Nov 6, 2012
Executives
Katherine M. Hayes - Treasurer and Assistant Secretary Bruce J.
Biemeck - President, Chief Operating Officer and Executive Director William S. Steckel - Chief Financial Officer and Senior Vice President Jonathan W.
Berger - Chief Executive Officer and Executive Director
Analysts
Richard S. Paget - Imperial Capital, LLC, Research Division Trey Grooms - Stephens Inc., Research Division John F.
Kasprzak - BB&T Capital Markets, Research Division Philip Volpicelli - Deutsche Bank AG, Research Division Jonathan Tanwanteng - CJS Securities, Inc. Tristan Richardson - D.A.
Davidson & Co., Research Division
Operator
Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 Great Lakes Dredge & Dock Corporation Earnings Conference Call. My name is Ashley, and I'll be your coordinator for today.
[Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host today, Ms.
Hayes -- Ms. Katie Hayes, Treasurer and Director of Investor Relations.
Please proceed.
Katherine M. Hayes
Good morning. This is Katie Hayes, and I welcome you to our quarterly conference call.
Bruce Biemeck, our President and Chief Operating Officer; and Bill Steckel, our Chief Financial Officer, will discuss the operational and financial highlights for the 3 and 9 months ended September 30, 2012. Then Jon Berger, our Chief Executive Officer, will share his market overview.
Following their comments, there'll be an opportunity for questions. During this call, we'll make 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 expectations. Certain risk 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 also refer to other certain non-GAAP financial measures, including adjusted EBITDA, which are explained in the net income to adjusted EBITDA reconciliation attached to our earnings release and posted on our Investor Relations website, along with certain other operating data. I would like to first turn the call over to Bruce Biemeck, our President and Chief Operating Officer.
Bruce J. Biemeck
Thank you, Katie. Good morning to all of you.
We issued our press release this morning, and as noted, our third quarter earnings results were hampered by items we will outline and discuss during this call. It's important to note at this point, we ended the -- this fourth quarter with backlog, providing scheduled revenues and margins to achieve our previously stated goal.
Since then, the epic Hurricane Sandy has had a significant impact on our expected results for the fourth quarter. We still anticipate a robust fourth quarter, and with the exception of Hurricane Sandy -- loss days due to Hurricane Sandy, have experienced strong utilization and productivity so far this quarter.
Due to the effects of the hurricane, we are prudently lowering our guidance to full year adjusted EBITDA in the range of $85 million to $90 million. To meet this goal, a very strong fourth quarter is required, and all of the work needed to achieve our new guidance goal was in backlog at September 30.
More importantly than book backlog, though, is executing on the many projects currently in process. Fortunately, we have a strong operating team and have confidence our operating team can achieve these results.
Revenues in the third quarter were $166.8 million, up from $158.5 million in the third quarter of '11. Our team and fleet produced well during the quarter, given the conditions we faced as certain higher-margin projects were deferred and scheduled for the fourth quarter.
Revenue increased during the third quarter in domestic maintenance and capital dredging as well as foreign dredging and in the demolition segment. These increases were offset somewhat by declines in both beach nourishment revenue and in rivers and lakes.
While we were able to generate an increase in revenue from the prior year quarter, we expected several projects, which we won on the third quarter, to begin earlier in the quarter. Two significant projects that were expected to be performed through most of the third quarter were not formally awarded until the end of the third quarter, resulting in a deferral of the project start up until the fourth quarter.
When this occurs, certain fixed costs related to the vessels working on these projects are not fully absorbed in the quarter, resulting in compressed gross margin. These projects that are in progress right now, are proceeding well and contributing strongly to the fourth quarter.
The demolition business led off with a strong start in the first 6 months of this year with revenue of $64.3 million, but experienced a bump in the third quarter with certain project cost overruns and a reduction in the price of scrap steel. Demolition sells a significant amount of scrap from projects, and the price of steel impacts margins.
September 30 year-to-date, demolition gross profit margin was 5.9%, compared to 2.2% for the same period in 2011. As noted in the earnings release, we did not feel this is indicative of any negative trends in the demolition business.
We continue to see additional opportunities, including a power plant demolition being worked on right now in North Carolina and a large building demo in Columbus, Ohio, won in October and is just starting up now. With regard to the domestic dredging bid market, as expected, it was a busy third quarter.
Similar to the prior year, third quarter bidding activity increased, though not to the levels of third quarter of '11. Awards in the quarter were $325 million, bringing the domestic dredging bid market for the 9 months ended September 30, 2012, to $678 million.
The company won 39% of the overall domestic bid market during this period, in line with its prior 3-year average of 39%. For the first 9 months of 2012, Great Lakes won $48 million or 43% of the beach nourishment projects awarded, $84 million or 74% of the capital projects awarded, $92 million or 25% on the maintenance projects awarded and $42 million or 45% of the rivers and lakes projects awarded.
The beach market was exceedingly strong in 2011 with the highest volume of beach work ever awarded. Certain of the 2012 beach work remains on the bidding schedule, and we fully expect to add to the beach backlog during this fourth quarter.
In addition, we still expect more capital work to be bid in the fourth quarter, adding to the 2012 capital market. Great Lakes' backlog continues strong with dredging backlog and pending domestic awards at September 30, 2012, of $525 million, compared to $356 million at December 31, 2011.
