gldd-10q_20180630.htm

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended June 30, 2018

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      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      No  

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

 

Large Accelerated Filer

 

 

Accelerated Filer

 

Non-Accelerated Filer

 

 (Do not check if a smaller reporting company)

 

Smaller reporting company

 

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. 

 

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

As of July 27, 2018, 62,305,408 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 June 30, 2018

INDEX

 

 

 

 

 

Page

 

 

 

 

 

 

 

Part I Financial Information (Unaudited)

 

3

 

 

 

 

 

Item 1

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2018 and 2017

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months ended June 30, 2018 and 2017

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Equity for the Six Months Ended June 30, 2018 and 2017

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

 

 

Item 2

 

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

 

22

 

 

 

 

 

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

 

 

 

 

 

 

 

 

2


 

PART 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)  

 

 

June 30,

 

 

December 31,

 

 

 

2018

 

 

2017

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,538

 

 

$

15,852

 

Accounts receivable—net

 

 

82,306

 

 

 

75,533

 

Contract revenues in excess of billings

 

 

55,003

 

 

 

90,788

 

Inventories

 

 

32,340

 

 

 

34,600

 

Prepaid expenses and other current assets

 

 

40,947

 

 

 

45,411

 

Total current assets

 

 

224,134

 

 

 

262,184

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT—Net

 

 

371,807

 

 

 

407,294

 

GOODWILL AND OTHER INTANGIBLE ASSETS—Net

 

 

84,186

 

 

 

84,484

 

INVENTORIES—Noncurrent

 

 

55,200

 

 

 

54,023

 

INVESTMENTS IN JOINT VENTURES

 

 

3,489

 

 

 

2,714

 

ASSETS HELD FOR SALE—Noncurrent

 

 

6,916

 

 

 

8,530

 

OTHER

 

 

12,473

 

 

 

13,128

 

TOTAL

 

$

758,205

 

 

$

832,357

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

68,751

 

 

$

87,659

 

Accrued expenses

 

 

45,943

 

 

 

56,218

 

Billings in excess of contract revenues

 

 

9,050

 

 

 

3,615

 

Current portion of long-term debt

 

 

1,169

 

 

 

2,758

 

Total current liabilities

 

 

124,913

 

 

 

150,250

 

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT

 

 

321,503

 

 

 

333,141

 

REVOLVING CREDIT FACILITY

 

 

70,882

 

 

 

95,000

 

DEFERRED INCOME TAXES

 

 

21,896

 

 

 

25,561

 

OTHER

 

 

7,497

 

 

 

7,109

 

Total liabilities

 

 

546,691

 

 

 

611,061

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

Common stock—$.0001 par value; 90,000 authorized, 62,583 and 61,897 shares issued; 62,305 and 61,619 shares outstanding at June 30, 2018 and December 31, 2017, respectively.

 

 

6

 

 

 

6

 

Treasury stock, at cost

 

 

(1,433

)

 

 

(1,433

)

Additional paid-in capital

 

 

291,468

 

 

 

289,821

 

Accumulated deficit

 

 

(78,973

)

 

 

(67,101

)

Accumulated other comprehensive income

 

 

446

 

 

 

3

 

Total equity

 

 

211,514

 

 

 

221,296

 

TOTAL

 

$

758,205

 

 

$

832,357

 

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

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract revenues

 

$

150,590

 

 

$

176,859

 

 

$

297,183

 

 

$

347,445

 

Costs of contract revenues

 

 

128,350

 

 

 

156,577

 

 

 

260,238

 

 

 

312,351

 

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

 

 

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

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(974

)

 

$

(3,856

)

 

$

(10,295

)

 

$

(21,495

)

Currency translation adjustment—net of tax (1)

 

 

(57

)

 

 

6

 

 

 

1,304

 

 

 

(22

)

Net unrealized gain on derivatives—net of tax (2)

 

 

(127

)

 

 

(718

)

 

 

(861

)

 

 

(1,452

)

Other comprehensive income (loss)—net of tax

 

 

(184

)

 

 

(712

)

 

 

443

 

 

 

(1,474

)

Comprehensive loss

 

$

(1,158

)

 

$

(4,568

)

 

$

(9,852

)

 

$

(22,969

)

 

(1)

Net of income tax (provision) benefit of $5 and $(6) for the three months ended June 30, 2018 and 2017, respectively. Net of income tax (provision) benefit of $(530) and $33 for the six months ended June 30, 2018 and 2017, respectively.

