Great Lakes Dredge & Dock Corp (GLDD) 2022 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the First Quarter of 2022 for Great Lakes Dredge & Dock Corporation Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your first speaker today, Tina Baginskis, Director of Investor Relations. Thank you, and Please go ahead.

Thank you. Good morning, and welcome to our first quarter conference call. Joining me on the call this morning is our President & Chief Executive Officer, Lasse Petterson; and our Chief Financial Officer, Scott Kornblau. Lasse will provide an update on the events of the quarter, then Scott will continue with an update on our financial results for the quarter. Lasse will conclude with an update on the outlook for the business and the market. Following their comments, there will be an opportunity for questions.

During this call, we will make certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. Certain risk factors inherent in our business are set forth in our earnings release and in filings with the SEC, including our 2021 Form 10-K and subsequent filings.

During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA reconciliation attached to our earnings release and posted on our Investor Relations website, along with certain other operating data. With that, I will turn the call over to Lasse.

Thank you, Tina. As stated in our earnings release, although we reported solid results for the first quarter of 2022, we did not fully meet our expectations as we experienced delays from abnormal weather events, production impacts on various jobs and some lingering costs from the COVID-19 pandemic, that began to diminish as the quarter progressed. In our last earnings call, we discussed 2 bomb cyclones that brought heavy snow and coastal flooding to the Northeast in January, and strong sustained winds impacted several projects in the Southeast, pushing production into later quarters.

Climate change continue to impact our nation and our cost continue to see damage as a result of severe storms and rising waters. Although these weather events have short-term impacts on our operations, the resulting damage add to the recurring nature and increased long-term demand for dredging and related projects. As we noted previously, planned dry dockings of 6 vessels will have an impact on our overall 2022 results as the vessels in dry dock are high revenue generators. The large hopper dredge Liberty Island was in scheduled dry dock the entire first quarter, but will be returning to work in the second quarter. And the largest vessel, the hopper dredge Ellis Island is scheduled for dry docking in the second half of the year.

In addition, 2 of our cutter dredges were partially idle during the quarter due to delays in mobilizing on several projects. As we continue to renew our fleet, we are focusing on initiatives that improve fuel efficiency and reduce emissions of greenhouse gases and other pollutants. Currently we are upgrading the cutter suction dredge Carolina, and the company's largest booster station, the Buster, which we expect will reduce NOx and particulate emissions by more than 80% from these 2 units.

These vessels would both commenced work in June on the first phase of the Houston Ship Channel Widening project, where the mechanical dredge, our Dredge 54, has already started working, in April. In addition, engines throughout our fleets are being replaced with new and more efficient models that will help conserve fuel and reduce emissions.

Our new building program which consists of our new build hopper dredge, which is a mid-sized hopper dredge, remains on schedule and on budget and with an expected delivery in the first quarter of 2023. And we have an option for a sister ship with delivery scheduled for 2024. After decommissioning several of our oldest dredges in 2017, we have invested in productivity upgrades to our best-performing vessels. And combined with our ongoing fleet renewal program, we have positioned us well to meet current and future market demands.

Our 2021 ESG report has been posted today. It provides an overview of the initiatives we undertook and the progress we achieved in the environmental protection and improvements, the safety and well-being of our employees and business partners, our community contributions and partnerships, fleet improvements, governance practices and our rapid and thorough response to the COVID pandemic. As part of our engagement with stakeholders and partners, we recently signed an agreement with the College of Engineering at Texas A&M University, to provide funding and technical support for what will become the Great Lakes Dredge & Dock Laboratory for Dredging and Coastal Studies.

Great Lakes has had a long and robust relationship with Texas A&M. That has included research, participating in and teaching all the dredging short courses and advocacy for the ocean and coastal engineering profession, and this agreement will allow us to formalize and build on that relationship.

Turning to the exciting news we announced yesterday. Equinor awarded Great Lakes our first major contract in the new offshore wind generation market. Equinor and a partner, BP, has chosen the Great Lakes and Van Oord consortium to perform the subsea rock installation work for the Empire Wind I and II wind farms of the East Coast of the U.S. This project is estimated to provide over 2 gigawatts of renewable energy to the State of New York.

