024. The company attributes this growth to improved utilization and higher-margin projects, particularly in capital and coastal protection, which accounted for 85% of the quarter’s revenue. Net income nearly doubled to $17.7 million from $8.9 million the previous year, reflecting efficient cost management and strategic project execution.

Financial Highlights

• Revenue: $195.2 million, up $4 million year-over-year.
• Net Income: $17.7 million, up from $8.9 million in Q3 2024.
• Adjusted EBITDA: $39.3 million, with a 20.1% margin.
• Gross Profit: $43.8 million, representing a 22.4% margin.

Earnings vs. Forecast

The company’s actual EPS of $0.26 exceeded the forecast of $0.1675 by 55.22%. However, revenue fell short by 2.58%, highlighting a mixed performance. The significant EPS surprise indicates strong operational efficiency and cost control, which may offset concerns about the revenue miss.

Market Reaction

Following the earnings announcement, Great Lakes Dredge & Dock’s stock rose by 6.5% in pre-market trading, reaching $11.98. This increase reflects investor optimism driven by the EPS beat and positive future outlook. The stock’s performance contrasts with its 52-week range, nearing its high of $12.89, indicating strong market confidence.

Outlook & Guidance

The company expects 2025 to be a record year for EBITDA, driven by ongoing project execution and new opportunities in subsea infrastructure protection. Great Lakes Dredge & Dock is also preparing for potential port deepening projects in late 2026 and aims for full utilization of its new vessel, Arcadia, in 2026.

Executive Commentary

• Scott Kornblau, CFO, stated, "We expect 2025 will be the highest EBITDA year in company history by a large margin."
• CEO Lasse Pettersson noted, "We have not been affected by the shutdown, and we don’t expect to be either going forward."
• Kornblau emphasized a focus on deleveraging, saying, "Our priority next year is to start paying down the revolver."

Risks and Challenges

• Potential delays in project execution due to regulatory changes.
• Fluctuations in government funding for infrastructure projects.
• Increased competition in the subsea infrastructure market.
• Economic downturns affecting project financing and demand.

Q&A

During the earnings call, analysts inquired about the impact of a potential government shutdown, to which the company responded confidently, indicating no expected disruptions. Questions also focused on the company’s strategy for entering European markets for cable protection and offshore wind, highlighting its international growth ambitions.

Full transcript - Great Lakes Dredge & Dock (GLDD) Q3 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the Q3 twenty twenty five Great Lakes Dredgen Dot Corp Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. Speakers’ there a Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your first speaker today, Eric Birge, Vice President of Investor Relations. Please go ahead.

Eric Birge, Vice President of Investor Relations, Great Lakes Dredgen Dock: Thank you, Ari. Good day, and thank you, everyone, for joining us. Welcome to Great Lakes Dredgen Dock’s third quarter twenty twenty five financial results conference call. Before we begin, please note that certain statements made during this call are forward looking in nature and are subject to various risks, uncertainties and assumptions. These factors may cause actual results to differ materially from those anticipated.

For a detailed discussion of these risks, please refer to our filings with the Securities and Exchange Commission. We will also be discussing certain non GAAP financial measures, including adjusted EBITDA. Reconciliations of these measures to the most direct comparable GAAP measure can be found on our earnings release or on our Investor Relations section of our website at investors.gldd.com, along with other supplemental operating information. Joining me on today’s call are Lasse Pettersson, our President and Chief Executive Officer and Scott Kornblau, our Senior Vice President and Chief Financial Officer. Lasse will begin with a review of our quarterly key developments, followed by Scott, who will provide a detailed overview of our financial performance.

Lasse will then conclude with commentary on the business outlook and market trends. With that, I will now turn the call over to Lasse.

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Thanks, Eric. Following strong financial results in the first half of the year, the momentum continued into third quarter with high utilization and strong project performance through the execution of complex port deepening and coastal restoration projects, leveraging the capabilities of our team and our fleet. We ended the quarter with revenues of $195,200,000 and adjusted EBITDA of $39,300,000 Our dredging backlog remains strong at $935,000,000 with 84% in capital and coastal protection projects, plus an additional $194,000,000 in awards and options pending. During the third quarter, we were awarded new projects totaling 136,000,000 Our successful bid strategy from last year resulted in a large number of projects wins, which resulted in a high quality backlog, which will support full utilization and revenues for the remainder of 2025, as well as providing a good base and revenue visibility for 2026. Our current backlog includes three major port deepening LNG projects: the Port Arthur LNG Phase one project the Bramtsville Ship Channel project, part of Next Decades Corporation’s Rio Grande LNG initiative and Woodside Louisiana LNG, which is expected to commence dredging early twenty twenty six.

