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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 1, 2018  

Great Lakes Dredge & Dock Corporation
(Exact Name of Registrant as Specified in Charter)

DELAWARE 001-3322520-5336063
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

2122 York Road
Oak Brook, Illinois, , Delaware 60523
(Address of Principal Executive Offices) (Zip Code)

(630) 574-3000
(Registrant's telephone number, including area code)


(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On August 1, 2018, Great Lakes Dredge & Dock Corporation issued an earnings release announcing its financial results for the three and six months ended June 30, 2018, and announcing a conference call and webcast to be held at 9:00 a.m. (C.D.T.) on Wednesday, August 1, 2018 to discuss these results.  A copy of the earnings release is furnished as Exhibit 99.1 and incorporated herein by reference.

The information in this Form 8-K and Exhibit 99.1 are furnished pursuant to Item 2.02 of this Form 8-K and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01. Financial Statements and Exhibits.

(d)           Exhibits

The following exhibit is furnished herewith:

99.1         Earnings Release of Great Lakes Dredge & Dock Corporation dated August 1, 2018 announcing financial results for the three and six months ended June 30, 2018.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Great Lakes Dredge & Dock Corporation
   
  
Date: August 1, 2018By: /s/ Mark W. Marinko        
  Mark W. Marinko
  Senior Vice President and Chief Financial Officer
  

EXHIBIT INDEX

 

Number Description
   
99.1 Earnings Release of Great Lakes Dredge & Dock Corporation dated August 1, 2018 announcing financial results for the three and six months ended June 30, 2018.

EdgarFiling

EXHIBIT 99.1

Great Lakes Reports Second Quarter Results

OAK BROOK, Ill., Aug. 01, 2018 (GLOBE NEWSWIRE) -- Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest provider of dredging services in the United States and a major provider of environmental and infrastructure services, today reported financial results for the three and six months ended June 30, 2018.

For the three months ended June 30, 2018, Great Lakes reported revenue of $150.6 million, net loss from continuing operations of $1.0 million and Adjusted EBITDA from continuing operations of $21.4 million.

Second Quarter Highlights (includes restructuring)

Management Commentary
Chief Executive Officer Lasse Petterson commented, “Today we announced another improved quarter. June 2018 marked the beginning of our busiest time of the year including high activity on the Charleston Port Deepening project in South Carolina where we have two of our largest cutter dredges and one mechanical dredge in continuous operation. We look forward to high utilization during the remainder of 2018. During the quarter, we saw dredging margins increase over the prior year quarter and we continue to see the Ellis Island operate at her full design criteria.

During the quarter, we also continued work on our restructuring plan, recognizing a charge of $0.5 million and $1.2 million positive impact on adjusted EBITDA from continuing operations. We remain on track to recognize $20 million of cost savings during 2018, with a full run rate of $40 million expected by year end 2018 and recognized in 2019. In addition to the stronger operational results that we have seen year to date, these restructuring efforts have allowed us to achieve the planned reduction in our net debt.

In July, we announced $234 million of awards in dredging contracts for seven projects. Five of the seven projects, with a total value of $150 million, were added to backlog during the second quarter. We have commenced execution on several of these projects and have entered a heavy bidding period for additional complex port deepening and coastal protection and restoration projects in the latter half of 2018. Included in the $234 million of award announcements is the $70 million San Jacinto Emergency Flood Protection project. This project is a great fit for our rivers and lakes division but was awarded subsequent to the quarter end and is therefore not reflected in our backlog reported today.”

Consistent with our 2017 year-end earnings release, the Company has chosen to exclude restructuring charges in certain comparisons to the prior year. As discussed in the “Use of Non-GAAP measures” disclosure, certain pieces of the discussion below remove the impact of these restructuring charges. Reconciliations to results prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") are provided within the schedules attached. Also, beginning in 2018, the Company chose to account for plant and overhead in the same interim period in which costs were spent as opposed to the accrual / deferral method previously used. As required by guidance, the Company has recast the prior interim period as if this accounting standard had always been in place for all periods presented.

Operational Update (without restructuring)

Dredging Segment

Environmental & Infrastructure (“E&I”) Segment

Consolidated Company

Market Update
During the second quarter of 2018, GLDD was awarded 46% of the overall $360 million bid market consisting of the following types of work.

Great Lakes was not awarded any maintenance projects during the quarter.

Subsequent to quarter end, the dredging segment has been awarded $84 million of projects, including the $70 million San Jacinto River project which will be added to backlog in the third quarter. The E&I segment has been awarded $7 million since the quarter end.