The renewable power generated by the 2 wind farms will power more than 1 million households in New York. This project is considered a flagship offshore wind development, shaping the future of this industry in the U.S. And this award is significant for our entry into these new markets. The project team will be mobilized and start work this year with the installation of rock install protection starting in 2025. This award will also provide a solid foundation as we build the backlog for a new subsea rock installation vessel to be delivered from the arc of Philly year in the second half of 2024.

Great Lakes will be generated local content, employment and equal economic benefits in the state of New York by purchasing rock from domestic New York quarries and using its marine logistics based in Staten Island for its site operations. I will now turn the call over to Scott to further discuss the results of the quarter and the year, and then I'll provide a commentary on the market as it goes forward.

Thanks, Lasse, and good morning, everyone. Let me start by giving some color on our first quarter results. For the first quarter of 2022, revenues were $194.3 million, net income was $11.1 million and adjusted EBITDA was $29.7 million. Contract revenues of $194.3 million for the first quarter of 2022 increased $16.7 million or 9.4% from the first quarter of 2021. The quarter-over-quarter increase in revenue was due to higher domestic capital and coastal protection revenue, partially offset by a decrease in revenue from maintenance dredging, rivers and lakes and foreign projects.

First quarter revenue came in about 10% above the guidance given on the last earnings call, primarily due to pulling a job forward into the first quarter that was previously expected to occur in the second half of the year and the positive settlement of claims from recently completed projects. Current quarter gross profit of $33.1 million is flat compared with the first quarter of 2021. Gross profit margin this quarter was 17% compared to 18.6% in the prior quarter and was a few points lower than the guidance given on the last call due to the previously mentioned the weather impacts and a couple of production issues related to different site soil conditions.

During the first quarter, we had minimal COVID-related production impacts and COVID expenses were approximately $1 million, most of which were incurred at the beginning of the quarter. Operating income for the current quarter of $18.8 million increased $2.1 million from the prior year quarter, primarily due to lower general and administrative expense. G&A expense came in at $14.6 million during the first quarter of 2022, which is down $1.7 million from the prior year quarter, primarily due to lower stock incentive expense and Houston relocation costs. G&A was approximately $2 million lower than prior quarter guidance, primarily due to lower-than-expected stock incentive expense and the timing of adding additional head count related to building up our offshore wind team.

Net interest expense of $4 million for the first quarter of 2022 came in at guidance and was down from $6.6 million in the first quarter of 2021, primarily due to the lower interest rate on the senior notes, which were refinanced in the second quarter of 2021. First quarter 2022 income tax expense of $3.3 million increased $1.9 million from the same quarter of 2021 due to the higher income and a onetime tax deduction related to stock compensation in the first quarter of 2021. Rounding out the P&L, net income for the first quarter of 2022 was $11.1 million, up from $8.8 million in the prior year quarter.

Next, we turn to our balance sheet, where we ended the first quarter of 2022 with $142.6 million in cash, no debt maturities until 2029 and our revolver remains undrawn. First quarter 2022 capital expenditures were $25.6 million, which included $12.7 million in maintenance CapEx, $8.7 million for the construction of our new hopper dredge and approximately $4 million for the construction of the new scales and Multi Cats.

Absent any additional new builds, the full year CapEx guidance I gave on the last call of $165 million remains unchanged. I'll conclude with some commentary on the second quarter of 2022. We expect Q2 revenues to be between $175 million and $185 million. The Liberty Island, which was in the shipyard for her regulatory dry docking all of the first quarter is expected to return to work later this quarter. The cutter dredge, Carolina entered the shipyard towards the end of the first quarter for emission reduction upgrades and is expected to return to work in June. The dredge New York is scheduled to enter the shipyard in the latter part of the second quarter for her regulatory dry docking and the Dredge 54, which completed her regulatory dry docking towards the end of the first quarter is currently working at the Houston Ship Channel.

We expect gross profit margin to be higher in the second quarter compared to the first quarter, but may experience a drag from the first quarter weather and production impacts. G&A expense is expected to be about $16 million and net interest expense should continue to slightly decrease each quarter throughout the year, as more interest is capitalized as the new builds progress. With that, I'll turn the call back over to Lasse for his remarks on the outlook moving forward.

The U.S. Army Corps of Engineers has received a record funding in 2022. And as they have throughout the pandemic, they have continued the bid schedule for all types of dredging, including port deepenings, port maintenance and expansion and costal protection and restoration projects. In 2021, the domestic market reached $1.8 billion in projects bid, and we expect 2022 bid with market to be equally strong. However, we have seen some delay in new bids here at the start of this year. We expect bid activities to increase substantially in the second and third quarter, and we expect to see bids for multiple new faces of port deepening projects in Norfolk, Freeport, Mobile, Sabine, Corpus and additional phases of the substantial Houston Ship Channel Widening project.

