Attached files
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| 8-K - FORM 8-K - Great Lakes Dredge & Dock CORP | d438787d8k.htm |
Exhibit 99.1
GREAT LAKES DREDGE & DOCK CORPORATION
INVESTOR PRESENTATION
Q4 2012
GREAT LAKES
DREDGE & DOCK CORPORATION
INNOVATION, ENGINEERING & EXECUTION
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.
GREAT LAKES DREDGE & DOCK CORPORATION
INNOVATION, ENGINEERING & EXECUTION
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PRESENTERS
CHIEF EXECUTIVE OFFICER, DIRECTOR
JONATHAN BERGER
• 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
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER
WILLIAM STECKEL
• Previously served as CEO, president, CFO and treasurer at Daystar Technologies, Inc. (NASDAQ: DSTI).
• Served as senior vice president, CFO and treasurer at Norwood Promotional Products
• Held management positions with Invensys (FTSE: ISIS) in its Lambda Power, Seibe Climate Controls and CTS Corporation Divisions
TREASURER, DIRECTOR OF INVESTOR
RELATIONS
KATIE HAYES
• 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
• Previously worked at TransUnion as Director of Corporate Accounting.
GREAT LAKES DREDGE & DOCK CORPORATION
INNOVATION, ENGINEERING & EXECUTION
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WHO IS GREAT LAKES DREDGE & DOCK CORPORATION?
INFRASTRUCTURE & ENVIRONMENTAL
DOMESTIC DREDGING
INTERNATIONAL DREDGING
DEMOLITION
ENVIRONMENTAL SERVICES
GREAT LAKES DREDGE & DOCK CORPORATION
INNOVATION, ENGINEERING & EXECUTION
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DREDGING & THE
ECONOMY
“The health of the U.S. economy depends, in part, upon the vitality and expansion of international trade. International trade depends upon the Nation’s navigation infrastructure, which serves as a conduit for transportation, trade, and tourism and connects us to the global community.
Marine transportation is one of the most efficient, effective, safe and environmentally sound ways to transport people and goods. It is a keystone of the U.S. economy. Ninety-five percent of our international trade moves through the Nation’s ports.”
Honorable Jo-Ellen Darcy Assistant Secretary of the Army (Civil Works)
GREAT LAKES DREDGE & DOCK CORPORATION
INNOVATION, ENGINEERING & EXECUTION
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GLOBAL REACH
DREDGING WORLDWIDE
WHERE WE HAVE WORKED
COUNTRIES WHERE WE SEE OPPORTUNITIES
GREAT LAKES DREDGE & DOCK CORPORATION
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WHERE WE ARE GOING
Great Lakes intends to grow the business by continuing to execute the following strategies:
BUILD
Build upon Great Lakes’ preeminent position in the U.S. dredging market
ENHANCE
Enhance the Company’s operating capabilities via prudent and cost-effective investments and asset management
CAPITALIZE
Capitalize on adjacent market opportunities in the Company’s domestic markets
EXPAND
Expand the Company’s presence in foreign markets
PURSUE
Pursue growth opportunities in the commercial and industrial demolition market
GROW
Looking at acquisitions that fit in well with our strategy
Announced construction of Hopper Dredge - strategic investment by the Company in providing the most productive, efficient and capable dredging equipment in the domestic industry
The 12/31/10 rivers & lakes acquisition expands the Company’s service offering into inland river, lakes and environmental dredging and levee construction using dredge material
GREAT LAKES DREDGE & DOCK CORPORATION
INNOVATION, ENGINEERING & EXECUTION
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INFRASTRUCTURE & ENVIRONMENTAL
PORT DEEPENING
PORT MAINTENANCE
COASTAL RESTORATION
BEACH NOURISHMENT
INLAND & LAKE DREDGING
SEDIMENT & SOIL REMEDIATION
LEVEE CONSTRUCTION
ENVIRONMENTAL & REMEDIATION SERVICES
LAND RECLAMATION
DEMOLITION CONTRACTORS
SITE DEVELOPMENT
BRIDGE DEMOLITION
HAZARDOUS MATERIAL REMOVAL SERVICES
GREAT LAKES DREDGE & DOCK CORPORATION
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GREAT LAKES HIGHLIGHTS
ATTRACTIVE NEAR AND LONG-TERM CATALYSTS IN U.S. DREDGING MARKET
• U.S. port deepening, post Panama Canal deepening
• Gulf Coast Restoration
• Other sources of dredging demand include port development and levee repair/replacement
MAP-21 TRANSPORTATION BILL
• RESTORE Act requires 80% of penalties to be deposited into a coastal protection works fund which includes dredging
• Calls for appropriations of HMTF monies so that total budget resources on harbor maintenance will be equal to the level of receipts.
