Ladies and gentlemen thank you for standing by and welcome to the Q2 2020 Great Lakes Dredge & Dock Corp. Earnings Conference Call. [Operator Instructions] As a reminder this conference call is being recorded. I would now like to turn the conference over to our host today Tina Baginskis. Thank you. Please go ahead..

Good morning, and welcome to our quarterly conference call. Joining me on the call this morning is our Chief Executive Officer and President, Lasse Petterson; and our Chief Financial Officer, Mark Marinko. Lasse will provide an update on the events of the quarter. Then Mark will continue with an update on our financial results of the quarter.

Lasse will conclude with an update on the outlook for the business and markets for the remainder of 2020. 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 2019 Form 10-K and subsequent filings.

During this call, we also refer to certain non-GAAP financial measures, including adjusted EBITDA from continuing operations, which are explained in the net income to adjusted EBITDA from continuing operations 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. The Great Lakes Dredge & Dock Corp we've been fortunate to be able to continue working as a federally designated critical infrastructure company. As such during this unprecedented COVID-19 pandemic we have remained focused on performing our projects effectively while ensuring the safety and continued faction of our employees.

The results of the second quarter of 2020 were less than previous year with net income continuing operations of $9 million versus $11.5 million in second quarter of 2019.

For the first half of the year net income from continuing operation was $42.9 million which was an increase of 34% prior year and year-to-date adjusted EBITDA from continuing operation was $89.5 million a $6 million or 18% increase over 2019.

In addition our net debt decreased by [indiscernible] from year and 2019 to $89.8 million resulting in a healthy net debt to adjust EBITDA from continuing operations ratio of 0.6.

As we noted last earnings release, planned dry dockings of certain vessels had an expected impact on second quarter results as we pushed dry dock pace from the first quarter into the second quarter. During the quarter we had the hopper dredges, Ellis Island and Dodge Island, hopper dredge, Illinois and the mechanical dredge 58 in drydock.

We expect the Ellis Island, Dodge and the dredge 58 will all be returning to work in the third quarter and Illinois will follow in the fourth.

The effects of the dry docks were offset with better than anticipated productivity on ongoing projects such as the west of Shinnecock inlet project, the Jacksonville deepening project and additional work on the Delaware River Reach B deepening project.

During the second quarter of 2020, the domestic bid market was down than the prior year with 428 million in total product bid of which we won 92.5 million comprised of capital, maintenance and coastal protection projects and subsequent to the quarter end we were awarded 63.2 million in project work and an additional 32 million in low bids pending award.

Please remember that variable gain contract wins from quarter to quarter or from year to year is not unusual and the win rate is not indicative of the win rate the company is likely to achieve this year.

As said Great Lakes's dredging dock continues to be financially well-positioned for potential changes in the current economic environment and we continue to actively update our safety and operational procedures and plans.

And with those updates I will turn the call over to Mark to discuss the results of the quarter for an update on backlog development..

Thank you Lasse. I will start with the quarterly results and then discuss some specifics related to our dredging business. Please remember that all results from our E&I segment in 2019 were placed into discontinued operations and therefore not included in the results that I will discuss.

For the second quarter of 2020 revenues were $167.9 million income from continuing operations was $9 million and adjusted EBITDA from continuing operations was $28.1 million. Total company revenues for the second quarter of 2020 represented a 16.9 million or 9.1% decrease compared to the second quarter of 2019.

The decrease was caused by lower foreign, coastal protection and rivers and lakes revenue offset partially by higher maintenance and domestic capital revenue. Gross profit from continuing operations was $33 million compared to $37.5 million in the second quarter of 2019. Gross profit margin was 19.7% compared to 20.3% in the prior year quarter.

The slight drop in gross profit margin is due to a change in project mix in 2020 versus 2019 and strong performance on the Jacksonville deepening project last year.

During the first half of the year, the company did have some additional expenses related to COVID-19 pandemic related to additional equipment and procedural changes to keep our employees safe but it does not have a material impact on our first half results.

The total company operating income was $18.3 million which is a decrease of $4.5 million over the prior year quarter. The decrease [audio gap lower gross margin, our G&A expenses remain flat between current year second quarter and prior year quarter.