The company's contracted dredging backlog was $463 million at September 30 of 2012, compared to $319 million at the end of December of '11. Demolition segment backlog was $43 million at September 30, 2012, compared to $51 million at December 31, 2011.
The demolition segment also added on a $12 million project in Columbus, Ohio in the fourth quarter. It's always unpleasant when earnings miss expectation, as they have here.
And that period of -- the unpleasant period is no different this time. We keep in mind, however, we are in a business where we are quickly impacted by weather, delayed bids and equipment repairs.
We missed our expectation, but currently enjoy a strong backlog, robust market ahead and the opportunity to perform very well in the fourth quarter. The excitement in the company is very electric, as we execute at higher levels, are building equipment, and have interesting and challenging project opportunities ahead.
We are ready to capitalize on an abundance of upcoming opportunities, and we are all fired up. That concludes my prepared comments, and we will proceed with detailed comments regarding the quarter and the longer-term outlook.
Before turning the call, however, I want to mention our impressive efforts during Hurricane Sandy. We -- as many are saddened by the injuries and property damage caused by Hurricane Sandy, I know many people and families are working hard to pick up the pieces.
We have seen the effects of many horrible hurricanes over the years, and this one was of epic proportions. We are proud of the performance by our Great Lakes team in managing the effects of the hurricane, and we commend our team for the outstanding job in managing personnel and equipment during the hurricane.
Our personnel are safe after successfully protecting our equipment and are back at work executing on projects. Our readiness plans are well-thought out, have been properly rehearsed and have proven to be effective.
So we congratulate all the people who lived through this horrible storm on the East Coast. I will now introduce you to Bill Steckel.
Bill is our new Senior Vice President and CFO. Bill brings with him a wealth of experience in all aspects of the finance organization, including budgeting, tax strategy, acquisitions, international operations, capital formation and strategic planning.
He has truly hit the ground running since starting at the end of August, and we are excited to have him here. Bill will be going over the results for the quarter, and I, along with Bill and Jon, will be available for questions afterwards.
I will now turn things over to Bill.
William S. Steckel
Good morning, and thank you, Bruce. I'm very excited to be a part the Great Lakes team, and I look forward to continuing to build on the great history of this company.
Regarding debt and liquidity, the cash balance at September 30 was $38.3 million. The decrease in cash related to continued investment, now nearing $40 million in working capital for the Wheatstone and Gulf Coast or Scofield restoration projects, and also due to higher levels of CapEx throughout the year.
The company has spent over $16 million on pipe this year to be in a strong competitive position for the golf course -- Gulf Coast restoration projects. The Australian Wheatstone project requires significant preparation prior to the commencement of dredging early next year.
The billing cycle does not begin for certain projects until pipe in place or mobilization is complete; however, these project investments will be monetized in 2013. From an operating perspective, we expect to bill and collect more in the fourth quarter, as a result of the more active October and November.
We will also be refinancing a nearly $4 million investment in scows we are building as part of a long-term operating lease. We will intensify our focus on managing our working capital and generating cash.
Our financial ratios remained very manageable even after our increased working capital investment and accelerated capital spending. Our total leverage ratio, which is net of cash and equivalents, is at -- is 3.17 at the end of the quarter, and our fixed coverage charge ratio new under this facility was 2.15.
As Bruce previously mentioned, while the third quarter was not in line with our expectations, we anticipate a record fourth quarter and a full year adjusted EBITDA in the range of $85 million to $90 million. We had all of the work we needed to achieve this goal in backlog at September 30, and we are busy executing now, although we must contend with the effects of the super storm on the East Coast, we expect to execute very well on this work, and we are confident our operations team can achieve these results.
Those are some summary comments related to operations and finance. I'd like to now turn the call over to Jon Berger, who is going to discuss some of the initiatives that we referred to, as well the strategic planning and growth considerations going forward.
Jonathan W. Berger
Thank you, Bill. While the quarter was not as strong as we expected, we do feel we're in line for a record fourth quarter and continue to foresee extremely strong prospects for 2013 and '14.
As it came to closing of the third quarter, we were in a position to meet our original estimates given to you at the end of the first quarter. But then, we were hit by the super storm Sandy.
As Bruce said, we did a wonderful job of minimizing the damage to Sandy from -- to our company. Through the efforts of our operations group, we were able to secure our vessels and subsequently get up and running quickly, and this is a major feat.
We had 7 projects in her path, something like 15 major pieces of equipment and a significant amount of floating support equipment alongside, all of which was over -- was secured, overseen and put back to service without incident. As was stated, Hurricane Sandy will impact the quarter.
It will push certain revenues from the fourth quarter and margin into the first quarter of '13. Additionally, we have incurred approximately $3 million of standby costs, which were not -- while we were not working during the storm.
But again, we're set -- we've set the stage for our fourth quarter to deliver one of the highest EBITDA quarters ever, and the midpoint of our new guidance of $85 million to $90 million of EBITDA represents a growth of over 7% year-over-year, excluding the gains on asset sales in the prior year. I'd like to take a moment to speak about Hurricane Sandy.
Like much of the country, we have personally been touched by the devastation in the communities, and we have many workers living in this community. Many of our employees were personally suffering significant losses, as was many of the people in the communities that we have served for decades upon decades.
