Good morning, thank you. This is Katie Hayes, Treasurer and Director of Investor Relations of Great Lakes, and I welcome you to our quarterly conference call.

Bruce Biemeck, our President and Chief Financial Officer, will begin a discussion representing the highlights of the 2012 first quarter. And then Jon Berger, our Chief Executive Officer, will share his market overview.

Following their comments will be an opportunity for questions.

During this call, we will be making certain forward-looking statements to help you understand our business. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from our expectation.

Certain factors inherent in our business are set forth in our filings with the SEC including our 2011 Form 10-K and subsequent filings.

During this call, we will also refer to certain non-GAAP financial measures including EBITDA, which are explained in the net income adjusted EBITDA reconciliation attached to our earnings release and posted in our Investor Relations website along with certain other operating data.

I'll now turn the call over to Bruce.

Thanks, Katie. We issued our press release this morning and it should help in understanding how our first quarter results fit into our annual and our long-term plan.

Some of the highlights from the quarter ended March 31 were revenues in the first quarter were $154.9 million, which is essentially flat from revenues of $155.3 million in the first quarter of 2011.

You'll recall the first quarter of '11 was positively impacted by the nonrecurring Louisiana berm work with revenues of $15.7 million in that first quarter of 2011. The primary reason revenues were flat in the first quarter was weather impacts in January and February affecting East Coast dredging operations.

The weather was mild as measured by temperature, but in our work environment, which is 2 to 5 miles offshore, the wind produced rough seas affecting our ability to execute on projects.

The Demolition business got off to a strong start with quarterly revenue of $32.5 million, a 74% increase from $18.7 million a year ago. A continuing strong bridge demolition market has helped the division but market growth is prevalent in all sectors.

Demolition gross profit margin improved to 12.5% from the loss of 1.6% in 2011. The Demolition margins continue to be affected -- adversely affected by projects which required setting of loss reserves in 2011.

The projects wins/loss reserves are established, operate at 0 margin through completion. The good news is we should be finished with the final project that is loss reserve in the second quarter, and that will be a small component of the second quarter for Demolition.

During the quarter, we won an impressive 53% of our domestic dredging market and also added $180 million for the Wheatstone LNG project in Australia resulting in a record-high backlog of $584 million.

In our Rivers and Lakes division, backlog and pending orders at March 31 totaled $43.4 million, a record level. Regarding the state of the markets in the first quarter of '12, the domestic dredging bid market totaled $230 million compared to $197 million in the prior year.

As I said, the company won 53% of the overall domestic bid market, above its prior 3-year average of 39%. Specifically, we won 76% or $20 million of the beach nourishment projects awarded, 100% or $53 million of the capital projects awarded, 22% or $23 million of the maintenance projects awarded and 56% or $24 million of the rivers and lakes projects awarded.

Great Lakes, being success coupled with the Wheatstone LNG project in Australia, resulted in record backlog and pending awards of $539 million at March 31, 2012, which compares favorably to $355 million at December 31, 2011.

The company's contracted dredging backlog was $523 million at March 31 compared to $319 million at December 31, 2011. Our Demolition business experienced further improvement in the first quarter in all areas of work, which includes bridge demolition and Yankee, the environmental remediation division.

Of note, management has been successful at improving projects that had loss reserves recorded. So those loss reserves that we did record, the projects actually improved as we determined ways to better execute.

There has been noted improvement in all areas of operation including bidding, estimating and control. So we have had success with our backlog with projects that we've won and added to backlog, and we see a strong market ahead in many of the markets that Demolition serves.

Demolition segment backlog improved to $60 million from $51 million at the -- at March 31 versus December 31. The dredging team right now is busy preparing for the Australian project and the Scofield coastal restoration project.

These projects are significant and will be a big benefit to operations in late '12 and in 2013, but require upfront working capital investment.

Our cash balances has declined due to the usual first quarter equipment maintenance and capital spending, as well as the investment necessary to prepare people and equipment to mobilize to the projects mentioned.

In February, we received favorable judgment in our loss of used claims for the dredge New York from an incident in 2008 when the dredge was struck by a tanker in New York. The judgment was in the amount of $13.2 million for damages including interest.

The case is appealed as expected, but we feel that judgment was merited and we will collect this just compensation following the appeal process.

