Good morning, ladies and gentlemen, and welcome to the Q3 2020 Great Lakes Dredge & Dock Corporation Earnings Conference Call. [Operator Instructions].

Please be reminded that this call is being recorded. I would now like to turn the conference over to your host, Ms. Tina Baginskis, Director of Investor Relations. Please go ahead. .

Thank you. 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 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 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. Great Lakes had a solid third quarter financially and operationally. Financially solid product performance in the third quarter resulted in strong increases when compared to last year's quarter with income from continuing operations of $12.5 million and adjusted EBITDA from continuing operations of $32.2 million.

The company ended the third quarter with a strong cash position of $229.7 million, and 0 draw on the revolver, resulting in a strong balance sheet and substantial liquidity..

Operationally, we saw a strong improvement in our backlog with the addition of several large projects, including the continuation in Jacksonville, winning the Contract C for $105 million, giving us a third quarter backlog of $661 million..

Our new hopper dredge build program remains on budget and on schedule at the Conrad Shipyard in Louisiana. Finally, the announcement of our new operating model, which includes moving our corporate headquarters to Houston and opening regional offices in Jacksonville, Florida and New York, was well received by our clients and stakeholders.

The new model situates the company with the senior executive centrally in our current markets on the East Coast and in the Gulf and positions the company for the growth we see in the Gulf of Mexico for dredging projects related to oil and gas and LNG exports. .

Overall, we believe with our improved financial position and new operating model, we are strategically well positioned for the future as we enter 2021..

Turning back to the quarter. As we noted in our last earnings release, we continue to have vessels in drydock. During the quarter, we had Ellis Island, Liberty Island, Padre Island, Illinois and New York in drydock.

The Ellis Island has completed its drydock and has returned to work while the drydocks for the other dredges are expected to conclude in the fourth quarter. The effect of these planned drydocks were offset by outstanding performance on the Jacksonville B deepening project in Florida and the Great Egg and Peck Beach renourishment work in New Jersey..

As expected, bidding activity increased significantly with $926 million of projects bid in the third quarter. Great Lakes were awarded $466 million or 50% of these projects, resulting in a third quarter backlog of $661 million. One of the awarded projects, as I said, was the Jacksonville Harbor Contract C Deepening Project totaling $105 million.

After successfully completing Jacksonville Contract B ahead of schedule, we look forward to continuing to support the expansion of the shipping channel for the Port of Jacksonville..

To expand on my opening remarks, Great Lakes continues to be well positioned to weather changes and the economic environment. Given our strong cash flow and balance sheet, we initiated a share repurchasing program in August, which demonstrates our confidence in our future and our commitment to delivering value to all our shareholders..

I now turn the call over to Mark to further discuss the results for the quarter and for more details on the update of our backlog development. .

Great. 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 in the discontinued operations, and therefore, not included in the results that I will discuss..

For the third quarter of 2020, revenues were $175.8 million, income from continuing operations was $12.5 million and adjusted EBITDA from continuing operations was $32.2 million. Total company revenues for the third quarter of 2020 represented a $6 million or a 3.5% increase compared to the third quarter of 2019.

This increase was caused by higher domestic capital and maintenance revenue, offset partially by lower coastal protection, rivers and lakes and foreign revenue. .

Gross profit from continuing operations was $36.4 million compared to $31.8 million in the third quarter of 2019. Gross profit margin was 20.7% compared to 18.7% in the prior year quarter. .

For year-to-date 2020, the company did have some additional expenses related to the COVID-19 pandemic related to additional equipment and procedural changes to keep our employees safe, but it did not have a material impact on our results..

Total company operating income was $23.2 million, which is an increase of $4.8 million over the prior year quarter. This increase is a result of higher gross margin and a gain from a loss of use claim.

Our general and administrative expense is $1.4 million higher in the current year third quarter than prior year quarter, primarily due to office rental expense and higher technical and consulting expenses..

