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| 8-K - FORM 8-K - Great Lakes Dredge & Dock CORP | d256312d8k.htm |
 Great Lakes
Dredge & Dock Corporation Investor Presentation
Growing Through Opportunities
November 15, 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?
Oresund Bridge –
International land reclamation
Jacksonville, FL Harbor Deepening
Dredge Florida Cutterhead
Growing Through Opportunities
Avalon & Sea Isle Beach Nourishment
Hunters Point Waterfront Park |
 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 1.8x at 9/30/11
•
Over $107m in cash on hand at 9/30/11 –
increase in 2011 as result
of refinancing of notes
•
Over $122m 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 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
Growing Through Opportunities
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
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.
Jonathan Berger
Chief Executive
Officer and Director
Bruce Biemeck
President and Chief
Financial Officer,
Director
David Simonelli
President of
Dredging Operations
Martin Battistoni
President of NASDI,
LLC |
 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
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
Growing Through Opportunities
Vice President since 2006
Responsible for Equipment Maintenance and Mechanical Engineering
Departments since 1995
Joined the Company in 1984 as a Field Engineer
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
Kyle Johnson
Senior Vice President,
Operations
John Karas
Senior Vice President,
Estimating and
Business
Development
Steve Becker
Vice President, Plant
Equipment and Chief
Mechanical Engineer
Katie Hayes
Treasurer and
Director of Investor
Relations |
 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
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
25 Material Transportation Barges and Over 160 Other Specialized Support Vessels
|
 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
awarded
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*
$303
GLDD Revenue
$219
$301
$130
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 September 30, 2011. |
 18
(in millions)
Three Year Average
(FY 2008-2010)
FY 2010
YTD 2011
Bid Market Size
$127
$76
$295
GLDD Revenue
$77
$106
$88
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 September 30, 2011. |
 19
(in millions)
Three Year Average
(FY 2008-2010)
FY 2010
YTD 2011
Bid Market Size
$478
$444
$226
GLDD Revenue
$130
$119
$93
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
•
51% of 2010 domestic bid market was maintenance work
Dredge 54 at NYCT Berth
Growing Through Opportunities
Note: YTD data is as of September 30, 2011. |
 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
$26
Growing Through Opportunities
Note: YTD data is as of September 30, 2011. |
 21
(in millions)
Three Year Average
(FY 2008-2010)
FY 2010
YTD 2011
GLDD Revenue
$130
$83
$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. Several
projects bidding in coming months
•
Awarded $35m East Hidd land reclamation project in Bahrain.
Ideal project for recently upgraded dredge Ohio
•
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 September 30, 2011. |
 22
Largest Provider of Dredging
YTD September 2011 REVENUE BY
WORK TYPE
$469 million
YTD September 2011 DOMESTIC
DREDGING BID MARKET SHARE
Domestic Bid Market: $847 million
2010 REVENUE BY WORK TYPE
$687 million
2010 DOMESTIC DREDGING BID MARKET
SHARE
Domestic Bid Market: $875 million
Growing Through Opportunities |
 23
(in millions)
Three Year Average
FY 2010
YTD 2011
Demolition Revenue
$76
$78
$72
Demolition Services -
The Preferred Demolition Contractor in New England
NASDI and Yankee Environmental Services
•
Major
U.S.
provider
of
commercial
and
industrial
demolition
services;
primarily in New England
•
Purchased Yankee in 2009; able to offer removal of asbestos and
hazardous materials
•
Gaining foothold in New York market over last year
•
Working through learning curve on these projects
•
Strong bonding capacity
•
Currently expanding into new domestic markets with significant
contract in Louisiana for specialty bridge demolition
Massachusetts Mental Health Hospital
Growing Through Opportunities
Note: YTD data is as of September 30, 2011. |
 Financial
Highlights 24
Growing Through Opportunities |
 25
Financial Performance
ANNUAL REVENUE
3 year CAGR = 10.0%
ANNUAL ADJUSTED EBITDA
(a)
3 year CAGR = 21.4%
(a)
Adjusted EBITDA represents net income (loss), adjusted for net interest expense,
income taxes, depreciation and amortization expense and debt restructuring
expense. Please see reconciliation of Net Income to EBITDA at the end of this presentation.
Note: Great Lakes went public in December 2006
($ in millions)
$426.0
$515.8
$586.9
$622.2
$686.9
Growing Through Opportunities
$468.8
$514.9
$81.5
$52.6
$57.5
$55.9
$103.0
$77.6
$67.9
14.5%
9.5%
15.0%
15.8%
12.5%
12.3%
11.1%
(20)
0
20
40
60
80
100
$120
2006
2007
2008
2009
2010
YTD Q3
2010
YTD Q3
2011
0%
4%
8%
12%
16%
20%
Dredging
Demolition
% EBITDA Margin |
 26
Improved Financial Flexibility
$25.7
$44.5
$111.0
(a)
$29.8
$55.5
$66.0
(b)
0.0
20.0
40.0
60.0
80.0
100.0
$120.0
2006
2007
2008
2009
2010
YTD Q3
2011
Maintenance
Growth
3.6x
3.3x
3.7x
2.4x
1.4x
1.8x
0.0
1.0
2.0
3.0
4.0
2006
2007
2008
2009
2010
Q3 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
Backlog
($ in millions)
Growing Through Opportunities
(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)
Include domestic low bids and options pending award : 2010 - $35m 9/30/11 - $78m
Rivers & Lakes
Demolition
Foreign
Beach
Maintenance
Capital
BY SEGMENT |
 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 ($67.9 million YTD Q3
2011) •
Decreased Net Debt / EBITDA from 6.4x in 2005 to 1.8x in Q3 2011
•
International Presence
•
Only U.S. dredger with significant foreign presence
•
Flexible fleet enables repositioning of vessels as necessary
•
Demonstrated record of successful project completion never having failed to complete a
marine project •
Expanding demolition business (Bridges and Sediment & Soil Remediation)
•
Opportunistic acquirer of dredging assets
Growing Through Opportunities |
 29
Appendix
Growing Through Opportunities |
 30
Reconciliation of Net Income to Adjusted EBITDA
Fiscal Year Ending December 31,
($ 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
$27.8
$9.7
Loss on Extinguishment of Debt
5.1
Interest Expense
24.3
17.5
17.0
16.1
13.5
9.5
16.4
Income Tax Expense
1.0
6.4
3.8
11.0
20.6
18.1
6.6
Depreciation and Amortization
25.1
26.5
30.1
33.0
34.3
26.0
30.0
Adjusted EBITDA
$52.6
$57.5
$55.9
$77.6
$103.0
$81.4
$67.8
Growing Through Opportunities
Nine Months Ended
September 30,
*Recent EBITDA guidance for 2011 is $85-90m |
 31
Stock Performance
Initial Investment $100
Growing Through Opportunities
Note: Great Lakes went public in December 2006
$-
$20
$40
$60
$80
$100
$120
$140
$160
12/31/2006
12/31/2007
12/31/2008
12/31/2009
12/31/2010
11/11/2011
Stock Performance
Initial Investment $100
GLDD
ORN
STRL
GVA |