These major capital projects are where Great Lakes can excel with our technical expertise, experience, safety, performance and a large diverse fleet. Europe is currently reevaluating the sourcing of energy after the Russian invasion of Ukraine, which will require imports of large quantities of LNG. Included in our low bids pending are 2 LNG projects that are still pending a notice to proceed by the clients. Both of these clients are now firming up their investment plans, and one of these clients has already instructed their EPC contractor to start construction of its export facility in second quarter of 2022, and preparation for the dredging would commence soon thereafter.

We ended the first quarter with a 50% bid market share or equal to $95 million, and it consisted of several coastal protection projects that would add to our total backlog. The awards included the Coastal Strong Risk Management, East Rockaway Inlet subcontract for $37.2 million, the Avon and Buxton Beach's projects for $25.9 million, the Carolina and Kure Beach project at $20.3 million and the Nags Head Beach project for $11.6 million. We ended the quarter with $474 million in backlog and $505.3 million in low bids and option pending awards. Post quarter end, we were low bidder on the New Jersey Wind Port Stage 1 Channel Deepening project, which will create a navigation channel from the Delaware River Channel to the hub-style offshore wind marshaling port, valued at $7 million is not a major dredging project. However, it is significant as the New Jersey Wind Port will be the first purpose-built wind port on the East Coast, providing heavy lift and component facilities with open access to the Atlantic Ocean.

We continue to see strong support from the administration for the dredging industry. On March 15 this year, the Omnibus appropriation bill was signed into law, including funding for the U.S. Army Corps of Engineer totaling $8.3 billion for fiscal year 2022. This is an increase of $548 million above the fiscal year 2021, and an increase of $1.6 billion above the President's original budget request.

Now turning to the U.S. offshore wind power generation market, which with our first award, we remain confident that this will provided Great Lakes with a strong opportunity for growth and diversification in building this new business. In March of 2021, the White House announced new initiatives that will advance the administration's goals to expand the nation's offshore wind energy capacity in the coming decade by opening new areas of development, improving environmental permitting and increasing public financing for projects. As part of the initiative, the Department of the Interior, Energy and Commerce, committed to a shared-goal of installing 30 gigawatts of offshore wind power generation capacity in the U.S. waters by 2030.

And in January of this year, the administration announced plans to auction more than 480,000 acres in the New York Bight for 6 new offshore wind energy leases. The administration's first wind sale and the largest lease sale ever offered with potential build-out capacity of over 7 gigawatts. So last year, we solidified our plans to enter the offshore wind market by signing a $197 million contract with the Philly Shipyard to build the first U.S.-flagged Jones-Act Compliant inclined fallpipe vessel for subsea rock installation for wind turbine foundations, which now has its first project set to start in 2022.

In parallel to the vessel build, we have been busy bidding from our multitude of offshore wind farm projects with rock installation planned for 2025 and beyond. Major wind farm developers like Equinor, Dominion, Orsted, Avangrid and the U.S. Wind have already issued RFQs, and they are in the process of selecting supplies for the wind farm developments. And with the Equinor, BP award yesterday as a strong start, we have good opportunities ahead to add new projects to our backlog, providing solid activity for our vessel from 2025 and onwards.

As the offshore wind industry is developing here in the U.S., the global offshore wind market are forecasted to be booming with more than 200 gigawatts of offshore wind generation capacity expected to be installed globally over the next 10 years. We expect this will keep the large international contractors involved in offshore wind, very busy for the next years, keeping vessel and equipment demand high.

In conclusion, although we were faced with some challenges in the first quarter of this year, we are confident in the decision we have made and the strategic initiatives we have implemented to grow and improve our fleet and business. We are optimistic that the domestic dredging market demand will remain strong in the coming years. And the ongoing developments in the U.S. offshore wind generation will provide an avenue for diversification and growth for our company.

And with that, I'll turn it over for questions.

(Operator Instructions) Our first question comes from the line of Joe Gomes of NOBLE Capital Markets.

This is Joshua Zoepfel filling in for Joe Gomes. Just my first question is just regarding yesterday's announcement of the Empire Offshore Wind project. Can you provide just any more detail on that? And if so, like why would they choose you guys over maybe some other peers?

