![]() Great Lakes Dredge & Dock Corporation Deutsche Bank Nineteenth Annual Leveraged Finance Conference Growing Through Opportunities October 13, 2011 Exhibit 99.1 |
![]() 2 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. Growing Through Opportunities |
![]() 3 Who is Great Lakes Dredge & Dock Corporation? Growing Through Opportunities Avalon & Sea Isle Beach Nourishment Oresund Bridge – International land reclamation Jacksonville, FL Harbor Deepening Hunters Point Waterfront Park Dredge Florida Cutterhead |
![]() 4 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 1.9x at 6/30/11 • Over $95m in cash on hand at 6/30/11 – increase in 2011 as result of refinancing of notes • Over $135M of availability on revolving credit facility Growing Through Opportunities |
![]() 5 Management Team 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 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 Martin Battistoni President of NASDI, LLC Named President of NASDI, LLC in July 2011 Former President of the Environmental Services Division of WRS Compass Former President and Chief Operating Officer of Compass Environmental Inc. |
![]() 6 Management Team Senior Vice President since 2009 Served the Company as Vice President and Chief Contract Manager since 2006 Joined the Company in 1983 as a Mechanical Engineer Kyle Johnson Senior Vice President, Operations Senior Vice President since 2009 Served the Company as Vice President and Chief Estimator since 1992 Joined the Company in 1983 as a Project Engineer in the Hopper Division John Karas Senior Vice President, Estimating and Business Development Growing Through Opportunities Steve Becker Vice President, Plant Equipment and Chief Mechanical Engineer Vice President since 2006 Responsible for Equipment Maintenance and Mechanical Engineering Departments since 1995 Joined the Company in 1984 as a Field Engineer Katie Hayes Treasurer and Director of Investor Relations Named Treasurer in March 2011 Served as Director of Investor Relations since the Company went public in 2006 Joined the Company in 2006 and has over 18 years of accounting and finance experience |
![]() 7 Strategy • New Strategy • 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 (Recent J.V. Announcement) • Offshore aggregate mining and sales • Other maritime and Jones Act related business • Specialty construction • Additional demolition services including marine demolition • Historical Strategy (through Private Equity ownership) • Ride the cyclical wave of domestic dredging, pay down debt and opportunistically take advantage of international markets Growing Through Opportunities |
![]() 8 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 Growing Through Opportunities |
![]() 9 Dredging Innovative Civil Engineering Solutions Since 1890 Growing Through Opportunities |
![]() 10 Domestic Dredging Market Growing Through Opportunities |
![]() 11 Foreign Dredging Market Growing Through Opportunities |
![]() 12 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 Growing Through Opportunities |
![]() 13 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 • 9 Vessels: 4 U.S., 4 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 Growing Through Opportunities *Note: Nine vessels were added from 2010 Matteson acquisition which are hydraulic but have less capacity, ideal for rivers and environmental dredging |
![]() 14 Our Intellectual Property and Human Capital are a Competitive Advantage Growing Through Opportunities |
![]() 15 Industry and Company Overview Growing Through Opportunities |
![]() 16 Attractive Catalysts in the Dredging Market • Coastal Restoration throughout Gulf Area • Two recent bids; Great Lakes was low bidder on the $43m Pelican Island job • 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 • Levee repair/replacement throughout U.S. Bayou Dupont, LA Coastal Restoration Dredge California and GL 55 at Pass a Loutre Coastal Restoration Growing Through Opportunities |
![]() 17 (in millions) Three Year Average (FY 2008-2010) FY 2010 YTD 2011 Bid Market Size $325 $ 356* $76 GLDD Revenue $219 $301 $90 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 Growing Through Opportunities *Note: The 2010 bid market excludes dredging work related to the construction of sand berms off the coast of Louisiana Note: YTD data is as of June 30, 2011. |
![]() 18 (in millions) Three Year Average (FY 2008-2010) FY 2010 YTD 2011 Bid Market Size $127 $76 $115 GLDD Revenue $77 $106 $46 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 • Have seen robust market in 2011 and anticipate continued opportunities in next 12 months Melbourne Beach Growing Through Opportunities Note: YTD data is as of June 30, 2011. |
![]() 19 Domestic Dredging Industry Demand Drivers Maintenance Dredge 54 at NYCT Berth Growing Through Opportunities Note: YTD data is as of June 30, 2011. 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 51% of 2010 domestic bid market was maintenance work (in millions) Three Year Average (FY 2008- 2010) FY 2010 YTD 2011 Bid Market Size $ 478 $444 $139 GLDD Revenue $ 130 $119 $76 |
![]() 20 Domestic Dredging Industry Demand Drivers Rivers & Lakes • 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 • A number of new projects coming up for bid Dredge Sandpiper (in millions) Three Year Average (FY 2008-2010) FY 2010 YTD 2011 GLDD Revenue N/A N/A $11 Note: YTD data is as of June 30, 2011. Growing Through Opportunities |