The legal expenses for preparation experts and the trial were expensed in the first quarter as required. This was the primary reason for an increase in G&A expense in the first quarter.

On debt and liquidity, the cash balance at March 31 was $85.6 million. The decrease related to the items that I mentioned, working capital, maintenance, expense and CapEx, as well as -- well, those are the components of our usual cash usage in the first quarter.

Our revolving credit facility matures in June of 2012. We've been working on this for a while.

We had no borrowings on the facility at the end of March, at the end of the first quarter of '12. We're currently finalizing the new credit agreement pretty close to a final draft of it and have a bank group that has signed up for participation in the facility.

New facility will be larger, $175 million and provide, we believe, better flexibility to the company going forward. Important ratios, we focused on as an internal measure and for credit agreement purposes.

Our total leverage ratio, net of cash and equivalents is just under 2 at the end of the first quarter and our interest coverage is 4.7x.

So despite some usage of cash, we remain strong financially as we project -- as we look at and project cash in coming periods. We normally expect that cash will be at somewhat of a low point at the end of the first quarter or two of the first quarter, and we expect to build cash from this point forward.

Those are some of the comments and, of course, you'll have opportunity to ask questions a little later. But right now, I need to turn the call over to Jon Berger, who's going to discuss some of the initiatives that I referred to, as well as strategic planning and growth considerations for moving forward.

Thanks, Bruce. Although the first quarter was not at our expectations, largely due to the related weather delays, we are pleased with our backlog, the firming up of our schedule in 2012 and the opportunities we see in front of us in 2012.

And therefore, we feel that we're in a good position to provide full year guidance this year at this time. I can't promise you that this will be our standard going forward, but we do feel good this year about where our backlog and our schedule is.

So we'd like to give you guidance now.

As we mentioned in the press release, our forecasted adjusted EBITDA from operations will range from somewhere in the $93 million to $100 million for the full year. And I think it's important to point out, exclusive of the asset sales in 2011, this would result in double-digit growth over 2011.

So we're excited about that. To meet those goals, will require us obviously to execute as planned for the year.

But as we said, based on the plan, the backlog and the focus of the total organization, everyone's, of course, are optimistic for achieving these results.

We have spent significant time with leadership, emphasizing importance of our execution throughout the year and our need to execute this year to hit those numbers.

Additionally, we believe that 2013 is shaping up very nicely for our long-term plans for growth. Let's talk a little bit about the market.

First, international. We see growth internationally in many areas.

Obviously, the Wheatstone is a tremendous win for us. And as Bruce said, we'll be mobilizing the second half of the year with a nice equipment package going down there.

If you look at the long-term prospects in Australia, there's tremendous natural resources that the country hopes to exploit and we believe being down there will create other opportunities for us.

We've talked about Brazil and we are in the process of mobilizing in the third quarter, a dredge package to go down there. This dredge package is different than our sell in, sellout hopper dredges.

So once we bring it down there, we expect this clamshell package to be there for a longer period of time and be utilized.

Additionally, as we have mentioned, we hired a Vice President to focus on South and Central America to call on that and we believe that, that will result in us opening up that market to us nicely. Additionally, we see the Middle East opportunities both in Bahrain and some other surrounding countries picking up.

So we believe the Middle East will also provide us again, solid numbers and be able to grow those numbers from last year.

Domestically, we've talked about Miami, and in the last couple of weeks, these -- they have settled their environmental lawsuits. And we believe that the project should be on the street in the early part of the third quarter.

And if that is the case, we anticipate that it will be awarded, and whoever wins will mobilize by the end of the year.

Again, we feel we are best positioned to complete that work. We have the best equipment package.

We have the best history in Miami. We can do it with the least environmental damage.

So we believe we are in a good position and hope to win that project.

Let's move now down to the Gulf. As we've stated, the Gulf coast restoration is becoming a reality.

There's money set aside. We see this state flooding contracts.

We have two projects of good note, Panama Canal and we're working on now, and Scofield that we announced on during the first quarter that we have started to do some mobilization. Scofield is a very interesting project because of its significant amount of pipe that we're laying over marshland.

And the hope is that, that installation of pipe can be multiple projects. And there's been discussions with the state about them doing other projects off of that.