Personally, I have over 40 relatives who have been affected, as they live in New York and New Jersey, and our hopes and prayers go to each and every one of them. It is our belief that this will provide near-term opportunities as emergency funds are directed to coastal restoration in the aftermath of the storm.
I have to believe Washington will need to immediately undertake a supplemental spending bill to support the disaster relief needed for Hurricane Sandy. In a disaster of this nature, many agencies beyond FEMA are called upon to support both short and long-term efforts to rebuild, including the Department of Housing, Transportation, Agriculture and clearly, the Army Corps of Engineers.
The existing continuing resolution that runs through March of '13 does not provide the extra money for these efforts. And if you follow Washington at all, you'll see that there's been significant talk, both from the coastal communities, plus other appropriators, about having to go in during the lame duck session and put in a temporary appropriation bill for disaster relief.
Other things going in Washington have actually been pretty slow. Since the passing of the RESTORE Act and MAP-21 in July, the focus has clearly been on election day, today, but we continue to push for additional spending for maintenance dredging and deepening.
These are bipartisan issues, and regardless of today's election, we believe there's momentum to spend more money on infrastructure and maintenance dredging. There has been legislation proposed by Senators Lamar Alexander and Lindsey Graham, called the American Waterworks Act, to develop a global solution to the harbor maintenance, the inland rivers and port deepening issues.
This legislation actually has gone in much discussion from a broad group of coalitions, including the RAMP group, the Inland Waterways Group, the California delegation and the Gulf Coast -- and the Gulf Coast governors. So it's too early to tell whether this truly have legs, but it is something that's being reached out to try to solve what has clearly become a major issue for our country.
On the bidding market, the bidding market continues to offer opportunities. There'll be large beach projects coming out before the end of the year and clearly, highlighted by the Miami deepening, where bids have been solicited and are due by November 30.
As most of you know by now, the Miami deepening is an RFP, so we do not expect to hear the results until after the first of the year. But we continue to feel our capabilities are well-positioned for that project.
As we talk about coastal restoration and the RESTORE Act, we expect to see a significant amount of money being directed towards Gulf Coast restoration and significant beach projects in the coming years. As Bill mentioned, we've invested a significant amount of money in pipe, specifically for the Scofield project, which we are mobilizing right now and will be dredging in the first -- second -- first quarter and the fourth quarter of this year.
We expect this to give us a competitive advantage in other projects that are planned near term in the state of Louisiana. Internationally, Wheatstone is moving along.
The dredging looks like it will get started by the end of the first quarter or at latest the beginning of the second quarter, so we should be fully operational there as we -- for at least 3 full quarters of next year. In the Middle East, we signed a $50 million land reclamation project in Qatar.
We continue to see nice bidding opportunities, but we do need to replenish our backlog in the Middle East to support the utilization of our full suite equipment in the region, and we continue to look for opportunities outside the Middle East to deploy our international equipment base. As Bruce mentioned, the demolition team is working diligently to add opportunities to lead to growth and elevating the level of professional service offered.
We laid out a plan in our demolition business to move to a more sophisticated group of clients than we've historically serviced, and we are doing that, and Bruce mentioned a few of those projects. Finally, we have a significant amount of equipment in the field this month -- this quarter working, and we continue to execute at a high level to bring in the fourth quarter we expect.
I'd finally like to take a moment to mention one of our captains, Captain Richard Cortese, and his crew of the survey boat, Miami River. On October 10 this year, we were notified of a missing boat off the coast of Rhode Island.
He took his boat back out to the last known location and found a man hanging on the capsized boat in 57 degrees waters. Undoubtedly, if it was not for the efforts of Captain Cortese and his crew, this man would have died.
The work we do is dangerous, and we have significant precautions to manage in these conditions. Captain Cortese and all of our captains conduct monthly man overboard drills and receive training annually on safety.
We foster a culture of safety and preparedness for all of our employees. We expect our people to work safely and return home to their families.
I want to take a moment to congratulate Captain Cortese and his crew. With that, I want to thank everybody, thank our workers, who were working at very high levels in some dangerous conditions in the winter months and at high levels of productivity.
So with that, we'd like to open it up for questions.
Operator
[Operator Instructions] Our first question is from Richard Paget of Imperial Capital.
Richard S. Paget - Imperial Capital, LLC, Research Division
Jon, I just wanted you to help us kind of work through the guidance here because, I mean, as you said, fourth quarter is expected to be a record, and that's even with the impact of Sandy. And I guess we'll just call it from the way you adjusted guidance that, that's $8 million to $10 million in EBITDA impact.
So if you kind of add that back to the $37 million to $42 million implied by guidance, I mean, at the low end, if you x out Sandy impact, you're looking at $45 million in EBITDA, which is well above any historical rate. And from what you've said about Wheatstone, which is not expected to start until next year, that's not even impacting it.
So what's really the kind of drivers of such the high the level of work here?
Jonathan W. Berger
Yes, a couple of things. And we probably think that Sandy pushed out about $6 million revenue and, just the way it works out, probably $3 million of EBITDA until next year.
And also, we probably incurred $3 million of standby cost. And Wheatstone, even though we're not to start dredging, we clearly have revenues associated with it during the quarter.
