SEC Filing | Great Lakes Dredge & Dock Corporation

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gldd-10q_20210930.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 September 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 October 26, 2021, 65,736,524 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, 2021

INDEX

		Page

	Part I Financial Information (Unaudited)	3

Item 1	Financial Statements	3

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

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

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

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

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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	23

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)

	September 30,		December 31,
	2021		2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	173,838	$	216,510
Accounts receivable—net		43,687		38,990
Contract revenues in excess of billings		33,344		32,106
Inventories		30,427		34,689
Prepaid expenses and other current assets		33,121		40,398
Total current assets		314,417		362,693

PROPERTY AND EQUIPMENT—Net		431,856		383,042
OPERATING LEASE ASSETS		52,100		65,188
GOODWILL		76,576		76,576
INVENTORIES—Noncurrent		63,833		58,413
OTHER		12,004		12,112
TOTAL	$	950,786	$	958,024

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	70,595	$	71,308
Accrued expenses		41,020		52,899
Operating lease liabilities		14,635		19,472
Billings in excess of contract revenues		18,752		32,608
Total current liabilities		145,002		176,287

LONG-TERM DEBT		320,834		323,735
OPERATING LEASE LIABILITIES—Noncurrent		37,777		45,879
DEFERRED INCOME TAXES		62,229		56,466
OTHER		10,164		8,989
Total liabilities		576,006		611,356

COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Common stock—$.0001 par value; 90,000 authorized, 65,737 and 65,023 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively.		6		6
Additional paid-in capital		307,065		304,757
Retained earnings		65,662		40,937
Accumulated other comprehensive income		2,047		968
Total equity		374,780		346,668
TOTAL	$	950,786	$	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						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020

Contract revenues	$	168,638		$	175,841		$	516,185		$	561,456
Costs of contract revenues		132,357			139,490			423,906			423,615
Gross profit		36,281			36,351			92,279			137,841
General and administrative expenses		15,167			14,888			45,713			45,263
Proceeds from loss of use claim		-			(1,723	)		-			(1,723	)
Gain on sale of assets—net		(291	)		-			(323	)		(184	)
Operating income		21,405			23,186			46,889			94,485
Interest expense—net		(4,214	)		(6,719	)		(17,457	)		(20,074	)
Other income (expense)		(204	)		156			692			(400	)
Income before income taxes		16,987			16,623			30,124			74,011
Income tax provision		(3,181	)		(4,076	)		(5,399	)		(18,517	)
Net income	$	13,806		$	12,547		$	24,725		$	55,494

Basic earnings per share	$	0.21		$	0.19		$	0.38		$	0.86
Basic weighted average shares		65,691			64,860			65,535			64,726

Diluted earnings per share	$	0.21		$	0.19		$	0.37		$	0.84
Diluted weighted average shares		66,311			65,894			66,246			65,861

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					Nine Months Ended
	September 30,					September 30,
	2021			2020		2021		2020

Net income	$	13,806		$	12,547	$	24,725	$	55,494
Net change in cash flow derivative hedges—net of tax (1)		(1,211	)		879		1,079		(2,807	)
Comprehensive income	$	12,595		$	13,426	$	25,804	$	52,687

(1)	Net of income tax benefit of $409 and $296 for the three months ended September 30, 2021 and 2020 respectively. Net of income tax provision of $(364) and $(959) for the nine months ended September 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		131			-		3,772			-			-			3,772
Vesting of restricted stock units and impact of shares withheld for taxes		431			-		(3,785	)		-			-			(3,785	)
Exercise of options and purchases from employee stock plans		152			-		2,321			-			-			2,321
Net income		-			-		-			24,725			-			24,725
Other comprehensive income—net of tax		-			-		-			-			1,079			1,079
BALANCE—September 30, 2021		65,737		$	6	$	307,065		$	65,662		$	2,047		$	374,780

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

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

BALANCE—July 1, 2021		65,654		$	6	$	304,977		$	51,856		$	3,258		$	360,097

Share-based compensation		58			-		1,207			-			-			1,207
Vesting of restricted stock units and impact of shares withheld for taxes		21			-		-			-			-			-
Exercise of options and purchases from employee stock plans		4			-		881			-			-			881
Net income		-			-		-			13,806			-			13,806
Other comprehensive income—net of tax		-			-								(1,211	)		(1,211	)
BALANCE—September 30, 2021		65,737		$	6	$	307,065		$	65,662		$	2,047		$	374,780



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			-		(68	)		-			-			(68	)
Exercise of options and purchases from employee stock plans		84			-		638			-			-			638
Repurchase of common stock		(425	)		-		(1,792	)		(2,068	)		-			(3,860	)
Net income		-			-		-			12,547			-			12,547
Other comprehensive income—net of tax		-			-		-			-			879			879
BALANCE—September 30, 2020		64,645		$	6	$	305,070		$	30,335		$	(2,512	)	$