Income from continuing operations for the third quarter of 2020 was $12.5 million compared to $8.8 million in the prior year quarter. The current quarter income includes net interest expense of $6.7 million and an income tax expense of $4.1 million..

In comparison, income for the third quarter of 2019 included $6.3 million in net interest expense and $3.2 million income tax expense. Adjusted EBITDA from continuing operations for the third quarter of 2020 was $32.2 million compared to adjusted EBITDA from continuing operations of $27.1 million in the third quarter of 2019..

Next, we turn to our balance sheet, where at September 30, 2020 we had $229.7 million in cash. .

During the quarter, we continued to maintain a 0 cash balance on our revolver. Our net debt at September 30, 2020 was $93.8 million. Our total capital expenditures for the quarter were $7.4 million. This compares to $6.9 million in capital expenditures during the third quarter of 2019.

The company continues to -- or the company expects to have total capital expenditures to be about $45 million for 2020, excluding the capital spending for the new hopper dredge. Also to date, we repurchased $3.9 million of Great Lake's common stock related to our previously announced repurchase program.

Current backlog at September 30, 2020 totaled $661.3 million, an increase of $238 million from June 30, 2020..

Backlog at September 30, 2019 was $653.7 million. In addition, at the end of the quarter, the company had $177.9 million in low bid and options pending award. With that, I will turn the call back over to Lasse for his remarks on the outlook moving forward. .

Lasse, are you there?.

Lasse, unmute. .

Thank you for that, Mark. As the country is facing the challenges of COVID-19, the dredging industry, deemed as an essential service, continues 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 at this capacity has continued to follow the bid schedule and prioritize all types of dredging, including port deepenings, port maintenance and expansion and coastal protection and restoration projects that are necessary to avoid or minimize potential storm damage during the hurricane and winter seasons..

As the projects move forward, GLDD remains committed to maintaining the health and safety of our team members through our incident and injury-free safety management program. This value-based approach has allowed us to respond quickly and effectively to the COVID-19 pandemic and any challenges as a result of the pandemic. .

In the third quarter, several projects were impacted by COVID-19 positive cases within our site staff and vessel crews. Thankfully, all cases were mild and our personnel has returned to work. The vessels were decontaminated and replacement crews were brought on board to recommence dredging operations.

Although some projects were impacted by the COVID-19 outbreak, to date, the majority of our project work has remained largely uninterrupted by the pandemic. And the U.S. Army Corps of Engineers is continuing to advertise new projects as evidenced by the large bid market in the third quarter..

In the third quarter, a strong hurricane and storm season began, which has extended into the fourth quarter. Although these storms impacted our ongoing projects in the Gulf and on the East Coast, they also added to the recurring nature of our business and the need for more extensive coastal protection and port maintenance projects..

Moving to the bid market. At the end of the third quarter, the domestic bid market for 2020 reached $1.6 billion. Great Lakes was awarded $630.6 million in projects year-to-date comprised of capital, maintenance and coastal protection projects..

Projects coming to the market pipeline in the fourth quarter includes 2 large marsh creation projects in Louisiana, the Spanish Ridge and Lake Borgne. And the Boston Harbor Improvement Project is bidding the third phase of the deepening project.

We continue to be confident in the market for the remainder of the year and onwards, and we anticipate the 2020 total bid market to even exceed 2019..

The dredging industry and market has seen support in the CARES Act, which includes a provision that lifts cap on the Harbor Maintenance Trust Fund. And the 2021 House Appropriation Bill introduced in July 2020 showed an increase of $1.7 billion above the President's budget request for the U.S. Army Corps of Engineers.

Although the Appropriation Bill was not passed before the close of the fiscal year, it is expected to pass by the end of this calendar year..

This is not unusual. And as a result, the corps is working under a temporary funding called the Continuing Resolution to continue their work with minimal impact to our marketplace.