Well, we certainly hope they chose us because we have the best technical solution and the best bid for the work. The combination of Great Lakes as the largest dredging contractor and subsea construction company in the U.S. combined with Van Oord, which is a world-leading and maybe the most experienced contractor building out offshore wind farms. I think the clients saw the value and saw the value in our offering.

And there's one more. And just I was looking to see like just how is the labor market looking for the company? Are you guys just seeing any good retention current employees and any good attraction of new ones?

Well, the labor market, it continues to be tight, and we see that both in our staff in our offices and also on our vessels that the labor market is changing. And we are looking at this very hard in order to make sure that we retain the staff we have, but also to make sure that we are attractive when it comes to new recruitments. So it is different than it was before the pandemic, but we have staff and we have plans in place to make sure that we can man our projects as we go forward.

Our next question comes from the line of Jon Tanwanteng of CJS Securities.

Congrats on the Empire Wind. It's nice to see all of that come to fruition after such a long time. My first one is, I was wondering if you could talk a little bit more about the scale of the project, the contract side, the length, the expected benefits to how quickly it ramps, those kinds of details?

Jon, it's Scott. At this time, we're not allowed to disclose the value of the contract. But let me give you some general commentary on the award and some thoughts on how we think about this wind vessel going forward. The Empire Wind award was the first step for building backlog for the SRI for 2025 and 2026. And these type of contracts are typically awarded with 2 to 3 years lead time, so the operator can reserve the vessel capacity. The scopes for Great Lakes on the Empire Wind project are expected to keep this vessel utilized for nearly half of 2025 and half of 2026, and we have bids on multiple other projects to absorb the rest of the vessel's availability for those 2 years and beyond. Once our wind vessel is fully utilized and operational, we expect annual revenue to exceed $100 million a year, and margins should be similar to our more complex dredging capital projects.

And I was wondering, once you get towards that 100% utilization, how many other ships will you be thinking you're needing? Is that in the discussion right now? Or is it something you're still going to wait till December or I guess, later this year before you're going to decide that?

Yes. As you know, we have an option to build an additional vessel at the arc of Philly Yard. But we will see how the market develops. Our focus here will be to make sure that this vessel is fully utilized. And then if the market takes off and if we see that the ambitions from the administration of the 30 gigawatts is coming through, then certainly, we will need more capacity than the one vessel.

And then are you any closer to the decision on the second half our dredge?

Yes, we have an option that expires in June of this year, and we see the dredging market as very active. So we are looking very keenly on whether to exercise that option or not.

And then finally, just the commentary on the slower bids entering this year last. I know you had been expecting a little bit of weakness in the first quarter. It seems like it's slower than even that. Does that impact your expectations for the year just in terms of how much work you can perform through year-end? Or is this more of a -- we can make it up a little bit later as these awards start rolling out?

Yes, in our list, there's 2 questions there. One is on the bid market, and I think the bid market will recover. There are some major projects that are in the core of engineers listing in addition to the LNG projects that are out there. So when it comes to the bid market, I'm very…

It seems like they drop. This is Tina. Let's just wait a few minutes to see if they dial back in. Okay.

But you guys are lost of answer?

I think you must have…

You guys are back on.

The bid pace for the beginning of the year versus your expectations for the whole year. So I'll comment on the bid market. And yes, the bid market was slow here in the first quarter, but we expect it to pick up quite strongly in second and third quarter. And I expect the bid market to be just as strong or even stronger than it was last year, in particular with the LNG development that we do see. When it comes to revenue development for the year, I'll let Scott comment on that.

So with the -- of the $474 million of backlog that we ended the quarter with, we expect roughly 80% of that to convert to revenue in 2022. The second quarter, we are pretty much fully utilized, except for some of the regulatory dry docking that I talked about before. But we already have the dance card full on that. Q3, there is some availability. We've got 2 or 3 vessels that we're bidding work on right now that we are hopeful we'll be able to fill in, in the next month or 2. So they'll be able to seamlessly move into work. And then we have a couple of more after that, that have availability in the Q4, again, working on filling up that. So nothing changes the way we were thinking about 2022 as a whole. We knew that Q1 would be slow bidding and it will start picking up in Q2 and Q3, and that's when we would fill out the second half of the year.

