Great Lakes Dredge & Dock BB&T C&I Conference Growing Through Opportunities April 7, 2011 Exhibit 99.1 |
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. 2 April 2011 Growing Through Opportunities |
Who is Great Lakes Dredge & Dock Corporation? 3 Avalon & Sea Isle Beach Nourishment Oresund Bridge – International land reclamation Jacksonville, FL Harbor Deepening Hunters Point Waterfront Park Dredge Florida Cutterhead Growing Through Opportunities April 2011 |
Great Lakes Highlights • Significant growth since 2006 • Revenue - three-year CAGR of 10.0% • EBITDA - three-year CAGR of 21.4% • Significant investment in PP&E of $140M since 2006 • Purchased four dredging vessels in 2007 as well as built a piece of ancillary equipment • Upgraded dredge Ohio into world-class cutter suction dredge • Decreased Net Debt / EBITDA from 6.4x at 12/31/05 to 1.3x at 12/31/10 • Over $48M in cash on hand at year-end – increase in 2011 as result of refinancing of notes • Over $145M of availability on revolving credit facility 4 Growing Through Opportunities April 2011 |
Management Team 5 Board member since December 2006 Former Managing Director and Co-head of Corporate Finance for Navigant Consulting, Inc Former partner at KPMG, LLP and past National Partner in charge of Corporate Finance at KPMG Jonathan Berger Chief Executive Officer and Director Board member since December 2006 Significant institutional knowledge as Senior Vice President, CFO and Treasurer of Great Lakes from 1991 to 1999 Private real estate investor and independent consultant since April 1999 Bruce Biemeck President and Chief Financial Officer, Director Growing Through Opportunities April 2011 David Simonelli President of Dredging Operations Served as Chief Site Manager from 2007 to February 2009 and Senior Vice President from February 2009 to April 2010 Joined Great Lakes in 1978 as a Project Engineer, and has served the Company in various roles since that time Member of the Hydrographic Society, the Western Dredging Association and the American Society of Civil Engineers |
Acquisition of L.W. Matteson On December 31, 2010, Great Lakes acquired the assets of L.W. Matteson L.W. Matteson is a leading inland dredging and marine construction contractor – Serves four primary markets in the U.S. including: Inland Levee and Construction, Inland Maintenance Dredging, Environmental and Habitat Restoration, and Inland Lake Dredging The purchase price was $45 million, with $37.5 million paid at closing and a note payable to the seller of $7.5 million (approximate EBITDA multiple of 3.0x) L.W. Matteson has experienced strong growth and provides Great Lakes with a platform to enter new markets 6 Growing Through Opportunities April 2011 |
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 in which we do not participate • International dredging • Environmental services • Other maritime and Jones Act related business • Aggregate mining and sales • Specialty construction • Historical Strategy (through Private Equity ownership) • Ride the cyclical wave of domestic dredging, pay down debt and opportunistically take advantage of international markets 7 Growing Through Opportunities April 2011 |
Significant Opportunities to Grow U.S. Port Deepening Post Panama Canal Deepening Harbor Maintenance Trust Fund Environmental Services/Dredging Gulf Coast Restoration International Levee Repairs 8 Growing Through Opportunities April 2011 |
Dredging Innovative Civil Engineering Solutions Since 1890 9 Growing Through Opportunities April 2011 |
Domestic Dredging Market 10 Growing Through Opportunities April 2011 |
Foreign Dredging Market 11 Growing Through Opportunities April 2011 |
Dredging Overview Deepening ports, land reclamation, and excavation of underwater trenches Maintenance Maintaining depth of shipping channels • 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 Growing Through Opportunities April 2011 |
Large and Flexible Fleet in U.S and International Markets Types of Dredges Hydraulic • 20 Vessels: 16 U.S., 4 Middle East (19 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 25 Material Transportation Barges and Over 160 Other Specialized Support Vessels Dredge Texas at Boca Raton Dredge Liberty Island at Melbourne Beach Dredge GL 55 at Upper Chesapeake 13 Growing Through Opportunities April 2011 |
Our Intellectual Property and Human Capital are a Competitive Advantage 14 Growing Through Opportunities April 2011 |
Industry and Company Overview 15 Growing Through Opportunities April 2011 |
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. Bayou Dupont, LA Coastal Restoration Dredge California and GL 55 at Pass a Loutre Coastal Restoration 16 Growing Through Opportunities April 2011 |