The 2020 election campaigns on both sides has been positive on industry issues as both candidates have indicated support for the Jones Act as well as continued major investments in infrastructure, including ports and dredging..

As we have stated previously, we continue to support the domestic dredging market demand by investing in our fleet. As such, we continue to responsibly operate our existing U.S. domestic fleet with new equipment and technology to increase productivity and improve safety and efficiency on our projects..

In June, we announced the execution of a contract with Conrad Shipyard in Louisiana to build a medium-sized 6,500 cubic yard hopper dredge with expected delivery in the first quarter of 2023. This project is moving forward as scheduled..

To further improve our operations, we are building 2 Multi Cat support vessels to improve project efficiencies and improve the working situation for our crews while placing submerged pipelines on our coastal protection projects. These vessels are the first of the kind in the United States and are targeted to be in operation in 2022. .

As discussed on prior earnings calls, we are excited about the potential opportunities in the offshore wind market. Internationally, this market has been very strong and developing over the last 20 years. This market is now opening up in the U.S.

and offshore wind power generation is anticipated to be installed more than 30 gigawatts of power generation capacity on the East Coast over the next 10 years.

As the time line for these projects are being developed, we are continuing to engage with developers and partners on these projects to use U.S.-owned, U.S.-built and U.S.-operated equipment, enhancing the local value creation and content, both in the construction phases and during operations..

In conclusion, we remain confident in our 2020 outlook and look forward to implement a new operating model and capitalize on the opportunities that lies ahead.

We also recognize that we must continue to adjust and develop our safety and operational contingency plans to be able to respond to potential changes in the evolving COVID-19 pandemic and its potential impact to the economic environment..

We continue to maintain a sharp focus on employee safety and project performance, while continuing to advance our long-term strategy of investing in our fleet and strengthening our balance sheet. And with that, I'll turn the call over to questions. .

[Operator Instructions] Your first question comes from the line of Jon Tanwanteng from CJS Securities. .

Nice quarter considering the storms and everything that's been happening.

My first one is, how much backlog is expected to liquidate in Q4, especially with more storms in the quarter, we had a number in October and we've got something possibly hitting in November? How does that flow through to your revenue and gross margin in conjunction with the drydocking that's going on?.

Yes. So I can answer that, Jon. So a few will go out tonight and so about 28% of the backlog will be recognized through the end of the year, okay? And as you kind of look forward to Q4 from a gross margin percentage perspective, I expect Q4 to be similar to Q3 from a gross margin percentage..

We'll have fewer drydocks in Q4. But we did have some exceptional performance in Q3 on a couple of projects, Jacksonville B, in particular. It will be difficult to replicate that possible. But without that -- that -- call that replication there, the margin will be -- margin percentage will be about the same as Q3. .

Got it. That's helpful. And then I noticed that lastly, you mentioned that there's a couple of big projects that you're looking to land in Q4, Spanish Ridge and another one. I didn't quite catch the name for Boston Harbor.

How much of that is in the low bid number, that $177.9 million that you mentioned?.

We haven't bid those projects yet. So there's nothing of that in that number. .

Got it. So those will be incremental and effectively... .

Yes. .

It could be very big. Got it. Win-win quarter as you [indiscernible]. Okay. Understood. I was wondering if you could discuss the headquarters and corporate moves you're doing.

Are there any hard costs or savings that might be associated with it? And if not, what are the, I guess, the intangible benefits that you guys are looking at?.

Well, I can answer that. I'll start out with -- we're saying this is the next phase of the transformation that we started for the company back in 2017. And as you know, we rationalized some more than 100 pieces of large equipment and dredges..

We reduced staff at the corporate headquarters. We divested all loss-making operations. We improved our run rate with more than $40 million a year. We reduced debt-to-equity from a factor of 7 to below 1. We now have 200 -- almost $230 million of cash on our balance sheet. We are investing in our fleet.

