Great Lakes Dredge & Dock Investor Presentation Experience & Leadership November 2010 Exhibit 99.1 |
Experience & Leadership Safe Harbor This presentation includes “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 or in releases made by the SEC, all as may be amended from time to time. Such statements include declarations regarding the intent, belief, or current expectation of the Company and its management. The Company cautions that any such forward-looking statements are not guarantees of future performance, and involve a number of risks, assumptions and uncertainties that could cause actual results of the Company and its subsidiaries, or industry results, to differ materially from those expressed or implied by any forward-looking statements contained herein, including, but not limited to, as a result of the factors, risks and uncertainties described in other securities filings of the Company made with the SEC, such as the Company’s most recent Report on Form 10-K. You should not place undue reliance upon these forward- looking statements. Forward-looking statements provided herein are made only as of the date hereof or as a specified date herein and the Company does not have or undertake any obligation to update or revise them, unless required by law. November 2010 2 |
Experience & Leadership Who is Great Lakes Dredge & Dock Corporation? November 2010 3 Avalon & Sea Isle Beach Nourishment Oresund Bridge – International land reclamation Jacksonville, FL Harbor Deepening Hunters Point Waterfront Park Dredge Florida Cutterhead |
Experience & Leadership Great Lakes Highlights • Significant growth since 2006 • Revenue - three-year CAGR of 13.5% • EBITDA - three-year CAGR of 13.8% • Significant investment in PP&E of $125M since 2006 • Purchased four dredging vessels in 2007 as well as built a piece of ancillary equipment • Currently upgrading dredge Ohio into world-class cutter suction dredge • Decreased Net Debt / EBITDA from 6.4x at 12/31/05 to 2.4x at 12/31/09 (1.2x September 30, 2010) • Over $79M in cash on hand • Over $130M of availability on revolving credit facility November 2010 4 |
Experience & Leadership Executive Management Experience & Leadership November 2010 5 |
Experience & Leadership New Executive Management Team • Jonathan Berger – CEO • Member of our Board since December 2006 • Former Managing Director and Co-head of Corporate Finance for Navigant Consulting, Inc. and President of Navigant Capital Advisors, LLC • Former partner at KPMG, LLP and past National Partner in charge of Corporate Finance at KPMG • Bruce Biemeck – President and CFO • Member of our Board since December 2006 • Senior Vice President, Chief Financial Officer and Treasurer of Great Lakes from 1991 to 1999 November 2010 6 |
Experience & Leadership Why Make the Change? • Inject new skills and discipline in management team • Increase efforts to drive top line growth • Address cyclicality of business • Develop and execute a corporate strategy • Enhance operating performance • Reinvigorate management Doug Mackie remaining on as a senior advisor will help execute a transition with minimal disruption to operations November 2010 7 |
Experience & Leadership Strategy • New Strategy (in formulation stage) • Must develop a risk-based growth strategy which takes advantage of our many strengths • Complex engineering • Maritime construction knowledge • Project management • Extensive and versatile fleet • Strong balance sheet • Areas to explore • Domestic dredging markets we do not participate in • International dredging • Environmental services • Other maritime related business • Aggregate mining and sales • Specialty construction November 2010 • Historical Strategy (through Private Equity ownership) • Ride the cyclical wave of domestic dredging, pay down debt and opportunistically take advantage of international markets 8 |
Experience & Leadership Dredging Experience & Leadership November 2010 Innovative Civil Engineering Solutions Since 1890 9 |
Experience & Leadership Domestic Dredging Market November 2010 10 |
Experience & Leadership Foreign Dredging Market November 2010 11 |
Experience & Leadership Dredging Overview Deepening ports, land reclamation, and excavation of underwater trenches Maintenance Maintaining depth of shipping channels November 2010 • Army Corps of Engineers (Largest) • Port authorities • State and local governments • Foreign governments • Prime contractors on turn-key projects • Private entities (e.g., oil companies, utilities) Customers Beach Nourishment Creating and rebuilding beaches Capital 12 |
