Okay. Morning, everybody, and thank you for joining the Sidoti & Company March 2025 Small Cap Conference. My name is Julio Romero, and I cover building products, industrials, engineering, and construction at Sidoti. We're really pleased to be able to host Great Lakes Dredge & Dock Corporation. Their ticker is GLDD. The company is here fresh off of announcing a $50 million share repurchase authorization. Very timely presentation, which we appreciate. With us today, we have Scott Kornblau, Senior Vice President and Chief Financial Officer. If you have any questions for Great Lakes, please type them into the Q&A section at the bottom. Happy to ask on your behalf. With that, Scott, thanks so much for being here, and the floor is yours. Great. Thanks, Julio. Appreciate you having us, and thanks for everybody for joining. I do have a handful of slides I want to run through, and then, as Julio said, we'll do Q&A at the end. Some high-level highlights, and I'm going to dive into all of this more throughout the presentation. 2024, an extremely successful year for us, and we ended up with the second highest EBITDA in company's history. We've also set ourselves up now for the strong results to continue. We entered this year with $1.2 billion of backlog. We also continue to make progress on our entry into the offshore energy space. We're building a new vessel, the Acadia. Again, I'll get into more details on all of this during the presentation. Just a little about us. We are the largest dredger in the United States, and we've been doing this for a very long time. The company was established in 1890. The kind of work we do is critical to the U.S. We do port deepenings. We protect coasts with barrier islands, rebuild beaches after storm damage. We mostly work on the dredging side for the Army Corps of Engineers, but we also work for state and local governments and private clients, including LNG producers. Some of the numbers on the bottom right, I'm going to dive into a little further into the presentation. There's really three kinds of dredging projects that we execute. The first is called capital. This is our bread and butter. These are large, complex projects. It's port deepening and expansion. There's been a number of deepening cycles in the U.S. for ports. As the ships get larger and bigger, the ports need to get deeper. The LNG facilities, same thing. We're working on a couple of large LNG. You need to make those facilities deeper so the carriers can come in. Complex, long projects, and we typically do very, very well on these kinds of projects. The next type of project is coastal protection. That is the creating and then rebuilding of beaches, you know, that get damaged from natural erosion and then also from storms. The last category is maintenance. This industry is the gift that keeps on giving. There is natural sediment that occurs on beaches and in ports, and you need to go in and be able to maintain that depth. I have these listed in order of complexity and therefore typically in order of margins and returns that you get on it. I have foreign listed here. We have historically worked internationally. The U.S. dredging market is so strong right now. We have all of our vessels here, and I think we'll be like that for the foreseeable future, but we always do have the option to deploy vessels overseas if it makes sense. There are three kinds of dredges, and we have a number in all three categories. It really is what gives us an advantage because we can put multiple dredges and different kinds of dredges on projects, so we always have the best equipment doing the right job. The first one is hoppers, these are ships, so these do move. We have five of these, and we are building a sixth one that we'll take delivery of later this year. We also have the largest hopper dredge in the U.S. that we built about seven years ago. These are very mobile assets. They can operate in rough water and are a very, very good tool. We have the youngest hopper fleet by far. Next is mechanical. We have four of these. These are really clamshells on a barge. Again, they're very fit for purpose, and we move them in and out of projects as needed. The last one is called hydraulics, or also referred to as cutters. They're really good for digging up hard rock. They have teeth on the bottom that can dig up rock, and then you can pump it on or offshore depending on what you need to do with the material. It gives us a huge advantage when we're bidding projects because we can deploy multiple assets on that project. We are, as I mentioned, the largest dredger. We typically have a market share in the 30% range. We're a little over that right now. Our market share is more than our next two competitors combined, and we also have the largest dredging fleet in the United States. As I mentioned, our biggest customer is the U.S. Army Corps of Engineers, so we do rely on federal funding. Fortunately for us, we had seven consecutive years of record budgets for the Army Corps of Engineers. 