We have preparation costs, we have people in the field, we're doing mobe [ph], so even though we're not going to start dredging Sandy until -- excuse me, Wheatstone until the first -- end of the first quarter of next year, we clearly have revenue we're generating for Wheatstone, just not at the same level we will when we're dredging. But it just so happens we have a tremendous portion of our fleet in the field working right now.
And with certain projects that are big suite of projects, a good example is, I guess, the Baltimore project where we have multiple pieces of equipment, not just one dredge working on that project, we have significant amount of support equipment, like our loader, and it just shakes out this year that we have a tremendous fleet of equipment working, probably as large a fleet as we've had at any one time working at any time. Right, Bruce?
Bruce J. Biemeck
Yes. I think that's right, Jon.
I mean, the work mix is such that it's just very balanced over our different types of equipment. So we have a good fleet of mechanical, hydraulic and hopper dredges all working away as we speak.
Richard S. Paget - Imperial Capital, LLC, Research Division
Okay. And then obviously, I realize it's still very early, but how could we possibly quantify the opportunity with Sandy?
I know you have 2 beach jobs in backlog in New Jersey, about $15 million each. I mean, could you say x miles of beach divided by that $15 million to kind of get an idea?
Or with the emergency work, it's even bigger than that? And then just should we only think about this on the beach restoration?
Do storms like this also kind of accelerate the maintenance market as well?
Jonathan W. Berger
First off, I mean, and we probably -- I assumed this would come up, but we probably have 3 projects that will kick off in late November, early December, that are scheduled to these beach communities. We are told today by the Army Corps that they are still a go.
But I think, to be fair to the Army Corps, they're still in assessment mode. But certain of the beaches that we were to work on were totally wiped out.
So can we expect there to be add-ons to this work? I think the answer is probably yes.
Is there a risk that some of this work gets pushed back a little as the Army Corps assesses that or moves us to other emergency projects? I think that is a possibility.
So the fourth quarter is -- the back end of the fourth quarter, especially with those 3 projects, does lend some to uncertainty. But clearly, this is going to generate more work for us, both in a maintenance and a beach market.
And places where you saw beach nourishment having been done like, such as Ocean City, Maryland, if you talk to Governor O'Malley, I mean, he's gotten on and said that these are tremendous saviors, beach nourishment. If you go to Nags Head, the beginning of the storm where it hit in and where we'd done work last year, it was clear that the local community said that the beach nourishment projects protected what otherwise would have been devastation.
So we clearly expect to see incremental work, both on beach nourishment and maintenance, coming out of this, but it's very hard for us to quantify that. And I will say that there is a reasonable chance that our Demolition business picks up some emergency work associated with this.
We are in the markets there in New York. We have relationships with people that have this.
We have equipment, and it's an opportunity potentially for our demolition and our dredging business to utilize some equipment in an emergency maintenance mode. So we do believe there'll be asset protection work coming out, but it's hard for me to quantify right now exactly what that'll be.
Richard S. Paget - Imperial Capital, LLC, Research Division
Okay. And then just one more.
The potential New York deepening job, is that just to continue of the program that they've been doing? And then how -- what's kind of the scope of that?
Bruce J. Biemeck
I mean, it's a continuation of the deepening work. As you know, we have our dredge New York geared for the project in Australia.
Our main focus from a capital standpoint right now is the Miami deepening work. Let me just add to something that Jon said.
I think that we talked about this since the days since Hurricane Sandy, and that is the beaches -- a number of those beaches were really in pretty good shape in terms of beach renourishment. And fortunately, that was the case, because the -- while people think about beaches from a tourist standpoint, recreation, a big part of the beach renourishment program is the protection of assets part, that is keeping the sea from the assets that are built at a point sometimes too close to the water.
But the beach renourishment is something that is a big help in protecting the assets. So while we don't know how to really think about the scheduling of work coming out, there will indeed have to be beach renourishment work to put many of the areas back in the position of being able to protect the assets that have been built on the shore.
Richard S. Paget - Imperial Capital, LLC, Research Division
And just to get back to the New York deepening project, and I know Miami is the focus. But would you have the assets with New York dredge over in Australia to do this particular job?
Bruce J. Biemeck
Well, not with dredge New York, which makes it difficult, and we have thought about how we might approach it. But it really was a market for the dredge New York, and we've made a good decision regarding how to the utilize the dredge New York.
We're happy with this decision. We're anxious to get going, and that's our focus.
And again, the focus on capital work deepening is Miami at the moment.
Operator
Our next question is from Trey Grooms of Stephens.
Trey Grooms - Stephens Inc., Research Division
Just kind of a follow-up to the last question, make sure I understood your response. Obviously, you guys are going to have a lot of irons in the fire, and you've got this what looks to be a big opportunity here resulting from this storm.
I think the real question is, will you have the capacity to be able to, I guess, participate as much as you would want to in that market and from the opportunity that arises from rebuilding?
Bruce J. Biemeck
Well, we're there to a large extent. We are performing on some of the projects.
We expect that in some cases, there may be modifications to add work on. The industry has dealt well, I mean Great Lakes and our competitors, in these kinds of needs in the past.
