Great Lakes Dredge & Dock Corporation
Great Lakes Dredge & Dock CORP (Form: 10-Q, Received: 05/03/2016 16:04:52)

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission file number: 001-33225

Great Lakes Dredge & Dock Corporation

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

20-5336063

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

2122 York Road, Oak Brook, IL

 

60523

(Address of principal executive offices)

 

(Zip Code)

(630) 574-3000

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   x     No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer

 

¨

 

Accelerated Filer

 

x

 

 

 

 

 

 

 

Non-Accelerated Filer

 

¨   (Do not check if a smaller reporting company)

 

Smaller reporting company

 

¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   x

As of April 29, 2016, 60,656,931 shares of the Registrant’s Common Stock, par value $.0001 per share, were outstanding.

 

 

 

 


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Quarterly Period ended March 31, 2016

INDEX

 

 

 

 

 

Page

 

 

 

 

 

 

 

Part I Financial Information (Unaudited)

 

3

 

 

 

 

 

Item 1

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2016 and 2015

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss for the Three Months ended March 31, 2016 and 2015

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2016 and 2015

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

 

 

Item 2

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

24

 

 

 

 

 

Item 3

 

Quantitative and Qualitative Disclosures About Market Risk

 

33

 

 

 

 

 

Item 4

 

Controls and Procedures

 

33

 

 

 

 

 

 

 

Part II Other Information

 

34

 

 

 

 

 

Item 1

 

Legal Proceedings

 

34

 

 

 

 

 

Item 1A

 

Risk Factors

 

34

 

 

 

 

 

Item 2

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

 

 

 

 

Item 3

 

Defaults Upon Senior Securities

 

34

 

 

 

 

 

Item 4

 

Mine Safety Disclosures

 

34

 

 

 

 

 

Item 5

 

Other Information

 

34

 

 

 

 

 

Item 6

 

Exhibits

 

35

 

 

 

 

 

 

 

Signature

 

36

 

 

 

 

 

 

 

Exhibit Index

 

37

 

 

 

2


 

P ART I — Financial Information

Item 1.

Financial Statements.

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except per share amounts)  

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,894

 

 

$

14,184

 

Accounts receivable—net

 

 

101,000

 

 

 

130,777

 

Contract revenues in excess of billings

 

 

74,576

 

 

 

81,195

 

Inventories

 

 

35,042

 

 

 

35,963

 

Prepaid expenses and other current assets

 

 

71,985

 

 

 

67,614

 

Total current assets

 

 

298,497

 

 

 

329,733

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT—Net

 

 

432,749

 

 

 

430,210

 

GOODWILL AND OTHER INTANGIBLE ASSETS—Net

 

 

85,774

 

 

 

86,004

 

INVENTORIES—Noncurrent

 

 

45,170

 

 

 

41,646

 

INVESTMENTS IN JOINT VENTURES

 

 

3,131

 

 

 

3,761

 

OTHER

 

 

7,181

 

 

 

6,770

 

TOTAL

 

$

872,502

 

 

$

898,124

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

96,499

 

 

$

118,846

 

Accrued expenses

 

 

61,596

 

 

 

72,277

 

Billings in excess of contract revenues

 

 

6,158

 

 

 

7,061

 

Current portion of long term debt

 

 

7,530

 

 

 

7,506

 

Total current liabilities

 

 

171,783

 

 

 

205,690

 

 

 

 

 

 

 

 

 

 

7 3/8% SENIOR NOTES

 

 

272,248

 

 

 

271,998

 

REVOLVING CREDIT FACILITY

 

 

35,000

 

 

 

20,000

 

NOTES PAYABLE

 

 

52,265

 

 

 

53,792

 

DEFERRED INCOME TAXES

 

 

71,624

 

 

 

74,006

 

OTHER

 

 

19,693

 

 

 

20,465

 

Total liabilities

 

 

622,613

 

 

 

645,951

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 8)

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

Common stock—$.0001 par value; 90,000 authorized, 60,934 and 60,709 shares issued; 60,656 and 60,431 shares outstanding at March 31, 2016 and December 31, 2015, respectively.

 

 

6

 

 

 

6

 

Treasury stock, at cost

 

 

(1,433

)

 

 

(1,433

)

Additional paid-in capital

 

 

284,589

 

 

 

283,247

 

Accumulated deficit

 

 

(31,699

)

 

 

(27,664

)

Accumulated other comprehensive loss

 

 

(1,574

)

 

 

(1,983

)

Total equity

 

 

249,889

 

 

 

252,173

 

TOTAL

 

$

872,502

 

 

$

898,124

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

3


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

Contract revenues

 

$

163,119

 

 

$

174,557

 

Costs of contract revenues

 

 

143,129

 

 

 

163,875

 

Gross profit

 

 

19,990

 

 

 

10,682

 

General and administrative expenses

 