EXPANDING DEMOLITION BUSINESS
• Focus on large complex projects such as municipal developments and specialty work such as bridge demolition
• Breaking into federal work and power plant market
GREAT LAKES DREDGE & DOCK CORPORATION
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BOSTON 40’
NEW YORK 50’
PORTS WITH DEEPENING EXPEDITED BY OBAMA DELAWARE 40’ ADMINISTRATION
PORTS WITH PLANS FOR EXPANSION
SAN DIEGO 35’ CHARLESTON 45’
SAVANNAH 42’
MOBILE 45’ JACKSONVILLE 40’ NEW ORLEANS 45’ HOUSTON 45’
PORT EVERGLADES 42’
MIAMI 42’
PORTS WITH PLANS FOR EXPANSION
International trade, particularly in the intermodal container shipping business, is undergoing significant change as a result of the Panama Canal expansion. Many shipping lines have announced plans to deploy larger ships which, due to channel dimension requirements, currently cannot use many U.S. East and Gulf Coast ports.
GREAT LAKES DREDGE & DOCK CORPORATION
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DREDGING OVERVIEW
Deepening ports, land reclamation, and excavation of underwater trenches Bid Market Share* 41%
CAPITAL
Creating and rebuilding beaches
Bid Market Share* 60%
BEACH NOURISHMENT
Maintaining depth of shipping channels
Bid Market Share* 32%
MAINTENANCE
International land reclamations, channel deepening and port infrastructure development
3-year Average Revenue $98M
INTERNATIONAL
Inland maintenance and lake dredging, Environmental and habitat restoration
Bid Market Share* 39%
RIVERS & LAKES
* The Company’s bid market is defined as the aggregate dollar value of domestic projects on which the Company bid or could have bid if not for capacity constraints. Bid market share represents bid market average over the prior three years.
GREAT LAKES DREDGE & DOCK CORPORATION
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LARGEST PROVIDER OF DREDGING
6% 12 17%
%2011 REVENUE BY
WORK TYPE
25
% $627 MILLION
22 18
% %
19 5% 15
%YTD 2012 REVENUE
% BY WORK TYPE
24
$488 MILLION
%
19 18
% %
CAPITAL MAINTENANCE BEACH
FOREIGN DEMOLITION RIVERS & LAKES
23 2011 DOMESTIC
% 43 DREDGING BID
6% MARKET SHARE
%
4% DOM. BID MARKET: $1,041 MILLION
15
% 9%
18 4% 4% 39
YTD Q3 2012
% % DOMESTIC
DREDGING BID MARKET SHARE
8% DOM. BID MARKET:
22 $678 MILLION
5% %
GREAT LAKES NORFOLK WEEKS MANSON
DON JON DUTRA ORION OTHER
GREAT LAKES DREDGE & DOCK CORPORATION
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LARGE & FLEXIBLE FLEET U.S. & INTERNATIONAL MARKETS
ESTIMATE FLEET REPLACEMENT COST IN EXCESS OF $1.5 BILLION IN CURRENT MARKET
HYDRAULIC
Dredge Alaska at Hilton Head
• 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
Dredge Liberty Island at Panama City Beach
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8 Vessels: 4 U.S., 4 Middle East, (4 U.S. flagged) |
• Highly mobile, able to operate in rough waters
• Little interference with other ship traffic
MECHANICAL
Dredge New York at Port Jersey Channel
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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
* Note: Nine vessels were added from 2010 rivers & lakes acquisition which are hydraulic but have less capacity, ideal for rivers and environmental dredging
+ 19 Material Transportation Barges and Over 160 Other Specialized Support Vessels
GREAT LAKES DREDGE & DOCK CORPORATION
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ARTICULATED TUG HOPPER DREDGE
3-D Rendering of the Hopper Dredge
NEW HOPPER DREDGE
Estimated cost: $94 million Currently in design phase with expected completion in the second half of 2014.