2024 had an $8.7 billion budget, which led to nearly a $3 billion U.S. dredging bid market, and that's a record. There's never been a U.S. dredging bid market that large, and that is part of what led to the extremely strong 2024. Just last week, President Trump signed a continuing resolution, and that will fund the federal government for the rest of the fiscal year, so that's through September. During a continuing resolution, the government, and in our case, the U.S. Army Corps of Engineers, they get access to prior year's funding, and that's good news for us because I mentioned this was a record budget. While I'm talking about government, I do want to talk about DOGE. We've been hearing a lot in the news around DOGE. We don't expect to see any impact to the dredging industry based on DOGE. The work we do is essential and critical to protecting and maintaining our coastlines. We have had conversations with DOGE in D.C. They invited us to their offices, and everything they're saying, they understand how important this is, and we believe the dredging market will be business as usual, and that's exactly what we have seen so far this year. In addition to the normal budget, which has been a record, at the end of 2023, there was an additional $1.5 billion approved as a disaster relief, and that was for the storms that decimated the East Coast. Those funds started going out in 2024, and they continue. There is additional funding to do a lot of the beach work, and we think that is what is going to be the focus this year. There will be a lot of activity in the bid market. We have made up a lot of these beach jobs. I want to quickly mention WRDA, the Water Resources Development Act. Every two years, Congress passes WRDA, and it basically allocates funding to start studying the next big projects that are along the line. The one of note, 2022, that's when the studying of the next deepening of the New York shipping channel, the New York Harbor, is happening. It's estimated to be a $6 billion dredging program. It'll be 10-plus years. That looks like it's going to be moving forward. We expect dredging, you know, will start in the next handful of years, and it's just going to be really, really good for the industry. Last thing I want to mention, we do work for private clients as well. There were two very large LNG projects that were awarded in 2023. Great Lakes won both of them, and they're both being executed right now. Rio Grande LNG is the largest project ever done in our history, and with the recent change of administration, we think there's going to be many more opportunities for LNG work. As I mentioned, we entered this year with $1.2 billion of backlog. I also mentioned capital projects and coastal protection are the highest margin projects. That makes up 94% of our current backlog. I'd say last year we won about a third, again, which is typically what we do. Of the major projects that were awarded last year, we won three of the top four. The ones in red are the Great Lakes wins and six of the top nine projects. Again, really setting ourselves up for the next couple of years. We are in the late innings of the largest new build program we've ever done, just over $500 million. That was investing in two new hopper dredges. I mentioned the Galveston Island we took delivery of last year. She's doing great. We're building a sister to the Galveston Island, named the Amelia Island. We'll take delivery of her in the second half of this year, and she's already contracted out through 2026, so we'll go straight from the yard to work. Also invested in multiple support equipment. We did some emission upgrades as well. We are building the first and only subsea rock installation vessel named the Acadia. Late innings, we should wrap up the new build program about a year from now, and there's about $120 million or so left on it. Again, most of the heavy lifting is done. We'll get it substantially wrapped up this year and completely wrapped up next year. I do want to talk about the Acadia. It's being built right now in the Philly Shipyard, and like I said, probably 9-12 months away from taking delivery. The Acadia is a subsea rock installation vessel. It will lay rock over anything that needs rock, and it's the only one being built in the U.S. that is Jones Act compliant and has all the latest emission requirements on there. Let me talk about the markets that it can service. One of them is offshore wind, not only here in the United States, but also globally. The bottom left is the outlook for offshore wind globally. The orange line is the quantity of vessels in the market right now, including the Acadia, that can do this kind of work. There is an undersupply of these vessels in order to keep up with the demand of offshore wind internationally. Let me talk about the U.S. market. There was an executive order put in that stops the permitting of new offshore wind permits. However, existing permits are allowed and will move forward. Fortunately for us, we do have two contracts already, one for Empire Wind with Equinor and one for Sunrise Wind, which is Orsted. Those are permitted projects, so those are moving forward. As we take delivery of the vessel, we will go and execute both of these projects, and that should keep us busy for 2026. We also recently signed a vessel reservation agreement with a third wind developer for work in the U.S. This is for work in 2028 and 2029, but it is also a permitted project. The vessel reservation agreements put us in exclusive negotiations to execute a contract, and that is progressing. A very robust