So the next step here is to ensure that we have the company and its executive positioned in markets and close to clients and operations to make sure that the operational improvements that we are targeting for the future are being implemented and followed..

So it's the next step in the company's development.

Mark, you may want to comment a bit on the costs involved?.

Yes, sure. So yes, we're actually working through a process now of -- if you saw our press release, we'll have these regional offices. Some have been already previously set up before this quarter..

And we'll have -- still have a presence in Oak Brook Terrace, Illinois. So what we will have in the short run, I'll call it, onetime items, potential relocation expense, potential recruitment fees, those things.

We don't know that yet until we finish our process, which will be at the end of the year because we'll also be looking at people working remote..

We will have, for the short term, a duplication of office rent as we have a new headquarters, so an additional piece in Houston. So I don't know -- we don't know the numbers yet until we complete the process of who exactly is going to move, who exactly is going to work remote, but that will be finished by the end of the year. .

Okay. Got it. And are you expecting to save anything as you move from Chicago to Houston, maybe more people will work from home, you have lower space and maybe rents come down. I don't know if there's anything associated with that. .

Well, the savings that we are looking for is really in the improvements in our operating model where we are making sure that we have decision-making power close to the projects, and we can coordinate both the projects and client interfaces as we go forward. .

Understood. And then just lastly for me.

Lastly, when are you expecting offshore to actually make a meaningful impact to your P&L and kind of what trajectory will that take?.

Yes. I think the time line for the offshore wind is continuously evolving. And as you can read in the press, there are changes that are happening right now. So we are looking at construction starts either in 2023 or 2024. And as things are developing, 2024 is more likely. .

Your next question comes from the line of DeForest Hinman from Walthausen & Co. .

I think I missed this. Can you say again what the repurchase activity was in the quarter? And then give us an update on pacing of the repurchase activity going forward? I think the previous commentary was an expectation that the repurchase authorization would be exhausted in 12 months.

Is that still the case?.

Yes. So in the quarter, we repurchased about $3.9 million, and it was approximately 425,000 shares. So you can work out the average price was about $9.09 a share. And there will be more -- all the details will be in tables in the 10-Q that goes out tonight, or we expect to go out tonight. .

Okay. That's helpful.

And then the low bids pending announcement, the -- I think you said $177 million, is that a handful of smaller projects? Or are there some bigger projects in there? And is there any private market awards in that number that we should be aware of?.

Yes, there is -- it's a -- there's about 1, 2, 3, 4 low bids pending. One of them is a large private client job, it's just south of $100 million. And then there's 4, 5 options pending, which total about $40 million on the options pending. So those are bids we've won, but there's options to them that have not been awarded yet. So that's the breakdown.

So the largest one is the private client one I mentioned. .

Okay. And I think -- I don't know if I heard it right. You talked about new vessels, Multi Cat.

Was that the term you used?.

Yes. That is correct. I can explain the operations. As we are doing our beach construction work, we are pumping the sand through pipelines from the dredge and to the beach. And those pipelines need to be connected. And that connection today is happening out in the open water.

And in order to make that connection work more efficient, we are constructing 2 Multi Cats, which are vessels that have cranes on them, so we can pull the pipelines up and do the connection on a dry platform, which makes it safer and much faster. So that's an investment, both in productivity on projects and also in safe operations. .

Okay. That's helpful.

Can you help us understand the cost of a vessel like that?.

Yes. We are looking at -- we haven't contracted for those vessels yet. So the details will come later, but it is an investment in the range of between $25 million and $30 million for the 2. .

Okay. And can you just give everybody an update in terms of how you're thinking about the outstanding notes with the coming call? I think it's in May. .

Yes. Yes, same -- we're in the same position as we were last quarter. We talked about it. We're monitoring the market, it's still a strong market, meaning the yields are much better than our 8%. Even the tenure is potentially longer. Meaning it could be a 7- or 8-year level -- size note or tenure on the note as opposed to our 5 year we have today..