We have seen no interruption to our business during the current government shutdown. Our operations remain unaffected, and we continue to conduct business as usual, maintaining full schedules, both in bidding awards and we receive payments on time. Our support to the core would proceed without disruption and our backlog of projects are fully funded. During the third quarter, our offshore energy team commenced rock placement operations on Equinor’s South Brooklyn Marine Terminal. And during the fourth quarter, installation of ARMOR rock commenced on Empire Wind 1, utilizing a chartered vessel until delivery of the Arcadia in Q1 of next year.

At the October, we completed the refinancing and upsizing of our revolver credit facility, increasing capacity to $430,000,000 and extending the maturity to 2,030. With the increased capacity, we elected to repay our $100,000,000 second lien term loan. Scott will provide more details later on. Moving on to our newbuild program. In the third quarter, we took delivery of our sixth hopper dredge, the Amelia Island, marking a significant milestone in our dredging newbuild program, which is now complete, leaving us with the largest and most advanced hopper dredge fleets in The United States.

Upon delivery of the shipyard, the Amelia Island was straight to work and is performing extremely well. The Amelia Island and our sister ship, the Galveston Island, have been specially designed for shallow and narrow waters in The United States coastlines and are effective tools for us to work on coastal protection projects such as beach restoration, wetlands improvements and barrier island construction. The final vessel in our newbuild program, the Arcadia, the first U. S. Flag Jones Act compliant subsea rock installation vessel, is also currently under construction and hit a key milestone with a launch from the dry dock in July.

Delivery is expected in the 2026, at which time she will go straight to work on Empire Wind one. The target markets for the Arcadia include domestic and international offshore work, protecting critical subsea infrastructure, such as oil and gas pipelines, power and telecommunication cables and offshore wind installations. I’ll now turn the call over to Scott to further discuss the results of the quarter, and then I’ll provide some commentary around the market and our business.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Thank you, Lasse, and good morning, everyone. I’ll start by walking through the third quarter, which resulted in revenues of $195,200,000 net income of $17,700,000 and adjusted EBITDA and adjusted EBITDA margin of $39,300,000 and 20.1% respectively. Despite having three dredges at the dock at various times during the quarter undergoing regulatory drydocking and repairs, revenues of $195,200,000 increased $4,000,000 from the prior year’s third quarter as every active dread was working for the majority of the quarter in addition to the newly delivered Amelia Island, which commenced work in August. Current quarter gross profit and gross profit margin increased to $43,800,000 and 22.4% respectively compared to $36,200,000 and 19% respectively in the 2024. The increase in gross margin is primarily due to improved utilization and project performance and a large number of capital and coastal protection projects, which typically yield higher margins.

These projects accounted for over 85% of our third quarter revenue. Current quarter’s operating income of $28,100,000 increased $11,400,000 compared to the prior year’s quarter’s operating income of $16,700,000 The year over year increase is driven by higher gross profit and lower general and administrative expenses. Net interest expense of $4,600,000 for the third quarter twenty twenty five was down slightly compared to $4,900,000 in the 2024. And net income tax expense of $6,100,000 increased from $3,200,000 in the same quarter of 2024 due to the stronger results. Rounding out the P and L, net income for the third quarter twenty twenty five was $17,700,000 up from $8,900,000 in the prior year quarter.

Total capital expenditures, including capitalized interest for the third quarter, were $32,800,000 made up of $8,300,000 for the completion of the Amelia Island, dollars 18,600,000.0 for the construction of the Acadia, with the remaining $5,900,000 for maintenance and growth CapEx. Full year CapEx guidance of between 140,000,000 and $150,000,000 including capitalized interest remains relatively unchanged from the prior quarter. Turning to our balance sheet. We ended the quarter with $12,700,000 in cash and nothing drawn on our revolver. And as Lasse mentioned earlier, on October 24, we upsized our revolving credit facility to $430,000,000 and extended the maturity out to October 2030 at lower borrowing rates than the previous facility.