Overall, the domestic dredging market continues to show positive indicators. The combination of the storm supplemental appropriation, a portion of which has been allocated to the United States Army Corps of Engineers as well as the proposed WRDA 2018 bill and proposed 2019 budget will provide the domestic market with substantial funding for projects going forward. Federal, state and local governments remain focused on planning and funding for the capital port deepening projects that have been and will continue to bid later in 2018 and into 2019. We are confident in our ability to remain the leading provider of domestic dredging in this healthy market going forward.

The Company will be holding a conference call at 9:00 a.m. C.D.T. today where we will further discuss these results. Information on this conference call can be found below.

Conference Call Information

The Company will conduct a quarterly conference call, which will be held on Wednesday, August 1, 2018 at 9:00 a.m. C.D.T (10:00 a.m. E.D.T.). The call in number is (877) 377-7553 and Conference ID is 9183109. The conference call will be available by replay until Friday, August 3, 2018 by calling (855) 859-2056 and providing Conference ID 9183109. The live call and replay can also be heard on the Company’s website, www.gldd.com, under Events & Presentations on the investor relations page. Information related to the conference call will also be available on the investor relations page of the Company’s website.

Use of Non-GAAP measures

Adjusted EBITDA from continuing operations, as provided herein, represents net income attributable to common stockholders of Great Lakes Dredge & Dock Corporation, adjusted for net interest expense, income taxes, depreciation and amortization expense, debt extinguishment, accelerated maintenance expense for new international deployments, goodwill or asset impairments and gains on bargain purchase acquisitions. Adjusted EBITDA from continuing operations is not a measure derived in accordance with GAAP. The Company presents Adjusted EBITDA from continuing operations as an additional measure by which to evaluate the Company's operating trends. The Company believes that Adjusted EBITDA from continuing operations is a measure frequently used to evaluate performance of companies with substantial leverage and that the Company's primary stakeholders (i.e., its stockholders, bondholders and banks) use Adjusted EBITDA from continuing operations to evaluate the Company's period to period performance. Additionally, management believes that Adjusted EBITDA from continuing operations provides a transparent measure of the Company's recurring operating performance and allows management and investors to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance. For this reason, the Company uses a measure based upon Adjusted EBITDA from continuing operations to assess performance for purposes of determining compensation under the Company's incentive plan. Adjusted EBITDA from continuing operations should not be considered an alternative to, or more meaningful than, amounts determined in accordance with GAAP including: (a) operating income as an indicator of operating performance; or (b) cash flows from operations as a measure of liquidity. As such, the Company's use of Adjusted EBITDA from continuing operations, instead of a GAAP measure, has limitations as an analytical tool, including the inability to determine profitability or liquidity due to the exclusion of accelerated maintenance expense for new international deployments, goodwill or asset impairments, gains on bargain purchase acquisitions, interest and income tax expense and the associated significant cash requirements and the exclusion of depreciation and amortization, which represent significant and unavoidable operating costs given the level of indebtedness and capital expenditures needed to maintain the Company's business. For these reasons, the Company uses operating income to measure the Company's operating performance and uses Adjusted EBITDA from continuing operations only as a supplement. Adjusted EBITDA from continuing operations is reconciled to net income (loss) attributable to common stockholders of Great Lakes Dredge & Dock Corporation in the table of financial results. For further explanation, please refer to the Company's SEC filings.

Starting with our December 2017 year-end earnings release, the Company has chosen to exclude restructuring charges in certain comparisons to the prior year.  This exclusion allows the user to better evaluate the Company’s financial results from operations and drivers of variances from the prior year without the impact of this special item. Restructuring items can include costs of contract revenues (depreciation and other), general and administrative expenses and gains / losses on sale of assets. Reconciliations to results prepared in accordance with GAAP are provided within the schedules attached.