offshore wind market. The U.S. will happen. In our opinion, it's not if, it's when. We'll execute these two projects, and there's a pipeline of a number of projects towards the end of the decade that we're excited about. In the meantime, there's plenty of work in Europe and Asia, and we'll start going after that. We were planning 18 months ago for, you know, wanted to make sure we expanded and weren't being fully reliant on the U.S. market. We did open up an office in Europe about 18 months ago, and are participating in a number of tenders for offshore wind projects for the period 2027, 2028, and 2029. The prospects look really, really good. We just don't expect contracting on those to happen until the beginning of next year because it's such a robust market and established market. They typically don't sign vessel contracts until about 12 months prior to needing them. We'll continue to tender on projects, and you know, we're very optimistic that we'll have full utilization in 2027 and beyond, you know, maybe going back and forth between the U.S. and international. As I mentioned, though, this vessel is not reliant just on the wind market. It's a scour protection vessel, and anything that needs rock over it, the Acadia can do. There are two other markets that are very interesting to us that we are looking at participating in tenders as well. One is rock over telecommunication cables. There's been a number of instances recently of sabotage of vessels dragging anchors over telecommunications lines, trying to disrupt communication. Putting rock over that would stop it. The other market is oil and gas pipelines. Putting rock over a pipeline also protects it from rupturing. We estimate that there's probably another 8-10 vessels needed for both of these markets in Europe and Asia. We also just recently put boots on the ground in Asia to be exploring that market. Plenty of opportunities for the Acadia, and I say we're really excited about the prospects of it. Moving forward to the numbers, as I mentioned, 2024, a great year on all accounts, $760 million-plus of revenue, EBITDA second highest ever at $136 million, and EBITDA margins in the high teens. Very, very successful year for us. Going back historically, I've talked in the past about, you know, the hiccup that happened in 2022 that was, you know, mostly macro-related. We were very adamant that we would see the return to normal. The work that we do, as I mentioned, it's critical. It doesn't go anywhere. It needs to be done, and this has played out exactly as we predicted the return to normalcy. As I mentioned, with the backlog we have, this will continue for quite some time. The bottom left is illustrative of the new build program that I spoke of. Again, winding down, we'll have one final large piece this year in 2025, and then it will be substantially complete the first part of 2026. Our balance sheet is in really great shape. We ended the year with liquidity of over $280 million. We have no debt maturities until 2029. We have a weighted average interest rate of under 7%. We have a $300 million revolver that doesn't mature until the third quarter of 2027. As Julio mentioned, we did just last week announce a $50 million repurchase program. We're going to be opportunistic on buying stock, but with the large disconnect from where our stock is trading right now and the results that we keep printing, we think this is a prudent use of capital. Last thing I want to say too on the new build program, once we complete this, we are done for the foreseeable future. We have no plans of building any other dredges, so we'll return to a more normal CapEx moving forward on the tail end of this new build program. I wanted to kind of demonstrate on the other side of this new build program, you know, what cash flow could look like. We do expect to be free cash flow positive starting next year as the new build program winds down. I took 2024 results, adjusted EBITDA, and you can use that as a proxy for operating cash flow. Our typical maintenance CapEx is somewhere in the $25 million range. Currently, we have cash interest of $30 million. Using the 2024 results as a proxy, we have free cash flow of $80 million. This does not account for the upside from the Acadia, from the Amelia Island, which is the new hopper dredge that we will be adding later this year. We will have a lot of options on the other side of this with the cash. That That can include paying down debt. That can include, you know, continuing with the repurchase program that we just put in place last week. You know, really excited about the prospects of this business on the other side of the new build program. The presentation we post on our website, I have got a few things in the appendix that I will not go through now, but it is there for reference. Julio, that's all I've got. I'll turn it back over to you. Excellent. Great rundown. Again, for folks online, if you have questions for Great Lakes, put them into the Q&A section. Happy to ask on your behalf. I'll kick it off here with kind of a headline of sorts from President Trump announced during his State of the Union address, a new White House Office of Shipbuilding that offers special tax incentives. Just if you could talk about how does that affect Great Lakes, if it affects