With the increased capacity, we elected to immediately repay our $100,000,000 second lien notes in full, reducing interest expense by almost $6,000,000 per year. Our balance sheet is in great shape with a trailing twelve month net leverage ratio of 2.5 times, liquidity of nearly 300,000,000 no debt maturities until 2029 and a weighted average interest rate on our total debt now under 6%. For the first nine months of this year, we’ve had positive free cash flow of $52,000,000 despite the newbuild payments. And as our newbuild program will be substantially complete at the end of this year, we expect to be significantly free cash flow positive starting in 2026. Looking forward to the fourth quarter, we expect to end the year on a high note even with two hopper dredges in the shipyard undergoing the regulatory dry dockings as every other active dredge will be working the majority of the quarter, including a full quarter of utilization for the Amelia Island.

With the strong fourth quarter we’re on pace to achieve, our expectation is that 2025 will be the highest EBITDA year in company history by a large margin. With that, I will turn the call back over to Lasse for his remarks on the outlook moving forward.

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Thank you, Scott. Our business operations continue without disruption during the current government shutdown. We remain fully operational, maintaining regular project schedules, responding to ongoing bid activities, receiving the contract awards, and we received timely payments. All current and upcoming projects in our backlog are fully funded. Our $935,000,000 backlog includes a robust mix of large and complex projects in the beach restorations and port deepening markets, enabling us to continue operations on a very busy 2025 and provide clear revenue visibility extending well into 2026.

As we predicted at the beginning of the year, the 2025 dredging bid market has been normalized after coming off a very strong port deepening bid market in 2023 and 2024. We expect the 2025 bid market to come in about $1,800,000,000 more focused on coastal protection projects,

Julio Romero, Analyst, Sidoti and Company: which

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: are funded by the 2023 Disaster Relief Supplemental Corporation, ARCT, and dredging maintenance projects funded by the US Army Corps of Engineers. As we look ahead, we’ll be beginning to see meaningful progress on the next phase of port deepening projects, including New York, New Jersey, Tampa, New Haven, and Baltimore, amongst others, with work most likely to commence in 2027. Turning to The U. S. Offshore wind markets, in May, we saw the reversal of the temporary pause from the Bureau of Ocean Management and Equinor’s Empire Wind project has resumed in accordance with its original schedule, which is part of our offshore energy backlog.

Between Empire Wind one, Earthsted Sunrise Wind and the additional scope for Sunrise Wind we were awarded last week, we have secured full utilization for the Acadia in 2026. In response to early signs of potential delays in The U. S. Offshore wind market, we proactively adjusted our strategic outlook for the Acadia. Over the past couple of years, we have looked at and include for the safeguarding of critical subsea assets, including oil and gas pipelines, power transmission lines, telecommunication cables and international offshore wind farms, increasing our opportunity into a broader range of services that we now refer to as offshore energy.

The Arcadia is engineered to precisely deposit rock for the protection of subsea infrastructure against environmental forces, such as weather and potential acts of sabotage by hostile entities. We are actively pursuing engagement across these sectors and are making good progress in securing full utilization of the ACADIA in 2027. In conclusion, building on strong performance in the first nine months of 2025, the company continues with great momentum and expects to achieve outstanding results for the remainder of 2025 and continuing into 2026. This success was a result of excellent project execution, the strength of our modernized fleet and our competent and excellent teams. And with that, I turn the call over for questions.

Conference Operator: Thank you. At this time, we will conduct a question and answer session. Our first question comes from the line of Julio Romero of Sidoti and Company. Your line is now open.

Julio Romero, Analyst, Sidoti and Company: Thanks. Hey, good morning. Lots of Scott and Eric.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Good morning, Julio.

Julio Romero, Analyst, Sidoti and Company: I wanted to start on just thinking about bidding trends and the trajectory of orders for dredging expected for the remainder of 2025 and 2026. And kind of given the end of that capital project cycle, just talk about your expectations about bidding and winning coastal protection orders through 2026 to help you kind of bridge you to the next East Coast deepening cycle expected in 2027?

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Yes. As I said, we are under a CR, that is, now extended to November 21. See what happens, when Congress get together. Probably, we get an extension of the CR to the end of the year and into maybe into 2026. And under the CR, the core can bid out the same amounts as they had for the previous years.

The only change is that new start projects cannot start up, and there hasn’t been that many new starts projects. So we expect bidding to continue as normal for maintenance dredging projects and for coastal protection and restoration projects. As I said, we’re the bid market for 2025 is a reduction from ’twenty three and ’twenty four. That was very active with port deepening projects, but it’s getting back to more normal bid market size.