We are -- as we look at the 104 premium, we would have to pay $13 million. At this time, financially, it's best to wait until May of next year to refinance those at part. So that's the position today. But we continue to monitor it in case something changes and we need to react sooner than that. .

Okay. And just a little more color on that. May is approaching, it's not incredibly far away.

Is there any potential or desire to do a bond deal, redo the revolver earlier than the call and then you have a little extra interest carry there, but if the planets aligned, is that a possibility? And then when May comes around, you call that [ at par ]?.

Yes. First, I want to say on the revolver. The revolver is a little over a year old now. So it's got 3.5 years, 4 years to go. And that revolver -- the rates on the revolver are a lot better than the current market is. So it's highly likely -- or I would expect not to change that revolver because it's better than what's in the market today.

But as we look forward, yes, we are looking at -- the Board has asked me to continue to look at things from a clean sheet of paper. As we get closer to that date, is there any other opportunities related to our debt structure? So we are analyzing that, but no news on that yet. .

Okay. And last group questions.

Can you give us any color on drydocking activity over the next 6 months? I think you had talked in the past on a vessel basis count-wise, can you just give us any color there?.

Yes. So in Q4 -- I think I mentioned a little bit, we'll have fewer drydock days in Q4 than we did in Q3. And then when you look forward to next year, we will have a little less drydocks in 2021 than 2020. We will have about the same number of vessels but much shorter drydocks.

We had the Illinoian drydock, it was the big driver this year in drydock and getting upgraded. So we won't have that next year. So it should be more of a positive impact from availability related to drydocks 2021 versus 2020. .

Your next question comes from the line of Poe Fratt from NOBLE Capital. .

I just had a couple of questions about the bid market. You talked about the low bids pending award.

I think the number was $178 million, Mark?.

Correct. .

Okay. And can you give us a little more color on that private clients, the nature of that work? I'm not sure I heard sort of the nature of that work. .

Yes. It's -- I can't -- for confidentiality, all I can tell you is it's an energy client. As I mentioned, it's a little south of $100 million.

So it's the -- as we talk through these type of energy-type clients, the way it works is you sign a contract with them, but then you need FERC approval, you need their final investment decision, you need notice to proceed. So we put it in low-bid pending when we signed the contract. So that's where we are today.

Similar to what -- when we had the Sabine LNG type project that we won earlier this year, it's kind of in that same status of. And we have to -- we won't put it into backlog until we get notice to proceed. .

And so that was actually something that was signed in the quarter, Mark?.

It was signed before this quarter. .

Before. Okay.

So it's been out there, right?.

Yes. Yes. .

Okay. And when we look at sort of the upcoming Louisiana bids, I think you've already bid on Spanish Ridge.

It's just the opening, what November 18?.

We -- no, we have not bid on Spanish Ridge yet. .

Okay.

The Spanish Ridge and Lake Borgne, my understanding is they're in the range of combined about $225 million, is that in line with your thinking? And then also, if you could sort of quantify what you think Boston 3 might be as far as the scope of work there?.

Yes. So I would say the expectation on the Spanish Ridge and Lake Borgne are in the $200 million range, could be north of $200 million. I would just pull that back a little bit, maybe, but yes, they're both large. And on Boston, that has a wide range publicly from the Army Corp. between $100 million and $250 million.

It's actually a pretty complex project with potential drilling and blasting there. So that has a wide range. But yes, those 3 projects are all $100 million or north of that. .

Okay. And then could you talk about just the tone of competition, how your -- how you think the stars are aligning for just the competitive landscape as we look forward? And if you could -- I'm not sure if you heard the same comment, but the entity that's administering the Spanish Ridge and Lake Borgne had a presentation from the top U.S.

Army Corps of Engineers guy from New Orleans. And he essentially was warning them or not warning them, but cautioning them to expect higher dredging costs going forward.