Experience & Leadership Large and Flexible Fleet in U.S and International Markets Types of Dredges Hydraulic • 11 Vessels: 7 U.S., 4 Middle East (10 U.S. flagged) • Including the only two large electric cutterhead dredges available in the U.S. for environmentally sensitive regions requiring lower emissions Hopper • 10 Vessels: 4 U.S., 5 Middle East, 1 Brazil (4 U.S. flagged) • Highly mobile, able to operate in rough waters • Little interference with other ship traffic Mechanical • 5 Vessels: All U.S (All U.S. flagged) • Operates one of two environmentally friendly electric clamshell dredges in the U.S. • Maneuverability in tight areas such as docks and terminals Estimate fleet replacement cost in excess of $1.5 billion in current market November 2010 Dredge Texas at Boca Raton Dredge Liberty Island at Melbourne Beach Dredge GL 55 at Upper Chesapeake 13 25 Material Transportation Barges and Over 160 Other Specialized Support Vessels |
Experience & Leadership Our Intellectual Property and Human Capital are a Competitive Advantage November 2010 14 |
Experience & Leadership Industry and Company Overview November 2010 15 |
Experience & Leadership Attractive Catalysts in the Dredging Market • Maintenance Dredging • Harbor Maintenance Trust Fund legislation passage could add $500M to the Company’s bid market • Panama Canal expansion leads to U.S. port deepening • Coastal Restoration throughout Gulf Area • Levee repair/replacement throughout U.S. November 2010 Bayou Dupont, LA Coastal Restoration Dredge California and GL 55 at Pass a Loutre Coastal Restoration 16 |
Experience & Leadership Capital Berm construction off Louisiana coast 17 |
Experience & Leadership (in millions) Three Year Average FY 2009 YTD 2010 Bid Market Size $296 $310 $ 275 GLDD Revenue $162 $203 $220 Domestic Dredging Industry Demand Drivers Capital • U.S. ports 5'–10' shallower vs. foreign ports • Domestic port development required to support larger, deeper draft ships • Long-term funding for wetland and coastal marshes • Other port development Note: YTD data is as of September 30, 2010. November 2010 Berm construction off Louisiana coast 18 |
Experience & Leadership Beach Nourishment Avalon & Sea Isle Beaches, NJ 19 |
Experience & Leadership (in millions) Three Year Average FY 2009 YTD 2010 Bid Market Size $151 $183 $ 38 GLDD Revenue $ 72 $ 62 $ 86 Domestic Dredging Industry Demand Drivers Beach Nourishment • Storm activity/natural erosion • Growing population in coastal communities • 22 of the 25 most densely populated U.S. counties are coastal • Importance of beach assets to recreation and local tourism industry • Anticipate robust market opportunities in next 12 months November 2010 Note: YTD data is as of September 30, 2010. Melbourne Beach 20 |
Experience & Leadership Maintenance Newburyport, MA 21 |
Experience & Leadership (in millions) Three Year Average FY 2009 YTD 2010 Bid Market Size $395 $645 $ 345 GLDD Revenue $117 $175 $ 97 Domestic Dredging Industry Demand Drivers Maintenance • Corps of Engineers’ goal is to reach 95% of U.S. port operating capacity • Natural sedimentation and volatile weather • New capital projects increase need for ongoing maintenance • 57% of 2009 domestic bid market was maintenance work November 2010 Note: YTD data is as of September 30, 2010. Dredge 54 at NYCT Berth 22 |
Experience & Leadership International - A Path for Future Growth Reem Island at Port of Natal, Brazil 23 |
Experience & Leadership (in millions) Three Year Average FY 2009 YTD 2010 GLDD Revenue $149 $134 $ 60 Great Lakes is Well Positioned to Compete Globally International • International projects tend to be larger/ longer duration vs. domestic projects • Middle East has been a strong market historically, and is expected to provide good opportunities in the future • Upgrade of the dredge Ohio expected to be completed by year end. Will allow us to meet future demand anticipated in Middle East • Deepening project in Brazil began in September • Strong market ahead in Brazil November 2010 Note: YTD data is as of September 30, 2010. Carolina at ASYR Shipyard, Bahrain 24 |
Experience & Leadership Largest Provider of Dredging 28% 10% 8% 21% 33% Foreign Capital Maintenance Beach Demolition 2009 REVENUE BY WORK TYPE $622 million 8% 9% 47% 7% 29% Great Lakes Norfolk Weeks Manson Other 2009 DOMESTIC DREDGING BID MARKET SHARE Domestic Bid Market: $1,137 million 29% 19% 16% 13% 23% Foreign Capital Maintenance Beach Demolition 5 YEAR AVERAGE REVENUE BY WORK TYPE Average 5 Year Revenue: $515 million 9% 24% 5% 42% 20% Great Lakes Norfolk Weeks Manson Other 5 YEAR AVERAGE DOMESTIC DREDGING BID MARKET SHARE Average 5 Year Bid Market: $793 November 2010 25 |