Julio Romero, Analyst, Sidoti and Company: Understood. And congratulations on upsizing and expanding your revolver a few weeks ago. Going forward, does cash interest expense and GAAP interest expense converge? And if so, what’s your estimation of kind of a good quarterly run rate to use going forward?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes. So as I mentioned, just taking the two l out, putting on the revolver, that by itself saves $6,000,000 of cash interest a year. As you know, Julio, I’ll kind of walk through the next few quarters, we’re still capitalizing interest while the Acadia is being finished up. So when I look forward to fourth quarter, we will have a onetime noncash, expense to interest, and that’s for the extinguishment of the financing costs on the two l. We ended up paying it off three point five years early.

So you see about a $7,500,000 charge. Again, I reiterate, In addition to that, we will start seeing interest coming down. We’ll probably have, in addition to that, dollars 3,500,000.0 of interest expense down from about $4,500,000 as we’ll still be able to capitalize, but we have the reduced rate. So looking at probably about $11,000,000 of interest expense in Q4, but about 3,000,000 to 3.5 being the noncash excluding the noncash charge. Looking forward to Q1, we’re probably in about the $3,000,000 interest expense.

Then the Acadia gets delivered. So going forward, that is when cash interest and interest expense will be the same. But as we’ve talked about on prior calls, our priority next year is to start paying down the revolver. So the $6,000,000 savings that we’re seeing, I expect to increase quarter over quarter as we pay down and eventually pay off that revolver balance.

Julio Romero, Analyst, Sidoti and Company: Super helpful. I’ll pass it on. Thanks very much.

Conference Operator: Thank you. Our next question from the line of Joe Gomez of NOBLE Capital. Your line is now open.

Joe Gomez, Analyst, NOBLE Capital: Good morning. Congrats on the quarter.

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: You, Joe.

Joe Gomez, Analyst, NOBLE Capital: Maybe you could just walk me through this just because it’s different from a number of other companies that I cover that are in the government space. I understand the whole you know, continuing resolution stuff. But with the shutdown, you know, many of the the other government services companies are saying they aren’t getting paid. You know, that because so many of those people in those offices have been laid off or are not coming to work. So maybe just clarify how you guys are getting paid.

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Yeah. You have to realize that the Corps of Engineers has about more than 30,000 employees, and only 1,000 of those are furloughed. And that is a consequence of that only three percent of the U. S. Army Corps of Engineers workforce is funded through annual appropriations.

Most of the core staff is funded through project based accounts. And you can see that this works out. We have not had any issues with getting paid. Ongoing projects are being executed as normal. And we also see the bidding going on at a reduced rate because of the reduction in the overall bid market.

But yes, we have not been affected by the shutdown, and we don’t expect to be either going forward.

Joe Gomez, Analyst, NOBLE Capital: Okay, great. Thanks for that clarity and much appreciated. Lasse, what kind of early days, but what are you seeing as the ’26 bid market? I know you said ’25 is coming back from more normalized rate, but what do you think your 26% outlook is looking for?

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Yes, that’s a good question. And it depends on a lot of things. We have a CER that is ongoing. Congress is discussing whether to extend that to the end of the year, and some wants to extend it into 2026. Some are predicting extensions, all through 2026.

Anyway, under a CER, the budgets are remaining the same as it was in 2024, which was at a high level. So the core is funded and can bid out, work that is more maintenance related. But the only thing we cannot see is new starts going forward. So what I expect to happen is that, we continue the CR into 2026. And then towards the end of 2026, these new port deepening projects that have been in study phase up to now will probably be bid out.

And then with operations starting in 2027, We will see a lot of coastal protection projects being bid out that is not affected by the CR as long with more maintenance strategy.

Joe Gomez, Analyst, NOBLE Capital: Okay. And then one more. We’ve talked about this in the past, it’s only that Acadia has got 26 fully booked, ’27 we’re working on with some of the other markets that you’ve talked about, the cables for power of transmission, telecom, oil and gas. You had success, I mean, contracts signed with those other non wind oriented customers for the Acadia? Or is this still more of a work in progress?

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: It’s still work in progress. But we have, as I said, for the last two years, been very active in Europe because we saw a reduction in activity in The United States. And, there is a market for cable protection in Europe, which is expanding, as a consequence of the political uncertainties surrounding us. And then the offshore wind market is continuing in Europe. We have bid several projects for execution in 2027 and 2028 and onwards.