 

20,089

 

 

 

17,948

 

Gain on sale of assets—net

 

 

(10

)

 

 

(8

)

Operating loss

 

 

(89

)

 

 

(7,258

)

Interest expense—net

 

 

(5,721

)

 

 

(5,630

)

Equity in loss of joint ventures

 

 

(115

)

 

 

(1,098

)

Other expense

 

 

(763

)

 

 

(441

)

Loss before income taxes

 

 

(6,688

)

 

 

(14,427

)

Income tax benefit

 

 

2,653

 

 

 

6,037

 

Net loss

 

$

(4,035

)

 

$

(8,390

)

 

 

 

 

 

 

 

 

 

Basic loss per share

 

$

(0.07

)

 

$

(0.14

)

Basic weighted average shares

 

 

60,507

 

 

 

60,265

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

$

(0.07

)

 

$

(0.14

)

Diluted weighted average shares

 

 

60,507

 

 

 

60,265

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

4


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,035

)

 

$

(8,390

)

Currency translation adjustment—net of tax (1)

 

 

409

 

 

 

(808

)

Comprehensive loss

 

$

(3,626

)

 

$

(9,198

)

 

(1)

Net of income tax (provision) benefit of $(271) and $536 for the three months ended March 31, 2016 and 2015, respectively.

See notes to unaudited condensed consolidated financial statements.

 

 

5


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Shares   of

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Treasury

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2016

 

 

60,709

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

283,247

 

 

$

(27,664

)

 

$

(1,983

)

 

$

252,173

 

Share-based compensation

 

 

81

 

 

 

 

 

 

 

 

 

 

 

 

927

 

 

 

 

 

 

 

 

 

927

 

Exercise of options and purchases from employee stock plans

 

 

144

 

 

 

 

 

 

 

 

 

 

 

 

415

 

 

 

 

 

 

 

 

 

415

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,035

)

 

 

 

 

 

(4,035

)

Other comprehensive income—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

409

 

 

 

409

 

BALANCE—March 31, 2016

 

 

60,934

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

284,589

 

 

$

(31,699

)

 

$

(1,574

)

 

$

249,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Treasury

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2015

 

 

60,170

 

 

$

6

 

 

 

 

 

 

 

 

$

278,166

 

 

$

(21,475

)

 

$

(734

)

 

$

255,963

 

Share-based compensation

 

 

67

 

 

 

 

 

 

 

 

 

 

 

 

1,057

 

 

 

 

 

 

 

 

 

1,057

 

Vesting of restricted stock units, including impact of shares withheld for taxes

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

(13

)

 

 

 

 

 

 

 

 

(13

)

Exercise of options and purchases from employee stock plans

 

 

139

 

 

 

 

 

 

 

 

 

 

 

 

736

 

 

 

 

 

 

 

 

 

736

 

Excess income tax benefit from share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

8

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,390

)

 

 

 

 

 

(8,390

)

Other comprehensive loss—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(808

)

 

 

(808

)

BALANCE—March 31, 2015

 

 

60,379

 

 

$

6

 

 

 

 

 

$

 

 

$

279,954

 

 

$

(29,865

)

 

$

(1,542

)

 

$

248,553

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

6


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(4,035

)

 

$

(8,390

)

Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

13,928

 

 

 

13,153

 

Equity in (earnings) loss of joint ventures

 

 

(419

)

 

 

1,098

 

Deferred income taxes

 

 

(2,108

)

 

 

(6,045

)

Gain on sale of assets

 

 

(10

)

 

 

(8

)

Amortization of deferred financing fees

 

 

623

 

 

 

492

 

Unrealized net gain from mark-to-market valuations of derivatives

 

 

(1,332

)

 

 

(1,051

)

Unrealized foreign currency gain

 

 

(77

)

 

 

(736

)

Share-based compensation expense

 

 

927

 

 

 

1,057

 

Excess income tax benefit from share-based compensation

 

 

 

 

 

(8

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

29,748

 

 

 

37,746

 

Contract revenues in excess of billings

 

 

6,748

 

 

 

(20,160

)

Inventories

 

 

(2,603

)

 

 

1,572

 

Prepaid expenses and other current assets

 

 

(3,418

)

 

 

(1,114

)

Accounts payable and accrued expenses

 

 

(33,322

)

 

 

(24,463

)

Billings in excess of contract revenues

 

 

(910

)

 

 

(2,245

)

Other noncurrent assets and liabilities

 

 

(780

)

 

 

(1,475

)

Cash provided by (used in) operating activities

 

 

2,960

 

 

 

(10,577

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(14,917

)

 

 

(20,777

)

Proceeds from dispositions of property and equipment

 

 

25

 

 

 

40

 

Cash used in investing activities

 

 

(14,892

)

 

 

(20,737

)

 

7


 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Deferred financing fees

 

 