So we feel that, that is a good foothold for us for future projects in the Gulf. And the money is there to do it.

As Bruce mentioned, our Rivers division that we acquired at the end of '10 executed in '11 and as planned, it's sitting there with the biggest backlog it's ever had. We are excited for its expected performance this year, and it also will support our growth in our environmental dredging with our TerraSea joint venture.

So we like the position we are in our Rivers. Our Demolition business, as Bruce said, is an extremely exciting story for us, very strong first quarter both on the revenue side and on the operating side, and we've made investments there in people to be able to continue to grow that business.

We see that marketplace picking up. We see opportunities.

We see opportunities to expand the skill set into, as Bruce has said, on the water with bridge demolition, brownfield, the utilities and also working with our dredging business.

We have two projects, one we just completed and another we're working -- where we're actually working in unison with our dredging business and we're finding opportunities there.

Well finally, I'd like to talk a minute about Washington. As many of you are aware, and I think we announced it last week, the transportation bill is going to congress and there are many nuggets in the transportation bill that bode very well for navigable waterways and coastal restoration.

The Restore Act, which would mandate 80% of the fines from the Horizon oil spill, would go to Gulf coast restoration. That has had, by far, some support and that is in the transportation bill.

Additionally, the long discussed Harbor Maintenance Trust Fund, it is in the house part of the bill, and there is a sense of the Senate vote on the transportation bill on the Senate side that has a sense that they should also do the Harbor Maintenance Trust Fund.

So we are in the game as we like to say. I can't tell you whether or not we will actually get a transportation bill and whether or not these two portions of the bill actually stay to fruition and have the teeth we're looking for, but we've never been closer and we seem to have continued, by far, some support and we will work hard with the other constituents we work with to try to make that a reality.

But one thing I want to point out, whether or not the transportation bill actually gets passed this year or not, we have seen language in Washington and support for the navigable waterways and Gulf coast restoration. There's been more money allocated to the Mississippi River in the last year.

There's been more money allocated to the O&M budgets of the core. Even the appropriators, which are probably the tightest people with money, have said that they would support the house a minimum of $1 billion in the O&M budget, which is again, a step up from this year.

And there's been -- a day doesn't go by that we don't talk about capital or core deepenings in each of the works.

So we're making progress in Washington and protecting our waterways and supporting that growth and we're still in the game with both the Restore Act and ACMF in a very tough Washington environment. So I just want to make sure, as I understand, we are making success there.

And finally, before we open up to questions, we continue to make stride to the management team in implementing our longer-term strategy of looking beyond what I call our historical four walls for growth of our company. As you can see, there's opportunities for us to take our core skills and competencies to different geographic regions, Brazil, Australia, India, we've had discussions with.

We're taking our skills to new markets, environmental dredging, brownfield and remediation services in our Demolition side. We're joining forces with Demolition and our dredging business for marine demolition.

We are in deep discussions about adding equipment, so that we can grow for another generation in our dredging businesses. And we are looking carefully to add new services to our core.

And as we continue to do that and as we continue to grow, we will focus on executing on our core business. We think that is obviously paramount in identifying ways to continue to reduce cost.

And we believe as a company, we have good forward markets and ample opportunities for us to grow to execute in '12 and for '13 to there be a significant growth for us.

With that, I'd like to open it up for any questions everybody might have.

It's actually Mark on for Andy this morning. Just firstly, can you provide any color on what type of gross margin you think you could achieve on Wheatstone when the project eventually ramps?

There seems to be two offsetting factors, and I mean, one margin could potentially be lower given the international nature of the job, but this could be offset by the size and complexity of the job. So would you say potentially average gross margins is there maybe mid to high teens?

Are you more optimistic or pessimistic around margin now versus the one that you've originally released?

Well, sure. First, as we look at Wheatstone, we -- the project payments come in 3 currencies and they're fashioned after the participants who are in the project.

We don't, as we project forward, we don't see any currency risk. So that's one of the risks we've eliminated.

We have built -- Dave Simonelli, our President of Dredging Operations, has built a good team to execute on their job, a very knowledgeable experienced team. And we think we'll be able to hit the ground running.

Now as far as the project, there are really two components of margin. One is a fixed margin based on equipment contribution that is the equipment we put on the project and there are good standby rates.