it at all, and then more broadly the industry. Yeah. Our vessels are substantially built right now. We're still parsing through that. That appears that may be more beneficial for the shipbuilders themselves, but it is fantastic for the industry. You know, it's what we've been, you know, looking for. It's keeping U.S. jobs. It's promoting U.S. industries. You know, again, all the work that we do fits right into that as well. No, we think it's a very favorable thing, you know, keep all the stuff that we're doing in America. Perfect. You know, part of his comments also talked about, you know, the Panama Canal, reclaiming the Panama Canal, et cetera. He highlighted that BlackRock, you know, was part of a group that bought a 90% stake in the Panama Ports Company. You know, does this translate to any increased dredging activity, you know, around that area for Great Lakes or the industry? Yeah, there'll definitely be, you know, projects. As I said, right now we are full here in the U.S. and, you know, have a lot of work here. I said we always have our pulse on other markets. We've deployed assets outside of the U.S. before. You know, if the returns are right, we absolutely are happy to do it again. The fact that we continue to have more access and larger ships that can continue going through Panama Canal, that also leads to other opportunities here in the U.S. The ports just need to continue getting wider and deeper. Absolutely. Just wanted to touch on your base dredging business. If you could give a kind of a State of the Union of sorts in terms of what you're seeing on the federal funding side. Does the continuing resolution impact the Army Corps pace and amount of projects and just what you're seeing there? Yeah. As I mentioned, now the continuing resolution gives us certainty to access to prior year's budget, which was, again, $8.7 billion and led to the largest bid market that we have seen. Yeah, the funding side is strong as it has been for the last seven years. Truly a bipartisan industry. The work we do is critical. It is supported by everybody. Yeah, we don't think, and we have not seen any impact whatsoever or change of pace in the bids that were supposed to come out so far this year. They've come out as expected. As I mentioned earlier, we do think this year, not anything based on the budget, but just how we saw this year playing out, will be heavier on the coastal protection. The last couple of years, there was a large number of capital projects. We think this year those are going to be replaced by a large number of coastal protection. The margin on coastal protection work is very comparable to capital work. It is also complex work that we do and do very well. Yeah, we're excited that we'll just continue to be able to add on to our backlog. With the backlog we have right now, we're really trying to fill out the second half of 2026 and 2027 right now. We have very, very little white space, you know, through until we get to the second half of 2026. Very helpful. You know, any exposure to tariffs on your end and, you know, dealing with the federal government and contracts with them, are you able to kind of put any mitigation clauses at all in the contracts? Being a U.S. company, we get almost nothing from overseas. We're already procuring the vast majority of our stuff here. And our new build program, the vessels, I mean, the equipment that came from overseas is also substantially here already. The exposure for us is just about nil. Gotcha. Wanted to spend some time talking about your recently rebranded offshore energy division, building the Acadia, as you said, expect to take delivery either later this year or early 2026. Just kind of a refresher of sorts, how much on the Acadia has been spent to date. And then you mentioned $120 million left on the new build. You know, how much of that, if you could parse out, is related to Acadia? Yeah. The total build on the Acadia is $245 million-$250 million. There's $95 million left on that. That's what makes up the bulk of the $125 million. The rest is just finishing up the Amelia Island. Perfect. And then when you take, you know, ownership of that, how long does a vessel like that operate from a year's perspective? Yeah. I mean, that's going to be 30 years plus for a vessel like that. Again, these are ships, very, very long life on these. The equipment on there, just as long as you maintain them and the thrusters, I mean, this ship will be, you know, well over 30-year life. For sure. And, you know, I really enjoyed slide 19 you put in the deck here talking about the illustration of free cash flow post-new build because I think that's a lot of the focus on the investor front these days. If I think about CapEx, you know, pre-new build period, averaging at around 9% of sales, you know, is that also a fair way to think about, you know, normalized CapEx and then, you know, we can layer on what we think net income and cash flow from operations is after that? Yeah. I mean, with the new build program we did, one of the reasons we did that too is that that should reduce maintenance CapEx going forward. We do have a newer fleet. There will be ebbs and flows year to year depending on dry dock scheduling, but I think $25-$30 million is normal. This last year, we were under $20 million. It does ebb and flow, but I do not envision maintenance CapEx really being over $30 million. I don't tie it as much as a percentage of sales. It's just what needs to be done on these vessels. The reason you get new vessels is so it doesn't need as much work on the CapEx side. For sure. Maybe thinking about the CapEx side, you did mention some slight, you know, growth CapEx for, I think, doing support vessels or things of that nature in 2027, 2028. Is that correct? We are considering that right now. Like I said, we are done building for the foreseeable future. We will not be building new dredges anytime soon. There are some moderate upgrades that we may do to some support equipment and to two or three dredges. We're in the evaluation stage right now. If we decide to pull the trigger on all of that, it's likely an $80 million program spread out over a three-year period. You know, call it another potentially $25 million or so of CapEx that would easily be done within cash flow. Again, we're still working through all the analysis on that now. Really helpful. I appreciate you putting a finer point on that. That helps kind of think about, you know, free cash flow normalized post-new build. Because the new build really is different. It's a different period these few years than your history. Fair? Absolutely. Again, we're building for the future, you know, especially on the hopper side. Those are the highest money earners. Prior to the new build program, we had the best hopper fleet in the U.S. Now adding the Galveston and Amelia, we have set ourselves up for a very long period of time. Really helpful there. And, you know, given the $50 million share repo announced this week through 2026, and then just given where the stock is, you know, how are you weighing being more opportunistic with regards to share repurchases versus other uses of cash? Yeah. Honestly, a month ago, a share repurchase was not on the radar for this year because we had other priorities. In our opinion, now there is just a huge disconnect. If the market is going to give us a softball like this, we are going to take it. We will be opportunistic. We still have, you know, longer-term priorities. We have to complete the new build program. Eventually, we will start delevering. If there's going to be this large of a disconnect, we'll just, you know, continue to, we think it's a really good return for shareholders and a good source of capital if we think there's this large of a disconnect between what our results have shown and what we believe they'll be and where the market has its price right now. Squeeze two more in here with the two minutes we have left. Number one is just a refresher on the schedule of dry docks by quarter for 2025. As you mentioned, you have a great backlog. This year is a little bit constrained because of the abnormal amount of dry docks. Any refresher there on the dry docks by quarter? Yeah. These vessels are required every five years to go into what we call a major dry docking and every two to three years to do an intermediate. The way the calendar falls, this is a heavy dry dock period for us, a heavy year. We do have seven vessels going into dry dock. Four of those are hopper dredges. As I mentioned, those are the earners. These are not, we are taking vessels off of jobs to do it. We have to do that. Q1, I mentioned on the call, we had one in and out and two starting right now, right at the end of the quarter. I'll give quarter-by-quarter guidance as we get to it on kind of the cadence of the rest of them. I will say, though, despite having seven, normal for us is kind of three dry docks a year. It doesn't change the fact this year is going to be extremely strong. Again, the backlog we have and more importantly, the kind of projects that we have in the backlog, we're still extremely excited about this year. The good news is when you have a heavy dry dock year, it means the following year is likely going to be a light dry docking year. Excellent. Any aspects you think that are overlooked in your view, as well as any other kind of key messages you want to have folks take away from today? Yeah. I mean, I think we're unfairly getting lumped in with government contractors right now. I think that has been some of the pain that we have seen on our stock. I said the work that we do is different. It's critical to infrastructure. This doesn't go anywhere. We haven't seen any impact. Now with the continuing resolution, we know we have access to budget. I sleep at night too, knowing also $1.2 billion of backlog sitting behind us. That gives clear visibility to revenue for quite some time for us. The last thing I would say is absolutely some headwinds on offshore wind in the U.S. As I mentioned, there are many markets and we've been planning for this for 18 months. It's not a knee-jerk reaction for us to go exploring the European market. I've talked about it for the last year and a half. There are many opportunities there. We're pursuing them. In the very large ocean, the Acadia will work. For a while, it may be going back and forth. Eventually, we do think there will be more utilization in the U.S. In the meantime, we'll work the vessel wherever we need to. I'll leave it there. Thanks, Scott. All right. Thank you, Julio. Thanks everyone for joining.