Income from continuing operations for the second quarter of 2020 was $9 million compared to $11.5 million in the prior year quarter, the current quarter income includes net interest expense of $6.8 million and an income tax expense of $3.1 million.

Income for the second quarter of 2019 included $7.2 million in net interest expense and $4.2 million income tax expense. Adjusted EBITDA from continuing operations for the second quarter of 2020 was $28.1 million compared to adjusted EBITDA from continuing operations of $32 million in the second quarter of 2019.

Next we turn to our balance sheet where June 30, 2020 we had $233.5 million in cash. During the quarter we continued to maintain a zero cash balance on a revolver. Our net debt at June 30, 2020 was $89.8 million. Our total capital expenditures for the quarter were $12.1 million.

This compares to $19.2 million capital expenditures during the second quarter of 2019. The company continues to expect total capital expenditures to be $40 million for 2020 excluding the capital spending for the new Hopper dredge. Contracted backlog at June 30, 2020 totaled 423.4 million compared to a backlog at June 30, 2019 of 498.1 million.

This decrease was expected as the company achieved below its historical bid market share in the second half of 2019 and the company earned additional revenue during the first half of 2020. With that I will turn the call back over to Lasse for his remarks and the outlook moving forward..

Thank you, Mark. As the country is still facing the challenges of COVID-19, the dredging industry deemed an essential service continue to operate and work on critical and needed infrastructure projects. The U.S.

army corps of engineers oversees the majority of these infrastructure projects and in this capacity has continued to follow their bid schedule and prioritize all types of dredging including port deepening, port maintenance and expansion and coastal protection and restoration projects that are necessary to avoid potential storm damage during the upcoming hurricane season.

Turning to the safety and to COVID-19 response. Great Lakes Dredge & Dock remains committed to maintaining the health and safety of its team members through an incident and injury-free safety management program.

This value-based approach has allowed us to respond quickly and effectively to COVID-19 pandemic and any challenges as a result of the pandemic. Through the first six months of 2020, COVID-19 pandemic has not had a material impact on our operations.

Any future impact from the pandemic to our employees, clients, supplying, or shipyards with which we contract a prolonged may lead to delays or cancellations in projects. Experts -- a potential new COVID-19 wave in the fall of June of 2020 and we continue to be proactive in preparing and are continuously planning should this occur.

Moving to the bid market, we expect the 2020 bid market to be similar to 2019, similar to last year. We expect the remainder of the years bid activity to be substantially more active than the first half of the year.

Upcoming bids in the second half of the year include additional cases of Charleston, Jacksonville and Corpus Christi port deepening projects well as new deepening projects for the ports in Mobile in Boston and in Sabine-Neches.

We've seen support for the dredging industry in the CARES Act which includes a provision that lifts caps in the harbor maintenance fund and in the 2021 house appropriation bill introduced in July 2020 which showed an increase of $1.7 billion above the President's budget for requests for the U.S. army corps of engineers.

In addition Florida engineers recently signed the chiefs report for the Houston ship channel widening project. This major expansion project will be included in the [indiscernible] 2020 legislation which when passed will allow the project to proceed to construction. Port to domestic market demand.

We continue to upgrade our existing domestic fleet with new equipment and technologies to increase productivity. Our upgraded and most powerful Cardia dredge the Ohio has returned to the U.S. market and is presently working on the Great Egg Beach renourishment project.

In addition, in June we announced the execution of a contract with Conrad's Shipyards in Louisville to build a 6,500 cubic yard Hopper dredge with expected delivery in the first quarter of 2023.

This highly automated new build vessel will increase the capabilities of our Hopper fleets in the coastal protection and maintenance models as well as address specific needs in the growing offshore wind market.

As stated last quarter several liquefaction, natural gas liquefaction petroleum and petrochemical and crude oil export projects are being developed in the Gulf of Mexico meeting the need for port developments and navigational channel deepening and widening to accommodate the larger vessels involved in this trade.

The last week designing of our subcontract with Bechtel Oil, Gas and Chemicals, Inc. for dredging of the third marine Park at the Sabine-Neches liquefaction project. This work involves complex dredging and long distance pumping commencing in third quarter for 2020 and lasting for approximately 215 days.

As discussed on prior earnings call offshore wind power generation is coming to the U.S. with more than now 30 gigawatts of power generation capacity planned for installation over the next 10 years. At the timeline for these projects are being developed. We are continuing to engage with developers and partners on these projects to use U.S. built, U.S.

operated equipment enhancing the local value creation and content both in the construction and during operations phases.

