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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 September 30, 2020

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.)

 

 

 

1 Parkview Plaza, Oakbrook Terrace, IL

 

60181

(Address of principal executive offices)

 

(Zip Code)

(630) 574-3000

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock (Par Value $0.0001)

GLDD

Nasdaq Stock Market, LLC

 

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 every Interactive Data File required to be submitted 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 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

 

 

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 October 29, 2020, 64,970,532 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 September 30, 2020

INDEX

 

 

 

 

 

Page

 

 

 

 

 

 

 

Part I Financial Information (Unaudited)

 

3

 

 

 

 

 

Item 1

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2020 and 2019

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months ended September 30, 2020 and 2019

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Equity for the Three and Nine Months ended September 30, 2020 and 2019

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

 

 

Item 2

 

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

 

17

 

 

 

 

 

Item 3

 

Quantitative and Qualitative Disclosures About Market Risk

 

25

 

 

 

 

 

Item 4

 

Controls and Procedures

 

25

 

 

 

 

 

 

 

Part II Other Information

 

26

 

 

 

 

 

Item 1

 

Legal Proceedings

 

26

 

 

 

 

 

Item 1A

 

Risk Factors

 

26

 

 

 

 

 

Item 2

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

26

 

 

 

 

 

Item 3

 

Defaults Upon Senior Securities

 

26

 

 

 

 

 

Item 4

 

Mine Safety Disclosures

 

26

 

 

 

 

 

Item 5

 

Other Information

 

26

 

 

 

 

 

Item 6

 

Exhibits

 

27

 

 

 

 

 

 

 

Signature

 

28

 

 

 

 

 

 

 

 

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)

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

229,725

 

 

$

186,995

 

Accounts receivable—net

 

 

47,218

 

 

 

19,785

 

Contract revenues in excess of billings

 

 

20,588

 

 

 

22,560

 

Inventories

 

 

32,980

 

 

 

30,189

 

Prepaid expenses and other current assets

 

 

34,220

 

 

 

41,183

 

Total current assets

 

 

364,731

 

 

 

300,712

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT—Net

 

 

372,847

 

 

 

374,596

 

OPERATING LEASE ASSETS

 

 

66,148

 

 

 

72,612

 

GOODWILL

 

 

76,576

 

 

 

76,576

 

INVENTORIES—Noncurrent

 

 

61,416

 

 

 

61,126

 

ASSETS HELD FOR SALE— Noncurrent

 

 

3,970

 

 

 

3,970

 

OTHER

 

 

8,777

 

 

 

7,960

 

TOTAL

 

$

954,465

 

 

$

897,552

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

79,312

 

 

$

76,091

 

Accrued expenses

 

 

52,112

 

 

 

51,225

 

Operating lease liabilities

 

 

19,019

 

 

 

21,351

 

Billings in excess of contract revenues

 

 

38,154

 

 

 

55,266

 

Total current liabilities

 

 

188,597

 

 

 

203,933

 

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT

 

 

323,512

 

 

 

322,843

 

OPERATING LEASE LIABILITIES—Noncurrent

 

 

47,280

 

 

 

51,131

 

DEFERRED INCOME TAXES

 

 

53,299

 

 

 

35,740

 

OTHER

 

 

8,878

 

 

 

4,506

 

Total liabilities

 

 

621,566

 

 

 

618,153

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 8)

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

Common stock—$.0001 par value; 90,000 authorized, 64,645 and 64,283 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively.

 

 

6

 

 

 

6

 

Additional paid-in capital

 

 

305,070

 

 

 

302,189

 

Retained earnings (accumulated deficit)

 

 

30,335

 

 

 

(23,091

)

Accumulated other comprehensive income (loss)

 

 

(2,512

)

 

 

295

 

Total equity

 

 

332,899

 

 

 

279,399

 

TOTAL

 

$

954,465

 

 

$

897,552

 

 

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract revenues

 

$

175,841

 

 

$

169,775

 

 

$

561,456

 

 

$

547,223

 

Costs of contract revenues

 

 

139,490

 

 

 

137,942

 

 

 

423,615

 

 

 

428,027

 

Gross profit

 

 

36,351

 

 

 

31,833

 

 

 

137,841

 

 

 

119,196

 

General and administrative expenses

 

 

14,888

 

 

 

13,488

 

 

 

45,263

 

 

 

42,926

 

Proceeds from loss of use claim

 

 

(1,723

)

 

 

 

 

 

(1,723

)

 

 

 

(Gain) loss on sale of assets—net

 

 

 

 

 

(27

)

 

 

(184

)

 

 

333

 

Operating income

 

 

23,186

 

 

 

18,372

 

 

 

94,485

 

 

 

75,937

 

Interest expense—net

 

 

(6,719

)

 

 

(6,335

)

 

 

(20,074

)

 

 

(21,074

)

Other income (expense)

 

 

156

 

 

 

(22

)

 

 

(400

)

 

 

273

 

Income from continuing operations before income taxes

 

 

16,623

 

 

 

12,015

 

 

 

74,011

 

 

 

55,136

 

Income tax provision

 

 

(4,076

)

 

 

(3,204

)

 

 

(18,517

)

 

 

(14,280

)

Income from continuing operations

 

 

