Stocks to Watch – Great Lakes Dredge & Dock Corporation (Public, NASDAQ: GLDD)

Great Lakes Dredge & Dock Corporation (Great Lakes) offers dredging services in the United States. It is engaged in the business of marine construction, primarily dredging, and commercial and industrial demolition. The Company provides services and operates in two segments:

• Dredging
• Demolition

It provides dredging services in the East, West, and Gulf Coasts of the United States and worldwide. It owns a majority interest in NASDI which is a demolition services provider located in the Boston, Massachusetts area. Moreover, it has a 50% interest in Amboy Aggregates, a sand mining operation in New Jersey.

The Company’s main dredging customers are domestic and foreign government agencies, as well as private entities, and its primary demolition customers are general contractors, corporations that commission projects, non-profit institutions, such as universities and hospitals, and local government and municipal agencies.

Dredging

By 2010, the Company’s dredging operations accounted for approximately 89% of the Company’s total revenues. Capital dredging service consists mainly of port expansion projects, which involve the deepening of channels to allow access by draft ships and the provision of land fill used to expand port facilities. It also includes land reclamations, trench digging for pipelines, tunnels and cables, and other dredging related to the construction of breakwaters, jetties, canals and other marine structures.

On the other hand, maintenance dredging consists of the re-dredging of previously deepened waterways and harbors to remove silt, sand and other accumulated sediments.

Lastly, foreign capital projects classically include land reclamations, channel deepening and port infrastructure development. By 2010, it generated more or less 14% of dredging revenues. In 2010, about 54% of the Company’s dredging revenues were from approximately 47 different contracts with federal agencies or third parties operating under contracts with federal agencies.

Demolition

This segment owns and operates specialized demolition equipment which includes a fleet of excavators equipped with shears, pulverizers, processors, grapples, and hydraulic hammers that provide high-capacity processing of construction and demolition debris for recycling, reclamation and disposal.

It receives revenues from change orders on existing contracts. NASDI established a network of local contacts with developers and prime contractors that act as referral sources and enable NASDI to procure demolition jobs on a sole-source basis. Its central business is exterior and interior demolition.

Great Lakes Dredge & Dock Corporation (Public, NASDAQ: GLDD) 52 week:  3.97 – 8.93 Mkt cap: 370.86M    Shares: 5