Related to a strengthened financial position a fleet enhancement and a strong market outlook we announced this morning that the board authorized a share repurchase program by which the company may repurchase up to $25 million of its common stock.

This repurchase program demonstrates the board's confidence in our future and our commitment to delivering value to our shareholders.

In conclusion through this pandemic we have maintained a sharp focus on employee safety and project performance while continuing to advance a long-term strategy of investing in our fleet and strengthening our balance sheet. And with that I will turn the call over for questions..

[Operator Instructions] Your first question comes from Poe Fratt with Noble Financial Capital Markets..

Hey, good morning. Thank you. I was hoping to look at just the overall, your award subsequent to the end of the quarter, it's 63 million that you had announced and then 32 million of pending.

Can you highlight whether the Sabine pass LNG was included in the awards in the quarter?.

Yes. Poe you broke up a little bit but..

Yes, I apologize..

No. That's okay. So yes, Sabine LNG project is actually in the quarter. It was awarded in the quarter. So it's in our backlog in the quarter..

Okay. Great.

And then the 32 million of pending a little bit of pending was that the award that was announced by the DOD late last week, the great [indiscernible] in New Jersey?.

Now so, yes the announcement was 30 million. 24 of that is awarded and 6 million of that is in low bid because there's a 6 million option there..

Okay.

Is that the one that you referenced in your press release as far as low bids pending award?.

No, we haven't announced that. Yes..

So that's incremental..

Correct..

Okay. Great. And then when we look at the wind market, Lasse you've highlighted that you want to participate in the installation market.

There was an interesting announcement after it closed yesterday where dry bulk company is going to build installation vessels to the tune of what $270 million or so is that the segment of the market that you intend to compete in or is there another segment that you intend to compete in?.

Well, when it comes to the offshore wind market we are looking at which parts of that market that we can expand into from our capabilities and our existing equipment and it is particularly the work that is going on underwater.

We are not targeting the heavy lift installation kit and the investments needed to participate in that market is very-very high and it is also allowed for currently international installation vessels to come into the U.S. and do that lifting operation. So we're not targeting that part of the market..

That's good news because that's a fairly undisciplined and inexperienced competitor too that's generating that market. So watch out there right.

When we look at Mark, if we can just hone in on some of the mainly your SG&A, the run rate in the second quarter looked a little high relative to what it was in the first quarter and could you give us an idea of whether there are any unusual expenses in G&A and then an outlook for the second half of the year?.

Yes. Sure. When we get to the second quarter, we reforecast for the year where we are. We adjust from there where G&A is related to incentive pay things like that so we kind of true up for the year. So as we look forward for the rest of the year that'd be the only change really from first quarter would be additional incentive pay.

So as we look out through the rest of the year, I expect G&A to be close to that number that we had in the second quarter..

Okay flatten the second half and then one last one and then I'll come back if I need to but on the buyback, a positive announcement shows your confidence in the outlook especially in the context of the new build program.

Do you have any timing on when you expect to execute that $75 million or is it open-ended?.

Yes. We're going to put that in place very shortly. We just received board authorization. We'll do that. It'll probably be, it's not finalized yet but I expect it to be within a 12-month period..

Great. Thank you..

Your next question comes from DeForest Hinman with Walthausen & Co..

Hey, thanks for taking my questions. I think the share purchase authorization is a positive announcement.

Just so everyone understands you said expectation to use that in 12 months that's under the [10v5-1] so you can in theory buy during blackout periods is that correct?.

Correct..

Okay. It's very helpful.

Can you give everybody an update on where we stand in terms of the refinancing outlook on our debt and give us an update in terms of where you think the rate on the borrowings could fall?.

Yes sure. So we can, it's actually kind of similar to where we were last quarter maybe a touch better. So we continue to monitor it every day essentially and it's an 8% senior just to re-refresh everybody's memories and 8% notes right now. We can call them today but at a 104 premium.

Next May of 2021 I can call an par and right now the rates are in if we were to refinance them today they're in the middle 6s, so let's say in the 6.5 range that was a little bit better than last quarter maybe 25 basis points better. The market is obviously better than it was in the middle of COVID but still not as good as pre-COVID.