Our next question comes from the line of Adam Thalhimer of Thompson Davis.

Congrats on the solid Q1. I want to start out on margins. You're starting out the year a little slower than you expected. Does any of that have to do with kind of general inflation or supply chain issues?

No. Adam. I mean, really, the drag on margin that we saw in Q1 was related to all the weather issues or production issues, which causes some delays. So those costs that we incurred because of those delays and production impact is really what's dragging down the margin because you see the revenue was solid and actually slightly higher than where we saw. But it's just the cost that we incur when we have these weather and production issues that really drag it down. And as I kind of foreshadowed in my commentary, it's not just the one and done. This does drag the project down, not just for the quarter but until the end. So we will still see some of the Q1 impacts rearing itself up in Q2 as some of these projects progress, but we also have a bunch of fresh projects starting as well that we should be able to recover.

So I do think that quarter-over-quarter, we will see an increase in margin even with some of the impacts that we will still feel from some of these issues.

Has the bidding changed at all in terms of contingencies that you can put in for fuel or some of these older contracts that are coming back? What kind of protections do you have in there for inflation?

Yes. So for most of the core contracts, once we bid them, the costs are locked. However, for fuel, we do have a very aggressive hedging program. So we are able to minimize any impact from fuel because we do endeavor and we always have to hedge at least 80% of our expected fuel consumption and we topped that up. So fuel is really not very impactful for us when it comes to how we perform against bids. As we bid on new projects, we don't just go back and look at what costs were. We have a view on what costs are going to be, and we make sure that we build all of those in as we bid all projects going forward.

And then on dry docking, it sounds like the schedule for the back half of the year is actually not as heavy as you were thinking maybe 3 or 4 months ago. Is that true?

No, I mean nothing really has changed. The Carolina, which is in now for its emission upgrades, that was not part of that original commentary that we gave on the number of dry docking because we were just talking about regulatory dry dockings. So this was an emission upgrade instead. But now the schedule is still right now pretty much the same. I kind of laid out what the second quarter would look like. We still would have 3 regulatory dry dockings in the second half of the year, including the Ellis Island.

And just last one for me. What's the -- you mentioned kind of 5 deepening projects. What's the timing on when those could get awarded? And how do you -- and there's a moving piece with the LNG also? Like how do you expect backlog to trend as we move through the year?

Yes. As I said, the bidding here starts really to kick off in second quarter. And third quarter is going to be very busy. So the backlog will start to be built as we move from, I would say, from second quarter into third quarter. And that goes for the deepening projects. We know that the Houston Widening, the second phase of that project is in under evaluation at this point in time, and that may be awarded here in second quarter. And then we have other phases all the 3 ports and Sabine and Corpus is getting towards the end of third quarter and fourth quarter. The LNG projects, we have already bid those projects. So we are expecting the FID to go forward. And as I said, one of the projects is already moving into the EPC construction. And we are then starting the preparations for the dredging here in second half of this year, but the dredging itself will probably start early next year at the earliest.

There are other LNG projects and the ones that we have in a low bid pending, which is also being reconsidered, but probably not will be bid until next year.

(Operator Instructions) Our next question comes from the line of the DeForest Hinman of Walthausen & Company.

The offshore stuff, it's really starting to look like it's more tangible, more real with the announcement we've made with the New York project. But can you just help us think about what does that look like when we start looking at -- and I think -- and the reason I'm asking is I think you guys have a lot of understanding of the geology of a lot of the -- I don't know if it's the shelf or whatever it's called. But when we start to think about all those units going up offshore and they're hooking those back to the land, the mainland. Is there dredging involved outside of this rock dumping vessel in terms of getting those cables to the land? Are they just set on the ground? Are they dock in a trench? I mean, is that a future revenue exposure as well?

Yes. There are additional scopes that we are looking at when it comes to offshore wind. We are focused in on the scour protection because those are of the larger contracts, and it is important for us to get contracts to our backlog for our vessel that we are building. But there are additional scopes around some dredging, particularly when it comes to the shore approaches, we are looking at scopes that will add to our backlog once those are bid and awarded.

And then on the geology piece of that outside of the coast of New York, is that a service that's done with a suction dredge or cutter dredge? What does that geology look like?