Experience & Leadership (in millions) Three Year Average FY 2009 YTD 2010 Demolition Revenue $ 75 $ 48 $ 51 Demolition Services - The Preferred Demolition Contractor in New England NASDI and Yankee Environmental Services • Major U.S. provider of commercial and industrial demolition services; primarily in New England • Purchased Yankee in 2009; able to offer removal of asbestos and hazardous materials • Successfully gaining foothold in New York market over last year • Maintained over $50 million in backlog throughout 2010 • Strong bonding capacity November 2010 Note: YTD data is as of September 30, 2010. Massachusetts Mental Health Hospital 26 |
Experience & Leadership Financial Highlights Experience & Leadership November 2010 27 |
Experience & Leadership Financial Performance 0 100 200 300 400 500 600 $700 2006 2007 2008 2009 Sept. 30, 2009 Sept. 30, 2010 Capital Maintenance Beach Foreign Demolition $81.5 $64.0 $77.6 $55.9 $57.5 $52.6 12.3% 11.1% 9.5% 12.5% 15.8% 13.9% (10) 10 30 50 70 2006 2007 2008 2009 Sept. 30, 2009 Sept. 30, 2010 0.0% 4.0% 8.0% 12.0% 16.0% 20.0% Dredging Demolition % EBITDA Margin ANNUAL REVENUE 3 year CAGR = 13.5% ANNUAL EBITDA (a) 3 year CAGR = 13.8% (a) EBITDA represents net income (loss), adjusted for net interest expense, income taxes, depreciation and amortization expense. Please see reconciliation of Net Income to EBITDA at the end of this presentation. Note: Great Lakes went public in December 2006 November 2010 ($ in millions) $426.0 $515.8 $586.9 $622.2 $461.7 $514.9 28 |
Experience & Leadership Improved Financial Flexibility $16.8 (b) $12.7 $29.8 $111.0 (a) $44.5 $25.7 0.0 20.0 40.0 60.0 80.0 100.0 $120.0 2005 2006 2007 2008 2009 September 30, 2010 Maintenance Growth 6.4x 3.6x 3.3x 3.7x 2.4x 1.2x 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0x 2005 2006 2007 2008 2009 September 30, 2010 Net Debt / EBITDA (a) Growth capital expenditures during the year of 2007 includes the purchase of four vessels. (b) Includes $4.3m related to the upgrade of the dredge Ohio CAPEX LEVERAGE November 2010 ($ in millions) 29 |
Experience & Leadership 0 100 200 300 400 500 2006 2007 2008 2009 Sept. 30, 2010 Capital Maintenance Beach Foreign Demolition Backlog BY SEGMENT November 2010 $276 (b) $382 $385 (a)(b) $360 $369 (a) Foreign backlog at December 31, 2008 has been adjusted for the portion of the Diyar contract that became an option pending award in the first quarter of 2009 (b) Option was awarded in October 2010 but not included in September 30, 2010 backlog ($ in millions) 30 |
Experience & Leadership Investment Highlights • Attractive near and long-term catalysts in U.S dredging market • Harbor Maintenance Trust Fund secures funding for long-term maintenance demand • Other sources of dredging demand include coastal restoration, port deepening and port development and levee repair/replacement • Strong financial performance and improved financial flexibility • Revenue – 3 year CAGR 13.5%, EBITDA – 3 year CAGR 13.8% • EBITDA growth from $45.1 million in 2005 to $77.6 million in 2009 ($81.5m September 30, 2010 YTD) • Decreased Net Debt / EBITDA from 6.4x in 2005 to 2.4x in 2009 (1.2x at September 30, 2010) • International Presence • Only U.S. dredger with significant foreign presence • Flexible fleet enables repositioning of vessels as necessary • Demonstrated record of successful project completion never having failed to complete a project • Expanding demolition business • Opportunistic acquirer of dredging assets November 2010 31 |
Experience & Leadership Appendix Experience & Leadership November 2010 32 |
Experience & Leadership Reconciliation of Net Income to EDITDA November 2010 $81.5 26.0 18.1 9.6 $27.8 2010 $64.0 24.6 10.7 12.3 $16.4 2009 Nine Months Ended Sept. 30 $52.6 25.1 1.0 24.3 $2.2 2006 Fiscal Year Ending December 31, $57.5 26.5 6.4 17.5 $7.1 2007 $77.6 33.0 11.0 16.1 $17.5 2009 $55.9 30.1 3.8 17.0 $5.0 2008 Depreciation and Amortization ($ in millions) Net Income Attributable to Great Lakes Dredge & Dock Corporation Interest Expense Income Tax Expense EBITDA 33 |
Experience & Leadership 0 20 40 60 80 100 120 140 12/31/2006 12/31/2007 12/31/2008 12/31/2009 11/11/2010 GLDD ORN STRL GVA Stock Performance Initial Investment $100 *Note: ORN, STRL, and GVA were selected as GLDD’s three closest peers 34 |
Experience & Leadership Stock Performance Initial Investment $100 40 50 60 70 80 90 100 110 120 130 140 12/31/2006 12/31/2007 12/31/2008 12/31/2009 11/11/2010 GLDD Peers NASDAQ Russel 2K 35 |