So at the 104 premium versus that savings and the lower interest rate it does at this point make sense to wait but we are continuing to monitor that looking at risk going forward but at this point the math would tell you to wait..

Okay. That's a good update. You made mention of the house appropriations bill interesting there. Can you just help us think about that numbers.

It's a pretty sizable number to increase versus the request? Do you have any thoughts around how that might trickle into the markets that you serve just generally?.

Well, the request from the executive branch tends to be lower than what has been traditionally appropriated for the core of engineers. So what we see here is that the appropriation from the house committee is supporting the U.S.

army corps of engineers at the same or higher level than what we had last year which then translates into the and funding of projects that the corps is then contracting with us for. So it gives us a very strong confidence in the bid market for the remainder of this year and into next year..

Okay.

That's helpful and then can you help us think about the cadence of the dry dockings in the third quarter either months or days and how those would compare to the second quarter and how they would compare to the third quarter of last year?.

Yes.

Mark can you take that?.

Sure. So we had four vessels in dry dock in Q2. We have two vessels in dry dock in Q3 the Illinois and the [Padre] as we move into Q4 we'll have those same two vessels in dry dock for about half of Q4 and when we look at yes, I'm trying to remember how many we had in Q2 last or Q3 last year.

I believe it was two but I would have to, I have to double check that..

Okay. I can circle back on that. I think that's it on the questions. Thanks..

Thanks..

[Operator Instructions] Your next question comes from Poe Fratt with Noble Financial Capital Markets..

Yes. Thanks I had a couple of follow-ups if you don't mind. On the Sabine pass LNG I noticed you didn't quantify the award on that.

Can you help us frame sort of what the potential is there?.

Mark can you?.

Sure. So Yes. Per the agreement I can't give you the pricing and dollar value but that's why we kind of or we use these 215 days of work so that's a fairly large amount of work. It'll be done and there's some windows where we won't be working on it. We finished that project leaving about the first quarter of 2021.

So it's a very nice size project for us but that's the extent of what I can give to you at this point in time..

Mark is that a Ellis Island type of job or is it another?.

No, it's actually the Alaska will be working on that cutter dredge Alaska..

Okay and then going back to dry dock and activity it sounds like the Ohio wasn't in the fleet at all in the second quarter and maybe is partially in the fleet in the third quarter?.

That it was worked a little bit in the end of the second quarter. So yes and then it's really full in the third quarter. That's correct..

Okay. And then looking at the cash flow statement you generated a lot of cash in the quarter. Net income depreciation were pretty much in line with expectations. It seems like the big variants might have been on non-cash items or working capital.

Can you give us a flavor on what happened to both those items in the quarter and sort of an outlook for the second half if you wouldn't mind?.

Yes. So we talked about this similar this last year a little bit is the way some of our projects work depending upon how the project is structured in terms of timing, we do have some movements on billings and excess of revenues or the other way around depending upon the timing of the project.

So we don't expect the positives for the rest of the year like we did see in the first half there. So some of that will reverse in the neighborhood of 10 million to 20 million. It just depends on the timing of the projects but yes we wouldn't expect that same level of working capital increase for the back half of the year..

Okay.

Do you happen to have an operating cash flow number before working capital changes or a total operating cash flow number? It looks like either one of those items or when do you expect it to file the queue?.

We are going to actually file the queue tonight..

Okay. Great. And then you highlighted the changes that you see as far as just higher potentially appropriations, also the harbor maintenance trust fund and the bid market over the second half of the year looks -- if I do the math correctly to be over a billion; maybe more like a billion one.

Can you maybe quantify the different opportunities from a revenue potential as far as whether it's Charleston, Jacksonville or Corpus and some of the other deep needs that you talked about in Mobile and then also isn't there the Spanish ridge seems like a pretty big opportunity for you and that's more of a state opportunities? Is that included in that or is that exclusive of sort of when you look at the bid market?.

Yes. Well, I can comment on the market in general when you look at the Corps of Engineers announced bid market ranges. They -- just to look at the major projects for the second half of the year, we're looking at somewhere between a billion or a billion and a half of the of bids and that is the range that the corps is giving for their, on their list.

In addition, there are several other smaller projects that are going to run a little less not simply not included in this. And as I said, there are some interesting opportunities coming up.