So we look at that as kind of a fixed portion and that's lower than obviously, lower than our usual dredging margins. And the other portion is variable.

On balance, we think that the project overall can do better than our historical dredging margins that we report.

Okay. Sounds good.

And then in terms of Brazil, you spoke about how you're in the process of mobilizing for 3Q, what are your expectations now to be awarded your first major project in the region?

There's one project that we are told we will have. They actually came up to visit the dredge last week.

They've got the environmental issues resolved there. The project is about a $20 million project.

It's not great margins because we're absorbing the mobe in that project. But we expect to have it awarded by the end of the second quarter and mobilizing down to that and most importantly, it get -- it absorbs the mobilization of getting a package down there.

And once we're there, we feel very comfortable that there's a market for clamshell dredge down in Brazil. So we think that we will be able to, on future projects down there, do better margins than our first project.

But getting it into market, we think is very important so we're pretty excited about getting this contract awarded finally.

First question is, is it possible to try and quantify the weather impact in the first quarter either on sales or margin or both?

Well, we said that our EBITDA of $14.7 million was off 15%, 16% from our plan. And we believe that had we not been impacted by weather in January, February, we would have been very close to our budget level maybe below, maybe above or maybe right in there, but we have determined that the weather impact is what affected our ability to meet our budget plan.

Now our budget plan was down from the previous year, and I think it's fair to say the reason is, we had the nonrecurring project in the first quarter of '11. So we anticipated a lower first quarter '12 than '11.

Okay. The guidance you guys gave in your press release around building to the EBITDA of $93 million to $100 million seems to suggest the tax rate in the high 20s for the year, do I have that right?

And if so, why would it be lower than your high typical high 30s tax rate?

John?

EBITDA is without taxes. So it doesn't...

Well, we had a reconciliation to net income. And I'm pretty sure the tax rate in there is about 38%.

Okay. And are you guys seeing any improvement in lettings from the Army Corps?

Any pickup in project lettings?

Well, yes. The answer is yes.

I mean, we've seen -- we're seeing more coming out of the -- on the Mississippi River and we've seen a continuation of what we expected. It's hard to say given any 1 or 2 quarters whether it's meeting expectations because it doesn't come out -- batches don't come out uniformly.

So you really need to kind of look over a longer period of time. But we're pleased with what we see and we believe that although there is a tendency to think about government reducing spending, I think that the infrastructure piece is something that is important and has more growth possibilities than reductions.

Yes, I think, John, we've done a good job in Washington. Like we said in the basic O&M budget, we think it's going to be pretty stable.

We think this additional money, as Bruce has said, on the Mississippi, we think there's going to be solid capital projects coming out, Miami. There's another project in New York.

There's some project that'll be driven by the states in both Mississippi and Louisiana from Gulf coast restoration money, so we think there'll be some good capital projects coming out that hit our wheelhouse. So we're optimistic that it’ll be a decent year.

Okay. And do you think -- are you expecting more Gulf coast island work to come out this year?

Is that part of the plan?

Yes. We think there's at least one more in Louisiana that should be let, and we think that Mississippi's talking about some work.

So we think they will be and we think there'll be a pretty constant stable over the next 2 or 3 years of barrier island work.

This is actually B.G. Dickey sitting in for Trey.

Just to kind of buildup on that last caller's questions about the Army Corps. It seems like the Army Corps is a little late this year in releasing their budgets.

So I'm just kind of wondering looking at your full year EBITDA guidance, does that assume that you'll see a pickup in EBITDA from Corps lettings in the back half? Or just given how long it takes to mobilize your fleet that it would be more impactful to 2013?

Yes, B.G., like in every year, we layout the equipment. We layout the schedule and we figure out what jobs are the right jobs that we've heard from the Army Corps coming out that fit our pieces of equipment.

The fourth quarter, there, as we sit here today, there are jobs that we have to -- that have to be let, and we have to win. But we're pretty comfortable with what we've heard with the Army Corps that this work will come out.

And the right work will come out that fits our equipment. So like every year, we have to obviously look forward and say we have to fill this hole, this hole for these pieces of equipment and based us reading the tea leaves, what the Army Corps is.

So we're banking on the fourth quarter being able to things being let in the second and third quarter for us to fill the fourth.