As you may recall, the fourth quarter of last year, we had some unfavorable experience because we had a very busy beach market and we took hydraulic dredges and put them to work on jobs where historically, we would use hopper dredges. And we had some learning curve effect from that.
But by the end, we got very comfortable and feel comfortable that the theory was right and execution just needed to go through a learning curve. And I think that we're ready to go at it in that manner again.
So I think that in addition to the hopper dredge fleet, we can count on some of our hydraulic dredges.
Jonathan W. Berger
And as Bruce said, we have some projects right there that are starting and working at some of the most damaged locations. So we feel that we're in a good position to be able to respond and to respond effectively.
So I do think, Trey, that it will result in some nice opportunities for us.
Trey Grooms - Stephens Inc., Research Division
Okay. And can you give us -- we kind of got an idea what your market share as, I guess, kind of, of the total dredging market domestically here.
But can you give us an idea what you kind of see as your market share in that particular region?
Bruce J. Biemeck
You mean in the Northeast region?
Trey Grooms - Stephens Inc., Research Division
Yes, exactly. Because, I mean, it looks like you guys have a very good footprint there, and it seems like you would, just intuitively, that you would have a higher market share there than you would of the overall dredging, I guess, dredging market.
But just to see if you could quantify that for us at all.
Bruce J. Biemeck
Well, we've always been a strong competitor in that market, but the way we look at market share is by type of work. And so what we would look to here is beach work, more so than maintenance or capital.
And so our -- Katie, our latest for '11, for example, our beach market share was...
Katherine M. Hayes
Our beach market share over the last 3 years has been 60%.
Jonathan W. Berger
Yes, and understand that these communities that are affected, many of them make their whole income over 3, 4 months out of the year. The Jersey shore, the Maryland shore, these are tourist and vacation spots.
And so if this work doesn't get done before that April/May time frame, many of these communities are going to lose a whole year of revenue. So we hope that -- like I said, we hope that emergency appropriations come through either in lame duck or right after.
And we think we'll -- as we said, Trey, we're in those community right now. So we feel that we're well positioned to take advantage of that.
Trey Grooms - Stephens Inc., Research Division
Okay. And then on the topic of funding, I mean, do you think that this would be nearly 100% emergency funding kind of that's going to be driving this or funding this?
Or do you think that you could see state and local agencies come in and step in with some funding. Or how do you see that rolling out?
Jonathan W. Berger
Yes, I think -- and certainly, we have already gotten calls from certain local communities. But it's going to be a combination of federal funds or -- and/or federal funds allocated down to state and local funding.
Some of the FEMA money can get driven down from the federal to the state and then the state will execute, especially I think once you get towards that rebuilding side. So it will be a combination, and trust it to say that our phone and our people have been talking to our relationships we have in these communities already.
Trey Grooms - Stephens Inc., Research Division
And my last question is just some clarity on the guidance. The new EBITDA guidance, just to be sure, it does or does not include the $3 million in one-timers that are...
Jonathan W. Berger
It does. It does.
Operator
Our next question is from Jack Kasprzak with BB&T.
John F. Kasprzak - BB&T Capital Markets, Research Division
Just following up on that last question quickly. So you have the $3 million of onetime cost and the $3 million of pushout of profit.
And what -- from Sandy. And what -- can you quantify in Q3 the delays you mentioned in the press release on the 4 projects from Isaac that hit -- that hurt Q3.
Jonathan W. Berger
Yes, Bill, you want to address that?
William S. Steckel
Well, we had 3 large projects we're working in the Gulf, and ballpark is about $3 million of EBITDA impact that was delayed in Q3, okay.
Bruce J. Biemeck
But the additional impact in Q3 was work that we assumed would be started in the third quarter, particularly one in Baltimore that we had. We had one, and that given notice to proceed, expected to get it in time to get at least a full month of September into the third quarter.
That notice to proceed wasn't issued until after the 1st of October, and we had a few other situations like that. So that one is clearly a postponement, a deferral of the work.
Our expectation was something different than what occurred.
John F. Kasprzak - BB&T Capital Markets, Research Division
So that would have helped Q4, so you take it out of Q3 but put it in Q4, excluding all these other weather-related events.
Bruce J. Biemeck
Exactly.
Jonathan W. Berger
And then that's a little bit why we have such a tremendous back-to-back fleet working was, clearly, Baltimore, which is a very large project for ours with a significant suite. We expected that to get started earlier.
John F. Kasprzak - BB&T Capital Markets, Research Division
And the $134 million of projects you were awarded in the third quarter, is that the largest award quarter you guys have had?
Katherine M. Hayes
No, I don't think so. I'd have to...
John F. Kasprzak - BB&T Capital Markets, Research Division
Does that include the $47 -- sorry, $47 million Middle East project?
Katherine M. Hayes
No, it does not. Our market is only the domestic market is what we report on.
So the percentages are always domestic dredging.
John F. Kasprzak - BB&T Capital Markets, Research Division
So that's $134 million of domestic, and that's not necessarily the biggest you've seen domestic?
Katherine M. Hayes
Correct.
John F. Kasprzak - BB&T Capital Markets, Research Division
But nevertheless, a robust award quarter.
William S. Steckel
Bill, were you going to mention another project?