12,547

 

 

 

8,811

 

 

 

55,494

 

 

 

40,856

 

Loss from discontinued operations, net of income taxes

 

 

 

 

 

(859

)

 

 

 

 

 

(7,490

)

Net income

 

$

12,547

 

 

$

7,952

 

 

$

55,494

 

 

$

33,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to continuing operations

 

$

0.19

 

 

$

0.14

 

 

$

0.86

 

 

$

0.64

 

Basic loss per share attributable to discontinued operations, net of tax

 

 

 

 

 

(0.02

)

 

 

 

 

 

(0.12

)

Basic earnings per share

 

$

0.19

 

 

$

0.12

 

 

$

0.86

 

 

$

0.52

 

Basic weighted average shares

 

 

64,860

 

 

 

63,861

 

 

 

64,726

 

 

 

63,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to continuing operations

 

$

0.19

 

 

$

0.14

 

 

$

0.84

 

 

$

0.63

 

Diluted loss per share attributable to discontinued operations, net of tax

 

 

 

 

 

(0.02

)

 

 

 

 

 

(0.12

)

Diluted earnings per share

 

$

0.19

 

 

$

0.12

 

 

$

0.84

 

 

$

0.51

 

Diluted weighted average shares

 

 

65,894

 

 

 

65,071

 

 

 

65,861

 

 

 

64,860

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

4


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

12,547

 

 

$

7,952

 

 

$

55,494

 

 

$

33,366

 

Net unrealized (gain) loss on derivatives—net of tax (1)

 

 

879

 

 

 

(160

)

 

 

(2,807

)

 

 

2,817

 

Comprehensive income

 

$

13,426

 

 

$

7,792

 

 

$

52,687

 

 

$

36,183

 

 

(1)

Net of income tax (provision) benefit of $296 and $(57) for the three months ended September 30, 2020 and 2019, respectively. Net of income tax (provision) benefit of $(959) and $998 for the nine months ended September 30, 2020 and 2019 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

Accumulated

 

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Additional

 

 

Earnings

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Treasury

 

 

Paid-In

 

 

(Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Deficit)

 

 

Income (Loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2020

 

 

64,283

 

 

$

6

 

 

 

 

 

$

 

 

$

302,189

 

 

$

(23,091

)

 

$

295

 

 

$

279,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

80

 

 

 

 

 

 

 

 

 

 

 

 

4,891

 

 

 

 

 

 

 

 

 

4,891

 

Vesting of restricted stock units and impact of shares withheld for taxes

 

 

432

 

 

 

 

 

 

 

 

 

 

 

 

(2,174

)

 

 

 

 

 

 

 

 

(2,174

)

Exercise of options and purchases from employee stock plans

 

 

275

 

 

 

 

 

 

 

 

 

 

 

 

1,956

 

 

 

 

 

 

 

 

 

1,956

 

Repurchase of common stock

 

 

(425

)

 

 

 

 

 

 

 

 

 

 

 

(1,792

)

 

 

(2,068

)

 

 

 

 

 

(3,860

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

55,494

 

 

 

 

 

 

55,494

 

Other comprehensive loss—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,807

)

 

 

(2,807

)

BALANCE—September 30, 2020

 

 

64,645

 

 

$

6

 

 

 

 

 

$

 

 

$

305,070

 

 

$

30,335

 

 

$

(2,512

)

 

$

332,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2019

 

 

62,830

 

 

$

6

 

 

 

(278

)

 

$

(1,433

)

 

$

295,135

 

 

$

(74,971

)

 

$

(3,809

)

 

$

214,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative effect of recent accounting pronouncements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,802

 

 

 

 

 

 

2,802

 

Share-based compensation

 

 

60

 

 

 

 

 

 

 

 

 

 

 

 

6,720

 

 

 

 

 

 

 

 

 

6,720

 

Vesting of restricted stock units and impact of shares withheld for taxes

 

 

605

 

 

 

 

 

 

 

 

 

 

 

 

(3,164

)

 

 

 

 

 

 

 

 

(3,164

)

Exercise of options and purchases from employee stock plans

 

 

699

 

 

 

 

 

 

 

 

 

 

 

 

4,355

 

 

 

 

 

 

 

 

 

4,355

 

Cancellation of treasury stock

 

 

(278

)

 

 

 

 

 

278

 

 

 

1,433

 

 

 

(1,173

)

 

 

(261

)

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,366

 

 

 

 

 

 

33,366

 

Other comprehensive income—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,817

 

 

 

2,817

 

BALANCE—September 30, 2019

 

 

63,916

 

 

$

6

 

 

 

 

 

$

 

 

$

301,874

 

 

$

(39,064

)

 

$

(992

)

 

$

261,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

Accumulated

 

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Shares of

 

 

 

 

 

 

Additional

 

 

Earnings

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Treasury

 

 

Paid-In

 

 

(Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Deficit)

 

 

Income (Loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—July 1, 2020

 

 

64,947

 

 

$

6

 

 

 

 

 

$

 

 

$

304,531

 

 

$

19,856

 

 

$

(3,391

)

 

$

321,002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

1,761

 

 

 

 

 

 

 

 

 

1,761

 

Vesting of restricted stock units and impact of shares withheld for taxes

 

 

20