Great Lakes Dredge & Dock Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

gldd-10q_20200331.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 March 31, 2020

☐	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)

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 April 28, 2020, 64,795,114 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 March 31, 2020

INDEX

		Page

	Part I Financial Information (Unaudited)	3

Item 1	Financial Statements	3

	Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019	3

	Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2020 and 2019	4

	Condensed Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2020 and 2019	5

	Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2020 and 2019	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 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	24

Item 4	Controls and Procedures	24

	Part II Other Information	25

Item 1	Legal Proceedings	25

Item 1A	Risk Factors	25

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25

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)

	March 31,			December 31,
	2020			2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	207,474		$	186,995
Accounts receivable—net		44,014			19,785
Contract revenues in excess of billings		37,080			22,560
Inventories		29,440			30,189
Prepaid expenses and other current assets		32,300			41,183
Total current assets		350,308			300,712

PROPERTY AND EQUIPMENT—Net		371,884			374,596
OPERATING LEASE ASSETS		81,319			72,612
GOODWILL		76,576			76,576
INVENTORIES—Noncurrent		64,090			61,126
ASSETS HELD FOR SALE— Noncurrent		3,970			3,970
OTHER		7,732			7,960
TOTAL	$	955,879		$	897,552

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	79,917		$	76,091
Accrued expenses		53,898			51,225
Operating lease liabilities		20,965			21,351
Billings in excess of contract revenues		61,327			55,266
Total current liabilities		216,107			203,933

LONG-TERM DEBT		323,066			322,843
OPERATING LEASE LIABILITIES—Noncurrent		60,641			51,131
DEFERRED INCOME TAXES		44,633			35,740
OTHER		4,803			4,506
Total liabilities		649,250			618,153

COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY:
Common stock—$.0001 par value; 90,000 authorized, 64,795 and 64,283 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively.		6			6
Additional paid-in capital		302,558			302,189
Retained earnings (accumulated deficit)		10,896			(23,091	)
Accumulated other comprehensive income (loss)		(6,831	)		295
Total equity		306,629			279,399
TOTAL	$	955,879		$	897,552

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
	March 31,
	2020			2019

Contract revenues	$	217,695		$	192,637
Costs of contract revenues		149,221			142,760
Gross profit		68,474			49,877
General and administrative expenses		15,571			14,825
(Gain) loss on sale of assets—net		(145	)		279
Operating income		53,048			34,773
Interest expense—net		(6,630	)		(7,551	)
Other income (expense)		(1,121	)		172
Income from continuing operations before income taxes		45,297			27,394
Income tax provision		(11,310	)		(6,846	)
Income from continuing operations		33,987			20,548
Loss from discontinued operations, net of income taxes		—			(3,380	)
Net income	$	33,987		$	17,168

Basic earnings per share attributable to continuing operations	$	0.53		$	0.33
Basic loss per share attributable to discontinued operations, net of tax		—			(0.05	)
Basic earnings per share	$	0.53		$	0.28
Basic weighted average shares		64,455			62,882

Diluted earnings per share attributable to continuing operations	$	0.52		$	0.32
Diluted loss per share attributable to discontinued operations, net of tax		—			(0.05	)
Diluted earnings per share	$	0.52		$	0.27
Diluted weighted average shares		65,717			64,569

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
	March 31,
	2020			2019

Net income	$	33,987		$	17,168
Net unrealized (gain) loss on derivatives—net of tax (1)		(7,126	)		2,740
Comprehensive income	$	26,861		$	19,908

(1)	Net of income tax (provision) benefit of $(2,417) and $971 for the three months ended March 31, 2020 and 2019 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				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		39		—		—			—			1,675			—			—			1,675
Vesting of restricted stock units and impact of shares withheld for taxes		388		—		—			—			(1,928	)		—			—			(1,928	)
Exercise of options and purchases from employee stock plans		85		—		—			—			622			—			—			622
Net income		—		—		—			—			—			33,987			—			33,987
Other comprehensive loss—net of tax		—		—		—			—			—			—			(7,126	)		(7,126	)
BALANCE—March 31, 2020		64,795	$	6		—		$	—		$	302,558		$	10,896		$	(6,831	)	$	306,629

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		31		—		—			—			2,201			—			—			2,201
Vesting of restricted stock units and impact of shares withheld for taxes		453		—		—			—			(2,188	)		—			—			(2,188	)
Exercise of options and purchases from employee stock plans		286		—		—			—			1,626			—			—			1,626
Net income		—		—		—			—			—			17,168			—			17,168
Other comprehensive income—net of tax		—		—		—			—			—			—			2,740			2,740
BALANCE—March 31, 2019		63,600	$	6		(278	)	$	(1,433	)	$	296,774		$	(55,001	)	$	(1,069	)	$	239,277

See notes to unaudited condensed consolidated financial statements.

