SEC Filing | Great Lakes Dredge & Dock Corporation

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gldd-10q_20210630.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, 2021

☐	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.)

9811 Katy Freeway, Suite 1200, Houston, TX		77024
(Address of principal executive offices)		(Zip Code)

(346) 359-1010

(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 July 28, 2021, 65,657,699 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, 2021

INDEX

		Page

	Part I Financial Information (Unaudited)	3

Item 1	Financial Statements	3

	Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020	3

	Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2021 and 2020	4

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months ended June 30, 2021 and 2020	5

	Condensed Consolidated Statements of Equity for the Three and Six Months ended June 30, 2021 and 2020	6

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4	Controls and Procedures	23

	Part II Other Information	24

Item 1	Legal Proceedings	24

Item 1A	Risk Factors	24

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3	Defaults Upon Senior Securities	25

Item 4	Mine Safety Disclosures	25

Item 5	Other Information	25

Item 6	Exhibits	26

	Signature	27

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,
	2021		2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	180,767	$	216,510
Accounts receivable—net		35,741		38,990
Contract revenues in excess of billings		34,556		32,106
Inventories		32,758		34,689
Prepaid expenses and other current assets		39,330		40,398
Total current assets		323,152		362,693

PROPERTY AND EQUIPMENT—Net		422,552		383,042
OPERATING LEASE ASSETS		52,777		65,188
GOODWILL		76,576		76,576
INVENTORIES—Noncurrent		61,578		58,413
OTHER		12,998		12,112
TOTAL	$	949,633	$	958,024

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	79,863	$	71,308
Accrued expenses		37,230		52,899
Operating lease liabilities		14,255		19,472
Billings in excess of contract revenues		28,833		32,608
Total current liabilities		160,181		176,287

LONG-TERM DEBT		320,696		323,735
OPERATING LEASE LIABILITIES—Noncurrent		38,877		45,879
DEFERRED INCOME TAXES		59,458		56,466
OTHER		10,324		8,989
Total liabilities		589,536		611,356

COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Common stock—$.0001 par value; 90,000 authorized, 65,654 and 65,023 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		6		6
Additional paid-in capital		304,977		304,757
Retained earnings		51,856		40,937
Accumulated other comprehensive income		3,258		968
Total equity		360,097		346,668
TOTAL	$	949,633	$	958,024

See notes to unaudited condensed consolidated financial statements.

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,
	2021			2020			2021			2020
Contract revenues	$	169,914		$	167,920		$	347,547		$	385,615
Costs of contract revenues		146,992			134,904			291,549			284,125
Gross profit		22,922			33,016			55,998			101,490
General and administrative expenses		14,224			14,804			30,546			30,375
Gain on sale of assets—net		(138	)		(39	)		(32	)		(184	)
Operating income		8,836			18,251			25,484			71,299
Interest expense—net		(6,657	)		(6,725	)		(13,243	)		(13,355	)
Other income (expense)		755			565			896			(556	)
Income before income taxes		2,934			12,091			13,137			57,388
Income tax provision		(829	)		(3,131	)		(2,218	)		(14,441	)
Net income	$	2,105		$	8,960		$	10,919		$	42,947

Basic earnings per share	$	0.03		$	0.14		$	0.17		$	0.66
Basic weighted average shares		65,646			64,864			65,458			64,659

Diluted earnings per share	$	0.03		$	0.14		$	0.16		$	0.65
Diluted weighted average shares		66,137			65,758			66,187			65,802

See notes to unaudited condensed consolidated financial statements.

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020

Net income	$	2,105	$	8,960	$	10,919	$	42,947
Net change in cash flow derivative hedges—net of tax (1)		404		3,440		2,290		(3,686	)
Comprehensive income	$	2,509	$	12,400	$	13,209	$	39,261

(1)	Net of income tax (provision) benefit of $(136) and $1,162 for the three months ended June 30, 2021 and 2020 respectively. Net of income tax (provision) of $(773) and $(1,255) for the six months ended June 30, 2021 and 2020 respectively.