(2)

Net of income tax provision of $689 and $468 for the three months ended June 30, 2018 and 2017, respectively. Net of income tax provision of $949 and $947 for the six months ended June 30, 2018 and 2017, 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

 

 

Income (loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2018

 

 

61,897

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

289,821

 

 

$

(67,101

)

 

$

3

 

 

$

221,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative effect of recent accounting pronouncements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,577

)

 

 

 

 

 

(1,577

)

Share-based compensation

 

 

72

 

 

 

 

 

 

 

 

 

 

 

 

2,264

 

 

 

 

 

 

 

 

 

2,264

 

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

 

 

486

 

 

 

 

 

 

 

 

 

 

 

 

(1,060

)

 

 

 

 

 

 

 

 

(1,060

)

Exercise of options and purchases from employee stock plans

 

 

128

 

 

 

 

 

 

 

 

 

 

 

 

443

 

 

 

 

 

 

 

 

 

443

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,295

)

 

 

 

 

 

(10,295

)

Other comprehensive income—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

443

 

 

 

443

 

BALANCE—June 30, 2018

 

 

62,583

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

291,468

 

 

$

(78,973

)

 

$

446

 

 

$

211,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Treasury

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Income (loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2017

 

 

61,240

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

286,303

 

 

$

(35,841

)

 

$

(1,145

)

 

$

247,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

164

 

 

 

 

 

 

 

 

 

 

 

 

1,758

 

 

 

 

 

 

 

 

 

1,758

 

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

 

 

147

 

 

 

 

 

 

 

 

 

 

 

 

(328

)

 

 

 

 

 

 

 

 

(328

)

Exercise of options and purchases from employee stock plans

 

 

132

 

 

 

 

 

 

 

 

 

 

 

 

434

 

 

 

 

 

 

 

 

 

434

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(21,495

)

 

 

 

 

 

(21,495

)

Other comprehensive loss—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,474

)

 

 

(1,474

)

BALANCE—June 30, 2017

 

 

61,683

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

288,167

 

 

$

(57,336

)

 

$

(2,619

)

 

$

226,785

 

 

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)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2018

 

 

2017

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(10,295

)

 

$

(21,495

)

Loss from discontinued operations, net of income taxes

 

 

 

 

 

(12,697

)

Loss from continuing operations

 

$

(10,295

)

 

$

(8,798

)

Adjustments to reconcile net loss to net cash flows provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

28,981

 

 

 

27,501

 

Equity in earnings of joint ventures

 

 

(1,313

)

 

 

(3,087

)

Cash distributions from joint ventures

 

 

538

 

 

 

4,486

 

Loss on extinguishment of 7 3/8% senior notes

 

 

 

 

 

2,330

 

Deferred income taxes

 

 

(2,850

)

 

 

(6,277

)

(Gain) loss on sale of assets

 

 

(1,262

)

 

 

180

 

Other non-cash restructuring items

 

 

2,015

 

 

 

 

Amortization of deferred financing fees

 

 

1,769

 

 

 

1,646

 

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

 

 

 

 

 

1,089

 

Unrealized foreign currency gain

 

 

(201

)

 

 

(115

)

Share-based compensation expense

 

 

2,264

 

 

 

1,758

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,297

)

 

 

26,126

 

Contract revenues in excess of billings

 

 

32,823

 

 

 

4,212

 

Inventories

 

 

1,083

 

 

 

(1,536

)

Prepaid expenses and other current assets

 

 

11,361

 

 

 

6,169

 

Accounts payable and accrued expenses

 

 