The Company

Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) is the largest provider of dredging services in the United States and the only U.S. dredging company with significant international operations. The Company is also a significant provider of environmental and remediation services on land and water.  The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions.  In its over 128-year history, the Company has never failed to complete a marine project. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.  Great Lakes also owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of over 200 specialized vessels.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking" statements as defined in Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission (the "SEC"), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Great Lakes and its subsidiaries, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words "plan," "believe," "expect," "anticipate," "intend," "estimate," "project," "may," "would," "could," "should," "seeks," “are optimistic,”  or "scheduled to," or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws. Great Lakes cautions investors that any forward-looking statements made by Great Lakes are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to Great Lakes, include, but are not limited to: our ability to obtain federal government dredging and other contracts; our ability to qualify as an eligible bidder under government contract criteria and to compete successfully against other qualified bidders; risks associated with cost over-runs, operating cost inflation and potential claims for liquidated damages, particularly with respect to our fixed cost contracts; the timing of our performance on contracts; significant liabilities that could be imposed were we to fail to comply with government contracting regulations; risks related to international dredging operations, including instability and declining relationships amongst certain governments in the Middle East and the impact this may have on infrastructure investment, asset value of such operations, and local licensing, permitting and royalty issues; increased cost of certain material used in our operations due to newly imposed tariffs; a significant negative change to large, single customer contracts from which a significant portion of our international revenue is derived; changes in previous-recorded net revenue and profit as a result of the significant estimates made in connection with our methods of accounting for recognizing revenue; consequences of any lapse in disclosure controls and procedures or internal control over financial reporting; changes in the amount of our estimated backlog; our ability to obtain bonding or letters of credit and risks associated with draws by the surety on outstanding bonds or calls by the beneficiary on outstanding letters of credit; increasing costs to operate and maintain aging vessels; equipment or mechanical failures; acquisition integration and consolidation risks; liabilities related to our historical demolition business; impacts of legal and regulatory proceedings; unforeseen delays and cost overruns related to the construction of new vessels, including potential mechanical and engineering issues; our becoming liable for the obligations of joint ventures, partners and subcontractors; capital and operational costs due to environmental regulations; unionized labor force work stoppages; maintaining an adequate level of insurance coverage; information technology security breaches; our substantial amount of indebtedness; restrictions imposed by financing covenants; the impact of adverse capital and credit market conditions; limitations on our hedging strategy imposed by new statutory and regulatory requirements for derivative transactions; foreign exchange risks; changes in macroeconomic indicators and the overall business climate; uncertainties of the impact of the Tax Cuts and Jobs Act and implementation of certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act; losses attributable to our investments in privately financed projects and the likelihood of realizing, and amount of, expected restructuring charges to be realized in connection with the restructuring activities; and our ability to realize the expected benefits from our restructuring activities. For additional information on these and other risks and uncertainties, please see Item 1A. "Risk Factors" of Great Lakes' Annual Report on Form 10-K for the year ended December 31, 2017, and in other securities filings by Great Lakes with the SEC.

Although Great Lakes believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any forward-looking statements. Great Lakes' future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof and Great Lakes does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.


Dredging Segment 
Select Income Statement Results Excluding Restructuring 
(Unaudited and in thousands) 
                    
 Three Months Ended  Six Months Ended 
 June 30,  June 30, 2018 
             
  2018 2017 Variance   2018 2017 Variance 
Revenue$135,270 $152,507 $(17,237) $268,893 $305,561 $(36,668)
                    
Gross profit 22,132  15,997  6,135   36,262  29,097  7,165 
Restructuring exclusions 1,402  -  1,402   5,661  -  5,661 
Gross profit excluding restructuring 23,534  15,997  7,537   41,923  29,097  12,826 
Gross profit margin 16.4% 10.5%     13.5% 9.5%   
Gross profit margin excluding restructuring 17.4% 10.5%     15.6% 9.5%   
                    
Operating income 11,567  2,989  8,578   13,745  3,725  10,020 
Restructuring exclusions 533  -  533   4,793  -  4,793 
Operating income excluding restructuring 12,100  2,989  9,111   18,538  3,725  14,813 
Operating margin 8.6% 2.0%     5.1% 1.2%   
Operating margin excluding restructuring 8.9% 2.0%     6.9% 1.2%   


Environmental & Infrastructure Segment 
Select Income Statement Results Excluding Restructuring 
(Unaudited and in thousands) 
                    
 Three Months Ended  Six Months Ended 
 June 30,  June 30, 2018 
             
  2018 2017 Variance   2018 2017 Variance 
Revenue$15,320 $24,711 $(9,391) $28,290 $43,935 $(15,645)
                    
Gross profit 109  4,286  (4,177)  684  5,997  (5,313)
Restructuring exclusions -  -  -   -  -  - 
Gross profit excluding restructuring 109  4,286  (4,177)  684  5,997  (5,313)
Gross profit margin 0.7% 17.3%     2.4% 13.6%   
Gross profit margin excluding restructuring 0.7% 17.3%     2.4% 13.6%   
                    
Operating loss (3,433) (143) (3,290)  (6,651) (2,873) (3,778)
Restructuring exclusions (10) -  (10)  159  -  159 
Operating loss excluding restructuring (3,443) (143) (3,300)  (6,492) (2,873) (3,619)
Operating margin -22.4% -0.6%     -23.5% -6.5%   
Operating margin excluding restructuring -22.5% -0.6%     -22.9% -6.5%   


Great Lakes Dredge & Dock Corporation 
Condensed Consolidated Statements of Operations 
(Unaudited and in thousands, except per share amounts) 
                