The dredge represents a strategic investment by the Company in providing the most productive, efficient and capable dredging equipment in the domestic industry.
GREAT LAKES’ HOPPER DREDGE OBJECTIVES:
• Build the low cost producer for U.S. Hopper Market
• Improve operating margins
• GLDD capacity grows and new technology positions us as the low cost hopper dredging competitor, expanding market leadership role
• Meet future market needs with HMTF & Gulf Coastal Restoration
• Positions us for competitive advantage in new market opportunities
GREAT LAKES DREDGE & DOCK CORPORATION
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TWO NEW MATERIAL SCOWS
3-D Rendering of Material Scow
TWO NEW SCOWS
Estimated cost: $17 million ($8.5 million each) Scows will be delivered in 2013
GREAT LAKES’ NEW MATERIAL SCOWS
• The scows will be used primarily on capital deepening and coastal restoration work on the East and Gulf coasts.
• GLDD has become very successful loading scows with cutter suction dredges. This has allowed us to match the dredging ability of the cutter suction dredges on projects, giving us an effective transportation system and a cost advantage over our competitors.
• Construction of the dredge and scows will create approximately 250 new U.S. shipyard and engineering jobs over the construction period.
GREAT LAKES DREDGE & DOCK CORPORATION
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OUR INTELLECTUAL PROPERTY AND HUMAN CAPITAL ARE A COMPETITIVE ADVANTAGE
GREAT LAKES DREDGE & DOCK CORPORATION
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DEMOLITION AND SITE REMEDIATION SERVICES
A PREFERRED DEMOLITION CONTRACTOR
I-10 Bridge Project in Louisiana
THREE YEAR
AVERAGE
(IN MILLIONS) (FY 2009-2011) FY 2011 YTD 2012
$10
DEMOLITION REVENUE $78 7 $92
Note: YTD data as of September 30, 2012
NASDI & YANKEE ENVIRONMENTAL SERVICES
• Major U.S. provider of commercial and industrial demolition services; preferred in New England
• Rated in the Top 10 Demolition Companies According to 2011 Engineering News-Record (ENR)
• Purchased Yankee in 2009; able to offer removal of asbestos and hazardous materials
• Growth in New York market
• Bidding work nationally
• Strong bonding capacity
• Expanding quickly in the bridge demolition market
GREAT LAKES DREDGE & DOCK CORPORATION
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BACKLOG
BY WORK TYPE ($ in millions)
$600
$568(B)
$506 $500
$385(A) $382 $400
$360 $364 $370
$300
$200
$100
12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 9/30/2012 9/30/2012
CAPITAL MAINTENANCE BEACH
FOREIGN DEMOLITION RIVERS & LAKES
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. Includes domestic dredging low bids and options pending award of $62 million
GREAT LAKES DREDGE & DOCK CORPORATION
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FINANCIAL PERFORMANCE
ANNUAL REVENUE
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Year CAGR = 2.2% 700 $687.0 $622.2 $627.3 $586.9 600 $515.8 $488.2 500 $468.8 |
400 300 200 100
2007 2008 2009 2010 YTD Q3 YTD Q3 2011 2011 2012
CAPITAL MAINTENANCE BEACH
FOREIGN RIVERS & LAKES DEMOLITION
($ in millions)
ANNUAL ADJUSTED EBITDA (A)
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Year CAGR = 18.8% |
$120 20% $103.0 100 $93.7
$77.6 $67.9 16% 80
15.0% 14.9%
$57.5 14.5% 12%
$55.9
60 $47.7
12.5%
11.1%
40 9.5% 9.8% 8%
20
4% 0
2007 2008 2009 2010 2011 YTD Q3 YTD Q3
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2011 2012 0 |
DEMOLITION DREDGING % EBITDA MARGIN
A. Adjusted EBITDA represents net income (loss), adjusted for net interest expense, income taxes, depreciation and amortization expense and debt restructuring expense. Please see reconciliation of Net Income to EBITDA at the end of this presentation.