(30,348

)

 

 

(34,498

)

Billings in excess of contract revenues

 

 

(2,249

)

 

 

51

 

Other noncurrent assets and liabilities

 

 

(4,743

)

 

 

1,379

 

Net cash flows provided by operating activities from continuing operations

 

 

25,276

 

 

 

22,616

 

Net cash flows used in operating activities of discontinued operations

 

 

 

 

 

(20,900

)

Cash provided by operating activities

 

 

25,276

 

 

 

1,716

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(11,790

)

 

 

(34,266

)

Proceeds from dispositions of property and equipment

 

 

9,979

 

 

 

2,212

 

Cash used in investing activities

 

 

(1,811

)

 

 

(32,054

)

 

7


 

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2018

 

 

2017

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

7 3/8% senior notes tender premium

 

 

 

 

 

(744

)

Deferred financing fees

 

 

 

 

 

(4,519

)

Repayments of debt

 

 

(1,070

)

 

 

(276,386

)

Proceeds from issuance of debt

 

 

 

 

 

326,241

 

Taxes paid on settlement of vested share awards

 

 

(1,060

)

 

 

(328

)

Exercise of options and purchases from employee stock plans

 

 

443

 

 

 

434

 

Borrowings under revolving loans

 

 

18,000

 

 

 

52,046

 

Repayments of revolving loans

 

 

(42,118

)

 

 

(70,157

)

Cash provided by (used in) financing activities

 

 

(25,805

)

 

 

26,587

 

Effect of foreign currency exchange rates on cash and cash equivalents

 

 

26

 

 

 

64

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(2,314

)

 

 

(3,687

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

17,352

 

 

 

19,702

 

Cash, cash equivalents and restricted cash at end of period

 

$

15,038

 

 

$

16,015

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

16,245

 

 

$

19,835

 

Cash paid for income taxes

 

$

243

 

 

$

555

 

 

 

 

 

 

 

 

 

 

Non-cash Investing and Financing Activities

 

 

 

 

 

 

 

 

Property and equipment purchased but not yet paid

 

$

5,220

 

 

$

4,578

 

Repayments of debt with proceeds from sale-leaseback transactions

 

$

13,034

 

 

$

 

 

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, 2017. 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 June 30, 2018, and its results of operations for the three and six months ended June 30, 2018 and 2017 and cash flows for the six months ended June 30, 2018 and 2017 have been included.

The Company adopted Accounting Standard Update No. 2016-18 (“ASU 2016-18”), Statement of Cashflows (Topic 230): Restricted Cash on January 1, 2018. The amendments require that the statement of cash flows explain the changes during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore amounts generally described as restricted cash or restricted cash equivalents should be included with the cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The impact of the adoption of ASU 2016-18 has been applied retrospectively and the prior period presented has been recast.

The following table provides a reconciliation of cash, cash equivalents and restricted cash at June 30, 2018 and December 31, 2017 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.

 

June 30, 2018

 

 

December 31, 2017

 

Cash and cash equivalents

$

13,538

 

 

$

15,852

 

Restricted cash included in other long-term assets

 

1,500

 

 

 

1,500

 

Cash, cash equivalents and restricted cash at end of period

$

15,038

 

 

$

17,352

 

 

Effective beginning the first quarter of 2018, the Company changed the method of accounting for allocated fixed equipment costs for interim periods such that fixed equipment costs are now recognized as incurred. The Company adopted this change as a result of management’s belief that the new method is preferable and results in a more objective measure of quarterly expense that will better support planning and resource allocation decisions by management. The change has been applied retrospectively and all prior interim periods presented have been recast. The Company’s cost structure includes significant annual equipment-related costs, including depreciation, maintenance, insurance and long-term rentals. Previously, the Company allocated fixed equipment costs to interim periods in proportion to revenues recognized over the year. Specifically, at each interim reporting date the Company compared actual revenues earned to date on its dredging contracts to expected annual revenues and recognized 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 impact of the change in accounting policy on our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets is as follows:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30, 2017