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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 June 30, 2021

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.)

 

 

 

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

 

 

 

 

 

 

 

 

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,

 

 

 

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.

 

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,

 

 

 

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.

 

4


 

 

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.

 

5


 

 

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.

 

6


 

 

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

)