William S. Steckel
Regarding Q3, we also had the Delaware River deepening that was originally anticipated to start in the August time frame and really didn't get started 'til really the very end of the quarter. So that's another one of those where you've got the whipsawing impact of not getting it in Q3 but then pushing it into Q4 and making Q4 a very big quarter.
John F. Kasprzak - BB&T Capital Markets, Research Division
Okay. The press release also mentions the BP settlement billion -- potentially adding $1 billion to the market.
I mean, do we have -- obviously we've been kind of talking about this for a little while now. But do we have any feel for timing of a settlement, when we could maybe start to see some of that work?
Are we closer to knowing?
Jonathan W. Berger
I was with Governor Jindal, I guess, about 3, 4 weeks ago, and he told us that he felt there was going to be at least one more push to get it settled before the end of the year. He clearly will have way more knowledge than I would.
So all I can believe is that he's telling -- he knows what's going on. So hopefully, it will get settled.
I mean, intuitively, you think it would but...
Bruce J. Biemeck
It feels near.
Jonathan W. Berger
Yes, it does feel near, as Bruce said. Now other than, anecdotally, what I'm hearing from some people, I have not.
John F. Kasprzak - BB&T Capital Markets, Research Division
And we've been talking about Miami for a little while here, and it looks like we're getting closer. But as far as other ports go, I mean, there's talk in Savannah, I know.
But the feeling had been that once one major port went on a deepening project that the other ports might follow or -- may follow is not the right word, but go along that path, obviously in preparation for the Panama Canal. Are we -- do you think we're going to see more and more ports go 2013, 2014?
Is that what's part of your optimism?
Jonathan W. Berger
Well, I mean, my long-term optimism, I mean, I think ports will be '14, '15, '16. Clearly, you read what Obama said about getting the legislation pushed through quicker.
You see clearly Lindsey Graham and the governors who are pushing this are pushing a global way to deal with all the maritime issues, not only harbor maintenance but also deepening, also the inland river system. That's why you see Alexander so promoting this is they have tremendous locks and dam issues in Tennessee.
But I mean, again, our optimism is because, near term, is we haven't had a major capital project in the last couple of years to work off of. And certainly, with Wheatstone for the next couple of years, we have one.
We feel very good about our positioning of Miami. So that's -- when we win Miami, and that's knocking on wood.
William S. Steckel
That wasn't my head though.
Jonathan W. Berger
That we're going to have 2 major capital projects going at one time, and it's been a long while since this company has had that. So when you layer in all the emergency beach work, you layer in the other expectations, what we see -- you layer in what we believe is a demolition company moving in the right direction, our Rivers and Lakes company, and some other things we're doing with TerraSea and the environmental.
I think this company hasn't had prospects and opportunities -- certainly in my tenure of being here, which is from '06 when we went public and I got on the board, 'til now, I don't think this company has seen the opportunities available to it in the last 5 or 6 years.
John F. Kasprzak - BB&T Capital Markets, Research Division
That's great. Last question, on demolition, do you think the issues that hurt margin in Q3 are behind that business?
Bruce J. Biemeck
I believe they are. I mean, a couple of these were projects that have lingered on a bit.
One of them or 2 of them were projects that we inherited a couple of years ago. And yes, I think as we are bidding on, and the kind of work we're bidding on and the bids that we're seeing these days and the work that we're picking up, is -- it looks different.
And we have improved our estimating and cost tracking system, particularly our estimating significantly, and I think we have a better feel for how to bid on these and how to make sure that the right amount of risk is built into the estimate. So yes, I do.
I think that, as we're seeing projects and as we're looking at what's available in the future, it feels as though we are definitely headed toward better projects, better customers and more consistent margins.
Operator
Our next question is from Philip Volpicelli of Deutsche Bank.
Philip Volpicelli - Deutsche Bank AG, Research Division
Just going back to the guidance. I guess I'm having a hard time getting my head around this.
I don't think you guys have reported $30 million on EBITDA at any quarter since I've been looking at the company. And based on the guidance, you've got $47.4 million of EBITDA year-to-date.
You would need $37 million to $42 million to reach the range that you're mentioning. And yet, you've lost 25 days of work because of Sandy.
Is there that much slack in the system that you can make that up and achieve the $37 million to $42 million that you're talking about for the fourth quarter?
Bruce J. Biemeck
Well, we have -- we've talked about some of these projects that got pushed from third to fourth. A quarter ago when we talked to you, we did see some of that in the third.
So it did get pushed into the fourth, and I have to tell you, we have a lot of equipment that is scheduled. And that said, this is a quarter where weather can affect us as it just did.
So we're -- there is some risk to it. But as we have it mapped out and we have scheduled, as we always do, a certain amount of weather delays, we add up the numbers and the pieces, and that's what we can get to.
Yes, it is a significant improvement. I think the best we've done is somewhere around $30 million.
That was without Rivers and Lakes, and I don't know in that particular quarter what Demolition contributed, but often times, Demolition contributed nothing or less. So I think that's all part of it.
There are more components. But from a dredging standpoint, this is a very busy quarter.
Jonathan W. Berger
Yes, as Bruce said, Phil, it's a very bottoms up analysis. I mean, it's dredge-by-dredge, contract-by-contract margin built up.