Please remember that for core strength is when the projects are getting not necessarily large but are getting complex and as we've seen on Jacksonville, on Charleston that's where we excel, that's where you're working offshore, you're working in or in difficult soil conditions and that is our sweet spot.

So the projects coming up is further phases of Charleston which are mostly inland. It is the Jacksonville project there is the Mobile start of the deepening and widening phase one and continued work on Corpus Christi and so forth. So it is a very active region for us here in the next quarter or two quarters..

Great Lasse.

So it sounds like Charleston may be more less complex but are all the other ones more complex and more are in your sweet spot?.

Well, as a general comment when the soil conditions gets difficult complex or we're working offshore where you have the impacts from the environment or the weather when you go to very large complex pumping distances and so forth that's when we excel due to our flexibility in our fleet and our ability to use specialized equipment for the special soil conditions that are or the varying soil conditions.

So general rule, difficult projects it's where we excel and that's projects that we target and they're clearly also a large project where you have to use a lot of equipment but that may vary as we've seen over the last two years there has been some larger projects that has been awarded to smaller local dredging contractors but typically that has been fairly easy projects to execute.

Hence, easier for them to target..

Okay. Great.

That's helpful and Mark on the CapEx number $12.1 million for the quarter did that include any new build CapEx?.

Yes. 2 million. Yes..

So $2 million so when we compare the $40 million exclusive of CapEx we should back out that $2 million in the second quarter and then what do you think CapEx will be for the new build for the year?.

Yes. We have a another $9 million at the end of the year. So around $11 million, $12 million for the year..

Okay. So that's on top of the $40 million roughly that you expect to spend on your normal maintenance CapEx..

Correct..

Great. Thank you so much and congratulations..

Thanks Poe..

Your next question comes from Richard Glass with Glass Capital..

Hey guys nice boring quarter in a boring is good in this industry kind of way..

Thanks..

Lasse, can you maybe help us define how we should think about the LNG and wind opportunities longer term? I mean are these niche opportunities that while sizable will be in passing or these are potentially more legs on the stool for buffeting tougher times in other markets and maybe lending some more stability over time? Where should we start with these?.

Yes. Turning first to the LNG opportunities and the developments in the gulf. What we have seen on LNG front is that when there is a additional train being added to an existing facility or LNG facility those projects are highly profitable for the operators and are very highly likely to go ahead as we saw on Sabine.

When it comes to greenfield developments, the picture is a little bit more difficult because you then need both permissions and financing for the facility and with the oil price war that started out with Saudi and Russia earlier this year and temporarily depressed LNG pricing in the international market.

I anticipate that we will see about a year delay in the greenfield LNG market. But I do think that this is something that will be recognized getting into 2021 and those projects are substantial when it comes to dredging and very interesting opportunities for us.

But it is our traditional business with very high focus from the oil and gas environment and contract material and owners on our safety procedures, our track record, our professionalism when it comes to executing these projects. So they are very good target for us to get engaged in.

When it comes to the offshore wind markets, timing is somewhat I would say uncertain.

We've seen delays happening in for those developments but now it looks that market is taking off and if you take the view that it's a 10-year market that's being developed, the installation is 30 gigawatts and you can just pick a nice number 10 megawatts per turbine, you can see that is a very large construction market and it's a large maintenance market coming up.

And to participate in that market we can modify our existing equipment or we need new equipment to target the niches of that market and that's how I look upon it. There is clearly an interest from the international contractors to come into the U.S.

and do most of the work and the international contractors have spent 20 years in the north sea, our renewable energy prices to develop their techniques and their equipment. So they are very efficient and experienced.

So it's a market which we have to approach in that where we have confidence and where we can define our niche and where we can generate some good margins for our shareholders..

Okay. That sounds good. Thanks a lot..

Your next question comes from Neil [indiscernible]..

Yes. Thanks for taking the questions.

Quick one, what are your outstanding, I guess you said the queue is coming out tonight are you secure your letters of credit outstanding number was and then if you can comment on the overall expected cost of the new Hopper dredge?.

Yes. Sure. So our outstanding letters of credit, I'm going to give a round number. It's in that about I think $36 million - $38 million and then our, the cost of the new Hopper dredge was out [indiscernible] it's $97 million..