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2020			2019
OPERATING ACTIVITIES:
Net income	$	33,987		$	17,168
Loss from discontinued operations, net of income taxes		—			(3,380	)
Income from continuing operations	$	33,987		$	20,548
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization		9,451			8,905
Deferred income taxes		11,310			7,074
(Gain) loss on sale of assets		(145	)		279
Amortization of deferred financing fees		403			868
Share-based compensation expense		1,675			2,000
Changes in assets and liabilities:
Accounts receivable		(24,229	)		30,285
Contract revenues in excess of billings		(14,520	)		1,538
Inventories		(2,215	)		280
Prepaid expenses and other current assets		8,036			(1,678	)
Accounts payable and accrued expenses		(523	)		(935	)
Billings in excess of contract revenues		6,062			36,062
Other noncurrent assets and liabilities		779			566
Net cash flows provided by operating activities from continuing operations		30,071			105,792
Net cash flows provided by operating activities of discontinued operations		—			2,668
Cash provided by operating activities		30,071			108,460

INVESTING ACTIVITIES:
Purchases of property and equipment		(8,733	)		(7,704	)
Proceeds from dispositions of property and equipment		447			147
Net cash flows used in investing activities of continuing operations		(8,286	)		(7,557	)
Net cash flows used in investing activities of discontinued operations		—			(60	)
Cash used in investing activities		(8,286	)		(7,617	)

	Three Months Ended
	March 31,
	2020			2019
FINANCING ACTIVITIES:
Taxes paid on settlement of vested share awards		(1,928	)		(2,188	)
Exercise of options and purchases from employee stock plans		622			1,626
Repayments of revolving loans		—			(11,500	)
Net cash flows used in financing activities of continuing operations		(1,306	)		(12,062	)
Net cash flows used in financing activities of discontinued operations		—			(253	)
Cash used in financing activities		(1,306	)		(12,315	)
Net increase in cash, cash equivalents and restricted cash		20,479			88,528
Cash, cash equivalents and restricted cash at beginning of period		186,995			34,458
Cash, cash equivalents and restricted cash at end of period	$	207,474		$	122,986

Price	9.93	EPS	1
Shares	65	P/E	19
MCap	646	P/FCF	4
Net Debt	142	EBIT	48
TEV	788	TEV/EBIT	17
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-05-05
10-K	2019-12-31	Filed 2020-02-26
10-Q	2019-09-30	Filed 2019-11-05
10-Q	2019-06-30	Filed 2019-08-02
10-Q	2019-03-31	Filed 2019-05-03
10-K	2018-12-31	Filed 2019-02-26
10-Q	2018-09-30	Filed 2018-11-06
10-Q	2018-06-30	Filed 2018-08-01
10-Q	2018-03-31	Filed 2018-05-04
10-K	2017-12-31	Filed 2018-03-01
10-Q	2017-09-30	Filed 2017-11-07
10-Q	2017-06-30	Filed 2017-08-03
10-Q	2017-03-31	Filed 2017-05-03
10-K	2016-12-31	Filed 2017-02-28
10-Q	2016-09-30	Filed 2016-11-02
10-Q	2016-06-30	Filed 2016-08-04
10-Q	2016-03-31	Filed 2016-05-03
10-K	2015-12-31	Filed 2016-02-29
10-Q	2015-09-30	Filed 2015-11-04
10-Q	2015-06-30	Filed 2015-08-04
10-Q	2015-03-31	Filed 2015-05-06
10-K	2014-12-31	Filed 2015-03-06
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-06
10-Q	2014-03-31	Filed 2014-05-07
10-K	2013-12-31	Filed 2014-03-11
10-Q	2013-09-30	Filed 2013-11-05
10-Q	2013-06-30	Filed 2013-08-09
10-Q	2013-03-31	Filed 2013-05-08
10-K	2012-12-31	Filed 2013-03-29
10-Q	2012-09-30	Filed 2012-11-07
10-Q	2012-06-30	Filed 2012-08-07
10-Q	2012-03-31	Filed 2012-05-04
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-15
10-Q	2010-09-30	Filed 2010-11-09
10-Q	2010-06-30	Filed 2010-08-09
10-Q	2010-03-31	Filed 2010-05-07
10-K	2009-12-31	Filed 2010-03-09

8-K	2020-06-05
8-K	2020-05-06
8-K	2020-05-05
8-K	2020-03-12
8-K	2020-02-19
8-K	2020-01-07
8-K	2019-11-05
8-K	2019-07-31
8-K	2019-05-03
8-K	2019-05-02
8-K	2019-04-30
8-K	2019-02-20
8-K	2018-11-06
8-K	2018-08-01
8-K	2018-05-02
8-K	2018-05-02
8-K	2018-03-07
8-K	2018-02-20

EX-31.1	gldd-ex311_6.htm
EX-31.2	gldd-ex312_8.htm
EX-32.1	gldd-ex321_9.htm
EX-32.2	gldd-ex322_7.htm

GLDD 10Q Quarterly Report

Great Lakes Dredge & Dock Earnings 2020-03-31