And it's also the fourth quarter where you tend to flush through various claims and other things on contract. So there's a little bit of expectation that we do the typical year-end push to get claims resolve with clients before the end of the year and things like that.
But it's clearly in our control now, totally, other than weather. I mean, we have the jobs.
We have the people working it. Everything is scheduled.
There's no having to capture work to execute on this.
Philip Volpicelli - Deutsche Bank AG, Research Division
Jon, how -- or I guess, Bruce, both of you guys, how many days on average does a dredge work in a given month? I just want to conceptually get my head around that.
Jonathan W. Berger
Yes, I mean, it's possible to work 24/7, 30 days, 31 days a month. I mean, it's -- we have the luxury of like right after Baltimore completes, we're going right up the river.
And Baltimore, and the next project up the river is...
Katherine M. Hayes
Chesapeake.
Jonathan W. Berger
Is the Chesapeake. So we won't have significant downtime in mobilization from a very big project.
And as an example, the Chesapeake also is going to use the unloader, which is another big piece of equipment that garners significant rates when we utilize it. So it really is the mix of projects, the space between projects, the mobe, de-mobe, and just the way its laying out this month.
This quarter, we have significantly high utilization.
Bruce J. Biemeck
Yes, and it is high utilization. I mean, you asked how much can a dredge work.
I mean, we have dredges and have years where there's well over 300 days of utilization. I'd have to say that's unusual, but they can -- the dredges can go depending, on the project and depending on the complement of equipment, they can go for a pretty good period of time before either weather or mechanical problems require that they be shut down.
Sometimes only temporary, but sometimes the repairs or the Coast Guard-required work takes some time. But they're available, they're in place, they're working on the projects.
And I guess I have to say what Jon said, and that is we've looked at each dredge and each job and how we're doing and it's a bottoms up approach, and the jobs are there, and the equipment's there and it's going.
Jonathan W. Berger
Yes, the other thing, though, I think we had 2 dredges have dry docks in the third quarter. And we had one that we were looking to take in to do an upgrade to put in some over-the-bow equipment, and I think we've postponed that because of the workload.
So we really have no scheduled downtime for any of the productive equipment this quarter.
Bruce J. Biemeck
Yes, nothing significant, though.
Operator
Our next question is from Andy Kaplowitz of Barclays.
Unknown Analyst
[Audio Gap] for Andy. So just I had 2 more general questions and a Sandy-related question.
So in terms of your maintenance bookings, they were very solid in the quarter. I think I'm calculating around $60 million.
So, given work from the transportation bill would mainly be maintenance, was this increase, do you think, in bookings related at least in part to the bill?
Jonathan W. Berger
No. Anything associated with the bill really won't come out till the '13 fiscal year.
So this is really any work that was -- that was really older work scheduled. So we haven't seen any -- anything really coming out.
I mean, right now the Army Corps and the Federal government is all working off of the CR.
Unknown Analyst
Okay. Got you.
So -- and then moving over to kind of your foreign opportunities. So in the past few quarters, I think dating back pretty much at the end of last year but excluding 2Q of this year, your foreign dredging bookings have held up considerably, mainly related to the Middle East and Wheatstone.
So based on what you see out there, should we continue to expect to see a pretty consistent run rate of relatively solid fortune dredging opportunities, bookings of maybe $25 million plus with some lumpiness obviously?
Bruce J. Biemeck
Well, we have held up our international backlog and operation to a level that's acceptable, but I shouldn't even -- I should say we really -- our initiative is to increase that level of work. We have a good compliment of equipment.
We've been able to pick up some good work. We see additional projects on the horizon, but we really need to increase the revenue stream from the international work.
Jonathan W. Berger
Yes, I mean obviously, Wheatstone, while it's going to be categorized internationally, we're taking a big U.S. dredge out of the U.S.
fleet. Over the last, I guess, year to 1.5 years in the Middle East, we've a little bit been fortunate that it's kind of held up.
We're working kind of hand to mouth, if you know what I mean. We don't have a nice visibility and backlog in the Middle East.
We see some opportunities, I think, that will -- that potentially can get us there. But as Bruce says, we have a big suite of equipment there that we'd like to see a more solid backlog that doesn't put the continual pressure to win that one next job to not have a dip off.
Unknown Analyst
Okay. Understood.
And then finally, I hate to ask this question again but, and maybe if I can ask in a different way. In terms of the beach nourishment work that you could potentially do off of Sandy, so based on your initial glance, you talked about in your release how 2011 was atypically high, and then the opportunities relating to beach nourishment dropped off a little bit in 2012.
So when you look to 2013, could -- based on your initial, I guess, outlook, could say that maybe work could return to that 2011 level?
Jonathan W. Berger
I'm not even sure if I can guess it, but we think it has to be a tremendous beach nourishment year next year. I mean, these communities are just -- beaches were just wiped out.
Bruce J. Biemeck
I think that -- thinking about the 2011 levels is probably a fair way to look at it. I think that if that's the market, I'm not even -- well, that won't take care of all the needs.
There's a tremendous amount of work that needs to be done because so much work was undone.
Jonathan W. Berger
Yes.
Operator
Our next question is from Jon Tanwanteng of CJS Securities.
Jonathan Tanwanteng - CJS Securities, Inc.
Can you talk a little bit more about the timing on Miami? I see it slated for Q1 now.