 Three Months Ended  Six Months Ended 
 June 30,  June 30, 
  2018   2017   2018   2017 
Contract revenues$150,590  $176,859  $297,183  $347,445 
Gross profit 22,240   20,282   36,945   35,094 
General and administrative expenses 15,169   17,267   31,113   34,062 
(Gain) loss on sale of assets—net (1,063)  169   (1,262)  180 
Operating income 8,134   2,846   7,094   852 
Interest expense—net (8,997)  (6,441)  (17,657)  (12,023)
Equity in loss of joint ventures —   (1,468)  —   (1,467)
Loss on extinguishment of debt —   (2,330)  —   (2,330)
Other expense (57)  (285)  (2,973)  (77)
Loss from continuing operations before income taxes (920)  (7,678)  (13,536)  (15,045)
Income tax (provision) benefit (54)  3,454   3,241   6,247 
Loss from continuing operations (974)  (4,224)  (10,295)  (8,798)
Income (loss) from discontinued operations, net of income taxes —   368   —   (12,697)
Net loss$(974) $(3,856) $(10,295) $(21,495)
                
Basic loss per share attributable to continuing operations$(0.02) $(0.07) $(0.17) $(0.14)
Basic loss per share attributable to discontinued operations, net of tax —   —   —   (0.21)
Basic loss per share$(0.02) $(0.07) $(0.17) $(0.35)
Basic weighted average shares 62,267   61,342   62,041   61,204 
                
Diluted loss per share attributable to continuing operations$(0.02) $(0.07) $(0.17) $(0.14)
Diluted loss per share attributable to discontinued operations, net of tax —   —   —   (0.21)
Diluted loss per share$(0.02) $(0.07) $(0.17) $(0.35)
Diluted weighted average shares 62,267   61,342   62,041   61,204 


Great Lakes Dredge & Dock Corporation 
Reconciliation of Net Loss to Adjusted EBITDA from Continuing Operations 
(Unaudited and in thousands) 
                
 Three Months Ended  Six Months Ended 
 June 30,  June 30, 
  2018   2017   2018   2017 
Net loss$(974) $(3,856) $(10,295) $(21,495)
Income (loss) from discontinued operations, net of income taxes —   368   —   (12,697)
Loss from continuing operations (974)  (4,224)  (10,295)  (8,798)
Adjusted for:               
Interest expense—net 8,997   6,441   17,657   12,023 
Income tax (provision) benefit 54   (3,454)  (3,241)  (6,247)
Depreciation and amortization 13,340   14,023   28,981   27,501 
Loss on extinguishment of debt —   2,330   —   2,330 
Adjusted EBITDA from continuing operations$21,417  $15,116  $33,102  $26,809 
Excluded for:               
Impact of restructuring (1,151)  —   2,299   — 
Adjusted EBITDA from continuing operations, excluding restructuring$20,266  $15,116  $35,401  $26,809 


Great Lakes Dredge & Dock Corporation 
Selected Balance Sheet Information 
(Unaudited and in thousands) 
            
     Period Ended 
     June 30,  December 31, 
      2018   2017 
            
Cash and cash equivalents    $13,538  $15,852 
Total current assets     224,134   262,184 
Total assets     758,205   832,357 
Total current liabilities     124,913   150,250 
Long-term debt     392,385   428,141 
Total equity     211,514   221,296 


Great Lakes Dredge & Dock Corporation
Revenue and Backlog Data
(Unaudited and in thousands)
            
 Three Months Ended  Six Months Ended  
 June 30,  June 30,  
Revenues 2018   2017   2018   2017  
Dredging:                
Capital - U.S.$69,651  $31,472  $146,603  $98,073  
Capital - foreign 3,279   12,420   8,802   31,574  
Coastal protection 38,121   60,304   79,982   100,639  
Maintenance 19,077   34,337   26,880   56,250  
Rivers & lakes 5,142   13,974   6,626   19,025  
Total dredging revenues 135,270   152,507   268,893   305,561  
Environmental & infrastructure 15,320   24,711   28,290   43,935  
Intersegment revenue -   (359)  —   (2,051) 
Total revenues$150,590  $176,859  $297,183  $347,445  
                 


     As of 
     June 30,  December 31,  June 30, 
Backlog     2018   2017   2017 
Dredging:               
Capital - U.S.    $335,588  $383,577  $238,581 
Capital - foreign     3,788   8,575   9,784 
Coastal protection     129,689   76,460   55,439 
Maintenance     12,254   23,662   42,866 
Rivers & lakes     25,192   19,046   38,801 
Total dredging backlog     506,511   511,320   385,471 
Environmental & infrastructure     28,454   35,357   52,768 
Total backlog    $534,965  $546,677  $438,239 

GLDD FIN

For further information contact:
Abby Sullivan
Investor Relations
630-574-3024