HOUSTON - Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD), the premier dredging service provider in the United States, has solidified its financial position by entering into a $150 million second-lien credit agreement with Guggenheim Credit Funding, LLC. This strategic financial move, announced today, aims to enhance the company's liquidity and support its ongoing projects and future endeavors.
The company, which boasts a history of over 134 years in marine projects, accessed $100 million from the new credit facility on the closing date. It also retains the option to draw an additional $50 million within a 12-month period. The initial borrowing under this agreement has been allocated to repay existing debts under the ABL Credit Agreement and cover transaction-related expenses. Furthermore, the funds will contribute to the payment schedule of new vessel constructions, a vital part of Great Lakes' expansion plans.
Scott Kornblau, the Senior Vice President, Chief Financial Officer, and Treasurer of Great Lakes, highlighted the significance of this financial arrangement. "The second-lien financing shores up our balance sheet and provides additional liquidity to complete our new build program," he stated. Kornblau emphasized the flexibility afforded by the delayed draw feature, which secures a commitment for further capital while allowing the company to explore other financing alternatives.
Great Lakes is not only the largest provider of dredging services in the nation but is also actively pursuing growth opportunities in the burgeoning offshore wind energy sector. The company prides itself on owning and operating the most diverse fleet in the U.S. dredging industry, which includes approximately 200 specialized vessels.
The company's commitment to safety and employee well-being is evident through its Incident-and Injury-Free® (IIF®) safety management program, which is deeply ingrained in the company culture.
Lazard (NYSE:LAZ) Frères & Co. LLC served as the placement agent and sole financial advisor to Great Lakes in connection with the Second Lien Credit Agreement. Additional details regarding the terms of the agreement will be disclosed in the company's forthcoming Form 8-K filing.
InvestingPro Insights
In light of Great Lakes Dredge & Dock Corporation's recent strategic financial move, a deeper dive into the company's financial health and market performance provides valuable insights. According to InvestingPro data, Great Lakes Dredge & Dock Corporation currently has a market capitalization of $496.52 million. Despite a challenging environment, analysts remain optimistic about the company's future, expecting net income growth this year. This is particularly noteworthy as the company navigates its expansion plans and capitalizes on opportunities within the offshore wind energy sector.
The company's Price/Earnings (P/E) ratio stands at 35.36, which reflects investor sentiment about its earnings potential. However, when adjusted for the last twelve months as of Q4 2023, the P/E ratio rises to 89.23, suggesting that investors have high expectations for the company's earnings growth in the near term. This aligns with an InvestingPro Tip indicating that Great Lakes is trading at a low P/E ratio relative to near-term earnings growth, which could signal an investment opportunity for those looking at the company's future profitability.
On the revenue front, Great Lakes experienced a decline of 9.12% in revenue over the last twelve months as of Q4 2023, yet it also reported a substantial quarterly revenue growth of 23.91% in Q4 2023. This juxtaposition of metrics suggests a potential turnaround or seasonal fluctuation that investors may want to monitor closely.
For those interested in a more comprehensive analysis, InvestingPro offers additional insights and metrics on Great Lakes Dredge & Dock Corporation. There are 12 more InvestingPro Tips available, which can provide a deeper understanding of the company's financial nuances and market position. Readers looking to access these tips can utilize the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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