Is that award expected earlier or late in Q1? And if you guys win it, when would that dredging and revenues actually start?
William S. Steckel
Well, as Jon said, its an RFP as opposed to a low-bid opportunity. So in terms of deadlines or due date, the due date for submittal is the fourth quarter.
We think, though, that it could take a month to 2 for the Corps to sort through the responses to the RFP request and determine the awardee. So yes, I guess, there have been some delays.
But since we talked last time, this is maybe slightly delayed but pretty much in line with our expectation.
Jonathan W. Berger
And once awarded, I mean, we will start mobilizing. Yes, we'll start mobilizing and there's clearly prep work that you have to do.
It's a big project. So we'd start to see some revenues right after award.
Jonathan Tanwanteng - CJS Securities, Inc.
Okay. Also, if you could, an update on the Savannah opportunity.
I see a couple of headlines, both approving and challenging it lately?
Bruce J. Biemeck
We see the same things. I don't think we can give you any inside information on that other than to say that there has been growing interest in it, it's certainly an interesting project, a deepening project.
We're eyeballing it and kind of reacting to the same thing you are. As we see heightened interest, we pay a little bit more attention to, okay, if this came at a certain point in time, what equipment would we have, how would we address it and so on.
But we see momentum gaining for that project, but for some others as well.
Jonathan Tanwanteng - CJS Securities, Inc.
Okay. And then finally, has there been any incremental demand yet from Hurricane Isaac?
I know it's a bit early for Sandy, but any kind of color on the Gulf would be appreciated, the scope, how the work will be funded, when it would affect results. I mean, would you have to pull equipment off other projects like you have in the past?
Bruce J. Biemeck
Yes, we just haven't had any information that's come to us for any kind of emergency need. So we kind of think that it's probably, the Corps is working on fitting it into the new year which began October 1.
So in that budget cycle.
Jonathan W. Berger
And that being said, there is -- there are some very beefy -- beefy island-building projects that should come out of the Gulf in the near term.
Jonathan Tanwanteng - CJS Securities, Inc.
Okay. What -- is that any different from like 3 months ago before the storm though?
Jonathan W. Berger
No, I just think it's heightening. So, no.
Operator
Our next question is from Tristan Richardson of D. A.
Davidson.
Tristan Richardson - D.A. Davidson & Co., Research Division
Just curious about capping z [ph] and what, if any, is your opportunity there, and just sort of what you're hearing on the timing and just an update.
Jonathan W. Berger
Yes, good question. We have obviously talked from both a demolition, which would be at the tail end of that project, and on a dredging perspective.
And we actually feel relatively strong that we've talked -- we've clearly had discussions with the winning bidder prior to that. We had detailed discussions.
I'm sure it'll go out to somewhat of a rebid. But on the dredging side, it's a significant amount of work that needs to be done in a relatively short period of time and a need of equipment.
I can't imagine, from the dredging side, we don't have some involvement in it. And on the demolition side, I think we're fairly well positioned, but that's probably a '15, '16 project.
Just really at the tail end of the completion of the outage [ph].
Bruce J. Biemeck
We're thinking '14, '15, but we're lined up and have been in place and are moving forward with discussions. But we think that we had a good bid on it to a general, and the general will now fine-tune all the supporting cast, and we'd be part of that supporting cast.
But we think we're in a good position.
Tristan Richardson - D.A. Davidson & Co., Research Division
Okay. And then just very generally, I mean, the size of that opportunity, at least on the dredging side for Great Lakes?
Jonathan W. Berger
It's really too soon to tell. I'm sure we gave very high level bids.
And as Bruce said, we actually probably bid to 3 out of the 4 groups. But we had very detailed discussions with the winning bidder, but I'm sure will be repriced again.
Bruce J. Biemeck
And I think it could involve more than 1 dredging company. It's hard to say how that work could be split up.
Operator
We have a follow-up question from Richard Paget of Imperial Capital.
Richard S. Paget - Imperial Capital, LLC, Research Division
Just real quick, has there been any talk of waiving the Jones Act for dredging, given the emergency nature of this?
Jonathan W. Berger
No. You've got to believe that our friends from Europe are out there pitching, clearly, from the -- they're clearly out there talking about -- you heard Cuomo say maybe we need to build a -- around the whole of Miami such as they have in some of the European cities.
But we haven't heard anything yet. Certainly, the AMP coalition have -- are way on top of it with the strategic petroleum reserve issues and waiving some things to get some oil up there, but...
Bruce J. Biemeck
As well as our team.
Jonathan W. Berger
As well as our team, we're part of the industry.
Bruce J. Biemeck
Yes, we're staying plugged into the Corps offices, and certainly want the Corps to remember that we and the industry have responded in the past. And in addition, we have the added option of the hydraulic dredges, which we, as I said earlier in the call, we went through a learning curve last year.
But we believe that the theory is right, and we've actually added to the capacity.
Operator
I'm not showing any further questions in the queue. I would now like to turn the call over to Katie Hayes for any closing remarks.
Katherine M. Hayes
Thank you very much for joining us today. We look forward to talking to you after our year-end results.
Operator
Ladies and gentlemen, thank you for participating in today's conference. This concludes the presentation.
You may now disconnect. Everyone, have a great day.