But in Europe, this market is a more mature market. So contrary to what we saw here in The United States, where the developers wanted to secure capacity very early on, and so our contracts on Empire and on Sunrise, in Europe is a more mature market. So the time between contract award and execution is shorter, more like six to nine to eight months to a year. So we have not we have bid a lot of work, and we are waiting for the outcome of those bids, but none awards as to now.

Joe Gomez, Analyst, NOBLE Capital: Okay. Thanks for that. I’ll pass it on. Thank you.

Conference Operator: Thank you. Our next question comes from the line of Adam Thalhimer of Thompson Davis. Your line is now open.

Adam Thalhimer, Analyst, Thompson Davis: Hey, good morning, guys. Congrats on a great quarter.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Thank you, Adam.

Adam Thalhimer, Analyst, Thompson Davis: Scott, I can’t help myself. You sounded so good on q four. I’m just curious, maybe you can compare your expectations for q four to the high watermark for the year of q one.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yeah. I I knew if somebody tried that, it would it would be you, Adam.

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: I’m glad I didn’t disappoint.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: You you did. And, I mean, again, as as you know, I mean, the the q one we had was, you know, one of the best, if not the best, in in company history. Q4 is going to be extremely strong. Now again, I did say we do have two hopper dredges in dry dock during the quarter, and you know the impact of that, the additional cost and of course, the zero in the revenue line. We did not have the same cadence of dry dockings in the first quarter on those type of vessels.

That being said, just as we typically do, the book end quarters are really, really strong Q1 and Q4, and we’re going to see that again in the fourth quarter.

Adam Thalhimer, Analyst, Thompson Davis: Okay. I’ll take that. And then the next one, I’m a little so you started booking offshore energy revenue in q three, and your backlog has grown, you know, grew in q two, grew again in q three for the offshore. It seems like that work is starting earlier. You talked about, you know, leasing a vessel to get to work.

Is it starting early, or maybe you can just level set what’s going on there?

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Well, what it’s it’s going on, as scheduled. We were planning to use the Acadia for executing the work this year, but the delay at the shipyard, resulting in to perform the scopes that is our scope on EMPOWIN-one. We have chartered in a vessel, and that work is ongoing right now. Scott?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes. And in addition to the work that’s ongoing on Empire Wind that started in the fourth quarter, We did, right at the beginning of the third quarter, win an additional scope of work for Equinor, and it’s on the South Brooklyn Marine Terminal. So that we began executing again with chartered vessel. That was never contemplated to be the Acadia, but it is to support the Empire Wind project. So that’s the revenue that you’re seeing in the third quarter.

That project will continue into the fourth quarter along with the commencement of the armor layer of work on Empire 1. So you will see Q4 revenue on offshore energy increase from the third quarter. So the increase that you saw in backlog is related to that South Brooklyn Marine Terminal, which was not in Q2 backlog.

Adam Thalhimer, Analyst, Thompson Davis: Okay. And does it so next year, does it stay at that Q4 rate, Scott? Or is there a further step up?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Well, Next year oh, you’re saying on a quarterly basis? Yeah. It runs around that. We will then take delivery of the vessel. We will go straight on to Empire, do some work there.

Then we’ll go straight on to Sunrise. And then you may have heard Lawson mention post quarter end, so it’s not in the backlog. We did win a little additional scope on Sunrise. So that is what fills out 2026.

Adam Thalhimer, Analyst, Thompson Davis: Okay. Last one for me, just high level. What are you seeing in the coastal protection market and potentially upcoming bidding opportunities?

Lasse Pettersson, President and Chief Executive Officer, Great Lakes Dredgen Dock: Yes. We see a number of beach restoration and coastal protection projects coming out to bid as we go into Q4 and into Q1 next year. It’s different funding streams, as I mentioned, in my brief remarks. So it’s a funding stream that is different from the normal appropriations to the Army Corps of Engineers, and that’s why it continues during the CER. As you know, we like to do these complex and difficult projects, because we perform well under those circumstances.

And then we see the maintenance dredging being bid out from the U. S. Army Corps of Engineers. I just want to say that, also part of what we’ve been able to do is to diversify our client portfolio. So we are now 50% private and 50% federal government funded, the work we do, and that gives us a good balance in our backlog.