 

 

 

(29

)

Repayments of long term note payable

 

 

(265

)

 

 

 

Taxes paid on settlement of vested share awards

 

 

 

 

 

(13

)

Repayments of term loan facility

 

 

(1,250

)

 

 

(1,250

)

Repayments of equipment debt

 

 

(367

)

 

 

(214

)

Proceeds from equipment debt

 

 

 

 

 

408

 

Exercise of options and purchases from employee stock plans

 

 

415

 

 

 

736

 

Excess income tax benefit from share-based compensation

 

 

 

 

 

8

 

Borrowings under revolving loans

 

 

38,000

 

 

 

53,000

 

Repayments of revolving loans

 

 

(23,000

)

 

 

(33,000

)

Net cash provided by financing activities

 

 

13,533

 

 

 

19,646

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

 

109

 

 

 

(102

)

Net increase (decrease) in cash and cash equivalents

 

 

1,710

 

 

 

(11,770

)

Cash and cash equivalents at beginning of period

 

 

14,184

 

 

 

42,389

 

Cash and cash equivalents at end of period

 

$

15,894

 

 

$

30,619

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

11,276

 

 

$

11,068

 

Cash paid (refunded) for income taxes

 

$

(1

)

 

$

368

 

 

 

 

 

 

 

 

 

 

Non-cash Investing and Financing Activities

 

 

 

 

 

 

 

 

Property and equipment purchased but not yet paid

 

$

10,003

 

 

$

7,301

 

Property and equipment purchased on notes payable

 

$

 

 

$

15,569

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

8


 

GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(dollar amounts in thousands, except per share amounts or as otherwise noted)

 

 

1.

Basis of presentation

The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Great Lakes Dredge & Dock Corporation and Subsidiaries (the “Company” or “Great Lakes”) and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations, although management believes that the disclosures are adequate and make the information presented not misleading. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of March 31, 2016, and its results of operations for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015 have been included.

The components of costs of contract revenues include labor, equipment (including depreciation, maintenance, insurance and long-term rentals), subcontracts, fuel, supplies, short-term rentals and project overhead. Hourly labor is generally hired on a project-by-project basis. Costs of contract revenues vary significantly depending on the type and location of work performed and assets utilized.

The Company’s cost structure includes significant annual equipment-related costs, including depreciation, maintenance, insurance and long-term rentals. These costs have averaged approximately 21% of total costs of contract revenues over the prior three years. During the year, both equipment utilization and the timing of fixed cost expenditures fluctuate significantly. Accordingly, the Company allocates these fixed equipment costs to interim periods in proportion to revenues recognized over the year, to better match revenues and expenses. Specifically, at each interim reporting date the Company compares actual revenues earned to date on its dredging contracts to expected annual revenues and recognizes equipment costs on the same proportionate basis. In the fourth quarter, any over or under allocated equipment costs are recognized such that the expense for the year equals actual equipment costs incurred during the year.

The Company has three operating segments: dredging, Terra Contracting Services, LLC (“Terra”) and Great Lakes Environmental & Infrastructure, LLC (“GLEI”), previously referred to as Magnus Pacific, LLC, which were aggregated into two reportable segments: dredging and environmental & infrastructure, previously referred to as environmental & remediation. As Terra and GLEI have similarity in economic margins, services, production processes, customer types, distribution methods and regulatory environment, they were aggregated into one reporting segment. There has been no change in the Company’s identification of operating segments and reportable segments. The Company has determined that the operating segments are the Company’s three reporting units. The Company will perform its next scheduled annual test of goodwill in the third quarter of 2016.

The condensed consolidated results of operations and comprehensive income for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year.

Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718) (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company is currently evaluating the impact of ASU 2016-09 on its consolidated financial statements.

In February 2016, the FASB issued Accounting Standard Update No. 2016-02 (“ASU 2016-02”), Leases (Topic 842) . The Board issued this update to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods. The Company is currently evaluating the impact of ASU 2016-02 on its financial statements.

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In Nove mber 2015, the FASB issued Accounting Standard Update No. 2015-17 (“ASU 2015-17”), Income Taxes: Balance Sheet Classifications of Deferred Taxes (Topic 740) which simplifies the presentation of deferred income taxes by requiring that deferred tax liabiliti es and assets be classified as noncurrent in the balance sheet. The update is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The guidance may be adopted prospective ly or retrospectively and early adoption is permitted. As of December 31, 2015, the Company elected to early adopt this ASU 2015-17 on a prospective basis and therefore, prior years were not retrospectively adjusted.

In April 2015, the FASB issued Accounting Standard Update No. 2015-03 (“ASU 2015-03”), Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This update is effective for fiscal years beginning after December 15, 2015, and is required to be applied retrospectively. The Company adopted this standard in the first quarter of 2016 on a retrospective basis. As a result, the Company presented $3,502 of unamortized debt issuance costs that had been included in other assets in the consolidated balance sheet as of December 31, 2015 as direct deductions from the carrying amounts of the related debt liabilities.