Is that -- did you hear that? And is that something that you would agree with? Can you just give us a sort of a color on how the competitive landscape looks at, like over the next 12 to 18 months?.

Yes, I can do that. As we've been saying, we believe that the dredging market will be strong and continue to be strong for a good number of years as we are seeing the port deepenings and the need for investment in the coastal infrastructure is developing. So we believe there's a strong dredging market.

At the same time, the dredging industry in the U.S. is responding to this strong dredging market by building new capacity..

And as you have seen over the last 2 years, we at Great Lakes, we have commissioned the Ellis Island hopper dredge, we have put in operation a large mechanical dredge. We have taken 2 cutter dredges back to the U.S. market from overseas. And we are now building a new hopper dredge.

At the same time, our competition is also building new hopper dredges and new cutter dredges. And when we see the outcome on the bid results for the Army Corps of Engineers, typically, the outcome of the bids are below the estimate that the Corps of Engineers are putting out. So it's a competitive market, but it's a strong market..

And the comment that came from the official from the Army Corps of Engineers, I must say, I don't quite follow that. .

Got you. If we could go back to, Mark, you had a loss of use claim of $1.7 million that had a positive impact on operating results in the fourth quarter -- or the third quarter.

Was there any tax effect on that? Or do you have -- a how that impacted the earnings per share number?.

Yes. So yes, you take the $1.7 million in tax [ backed ] by 25%, that will get to your EPS. .

Okay. And then, can we talk about CapEx? You've announced 2 of the multiservice cap vessels or cat vessels, that probably didn't hit the third quarter CapEx or fourth quarter CapEx. But you said that you spent $7.4 million in the quarter, exclusive of newbuilds.

So did you spend any money on the newbuilds in the fourth -- in the third quarter?.

And then to get to $45 million for the year, it looks like CapEx might be as high as $20 million in the fourth quarter. Can you just talk about sort of where you think CapEx will be in the fourth quarter? And then also tell us sort of the timing on how much of the newbuild will be on top of that CapEx. .

Yes, you got it. So no, there is no newbuild money in the third quarter.

And when I just stated, the $45 million, excluding the hopper dredge, that included $12 million for one of the Multi Cats, okay?.

So we would have been, I'll call it, normal CapEx of roughly $33 million to get plus $12 million for the $45 million. And then the newbuild for this year will have about a total of $12 million. We have about a little south of $10 million payment in Q4 for the ordering of steel. .

Okay. So no change there. .

Correct. .

But the -- and so you think that you'll spend half of the new announcement in the fourth quarter for the cat vessels?.

Yes, that -- yes, that's in the $45 million, correct. .

Got you.

And -- but they're still coming on -- I think you said they'd be online in the middle of 2022?.

That's correct. .

Okay. Got it. So more upfront costs than the other newbuilds. And then we on the -- do you have an option for a second newbuild, a second hopper dredge.

What is your current thinking on that? And when do you have to decide on executing that option?.

Yes. That option, we have 12 months from the first contract award to announce that option. We are still considering that. We haven't made any decisions. .

Okay. And then Lasse, if you could just expand on sort of the new operating model that you've been talking about in the next phase. And just maybe just walk us through how you chose the locations of your regional offices.

And then do you expect another regional office to cover sort of the other areas? Or sort of -- can you just sort of talk about sort of how the process went through? And then also, maybe if you -- possible, how many employees this will impact in Oak Brook? That would be helpful. .

Yes. The process we went through was very thorough.

Over the last couple of years, I looked at where do we execute our projects, where is our clients located? So where is the best opportunities to both improve project execution and to have a good client interface to make sure that we are positioned for the new work that is coming up and get our share of that.

We execute a lot of work on the East Coast, the Southeast and Jacksonville was a natural choice for that operation. As you know, we are deepening the Jacksonville channel right now. We are doing Charleston, and there is a lot of beach work in the area..

