While that doesn't worry us too much, it does suggest the interest payments are somewhat of a burden. Great Lakes Dredge & Dock has net debt worth 2.0 times EBITDA, which isn't too much, but its interest cover looks a bit on the low side, with EBIT at only 5.1 times the interest expense. The advantage of this approach is that we take into account both the absolute quantum of debt (with net debt to EBITDA) and the actual interest expenses associated with that debt (with its interest cover ratio). We measure a company's debt load relative to its earnings power by looking at its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and by calculating how easily its earnings before interest and tax (EBIT) cover its interest expense (interest cover). This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. This is a mountain of leverage relative to its market capitalization of US$590.1m. So its liabilities total US$395.6m more than the combination of its cash and short-term receivables. Offsetting this, it had US$75.4m in cash and US$131.9m in receivables that were due within 12 months. NasdaqGS:GLDD Debt to Equity History September 22nd 2022 A Look At Great Lakes Dredge & Dock's LiabilitiesĪccording to the last reported balance sheet, Great Lakes Dredge & Dock had liabilities of US$141.6m due within 12 months, and liabilities of US$461.4m due beyond 12 months. However, it also had US$75.4m in cash, and so its net debt is US$245.8m. The chart below, which you can click on for greater detail, shows that Great Lakes Dredge & Dock had US$321.2m in debt in June 2022 about the same as the year before. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.Ĭheck out our latest analysis for Great Lakes Dredge & Dock How Much Debt Does Great Lakes Dredge & Dock Carry? By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. GREAT LAKES DREDGE FREEBut should shareholders be worried about its use of debt? When Is Debt A Problem?ĭebt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. We can see that Great Lakes Dredge & Dock Corporation ( NASDAQ:GLDD) does use debt in its business. In 1995 the company's main office was located in Oakbrook, IL, and the Cleveland office served as a small regional center.Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. was taken over by real estate magnate Sam Zell, who sold the company in 1992 to Blackstone Investment Group of New York. Management change took place in early Nov. became the holding company for the firm and its subsidiaries. as a wholly owned subsidiary, and 2 years later Great Lakes Intl. established the North American Trailing Co. Dredging the Cuyahoga River was an annual task, and among other projects managed by the Cleveland office during these years was revamping the breakwater at the Avon Lake Power Plant and performing marine work at the CLEVELAND ELECTRIC ILLUMINATING CO. It also participated in construction of the St. Marie and built the southwest pier at that location to protect the Power Canal from out-of-control freighters. In the 50-year period 1920-70, Great Lakes Dredge & Dock worked on the McArthur Lock at Sault Ste. In 1914-15 the firm participated in the construction of piers and abutments for the Detroit-Superior and Clark Ave. In addition to dredging and dock construction, Great Lakes has also fabricated and laid pipelines, installed piers for bridges, built up breakwaters, and added sand to eroding beaches. Lydon, the company has grown since then and expanded its operations to Central and South America, as well as the Middle East, Africa, and the Caribbean Islands. was established when the use of larger ships on the Great Lakes created a need for deeper channels and sturdier docks.
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