Adam Thalhimer, Analyst, Thompson Davis: Good update. Thanks, guys.

Conference Operator: Thank you. Our next question comes from the line of Alex Rygiel of Texas Capital Securities. Your line is now open.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Alex, you there?

Adam Thalhimer, Analyst, Thompson Davis: Yes, sorry about that. Very nice quarter. Thank you for taking my question. Can you talk a bit about your very strong cash flow as we look into 2026 and beyond? And maybe what some of the uses of the cash flow is going to be?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes. I mean, so as I mentioned, even this year, despite writing some really big checks to finish the new build program, we are cash flow positive, and that will grow even more so next year as the new build program is over. Priority one right now to look at it is to delever. So we just did one of the maneuvers, which was to take out the second lien and greatly reduce interest expense. By putting it on the revolver, we have the flexibility to pay that off when we want as cash flow from operations come in.

So priority next year, finish the Acadia, use the excess cash to start paying that down, and then we’d just be left with the $325,000,000 notes. Those don’t mature until ’twenty nine, and they’ve got a fixed interest rate at 5.25%.

Adam Thalhimer, Analyst, Thompson Davis: Thank you very much.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes.

Conference Operator: Thank you. Our next question comes from the line of Jon Tanwanteng of CJS. Your line is now open.

Jon Tanwanteng, Analyst, CJS: Hi, good morning guys and thank you for taking my questions and congrats on a nice quarter.

Eric Birge, Vice President of Investor Relations, Great Lakes Dredgen Dock: Hey, Hey, Jon.

Jon Tanwanteng, Analyst, CJS: I was wondering if you could talk a little bit more about Q4. I think you guys mentioned it ending the year on a high note. Maybe give us a little bit more color on what is currently scheduled to revenue from a backlog perspective and given the drydocking schedule and how margins are likely to compare to Q3.

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes. Again, I’m not going to give specific guidance, but I’ll reiterate every vessel is working majority of the quarter with the exception of the two hopper dredges that will spend a part of the quarter within dry dock, but the work up until the dry dock and then when when they when they come out. Typically, and I don’t see the fourth quarter being really any different, we are starting to work on some environmental window work, and those usually do come with higher margins. So revenue will be extremely strong despite having the two vessels in drydock, and margins will be extremely strong based on the work that we plan to be executing during the quarter.

Jon Tanwanteng, Analyst, CJS: Okay, great. That was helpful. And then just in Q3, can you help break out the offshore margin contribution so that maybe we can back into the dredging margins?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes. And again, we’re not going to give or ever give project by project, and there was only one project being executed. It was $6,000,000 of revenue. Again, we just commenced the project. I’ll just tell you, the expectations we had going into this market, were really healthy margins, this project did not disappoint.

Jon Tanwanteng, Analyst, CJS: Got it. So we shouldn’t expect a change in the margin profile as you bring the Acadia online, if that’s the case. Is that fair to say?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: That’s correct.

Jon Tanwanteng, Analyst, CJS: Okay, great. And then last one for me. Just given the outperformance this year at an EBITDA level and maybe the changes in mix as you head into next year, is it possible to meet or beat the EBITDA that you’re generating this year in 2027 with two new ships coming online? Or is that going to be hard to do with the mix coming off and the hard comp from Q1?

Scott Kornblau, Senior Vice President and Chief Financial Officer, Great Lakes Dredgen Dock: Yes. I mean so yes, we definitely have entered this year with well over $1,000,000,000 of back log. We’re still going to enter next year with healthy backlog. And the mix of projects are still going to be strong. What we have in backlog now, the $934,000,000 post quarter end, we’ve had some additional awards.

There’s also about $190,000,000 in low bids and option pending. One of those options, two of the options are on the LNG projects, which have very high margins. Our expectations are those do get exercised sometimes next year and we’ll execute those. So I do think when we look at 2026, we will have a similar mix of revenue like we saw this year. So again, I’m not going to give guidance as to how next year can compare to this year.

But we see no reason why next year won’t be an extremely strong year as well.

Jon Tanwanteng, Analyst, CJS: Great. Thank you.

Conference Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Eric Birge for closing remarks.

Eric Birge, Vice President of Investor Relations, Great Lakes Dredgen Dock: We appreciate the support of all our shareholders, employees and business partners. And I to thank everybody for joining the discussions today about the developments and initiatives of our business. We look forward to speaking to everybody next quarter. Thank you.

Conference Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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