Up in New York, there is deepening projects that are complex and difficult, and it's also the potential hub for the offshore wind once that gets going.

And then, of course, in Houston, the oil and gas and oil products, the LNG exports, where private clients are paying for a share of the channel deepening or maybe all of it on some projects, there is a great opportunity in the years to come for our business in that area as well as Houston being close to Louisiana and New Orleans for the Mississippi River developments and deepenings..

So we look at where do we have our business and where is the new business coming and started with the regional offices in that respect. And we are in the process here of manning those locations from -- with people from Oak Brook and there will be some new hires in the months and years to come. .

Great. That's helpful. And then you've had a very strong year for 2020, and it looks like the fourth quarter looks as strong as the third quarter, even maybe potentially a little bit better. That will land you in the $155 million to $160 million for the -- EBITDA for the year.

And can you just talk about next year and sort of looking into 2021, you talked about less downed or less drydocking days.

But can you -- is the bar -- can you just sort of talk about that bar of 2020? And do you think you can improve on 2020 and 2021? Can you just sort of give us a couple of preliminary thoughts on how you're thinking about 2021?.

Yes, I'll let Mark handle that question. But I have a strong belief in the market going forward. And our backlog is strong, our product performance is strong. So I think the outlook for both this year and next year and years to come is good. But Mark, please take the details on that. .

Yes, sure. So yes, at this point, yes, we like the market. Next year, we expect it to be as good as this year. What I think is going to be maybe important related to next year will be these bids that are coming up in Q4. But on the tailwind side, we have the fewer drydocks next year.

You have -- you have the ability of the Illinois to work next year, where it was in major drydock and upgrades this year..

From -- I would say a little bit from a tailwind perspective, we had some really phenomenal performance on jobs. Jacksonville B was really, really strong first quarter and then this year and in the third quarter. So it's difficult to replicate those, but we have been -- our field performance has been really exceptional all year long, even with COVID.

So it's just a difficult comp, but they have been overperforming on a fairly consistent basis. So I think the important thing to see is these bids that happen in the fourth quarter and how they impact 2021. So it's a little too early to tell based on that. But there's some good tailwinds and some headwinds. .

It sounds like though the tailwinds might be a little -- at least offset and potentially more than offset the headwinds? Is that fair?.

It's -- that's possible. It's the -- I think the -- like I said, I think a couple of these fourth quarter projects are -- could have an important impact on 2021. .

And I know the Q will be out, Mark, but backing into the -- the Q will be out tonight. But backing into your cash change for the quarter, it looks like working capital might have been pretty significantly negative.

Is that the plug? And then sort of how do you look at the fourth quarter as far as working capital changes?.

Yes. So no, good question. So you're right. As I talked about earlier in the year, the -- on the liability side, we expected the billings exceeding revenues or deferred revenue, whatever you want to call it, would be -- we had very positives. Last year, we expected that to reverse. It is reversing in the third quarter. So that was down.

Accounts receivable was up. So some of that AR will come back, but that billings in excess of -- was important there. And that did happen as we expected. We spent the money on CapEx as well as the share buyback program. So that left our cash for the quarter fairly flat with third quarter slightly down. .

As we go into fourth quarter, what you'll see is the CapEx for the new hopper dredge just south of $10 million. We have our interest payment on the senior notes of $13 million in the quarter. So from our stand, we should see cash come down a little bit more and fourth quarter would be our expectation -- mostly on those 2 big items. .

[Operator Instructions] Your next question comes from Max Batzer from Wynnefield Capital. .

I didn't get to the pound key in time, guys. My question has already been answered, but nice work, and particularly, David, if you're not on -- if you're on the call, good work. Mark, Lasse, thank you very much, and we'll be in touch. .

I'm showing no further question at this time. I would now like to turn the conference back to Ms. Tina Baginskis, Director of Investor Relations. .

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. .

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