In May 2014, the FASB issued Accounting Standard Update No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers (Topic 606) , which supersedes the existing revenue recognition requirements. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 has been deferred to be effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, which will be its first quarter of fiscal 2018. Early adoption is permitted in fiscal 2017. The Company is currently evaluating the impact of ASU 2014-09 on its consolidated financial statements.

 

 

 

2.

Earnings per share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similarly to basic earnings per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. For the three months ended March 31, 2016 and 2015, the dilutive effect of 359 thousand and 534 thousand stock options and restricted stock units, respectively, were excluded from the diluted weighted-average common shares outstanding as the Company incurred a loss during these periods. For the three months ended March 31, 2016, 1,812 thousand stock options and restricted stock units were excluded from the calculation of diluted earnings per share based on the application of the treasury stock method, as such stock options and restricted stock units were determined to be anti-dilutive.

The computations for basic and diluted loss per share are as follows:

 

 

 

Three Months Ended

 

 

(shares in thousands)

 

March 31,

 

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,035

)

 

$

(8,390

)

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding — basic and diluted

 

 

60,507

 

 

 

60,265

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share —   basic

 

$

(0.07

)

 

$

(0.14

)

 

Loss per share — diluted

 

$

(0.07

)

 

$

(0.14

)

 

 

 

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3.

Accounts receivable and contracts in progress  

Accounts receivable at March 31, 2016 and December 31, 2015 are as follows:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Completed contracts

 

$

37,324

 

 

$

37,111

 

Contracts in progress

 

 

50,669

 

 

 

70,787

 

Retainage

 

 

17,088

 

 

 

27,203

 

 

 

 

105,081

 

 

 

135,101

 

Allowance for doubtful accounts

 

 

(439

)

 

 

(754

)

 

 

 

 

 

 

 

 

 

Total accounts receivable—net

 

$

104,642

 

 

$

134,347

 

 

 

 

 

 

 

 

 

 

Current portion of accounts receivable—net

 

$

101,000

 

 

$

130,777

 

Long-term accounts receivable and retainage

 

 

3,642

 

 

 

3,570

 

Total accounts receivable—net

 

$

104,642

 

 

$

134,347

 

 

The components of contracts in progress at March 31, 2016 and December 31, 2015 are as follows:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Costs and earnings in excess of billings:

 

 

 

 

 

 

 

 

Costs and earnings for contracts in progress

 

$

375,747

 

 

$

230,159

 

Amounts billed

 

 

(332,037

)

 

 

(176,283

)

Costs and earnings in excess of billings for contracts in progress

 

 

43,710

 

 

 

53,876

 

Costs and earnings in excess of billings for completed contracts

 

 

30,866

 

 

 

27,319

 

Total contract revenues in excess of billings

 

$

74,576

 

 

$

81,195

 

 

 

 

 

 

 

 

 

 

Billings in excess of costs and earnings:

 

 

 

 

 

 

 

 

Amounts billed

 

$

(176,226

)

 

$

(207,550

)

Costs and earnings for contracts in progress

 

 

170,068

 

 

 

200,489

 

Total billings in excess of contract revenues

 

$

(6,158

)

 

$

(7,061

)

 

The Company has $17,910 included in costs in excess of billings that are dependent upon the sale of environmental credits earned for a wetland mitigation project. The sale of these credits is subject to market factors that could cause the amount of expected revenue to be higher or lower than currently estimated. If the amount of proceeds received from the sale of the environmental credits is lower than our expectations, we could sustain a loss of part or all of the costs incurred related to this project. Additionally, the timing of realization may be impacted by the timing of a delay in the sale of these environmental credits, resulting in a longer period to recover our investment.

 

 

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4.

Accrued expenses  

Accrued expenses at March 31, 2016 and December 31, 2015 are as follows:

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

Insurance

 

$

16,728

 

 

$

16,291

 

Accumulated deficit in joint ventures

 

 

14,359

 

 

 

15,408

 

Payroll and employee benefits

 

 

10,345

 

 

 

13,317

 

Interest

 

 

4,008

 

 

 

8,743

 

Percentage of completion adjustment

 

 

3,197

 

 

 

2,837

 

Fuel hedge contracts

 

 

3,056

 

 

 

4,388

 

Income and other taxes

 

 

1,845

 

 

 

3,726

 

Other

 

 

8,058

 

 

 

7,567

 

Total accrued expenses

 

$

61,596

 

 

$

72,277

 

 

 

 

5.

Long-term debt

Credit Agreement

On June 4, 2012, the Company entered into a senior revolving credit agreement, as subsequently amended, (the “Credit Agreement”) with certain financial institutions from time to time party thereto as