We hosted a virtual NDR meeting last week with Lasse Petterson, President/CEO and Mark Marinko, CFO, that showcased the favorable dredging market outlook and GLDD's strong market position. A link should be available shortly at www.channelchek.com.No change in favorable dredging market outlook even though competition has increased. Recent backlog trend has been down, but smaller projects have successfully sustained operating results. News on several large bid opportunities and Jacksonville C in 3Q/4Q2020 should firm up backlog. Added work of $35 million awarded/pending. $15.2 million of work in Ponte Vedra, FL was awarded on July 8th and GLDD was low bidder on $10.0 million of maintenance work on Delaware River Inland Waterway C&D. It appears that another $8.8 million of maintenance work in Chesapeake City, MD was awarded on Friday. The awarded/pending work is additive to recently announced awards of $51.1 million.Fleet renewal on the horizon. New build one approved and option for new build two creates optionality. The total cost of new build one is ~$97 million with expected delivery in 1Q2023. There is an option for new build two priced at ~$93 million so the total new build program could approach $190 million. Capex on new build one estimated at $12 million in 2020, $35 million in 2021, $45 million in 2022, and $5 million in 2023. Full details of the new build program should be available once the 2Q2020 10-Q is filed in early August.Strong credit profile makes new build program manageable and debt refinancing likely. The decline in net debt into the sub-$120 million range in 1Q2020 strengthened the credit profile and should allow for financing the new build(s), plus refinancing existing debt. The new build program appears manageable with current cash at $207 million and estimated 2020 free operating cash flow of $79 million after adding $12 million to capex for new build one.Maintaining Outperform rating and price target of $13.80/share due to continued confidence in 2020 outlook. While GLDD has rebounded 37% from the March low, it is still down 21% this year. We believe that GLDD should rebound since concerns about project win rates and backlog direction should not linger after additional work is awarded. Several larger awards are possible over the next year, if not sooner, and FID on new build one is positive. Potential catalysts include infrastructure stimulus and debt refinancing.Read More >>