Note: Great Lakes went public in December 2006
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FINANCIAL DISCIPLINE
CAPEX
($ in millions)
120.0 $111.0 (A)
100.0
80.0
$66.0(B)
60.0
$44.5
$34.0 40.0
$30.7 $21.8
$25.7
20.0
2007 2008 2009 2010 2011 YTD Q3 YTD Q3 2011 2012
GROWTH MAINTENANCE
LEVERAGE
3.7x 4.0
3.3x
3.2x
3.0
2.4x
1.8x 2.0
1.4x 1.6x
1.0
2007 2008 2009 2010 2011 9/30/2011 9/30/2012
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 $36 related to rivers & lakes acquisition.
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INVESTMENT HIGHLIGHTS
• LARGEST U.S. DREDGING PROVIDER IN THE U.S.
• PROTECTED MARKET & PROVEN RECORD
• “Dredging Act” and “Jones Act” effectively serve as barriers to entry for non-U.S.-owned dredging companies
• Demonstrated record of successful project completion having never failed to complete a marine project
• STRONG CAPITAL STRUCTURE
• INTERNATIONAL PRESENCE
• U.S. dredging operator with significant international presence
• Portfolio of flexible fleet enables repositioning of vessels as necessary
• EXPANDING DEMOLITION BUSINESS
• Completed quick and successful turnaround in 2011
• Expanding demolition business into bridge demolition and sediment & soil remediation
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APPENDIX
GREAT LAKES DREDGE & DOCK CORPORATION
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RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
FISCAL YEAR ENDING DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
($ in millions) 2007 2008 2009 2010 2011 2011 2012
NET INCOME ATTRIBUTABLE TO
GREAT LAKES DREDGE & DOCK CORPORATION $7.1 $5.0 $17.5 $34.6 $16.5 $9.7 $3.4
LOSS ON EXTINGUISHMENT OF DEBT 5.1 5.1
INTEREST EXPENSE 17.5 17.0 16.1 13.5 21.7 16.5 15.7
INCOME TAX EXPENSE 6.4 3.8 11.0 20.6 9.5 6.6 2.0
DEPRECIATION AND AMORTIZATION 26.5 30.1 33.0 34.3 40.9 30.0 26.6
ADJUSTED EBITDA $57.5 $55.9 $77.6 $103.0 $93.7 $67.9 $47.7
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STOCK PERFORMANCE
INITIAL INVESTMENT $100
RETURN ON INITIAL INVESTMENT - $100
140.0% 130.0% 120.0% 110.0% 100.0%
90.0%
80.0%
70.0%
60.0% GLDD PEERS
50.0%
12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 9/30/2012
GLDD 100.0% 135.2% 64.3% 100.5% 114.3% 86.2% 119.4%
PEERS 100.0% 132.6% 89.3% 96.6% 96.8% 79.3% 78.1%
RUSSELL 2K 100.0% 97.3% 63.4% 79.4% 99.5% 94.1% 106.3%
NASDAQ 100.0% 109.8% 65.3% 93.9% 109.8% 107.9% 129.0%
Note: Great Lakes went public in December 2006
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GREAT LAKES DREDGE & DOCK CORPORATION
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