See notes to unaudited condensed consolidated financial statements.

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands)

								Retained			Accumulated
	Shares of				Additional			Earnings			Other
	Common		Common		Paid-In			(Accumulated			Comprehensive
	Stock		Stock		Capital			Deficit)			Income (Loss)			Total
BALANCE—January 1, 2021		65,023	$	6	$	304,757		$	40,937		$	968		$	346,668

Share-based compensation		73		-		2,564			-			-			2,564
Vesting of restricted stock units and impact of shares withheld for taxes		410		-		(3,784	)		-			-			(3,784	)
Exercise of options and purchases from employee stock plans		148		-		1,440			-			-			1,440
Net income		-		-		-			10,919			-			10,919
Other comprehensive income—net of tax		-		-		-			-			2,290			2,290
BALANCE—June 30, 2021		65,654	$	6	$	304,977		$	51,856		$	3,258		$	360,097

BALANCE—January 1, 2020		64,283	$	6	$	302,189		$	(23,091	)	$	295		$	279,399

Share-based compensation		61		-		3,130			-			-			3,130
Vesting of restricted stock units and impact of shares withheld for taxes		412		-		(2,106	)		-			-			(2,106	)
Exercise of options and purchases from employee stock plans		191		-		1,318			-			-			1,318
Net income		-		-		-			42,947			-			42,947
Other comprehensive loss—net of tax		-		-		-			-			(3,686	)		(3,686	)
BALANCE—June 30, 2020		64,947	$	6	$	304,531		$	19,856		$	(3,391	)	$	321,002

											Accumulated
	Shares of				Additional						Other
	Common		Common		Paid-In			Retained			Comprehensive
	Stock		Stock		Capital			Earnings			Income (Loss)			Total

BALANCE—March 31, 2021		65,620	$	6	$	303,999		$	49,751		$	2,854		$	356,610

Share-based compensation		12		-		798			-			-			798
Vesting of restricted stock units and impact of shares withheld for taxes		-		-		-			-			-			-
Exercise of options and purchases from employee stock plans		22		-		180			-			-			180
Net income		-		-		-			2,105			-			2,105
Other comprehensive income—net of tax		-		-								404			404
BALANCE—June 30, 2021		65,654	$	6	$	304,977		$	51,856		$	3,258		$	360,097

BALANCE—March 31, 2020		64,795	$	6	$	302,558		$	10,896		$	(6,831	)	$	306,629

Share-based compensation		22		-		1,455			-			-			1,455
Vesting of restricted stock units and impact of shares withheld for taxes		24		-		(178	)		-			-			(178	)
Exercise of options and purchases from employee stock plans		106		-		696			-			-			696
Net income		-		-		-			8,960			-			8,960
Other comprehensive income—net of tax		-		-		-			-			3,440			3,440
BALANCE—June 30, 2020		64,947	$	6	$	304,531		$	19,856		$	(3,391	)	$	321,002

See notes to unaudited condensed consolidated financial statements.

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Six Months Ended
	June 30,
	2021			2020
OPERATING ACTIVITIES:
Net income	$	10,919		$	42,947
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization		20,681			18,707
Deferred income taxes		2,218			14,441
Gain on sale of assets		(32	)		(184	)
Amortization of deferred financing fees		1,715			805
Share-based compensation expense		2,564			3,130
Changes in assets and liabilities:
Accounts receivable		3,249			(14,109	)
Contract revenues in excess of billings		(2,450	)		2,123
Inventories		(1,233	)		(4,733	)
Prepaid expenses and other current assets		4,131			10,733
Accounts payable and accrued expenses		(2,668	)		(8,229	)
Billings in excess of contract revenues		(3,775	)		(179	)
Other noncurrent assets and liabilities		282			2,008
Cash provided by operating activities		35,601			67,460

INVESTING ACTIVITIES:
Purchases of property and equipment		(64,828	)		(21,076	)