Yes. The work that we are looking at is really the shore approaches for the export cable, and I think that's where you tie in to the shore, where the approach is complicated, and there's various different techniques that can be used there. It could involve dredging. It could involve digging with a mechanical dredge. It could involve cutter dredge. And we just have to see where the approaches are happening. The other scopes that we are looking at and which seems to be an issue for offshore wind is the scour protection around cables in general. I don't know if you saw what Orsted was out for the press release earlier this year, where they had to go out and provide additional scour protection on the cables for their wind farms in Europe.

And so we expect that to be additional scopes here when it comes to protection of the cables themselves, that provides additional work for this.

And then on the LNG contract -- sorry, apologies, not the LNG contract. The offshore contract that we just discussed, I think I know the answer to the question, but can you just refresh us, and I guess it's probably one of the first contracts that was kind in the U.S. But just in terms of how we're getting paid, it sounds like on a lot of the dredging contracts, it's some revenue amount per ton. Is that similar, dissimilar? Just help us understand how that contract is structured?

Yes. It is similar to the way that we price our dredging contracts. It is a cost per unit. And so we are being paid for the rock that we are placing on the sea floor. And so the structure of the contracts is pretty much the same. And then when it comes to how the scope is split up, we have a cooperation or partnership with Van Oord. And Van Oord has done this work in Europe prior and have vessels that are active in Europe at this point in time. So we are -- with our Jones Act vessel, we will do the work that is required for Jones Act vessel to perform. And then we have additional capacity that we can bring in with Van Oord vessels.

A separate topic on these LNG projects. Clearly, the Russian, Ukraine situation has changed a lot of the thoughts, I think, globally in terms of how they're thinking about gas and gas supply. Have you -- this more big picture, have you had any conversations with engineering construction firms, the companies themselves that you'd be willing to share with us in terms of what are people thinking in the U.S. as it relates to LNG projects and helping out the situation in Europe? Because it's starting -- maybe it's my opinion, a little bit, it's more of a -- there's a political piece that's coming into this as well as the economic piece in terms of building these facilities. Mathematically, these spreads are looking very attractive, but just any thoughts you have that you could provide to investors and shareholders, that would be very helpful in terms of how you're thinking and what you're hearing regarding these projects?

Yes. As I referred to, these projects have been waiting for a final investment decision and those final investment decisions made by the owner of the terminals has been dependent on entering into long-term supply contracts. And prior to -- or last year before the invasion of Ukraine, these contracts seem to be more difficult to get in place. Whilst now after the invasion, Europe is looking at a much more diverse strategy for supply of energy, and that includes import of LNG. So the ones we talk to -- and you can see it in the press releases from a company such as Tellurian, where they are optimistic about entering into these longer-term contracts very shortly, which then leads up to an investment decision and financing of the project. So I think that these projects will be accelerated and start moving forward and really on the back of this new situation in Europe.

We have Jon Tanwanteng of CJS Securities again on the line.

My first one is just, you mentioned a pull-in in the quarter. I was wondering what the impact was just in terms of revenue and margin and which quarter you pulled it from?

When I said, it was a job that was slated into the second half of the year that we were able to accommodate a request from our customer and move it into the first. It was -- I'm not going to go into detail specifically on the project, but it was -- I kind of laid out the 10% increase that we had from guidance. This was a big part of that pickup. And the margins were comparable to where we ended up for the quarter. So didn't -- the job itself didn't have a big influence one way or another on the margins, but definitely a pickup on revenue again that just moved from second half of the year to the first quarter.

Can you provide a little bit more granular impact of when the Ellis goes into dry dock and kind of the expected impact from that? Maybe the lack of time and kind of the specific quarter is going to be in?

Yes. I still don't have a specific quarter. We're going to be very flexible and make sure that we work it as much as we can, take it down at the right time to get it back. So it's still somewhere in the second half. It's very possible that it will kind of hurdle the quarters, but don't have that completely nailed down yet. Because of the impact that the vessel does have to our bottom line and because it's a relatively new vessel, we are expecting it to be on the shorter end of the number of days that you would normally see vessel out, and we have challenged our team to get in and out, so we can get back to making money. We do see some of our vessels, especially on the older ones that could be 90-plus days in the yard. This will be well inside of that. We're hoping to have it in and out in under 2 months.

There are no further questions coming in at this time. I'm now turning the call back to Tina.

Thank you. We appreciate the support of our shareholders, employees and business partners, and we thank you for joining us in this discussion about the important developments and initiatives in our business. We look forward to speaking with you during our next earnings discussion. Thank you.