A critical schedule that we use in our forecasting is a schedule that forces out the remainder that we would have to win and perform to meet the forecast expectation for the year. So we measure that against previous years.

What -- how does that number compare to what we had to win and execute in the previous year, the two years ago, I'm sorry. What we can say is that there always is a piece of potential but at this point in time, we don't see it as a significant number.

So we have a good solid backlog to work on in the next couple of quarters and that's a potential on the fourth but not an extraordinary amount.

Okay. That's helpful.

And then just switching gears a little bit to your Demolition business, you guys have done a great job of turning that around. I'm just kind of curious to how we should think about margins in that business going forward?

Do you have any kind of target rates that we could assume for that business?

Well, we've been battling with the loss of reserves, as I've pointed out. So that's been dragging margins down and we hit a little under 13% in this quarter dragging along some loss reserve jobs.

We think of moving that margin level above the 15%. And as we get into some of the new sectors, some of the new markets and customers, we think that we could see some upside as we deal with the more sophisticated projects.

Yes, B.G., as Bruce said and as we've talked about in the past, we’re repositioning that business to a more industrial and away from some of the smaller projects that we have done in markets. And as we better penetrate industrial markets such as the remediation work, brownfields, work with utilities, we believe that we'll garner higher-margin work.

So we're going to need another 6 to 18 months until we fully get ourselves entrenched into that market to the point where I think Bruce and I and Marty really feel comfortable about when we do. As Bruce says, I think we can sit and put up those higher margins.

It's Philip Volpicelli of Deutsche Bank. My first question is regard to the Orange Sun-New York dredge litigation.

Bruce, I think you mentioned that, that was the entire difference between G&A year-over-year. I just want to see if you gave -- if you could give us a more precise number?

And Kathy, whether or not that was added back to EBITDA?

Well, no. It was not added back and it was not the only difference in G&A.

I mean, we had some other increases in expenditures as well but that was the primary change or reason for the increase in G&A over the period.

Roughly $1.2 million?

Well, that was the difference in G&A. The expenses -- they say, I -- the whole $1.2 million was not related to the litigation, but more than half of it was, and I don't have the exact number, but it was really had it not been for that, it would have been an increase but not worth talking about much.

Okay. Great.

And I didn't catch if you guys disclosed capital expenditures for the quarter?

I thought we did at $9.6 million.

$9.6 million and $9.8 million.

Okay. And then in the past, we've talked about you guys possibly building a new dredge and you continue to evaluate that.

Can you give us sort of any update on where you are with actually building a new dredge?

Yes, we keep getting closer. I think we keep talking about it and I'd suggest to you that we're even closer than we were last quarter.

I mean, we'll announce it when we announce it, but...

Maybe I can go at this way, John. Is it something that you guys think you'll make the decision in 2012?

Yes.

Okay. Great.

And then just lastly on the timing of the revolver, I know you guys have been working on that. Any update on when you think you might have that closed?

I've predicted this a few times and it's been a long process. As you know, we wanted to change the structure of our revolver to that of a secured revolver to an unsecured revolver and that's what we've done.

The new revolver will be unsecured but with a spring mean feature if our leverage, our net leverage gets above a certain level. So it's been a lengthy process and we haven't had any need for borrowings, so I suppose that, that has factored into until we thought it unimportant to get a new surety agreement in place and then move on to the credit agreement.

It has been a long process as they say. I would like to say that within the next two weeks, we should be able to get there.

Bruce, I apologize if I missed this. Did you give us the operating earnings by segment?

Demolition versus dredging?

We did not.

No. Operating income for dredging is about $4.9 million and Demolition is about $1.9 million.

Okay. So the demolition was profitable?

Yes.

Yes.

Okay. That's fine.

Confirmed. And then in terms of some of the projects that you talked about, upcoming projects, you referenced a couple of them.

But at this point, what's your expectations, sort of the size of the Miami project?

Well, it's a project that's...

I mean, it sounds like it's going to come in pieces, but...

No, it won't.

Well, I don't think so. And it's a good start.

Yes, it's going to be somewhere between 100 and 200. It's a nice project.

I mean, we don't want to give you much...

No, no, no, that's fine. All right.

Yes, pre-bid it, but I just...

Exactly. But it's a nice test project.

Yes.