![]() 21 (in millions) Three Year Average (FY 2008-2010) FY 2010 YTD 2011 GLDD Revenue $130 $ 83 $ 38 Great Lakes is Well Positioned to Compete Globally International • Adding more projects to backlog in Brazil. Low bidder on private port deepening for Porto Trombetas • 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. Several projects bidding in coming months • Upgrade of the dredge Ohio completed at the end of 2010. Will allow us to meet future demand anticipated in Middle East • Working to enter India market via teaming agreement with successful Indian civil contractor Reem Island at Port of Natal, Brazil Growing Through Opportunities Note: YTD data is as of June 30, 2011. |
![]() 22 Largest Provider of Dredging YTD June 2011 REVENUE BY WORK TYPE $310 million YTD June 2011 DOMESTIC DREDGING BID MARKET SHARE Domestic Bid Market: $333 million 2010 REVENUE BY WORK TYPE $687 million 2010 DOMESTIC DREDGING BID MARKET SHARE Domestic Bid Market: $875 million Growing Through Opportunities 4% 24% 15% 16% 12% 29% Foreign Capital Maintenance Beach Demolition Rivers & Lakes 22% 5% 3% 40% 13% 17% Great Lakes Norfolk Weeks Manson Don Jon Other 44% 17% 16% 11% 12% Foreign Capital Maintenance Beach Demolition 12% 4% 24% 4% 30% 26% Great Lakes Norfolk Weeks Manson Don Jon Other |
![]() 23 (in millions) Three Year Average FY 2010 YTD 2011 Demolition Revenue $ 76 $ 78 $ 49 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 • Gaining foothold in New York market over last year • Working through learning curve on these projects • Strong bonding capacity • Currently expanding into new domestic markets with significant contract in Louisiana for specialty bridge demolition Massachusetts Mental Health Hospital Growing Through Opportunities Note: YTD data is as of June 30, 2011. |
![]() Financial Highlights 24 Growing Through Opportunities |
![]() 25 Financial Performance 0 100 200 300 400 500 600 700 2006 2007 2008 2009 2010 YTD Q2 2010 YTD Q2 2011 Capital Maintenance Beach Foreign Rivers & Lakes Demolition $57.3 $52.6 $57.5 $55.9 $103.0 $77.6 $41.9 13.5% 9.5% 15.0% 16.8% 12.5% 12.3% 11.1% (20) 0 20 40 60 80 100 $120 2006 2007 2008 2009 2010 YTD Q2 2010 YTD Q2 2011 0% 4% 8% 12% 16% 20% Dredging Demolition % EBITDA Margin ANNUAL REVENUE 3 year CAGR = 10.0% ANNUAL ADJUSTED EBITDA (a) 3 year CAGR = 21.4% (a) Adjusted EBITDA represents net income (loss), adjusted for net interest expense, income taxes, depreciation and amortization expense and debt restructuring expense. Please see reconciliation of Net Income to EBITDA at the end of this presentation. Note: Great Lakes went public in December 2006 ($ in millions) $426.0 $515.8 $586.9 $622.2 $686.9 Growing Through Opportunities $310.3 $341.5 |
![]() 26 Improved Financial Flexibility $25.7 $44.5 $111.0 (a) $29.8 $30.0 $66.0 (b) 0.0 20.0 40.0 60.0 80.0 100.0 $120.0 2006 2007 2008 2009 2010 Q2 2011 Maintenance Growth 3.6x 3.3x 3.7x 2.4x 1.4x 1.9x 0.0 1.0 2.0 3.0 4.0 2006 2007 2008 2009 2010 Q2 2011 Net Debt / EBITDA (a) Growth capital expenditures during the year of 2007 includes the purchase of four vessels. (b) Includes $14.6 related to the upgrade of the dredge Ohio and $36 related to Matteson acquisition CAPEX LEVERAGE ($ in millions) Growing Through Opportunities |
![]() 27 0 100 200 300 400 500 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 6/30/2011 Capital Maintenance Beach Foreign Demolition Rivers & Lakes $ Backlog BY SEGMENT $364 $382 $385 $360 $369 ($ in millions) Growing Through Opportunities $271 (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 (a) |
![]() 28 Investment Highlights • Attractive near and long-term catalysts in U.S dredging market • Gulf Coast Restoration • Harbor Maintenance Trust Fund secures funding for long-term maintenance demand • Other sources of dredging demand include 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 ($41.9 million YTD Q2 2011) • Decreased Net Debt / EBITDA from 6.4x in 2005 to 1.9x in Q2 2011 • International Presence • Only U.S. dredger with significant foreign presence • Flexible fleet enables repositioning of vessels as necessary • Demonstrated record of successful project completion never having failed to complete a marine project • Expanding demolition business (Bridges and Sediment & Soil Remediation) • Opportunistic acquirer of dredging assets Growing Through Opportunities |
![]() 29 Appendix Growing Through Opportunities |
![]() 30 Reconciliation of Net Income to Adjusted EBITDA Fiscal Year Ending December 31, ($ in millions) 2006 2007 2008 2009 2010 2010 2011 Net Income Attributable to Great Lakes Dredge & Dock Corporation $2.2 $7.1 $5.0 $17.5 $34.6 $20.1 $4.1 Loss on Extinguishment of Debt 5.1 Interest Expense 24.3 17.5 17.0 16.1 13.5 6.2 10.9 Income Tax Expense 1.0 6.4 3.8 11.0 20.6 13.0 3.0 Depreciation and Amortization 25.1 26.5 30.1 33.0 34.3 18.0 18.8 Adjusted EBITDA $52.6 $57.5 $55.9 $77.6 $103.0 $57.3 $41.9 Growing Through Opportunities Six Months Ended June 30, *Recent EBITDA guidance for 2011 is $85-90m |
![]() 31 Stock Performance Initial Investment $100 Stock Performance Initial Investment $100 $- $20 $40 $60 $80 $100 $120 $140 $160 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 6/30/2011 GLDD ORN STRL GVA Growing Through Opportunities |