Thanks a Mark..

Sure..

Your next question comes Jon Tanwanteng with CJS Securities..

Good morning. Nice quarter guys.

My first question, I don't recall this being mentioned but can you talk about the impact of storms in the quarter first I guess Hannah and the Texas area and the [indiscernible] up on the Atlantic coast right now?.

Yes. Sure. I can take that Lasse. So yes with this tropical storm going through it impacted or will impact four of our projects Jacksonville, Charleston, New York, Great Egg most of those projects are impacted by about four days. So we take before the storm comes in we take it in and then after the storm moves we take it out.

So for example Jacksonville expecting that to be back at work today actually. So it's already been in and out and these weather delays we've obviously, we put these contingencies in our estimates. So especially when we know we're working at this time of the year in that area during hurricane season.

So we're covered from in our estimates on these weather type delays..

Got it. Thank you and then just talk about your annual expectations from an EBITDA perspective now that you've outperformed for two quarters in a row you've also landed the LNG project which excluded from your prior flat up outlook just how are you thinking about the year either compared to last year or an absolutely relative basis..

Yes. Just give you a few data points so, not too different from what we talked about in the first quarter but we expect revenues this year to be above 2019. We expect our gross profit margin, I think last quarter I said to be about the same as 2019. Now I'm expecting it to be a little bit better.

We expect G&A to be slightly higher than the prior year and those are the data points, I can give you at this point. So a little bit more positive than what we talked about in the first quarter..

Okay. Got it and then just in terms of the win rate that you've been showing over the last few quarters. Now it's been under your market share.

Can you just give us an update on how we should think about the competitiveness of your project lettings the competitions out there and the chances of you actually having a higher backlog by year end as I know there's a lot of big projects coming up by in the next two quarters..

Yes, I can start with that. Yes sure. Yes. We're really actually excited about the bid market that's coming up. As Lasse said, it's between just the large projects or between a billion and a billion and a half if you look at the range. So that's going to put our bid market close to 2 billion this year is the way this is looking.

So we're expecting it could be close to that and one other thing to add that bid market does not include any of the LNG opportunities that Lasse was talking about. Those really be 2021 type in that bid market.

So a couple of these projects, these large deepening projects whether you're talking about the Jacksonville project or Boston those are Boston for example complex or hard rock; those are our projects that we've done before that we're well equipped to do and those are the larger ones in this bid market in the back half of the year.

So the opportunities look good for us and so that's why we're pretty excited about the back half of the year..

Okay. Great. Thank you very much guys..

Sure..

Your next question comes from Matt Baxter with Wynne Capital..

Hi guys. Thanks for taking the question. Lasse, I heard you talking about the wind opportunity in foreign vessels but it was my understanding that a substantial portion of the work is reserved for Jones Act vessels that foreign vessels can't compete for and you didn't mention it.

I wondered if you'd tell us a little bit about what portion is reserved for Jones Act and what portion isn't would have to be competed against foreign vessels?.

Yes Max. There is some uncertainty around this and as you know there are several questions that are into the administration to the customs and borders to rule on some of these questions.

What seems to be very clear is that the installation of the foundation or the monopile and the installation of the towers, blades and turbines with heavy lift equipment is excluded from Jones Act. So there's no Jones Act protection. So the vessels can come in from the international market and do that work. You have to remember that not just the U.S.

market is active but the European and the Asian markets are also extremely active the next 10 years in offshore wind generation installations. So there will be competition for these vessels and there are several international and U.S. groups that are looking at that segment. The segment that we are looking at is what goes on underwater.

So we're looking at rock installation, foundations installation.

We're looking at parts of the trenching which could be done by our equipment for cable installation and so forth and our uncertainty around the genocide protection around this clearly dredging that is required is Jones site protected so that is something we will compete for but we are looking at these other segments to see how we can compete making sure that we can maximize the local content requirements that the states are requiring and help the operators in achieving those goals for local content..

Lasse I guess my point was it was I understood that any of the trenching that was coming back to the U.S. to bring the power cables back from these in U.S.

waters would be Jones Act protected at this stage is that correct or is that still up in the air?.

It is my understanding that that is not clear..

We hope it gets clear for you and us, thank you..

Thank you..

And at this time you have no further questions..

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..

Ladies and gentlemen this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect..