Great Lakes Dredge & Dock Corp (GLDD) 2007 Q1 法說會逐字稿

Good morning, and welcome to the Great Lakes Dredge & Dock Quarterly Update Call. Today's call is being recorded. At this time I would like to turn the call over to Ms. Deb Wensel, Chief Financial Officer of Great Lakes. Please go ahead ma'am.

Thank you. This is Deb Wensel, Chief Financial Officer of Great Lakes and I welcome you to our quarterly conference call. I'll begin our discussion by presenting the financial highlights for the first quarter of 2007. Then Doug Mackie, Chief Executive Officer of Great Lakes, will share his market overview, which will provide useful context within which to view my more detailed discussion of operating results. Following our comments there will be an opportunity for questions.

Before I begin, however, I need to remind you that certain matters discussed may be considered forward-looking statements and participants in this call are cautioned not to place undue reliance on such forward-looking statements. Furthermore, any forward-looking statements speak only as of the date hereof and Great Lakes assumes no obligation to provide any future updates.

Our revenue for the quarter ended March 31, 2007 was $126.7 million, a 17% increase from first quarter 2006 revenue of $108.4 million. Results from the first quarter were driven primarily by maintenance projects and work in the Middle East. The Company begun and continue to work on 4 land reclamation projects in Bahrain. The large Diyaar project, Bahrain investment [war], South Durrat and Durrat, the latter which is nearing completion.

Throughout the quarter, the Company experienced good utilization of its fleet both domestically and internationally. Although inclimate weather along the East Coast of the United States negatively impacted margins on several of the Company's projects. Gross profit growth in the first quarter of both 2007 and 2006 was hindered by increases in self insured claims reserves. Despite these two factors gross profit grew by more than 18% from a year ago, producing a slight increase in the gross profit margin to 10.8%.

Strong revenue growth enabled the Company to effectively re-leverage its operating expenses, resulting in more than a 46% increase in our operating income during the first quarter of 2007. Interest expense of $4.3 million decreased $1.9 million from the first quarter of 2006, primarily due to the pay down in the fourth quarter of 2006 for the Company's term debt. In addition, non-cash adjustments to the market value of the Company's interest rate flop were favorable between the quarters. EBITDA of $12.4 million for the 2007 quarter was up over 20% from $10.2 million in the previous year.

Net income was $1 million in the first quarter of 2007, compared with a net loss of $1.5 million in the first quarter of 2006.

Prior to the Aldabra transaction, GLDD Acquisitions Corp. had shares of preferred stock outstanding on which dividends were accrued semi-annually. In connection with the merger, those shares were exchanged for common stock of the Company. Therefore there are no preferred dividends in 2007. In the Fiscal year 2006, the net loss available to common stockholders after accruing $2 million of preferred stock dividends was $3.5 million.

At this point, I'll turn the call over to Doug Mackie, our CEO, who will give you an overview of what's going on in the Dredging market.

Thank you, Deb. The Company experienced good utilization of its Dredging fleet both domestic and international work during the first quarter of 2007. As Deb said although margins were negatively impacted due to severe weather on the East Coast. The first quarter domestic bid market produced approximately $116.5 million of contract awards. Which is better than what was generated in the first quarter of 2006, but is less than we expected. As I noted in last quarter, the core is hampered in getting projects out to bid to current Federal budget constraints, a change to central control in Washington governing the release of Core funds and new restrictions concerning the obligation for funding contracts that roll into future years. As a result, while the Core awarded 14 projects in the first quarter, the majority were maintenance and rental projects, each for under $10 million.

While the size of the first quarter bid market wasn't disappointing, it is not necessarily predictive of the full year bid market. Often, we talked about the lumpiness of the bid market and the timing of when a large project comes out to bid can sway one quarter significantly. In fact, in the first quarter, Great Lakes was low bidder on a $64 million project in New Jersey that had not been awarded by quarter end. This project will be included in the second quarter bid market when the project is awarded this month.

Generally, we feel that the letting of beach and capital projects is continuing to suffer from the impact of the Corp's funding issues. However, what has offset this is State and local authorities and other Federal agencies developing funding to protect vital tourism, beach front property investments in the Louisiana Coast land, a trend we see continuing into the future. In addition, the active market for the new liquefied natural gas terminals as well as other private core development has produced privately funded demand for dredging work which should fill the void in capital work caused by the corresponding difficulties. During the first quarter, the largest capital project awarded to a competitor for $42 million was from a private source.

In the meantime, we continue to hear hopeful news regarding the passage of a new WRDA Authorization Bill for this year. The Water Resources Development Act or WRDA is the legislation under which Congress authorizes capital for deep water dredging projects. In April, the House of Representatives passed the bill and there is optimism that the bill also will pass in the Senate within the next 60 days. The important positives for the industry included in the current WRDA bill are; authorization of various harbor deepening projects and the approval of numerous priority projects under the Louisiana Coastal Restoration Plan.

While the passage of this bill will not alleviate the current funding issues for all dredging work, a new authorization bill would provide support for continuing deep water projects in the future. For the near term, the Corp will be hampered to the remainder of this fiscal year as the government will operate without a budget under a continuing resolution. As a result, we expect the Corp to continue utilizing the base-plus option bidding structure to get work out this year. The problem for Great Lakes and the industry overall is the scheduling of equipment and forecasting utilization, since a contractor has to commit and reserve equipment for a scope of work that may never be awarded.

Despite these continuing concerns, we are optimistic that there will be additional deep port capital work put out this year. As I mentioned earlier, in January we bid and won a $64 million deepening project in Port Jersey, New Jersey. Also we are tracking authorized port projects, including another phase of the New York Harbor 50-foot deepening project, two deepening projects in Portland, Oregon, a port expansion project in Jacksonville harbor and several port expansion projects in the Tampa area which, in aggregate, could generate as much as $200 million of bidding opportunities in 2007.

In addition, nearly $80 million of work has been funded through the Coastal Wetlands Planning Protection and Restoration Act for work along the coast of Louisiana. Not to be confused with the project earmarked in the WRDA bill relating to a Louisiana Coastal Restoration Plan. We expect this work to come out to bid in the next three to six months.

On the capital work front, the private capital work front, Great Lakes just signed a contract for $26 million of work for a port expansion on the Freeport, the Bahamas. This is some of the private port funding I have been talking about along with the expansion of ports for LNG's facilities. We continue to follow numerous LNG related port expansion projects that should provide a sizeable amount of capital work to supplement the work put out by the Corp. If even a small portion of these planned facilities happen, it will continue to be a boost for the industry for the next several years.

With respect to beach nourishment market, we see a mix of both Federal and privately funded contracts that should produce in 2007, a better market than last year's total of $126 million. The positive here again is the amount of funding that is committed from the State and local municipalities. In addition, the Corp is funding approximately 50% of the $150 million of projects expected to be bid in 2007. We believe that the international dredging work will continue to be an important source of revenue for us. The international work we currently have in backlog is sufficient to occupy the equipment we presently have in Bahrain into 2009 and beyond. We anticipate additional opportunities will continue to materialize that could support more of our equipment in the region.

As previously announced in April 2007, Great Lakes entered into agreement to purchase two dredges. On April 10th, Great Lakes entered into agreements to purchase from affiliates of CFB LLC, [Bean], the Eagle, a 6400 cubic air hopper dredge and the Meridian, a hydraulic dredge along with attendant plant.

On April 13, 2007, Great Lakes assigned to WIX Marine its right to purchase a hydraulic dredge, Meridian and its attendant plant. Great Lakes in turn agreed to purchase from WIX marine the Beach Builder, a large hydraulic dredge for $11.8 million and attendant plant for $1.5 million. This exchange of dredges is advantageous to Great Lakes because the beach builders larger size will allow the Company to modify this vessel to create a world class hydraulic cutter hedge dredge well suited for the capital and off shore beach nourishment work.

On April 25, the purchase of the beach builder was completed. We then renamed it Dredge Ohio. We anticipate closing the Eagle purchase prior to June 15 of this year. This dredge will then be renamed the Terracan Island. The acquisitions and modifications are expected to enhance the Company's competitive strength in all dredging sectors; capital, beach and maintenance. With the increasing capacity, Great Lakes will be able to take on additional domestic and foreign work. It is the Company's intention to employ both the Eagle - the now Terracan Island and the Ohio in 2007 as soon as practical, most likely during the last four months of the year.

The beach builder will operate for a period of time while the fabrications for this dredge are being constructed. It will then - it will be taken out of operation for a period, most likely in 2008, when the upgrades to the vessel are completed. Since there are various operation scenarios for these vessels, we have not indicated what their contribution may be for the remainder of this year or beyond. In addition [Royal Boat Callis] announced last quarter the termination of the [Beans Stiveson] and partnership that it had with Bean Dredging. In the last few months we have seen the [Bean Stiveson] fleet in the US dwindle from five dredges to one. As we purchase one vessel, WIX another and [Booth Calyx] acquired the two other dredges from the partnership removing them from the US market.

Now I would like to ask Deb to walk you through more of the detailed analysis of the first quarter performance.

Okay. The following is a general overview of contracts contributing to the quarter's performance within the context of the Dredging markets we serve and our demolition segment. Revenue during the quarter included -- $16 million of domestic capital, $25 million of foreign capital, $37 million of beach, $37 million of maintenance and $11 million of demolition for a total quarter revenue of $126 million. This compares to the fourth quarter of 2006 where we had $38 million of domestic capital, $29 million of foreign capital, $15 million of beach, $26 million of maintenance and $13 million of demolition, for total quarter revenue of $122 million. And the comparative amount for the first quarter of 2006 were $23 million of domestic capital, $17 million of foreign capital, $41 million of beach work, $16 million of maintenance and $11 million of demolition for a total revenue of $108 million.

The majority of our $41 million of capital revenues were generated by our hydraulic dredge Florida. We are trying to work on our deepening project in Brunswick, Georgia and the three projects in Bahrain, Diyaar, Bahrain Investment work and South Durrat, all made significant contribution to revenue in the first quarter. We did not work on the LNG terminal project in Golden Pass, as we waited for our customer to secure the necessary materials for the continuation of the project.

Beach revenue in the first quarter was robust at $37 million, which is consistent with the first quarter levels from the prior year. Two jobs in North Carolina, one in South Carolina and one in Florida all contributed to the revenue, though they were impacted by weather throughout the quarter.

Maintenance revenue in the first quarter totaled $37 million, a very strong quarter for maintenance work and more than double from the prior year. The majority of the quarter's maintenance revenues related to dredging on the East Coast, including work in Baltimore Harbor and a channel in Newark Bay. Also the hydraulic dredge, Texas while not working in Golden Pass as previously mentioned, was able to complete substantial work on the [Calcasieu] River Project in Louisiana. Despite the Corps' chronic funding issues, maintenance work continues to be put out to bid and provide steady work.

NASDI had another solid quarter, generating approximately $11 million in demolition revenues. NASDI has consistently generated this quarterly revenue level over the past 2 years. The activity in the Boston area continues to provide constant opportunities for NASDI to take on a good amount of projects and a number of larger projects in the range of $1 to $5 million.

Now, looking at our bid market, the first quarter 2007 domestic dredging bid market representing work awarded during the period totaled $116.5 million, of which Great Lakes obtained close to 19% share. As previously noted the bid market is changing in the nature and scope of projects put out for bid. Of the $54 million of capital projects awarded, only $2 million was funded by the Corp. A majority of the projects awarded by the Corp were maintenance and rental work and each project was under $10 million. The Corp did bid a beach project this quarter, for over $7 million that Great Lakes won. The remainder of the work won by the Company during the quarter was three maintenance projects. In addition as previously mentioned, the core did put out a bid -- put out to bid a large capital project in New Jersey for $64 million that has not yet been awarded. It is expected that the first days to this job with revenue of over $25 million will be awarded this month once the necessary permits have been secured.

Although the domestic market generated $714 million to contract bids in 2006, the Corps of Engineers continues to struggle with funding challenges, as Doug explained. Consistent with the base-plus-option bank strategy, most of the bids let during the quarter were designed with the intent of being ready to award the base contracts immediately and then award the options for additional work based upon fiscal year 2007 appropriations. The subsequent work option -- the subsequent option work will be included in the bid market statistics when the work is awarded.

Our dredging backlog; even though the Company worked off a good amount of backlog in the first quarter, our dredging backlog remains solid at quarter-end. Dredging backlog at March 31, 2007, totaled $267 million versus $217 million a year earlier. The company's March 31, 2007 recorded backlog does not reflect approximately $256 million of low bids pending award or options related to additional work on projects currently in backlog, including the approximately $156 million for the second phase of the Diyaar land reclamation contract.

The demolition services backlog in March 31st, 2007, was $15 million, which was on par with the same 2006 period. NASDI has consistently been able to generate stable revenues and backlog and is expected to maintain this trend as there continues to be a good demand for demolition services in the Boston area. In April, NASDI signed a $10 million project for a building demolition in downtown Boston.

Our backlog by dredging work type and segment at March 31st since the recent comparative period was $60 million of domestic capital, $159 million of foreign capital, $39 million of beach work, $9 million of maintenance for total dredging backlog of $267, about $15 million for NASDI for a total company backlog of $282 million. The comparative numbers for the end of the year 2006 were $72 million of domestic capital, $185 million of foreign capital, $56 million of beach, $40 million of maintenance for a total dredging of $353 million, NASDI at $16 million for total company backlog of $369 million.

And finally, comparative at the end of the first quarter of 2006, we had $81 million of domestic capital, $74 million of foreign capital, $44 million of beach, $5 million of maintenance for a total dredging backlog of $204 million, plus $14 million for demolition giving total company backlog of $218 million.

Capital expenditures for the first quarter totaled $5.1 million, and is on target for full year capital spending of 18. The first quarter included $2 million of spending to complete the upgrade started in late 2006 on a domestic hopper dredge and a booster. Both of which are needed for beach nourishment were and LNG projects. Boosters are used for projects that require pumping material over extremely long distances, sometimes as far as 5 or 6 miles.

As I mentioned last quarter the Company has been investing in pipeline to reduce dredging downtime between domestic projects requiring pipelines for moving dredge material. This is in response to the recent contraction in the size of projects put out by the Corp. In addition, we increased our foreign pipe inventory to accommodate the expansion and backlog of projects in the Middle East. Over the third and fourth quarter of 2006, we increased inventory by approximately $6.5 million and have invested an additional 2 to $3 million in the first quarter of 2007.

First quarter 2007, maintenance spending, which is equipment-related costs that are expensed in the year incurred, was $8.4 million which is on par with first quarter 2006 maintenance spending. As previously announced, Great Lakes merged with Aldabra Acquisition Corporation, a publicly traded blank check company, on December 26th 2006, and is now traded on the NASDAQ under the symbol GLDD. This merger has allowed the company to delever which facilitated the company's recent purchase of two dredges. By virtue of the fund receiving connection with the merger the company paid in full its senior bank term debt of just over $50 million. The company's $175 million of 7.75 senior subordinated note due to 2000 -- during 2014, remained outstanding.

The company had 3 million of revolver borrowings outstanding and therefore total availability at the end of the first quarter was $29.1 million. In March 31st 2007, Great Lakes was in compliance with all financial covenants and its senior credit and surety agreements. In March 31st 2007, the company had total debt of $195.1 million, total cash and equivalents of $0.3 million and outstanding performance letters of credit totaling $46.3 million. At quarter end, without adjustments allowed by our senior credit agreements, our total leverage was 3.55, senior leverage was 0.36, and interest coverage was 2.75.

On May 7th, the company signed a commitment letter for a new $130 million revolving credit facility that will be used to fund the Ohio and its modification, pay off the Company's equipment debt of approximately $17 million, allow for the lease by us of approximately $14 million planned for 2007 and provide for letters of credit and working capital needs. In addition the company expects to sign a commitment for a long term lease for the purchase of the Terracan Island.

Turning to some other matters. On February 10th, 2004, the Company was served with a subpoena to produce documents in connection with a Federal grand jury investigation which we believe was convened to investigate the United States Dredging Industry in connection with work performed for the U.S. Army Corps of Engineers. The Company believes that it has fully complied with all requests related to the Federal subpoena matter and has delivered its affidavit to that effect. For over 6 months we had received no additional communication from the justice department. However, in April we received some follow up requests for additional information. We are in the process of preparing information to comply with this request. As noticed previously the matter continues to remain open and the Company is continuing to incur legal costs, although at a much reduced level from 2004 and 2005.

The company's results continued to be negatively impacted from the increase in reserves related to injury claims from our hourly workforce residing in Texas. In the normal course of business the company is party to various personal injury lawsuits for which we maintain insurance subject to deductible to cover claims that arise. Over the last year there has been a substantial increase in suits filed in Texas, due in large part to two Texas law firms aggressively pursuing personal injury claims on behalf of Dredging workers resident in Texas. We again recorded additional reserves during the first quarter related to those lawsuits. As of the end of the quarter our recorded self-insurance reserves represent our best estimate of the outcome of claims currently outstanding.

The occurrence in the future of new claims of similar nature is not possible to predict. However, over the last several month's maritime jobs through Texas, a coalition of maritime employers has been working to reform Texas law with regard to the type of personal injury suit, the dredging Industry has recently faced. Based on recent discussions in the Texas legislature, we are optimistic that the law will be changed that should lessen the likelihood of future claims of this type.

Finally, our outlook. As Doug indicated the first quarter of 2007 was a solid quarter for operations, despite the effects of the severe weather experienced on the East coast. Backlog continues to be robust with expectations for our domestic market, at least at the level we experienced over the prior few years. Therefore, looking forward our expectations for the Company's EBITDA still in the range of $52 to $57 million for 2007. This guidance does not include any impact from the acquisition of the two dredges, which should only provide upside if any to cash flow expectation.

At this level of EBITDA, we expect to generate sufficient cash flow to meet our current annual debt service requirements of approximately $18 million, to fund our necessary capital expenditures of $18 million and to cover the expected annual -- expected additional debt service requirements related to the financings of the dredge acquisitions and related modifications discussed earlier.

This concludes our prepared remarks, but I would also note that we will provide a summary of the operating and backlog information provided herein, as well as a reconciliation of our EBITDA, which is a non-GAAP measure, to net income, a GAAP measure, in the financial section of our Company's Web site at gldd.com.

Now I would like to open the call for your questions.

[OPERATOR INSTRUCTIONS]. And our first question comes from Richard Paget with Morgan Joseph. Please go ahead.

Good Morning everyone?

Hi, Richard.

Given your comments about the funding issues with the Army Corp and you really don't expect anything to change too much in '07, then we have an election year in '08, I mean is that going to put this on hold? Or do you think the Army Corp realizes they need to get back on track?

Well, I think it's a pretty tough question. I mean obviously we have a new congress -- change in the Congress and the ongoing battle with the money going to Iraq. There is -- there is more emphasis put on infrastructure projects in the United States now and they get them funded. We realized that not only in dredging, but many congressmen have been raising the issue of lack of funding in these areas. But we are not anticipating really much of a change for 2008. I mean it will be a bonus, as it was. We think we have a very good market as it is. Any upside from what will happen in Congress in 2008 would be fantastic for us.

Okay, and then with the water bill, could you give us maybe a sense of magnitude about the market opportunity there? Whether -- I guess how much this could possibly add to a contract port?

The largest portion of it does focus on Louisiana coastal restoration. Which is in the hundreds of millions of dollars. Maybe a billion dollars of work or a number of years for dredging. That is the biggest -- biggest piece of good news, if that gets passed. So, -- but it will also have several other or projects whether they are new port projects as a couple looking in -- at in North Carolina. And just authorizing additional depths to projects that are already authorized. Overall it just be a -- it's a good shot in the arm for to -- for the industry and for the sea-going -- sea-going interest in the United States if we can get this bill passed.

So, assuming it does get passed, is there something that you are going to start to see contracts immediately or are they are going to have to do a bunch of engineering studies and kind of ramp stuff up so we might not feel the impact until next year.

I would see -- there definitely would be the impact on next year. But as I said earlier, there is a -- they already have pass a separate act outside of WRDA to perform $80 million worth of work to be bid this year. This is a separate act that was passed. So, I would not expect to see if this water bill passed, to see work until 2008 or 9. But this -- just this additional work is great. This additional $80 million work that they have funded and will be bid is very positive.

Okay. And then given the asset acquisitions you made in April. What should we expect that levels to be kind of end of second quarter?

The acquisition -- we have already taken on the acquisition of the Ohio and we will be wrapping into our new credit facility that I was mentioning, some of our current debt. So, at the end of the June timeframe we would expect that we have probably a total debt related to the acquisitions in the current debt that we currently have of something of around $40 to $45 million. And that would be encompassing on the senior debt side. So, it will be $45 million plus and the 175 of the indentures.

Okay. Thanks I'll get back in queue.

And we will take our next question from John Parker with Jefferies. Please go ahead.

Good morning. I think you mentioned the CapEx expenditures for the quarter?

Okay. The quarter was $5.1 million.

Okay. Is that the actual CapEx or the ones under the covenant?

That's our actual spend.

Okay great. And can you tell me the magnitude insurance expense you had -- the self insurance reserve?

We don't have a definite number to be comparative at this point. I mean, part of it is some new claims; part of it is investigation of the details of some of the claims. We still are incurring some significant numbers but we don't have exactly what that is. I think in the first quarter of last year, we took on about $2 million; it's less than that in the first quarter of this year.

Okay. So, given the prior quarters you could put out a number but you don't really have that number at this point.

Well, it gets a little bit nebulous here as to whether or not its an addition to claim that we already had from last year versus is it a new claim and how we are valuing this. So, at this point it is getting less, it's going down in volume. So unless it's something of greater significance, we will give you those numbers.

Okay. Now, in terms of your margins seem to be -- your up-gross margin seems to be significantly lower than the fourth quarter and that -- and you mentioned the weather, and also I noticed you did a lot in maintenance work in the first quarter. Can you give any more color into why the margins were so much lower other than just bad weather?

Yes, and just as you've explained, you've mentioned it's a mix of work between what we did in the fourth quarter of last year. We had more capital work; we had more maintenance work in the first quarter. So, there's a difference of the types of projects and then the weather issue impact as well.

Okay. Can you give any idea of the cost of the weather issue or --?

Yes. I don't know. Not specifically. I mean in any quarter is -- there is ups and downs in every single job. But clearly we could see some negative impact from those.

So, is the beach work also lower margin work?

The beach work is what we call a more volatile margin. They can be very good if the weather is better than we anticipate or they could be worse if the weather is worse than we anticipate.

And that's beach work is -- I mean clearly the most exposed to the weather conditions and we did have a outstandingly bad January and February in the East Coast which did affect mostly the beach work. We do put a lot of weather time in our estimates and we go by averages and have years of experience in those areas. We can only go by averages during those periods and our experience -- I mean sometimes we get -- you hit homeruns cause there is very little weather and sometimes you have to, over a short period of time certain projects take some weather hits that go beyond what you estimate.

Okay. Doug, can you give me any -- your view on this Delaware River dredging that gets brought up? All the plans just be a big political issue. Did you have any hope that the Delaware River dredging would ever take place?

We have been following it for I guess since 1986, longer than following it. And it is -- the whole issue is really where is this material going to be disposed of? The best disposal area is in New Jersey; however New Jersey doesn't want to take any material that could be considered Pennsylvania soil. So it is still alive, they've done some pilot jobs but I don't see -- it is not on our radar screen for the next two or three years. It is - especially when we have a -- we're in a trend where the Corp of engineers is not putting out a lot of capital work; they are focusing more on work that is less controversial. So, it's still in the books, it's still authorized to go to 50 but we are not focused on it over the next three or four years.

And as far as your overseas work goes, you seem to be pretty fully employed in the Middle East, do you ever consider looking at other regions, for example Asia where I know there is a lot of dredging work going on? Or are you just kind of continue to be focused on the Middle East for now?

We are focusing in on the Middle East. It's where we have a great operation and what we feel is the best opportunities for additional work.

And you mentioned the $42 million that a competitor won from the private sector, is that an LNG job?

No it was not. It was just a [port fee] paying job in Maryland.

Okay. Deb, can you tell me the rate or the spread on your new facility?

No, we haven't put out those details yet.

Okay. It's going to be completely revolver, no term?

It will be a complete revolver.

Okay. Can you give me a sense -- the three vessels you purchased, can you give me a sense of how much it would cost to build them from scratch?

Well the Eagle build - the Terracan Island building new would be $75 million, probably $70 to %75 million. The Beach Builder or the Ohio would probably be in the $35 to $40 million build new.

Okay. And how long would it take to get one of those built do you think?

Well, the Beach Builder would probably take a year and a half to 2; the Eagle could take 2.5 to 3 years. Or the Terracan Island would be 2.5 to 3 years to build a bus like that.

Okay. And the way you look at these vessels, do you have any sense of the EBITDA you might be able to earn off of it or the cash flow you may be able to earn off them, each of these vessels at run rate cash flow?

Well, again we kind of alluded to that in the talk, there is just so many scenarios that are possible at this point in time that we really haven't done that yet, but at a point in time when we have more clarity we will give more guidance.

Okay. That's all for me thank you very much for your help.

and our next question comes from [Sara Thomson] with Lehman Brothers.

Good morning this is George Konig for Sara Thomson. Just a couple of quick questions. I think I missed this, but you said on the new facility, what was the amount of the revolver?

That will be a - a $130 million facility. Of course that is revolver and our letter of credit.

Right. And you said that at the end of the second quarter you expect to be --?

From $40 or $45 million of outstanding.

Okay. Twice the 175 but that's fair.

40 to 45 million outstanding on the debt side.

Right.

Okay.

With the bad weather that you talked about, can you just provide a little color on what that means for the dredges? Does that mean that the dredges for that time period were out? You're incurring costs but you weren't actually producing any revenue? EBIDTA

Actually, you're fully staffed up, all the crews are there and you just cannot, you cannot hook-up to the pipeline to pump the material ashore. It's too dangerous and you just damage the vessels. So, we just got weeks after weeks where we could work two days and then you are down five on and off. It was just a weather pattern that's not good for dredging but it's very good for beach erosion. Whenever you've got a [big] north easters or these patterns going in along the East Coast, not fun when you're dredging but you know it provides future opportunities.

Does that mean that during those time period you continue to book revenue or is revenue not booked at that time?

We --

We do a percent complete. So, if you are just adding to the cost overall of the project you still with it.

So you would continue to--?

-- earn some revenue on those costs but that starts to get lower and lower as the costs go up and up.

Okay. Thank you very much.

Sure.

[OPERATOR INSTRUCTIONS]. And our next question comes from James Nolan with JMG Capital.

Hi, you just answered my question about the facility. Thank you.

Okay.

And moving on to our next question with Tim Priado with West Creek Capital, please go ahead.

Hi, good morning. Two quick ones. Could you help me think about -- you said that in the first quarter you won 19% of the bid market. How does that compare to [surfing] I was under the impression that you guys were closer to half of US market.

I think if you look on average of the last 3 to 5 years somewhere between 36 and 40% of the market is where we come out. But you also too need to look at it over a longer period of time. It's not unusual to be 20% in one quarter and 50, 60% in another quarter. And also just depends on the amount of work in there, particular quarter as well as to whether or not by the end of the year you're at that rate. So, really to focus on the fact that we are off 19% in the first quarter really should -- its an average, I mean, it reaches a point in time where over a longer period of time its more telling. Also Tim, we indicated that we did bid that for Jersey project which is 64 million. Had that been awarded in March instead of here in May, which is a normal timing item not to be worried some about it, we would have been about overall 40% of the market.

Okay, great.

You know, one job sways it pretty significantly.

That's very helpful. Other thing is, a couple of other former blank check companies have talked about the warrant overhang, given the dilution of where the stocks trading. So, have you guys discussed that internally at all?

Well, obviously it's an issue that warrant holders ask about or stockholders ask about. Interestingly we look at where the stock price is now and in that range where there coming may be able to call, that would be an easy way to take care of it.

Okay, well thank you very much.

[OPERATOR INSTRUCTIONS]. And it appears there are no further questions. I'd like to turn the conference back over to our host for any additional or closing remarks.

Okay. Well, thank you for joining our first quarter update and we look forward to talking to you in the next quarter. Bye-bye.

And that concludes today's teleconference, thank you for your participation and you may now disconnect.