Okay. And in terms of the -- I assume as you look at the year, I mean you've factored in additional weather risks and things like that, or lost days but is any of the delays that you saw in the first quarter, are you assuming that there's work to be made up or is it just higher-margin or a higher cost that brought down margins in the quarter?

I'm just trying to understand whether it was revenues or margins or both?

It's a combination. We do some -- we do incur ongoing costs when we hit weather patches.

All our project estimates include an average number of down days for weather based on our database. Just what the weather has been working in that area for a significant number of years, but weather is like that.

I mean, you rarely hit it right on, and so we normally -- but what we say is that our first and fourth quarters are clearly weather-risk quarters and we were off on this one and every opportunity to offset that with favorable weather. But yes, some of that revenue does go into the second quarter.

And then I'm going to give you kind of an anecdotal thing. I was in Georgia this weekend and on the local news, this was the earliest they’ve ever seen a turtle on the beach laying the eggs and obviously, we don't think we're going to be affected by that because it's the way our projects are laying out right now, but there are turtle windows and you have to deal with that.

And so, the warmer temperature has caused the turtle to come to the beach way earlier than ever seen. And it kind of -- it's anecdotal in this kind of -- unusual but that kind of stuff does -- can have an effect on us.

Yes, it cuts both ways, so...

Yes, Right. So yes.

Okay. What about -- and then just lastly, last year, you reported I think total market activity of about $1 billion.

And this year, including the Rivers and Lakes and the Miami work, I mean is this $1.5 billion domestic mark opportunity this year?

Well, it's hard to say. I mean, the $1 billion is always a safe number and then you add from there.

We expect some coastal restoration. We expect Miami to bid.

I don't know. Jon could answer better than I as to whether we might see anything, if Harbor Maintenance Trust Fund passes, maybe some small piece.

But considering all of those, I think that we would say, we would expect the market to be better than last year.

I mean, it sounds like it, but the benefits to you probably show up in '13, '14 I think at this point?

I think that's right. I mean like Miami, at the end of the day, we probably, if we win Miami, we've seen minimal other than probably mobe costs this year but '13.

And that's the other point and if we've talked to some people about this. '13, we think, if we win Miami, we think we stack up tremendously well for '13 and probably '14.

Because as you look at it, we'd have two big capital projects employing a lot of equipment at historically better margins, our highest margin type of work running at one time for pretty much all of '13 and a good part of '14. And the prospect for more capital work in the gulf.

So we think again, we think we told you what we think for '12 now, which we think is a solid operating performance year, but we think '13 can be a very exciting year for us if we win Miami and things in Washington play out even reasonably well.

Assuming the ramp back in Restoric passed and become law, in what timeframe after pass this, would you expect to start seeing benefits? And is that dependent on the Army Corps' budgeting process still?

Well, it's dependent on -- well, '13 would be where you’d start seeing it. And then don't forget that the Army Corps has a lot of work they have to do to get projects out, right?

They have to still do the engineering. They have to do the estimating.

The have to run the process. They have to monitor it, so the Army Corps has a big job in this.

And as good as they are, like everything else, they'll be stressed some. But we do think '13 going forward, there'll be opportunities.

Got it. And you guys had a nice win rate in the quarter.

How sustainable do you see that if letting starts to increase?

It really depends on the type of projects. I mean, the more capital that work comes out, we think we're better suited for that.

They maybe higher dollars, but we may then look beyond or not get as aggressive on the maintenance side, so it really depends on the mix of projects. But historically, we've always been in that 42% range over a fairly long period of time.

That's it. And then what's in the ramp back fund?

Is there something that passed again? Do you expect any of that to be used for capital or is it all to maintenance?

The definition of it is to maintain the navigable waterways. Now when you get into conference, I can't tell you that there isn’t some push and pull along the lines there, but we're going for the whole enchilada.

And if you believe the economy is -- were going to increase our exports and imports, we think there's plenty of money ultimately to -- if the ramp back passes where we are there. But right now, that is solely for to maintaining the navigable waterways.

Thank you very much for joining us this morning. Just as a reminder, our Annual Meeting is next Wednesday, May 9, at 10:00 here in Oak Brook, if you're able to come out and join us.

Otherwise, we will speak with you at our next quarterly conference call. Thanks again, and have a good day.

Thanks, everyone.