Strong finish to year. 4Q2021 results ahead of expectations due to solid execution and less COVID-19 issues which more than offset late-quarter weather issues in the Northeast. Revenue of $210 million was ~$15 million lower than expected, but gross margin expanded to $53.0 million with gross margin improving to 25%. After a couple of weaker quarters, it was the strongest quarter in almost two years.Recovery expected this year. Fine tuning 2022 EBITDA estimate. With moderating COVID-19 costs, we estimate that 2022 EBITDA will recover to $144.2 million. More than 80% of current backlog should be converted to revenue this year and 1Q2022 awards of $48 million are shorter term. Three factors create headwinds this year, including dry docking activity, higher offshore wind support infrastructure and a tighter labor market.Backlog dropped 8% sequentially to $552 million, but low bids pending award remained high at $567.3 million. As expected, backlog declined to $552 million due to drops in Capital and Coastal Protection, which more than offset a slight increase in maintenance. It appears that the prospects for one of the LNG projects in low bids pending award has improved with FID on the horizon, and $100-$150 million of low bid number might shift into backlog.Big news of 4Q2021 was FID to build first Jones Act qualified incline fallpipe rock installation barge. Initial customer contract commitments look likely in late 1H2022. Based on call comments, it seems likely that offshore wind customers could make contract commitments toward the end of 2Q2022. We believe that news would be well received since it would serve to de-risk the major $225 million commitment on the first rock dumping barge and bolster confidence that the offshore wind market entry is a good strategic move.Maintain Outperform rating and price target of $17.05/share due to new awards, recovering backlog and fleet renewal program. We are encouraged that execution was solid after a couple of challenging quarters, and the year ended on a high note. Still, the stock is off to a relatively weak start this year following a loss of 13% in January partially offset by a gain of 7% in February, but we believe that the risk/reward profile is very favorable. Trading at an EV multiple of 8.3x 2022 EBITDA, the stock remains attractive due to recent awards, strong execution and solid backlog. Read More >>