(in millions) Three Year Average FY 2009 FY 2010 Bid Market Size $325 $310 $356* GLDD Revenue $219 $203 $301 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 Berm construction off Louisiana coast 17 Growing Through Opportunities April 2011 *Note: The 2010 bid market excludes dredging work related to the construction of sand berms off the coast of Louisiana |
(in millions) Three Year Average FY 2009 FY 2010 Bid Market Size $127 $183 $ 76 GLDD Revenue $ 77 $ 62 $106 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 Melbourne Beach 18 Growing Through Opportunities April 2011 |
(in millions) Three Year Average FY 2009 FY 2010 Bid Market Size $478 $645 $444 GLDD Revenue $130 $175 $119 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 Dredge 54 at NYCT Berth 19 Growing Through Opportunities April 2011 |
(in millions) Three Year Average FY 2009 FY 2010 GLDD Revenue $130 $134 $ 83 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 completed at the end of 2010. Will allow us to meet future demand anticipated in Middle East • Deepening project in Brazil began in September • Strong market ahead in Brazil Reem Island at Port of Natal, Brazil 20 Growing Through Opportunities April 2011 |
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 44% 17% 16% 11% 12% Foreign Capital Maintenance Beach Demolition 2010 REVENUE BY WORK TYPE $687 million 12% 4% 24% 4% 30% 26% Great Lakes Norfolk Weeks Manson Don Jon Other 2010 DOMESTIC DREDGING BID MARKET SHARE Domestic Bid Market: $875 million 21 Growing Through Opportunities April 2011 |
(in millions) Three Year Average FY 2009 FY 2010 Demolition Revenue $ 76 $ 48 $ 78 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 • Strong bonding capacity • Currently expanding into new domestic markets with contract awarded in Louisiana Massachusetts Mental Health Hospital 22 Growing Through Opportunities April 2011 |
Financial Highlights 23 Growing Through Opportunities April 2011 |
Financial Performance 0 100 200 300 400 500 600 700 $800 2006 2007 2008 2009 2010 Capital Maintenance Beach Foreign Demolition $52.6 $57.5 $55.9 $103.0 $77.6 9.5% 15.0% 12.5% 12.3% 11.1% (20) 0 20 40 60 80 100 $120 2006 2007 2008 2009 2010 0.0% 4.0% 8.0% 12.0% 16.0% 20.0% Dredging Demolition % EBITDA Margin ANNUAL REVENUE 3 year CAGR = 10.0% ANNUAL EBITDA (a) 3 year CAGR = 21.4% (a) EBITDA represents net income (loss), adjusted for net interest expense, income taxes, depreciation and amortization expense. Please see reconciliation of Net Income to EBITDA at the end of this presentation. Note: Great Lakes went public in December 2006 ($ in millions) $426.0 $515.8 $586.9 $622.2 $686.9 24 Growing Through Opportunities April 2011 |
Improved Financial Flexibility $25.7 $44.5 $111.0 (a) $29.8 $12.7 $66.0 (b) 0.0 20.0 40.0 60.0 80.0 100.0 $120.0 2005 2006 2007 2008 2009 2010 Maintenance Growth 6.4x 3.6x 3.3x 3.7x 2.4x 1.3x 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0x 2005 2006 2007 2008 2009 2010 Net Debt / EBITDA (a) Growth capital expenditures during the year of 2007 includes the purchase of four vessels. (b) Includes $14.6m related to the upgrade of the dredge Ohio and $36m related to Matteson acquisition CAPEX LEVERAGE ($ in millions) 25 Growing Through Opportunities April 2011 |
0 100 200 300 400 500 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 Capital Maintenance Beach Foreign Demolition Rivers & Lakes $ Backlog BY SEGMENT $364 $382 $385 (a) $360 $369 (a) Foreign backlog at December 31, 2008 has been adjusted for the portion of the Diyar contract that became an option pending award in the first quarter of 2009 ($ in millions) 26 Growing Through Opportunities April 2011 |
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 10%, EBITDA – 3 year CAGR 21.4% • EBITDA growth from $45.1 million in 2005 to $103.0 million in 2010 • Decreased Net Debt / EBITDA from 6.4x in 2005 to 1.3x in 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 27 Growing Through Opportunities April 2011 |
Appendix 28 Growing Through Opportunities April 2011 |
Reconciliation of Net Income to EBITDA $103.0 34.3 20.6 13.5 $34.6 2010 $52.6 25.1 1.0 24.3 $2.2 2006 $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 29 Growing Through Opportunities April 2011 |
0 20 40 60 80 100 120 140 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 GLDD ORN STRL GVA Stock Performance Initial Investment $100 *Note: ORN, STRL, and GVA were selected as GLDD’s three closest peers 30 Growing Through Opportunities April 2011 |
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 12/31/2010 GLDD Peers NASDAQ Russel 2K 31 Growing Through Opportunities April 2011 |