10-Q 1 gldd-20220930.htm 10-Q 10-Q
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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, 2022

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

img151411916_0.jpg 

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 28, 2022, 66,169,959 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, 2022

INDEX

 

 

 

 

 

Page

 

 

 

 

 

 

 

Part I Financial Information (Unaudited)

 

3

 

 

 

 

 

Item 1

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2022 and 2021

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months ended September 30, 2022 and 2021

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Equity for the Three and Nine Months ended September 30, 2022 and 2021

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

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,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,833

 

 

$

145,459

 

Accounts receivable—net

 

 

68,670

 

 

 

82,953

 

Contract revenues in excess of billings

 

 

61,638

 

 

 

39,844

 

Inventories

 

 

27,302

 

 

 

30,760

 

Prepaid expenses and other current assets

 

 

36,336

 

 

 

28,416

 

Total current assets

 

 

232,779

 

 

 

327,432

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT—Net

 

 

517,839

 

 

 

455,102

 

OPERATING LEASE ASSETS

 

 

86,158

 

 

 

62,233

 

GOODWILL

 

 

76,576

 

 

 

76,576

 

INVENTORIES—Noncurrent

 

 

82,149

 

 

 

65,049

 

OTHER

 

 

8,019

 

 

 

11,278

 

TOTAL

 

$

1,003,520

 

 

$

997,670

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

81,248

 

 

$

85,566

 

Accrued expenses

 

 

37,667

 

 

 

37,626

 

Operating lease liabilities

 

 

22,668

 

 

 

16,729

 

Billings in excess of contract revenues

 

 

5,451

 

 

 

14,814

 

Total current liabilities

 

 

147,034

 

 

 

154,735

 

 

 

 

 

 

 

 

LONG-TERM DEBT

 

 

321,383

 

 

 

320,971

 

OPERATING LEASE LIABILITIES—Noncurrent

 

 

64,316

 

 

 

45,986

 

DEFERRED INCOME TAXES

 

 

67,188

 

 

 

68,497

 

OTHER

 

 

6,693

 

 

 

8,484

 

Total liabilities

 

 

606,614

 

 

 

598,673

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 8)

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

Common stock—$.0001 par value; 90,000 authorized, 66,167 and 65,746 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.

 

 

6

 

 

 

6

 

Additional paid-in capital

 

 

310,640

 

 

 

308,482

 

Retained earnings

 

 

87,483

 

 

 

90,369

 

Accumulated other comprehensive income (loss)

 

 

(1,223

)

 

 

140

 

Total equity

 

 

396,906

 

 

 

398,997

 

TOTAL

 

$

1,003,520

 

 

$

997,670

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract revenues

 

$

158,346

 

 

$

168,638

 

 

$

502,123

 

 

$

516,185

 

Costs of contract revenues

 

 

154,547

 

 

 

132,357

 

 

 

454,788

 

 

 

423,906

 

Gross profit

 

 

3,799

 

 

 

36,281

 

 

 

47,335

 

 

 

92,279

 

General and administrative expenses

 

 

13,292

 

 

 

15,167

 

 

 

38,716

 

 

 

45,713

 

Gain on sale of assets—net

 

 

(40

)

 

 

(291

)

 

 

(358

)

 

 

(323

)

Operating income (loss)

 

 

(9,453

)

 

 

21,405

 

 

 

8,977

 

 

 

46,889

 

Interest expense—net

 

 

(3,551

)

 

 

(4,214

)

 

 

(11,000

)

 

 

(17,457

)

Other income (expense)

 

 

(253

)

 

 

(204

)

 

 

(1,778

)

 

 

692

 

Income (loss) before income taxes

 

 

(13,257

)

 

 

16,987

 

 

 

(3,801

)

 

 

30,124

 

Income tax (provision) benefit

 

 

3,347

 

 

 

(3,181

)

 

 

915

 

 

 

(5,399

)

Net income (loss)

 

$

(9,910

)

 

$

13,806

 

 

$

(2,886

)

 

$

24,725

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

 

$

(0.15

)

 

$

0.21

 

 

$

(0.04

)

 

$

0.38

 

Basic weighted average shares

 

 

66,111

 

 

 

65,691

 

 

 

66,010

 

 

 

65,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share

 

$

(0.15

)

 

$

0.21

 

 

$

(0.04

)

 

$

0.37

 

Diluted weighted average shares

 

 

66,111

 

 

 

66,311

 

 

 

66,010

 

 

 

66,246

 

 

See notes to unaudited condensed consolidated financial statements.

 

4


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(9,910

)

 

$

13,806

 

 

$

(2,886

)

 

$

24,725

 

Net change in cash flow derivative hedges—net of tax (1)

 

 

(7,222

)

 

 

(1,211

)

 

 

(1,363

)

 

 

1,079

 

Comprehensive income (loss)

 

$

(17,132

)

 

$

12,595

 

 

$

(4,249

)

 

$

25,804

 

 

(1)
Net of income tax benefit of $2,176 and $409 for the three months ended September 30, 2022 and 2021, respectively. Net of income tax (provision) benefit of $197 and $(364) for the nine months ended September 30, 2022 and 2021, 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Shares of

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

Total

 

BALANCE—January 1, 2022

 

 

65,746

 

 

$

6

 

 

$

308,482

 

 

$

90,369

 

 

$

140

 

 

$

398,997

 

Share-based compensation

 

 

30

 

 

 

 

 

2,837

 

 

 

 

 

 

 

2,837

 

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

 

 

212

 

 

 

 

 

(1,827

)

 

 

 

 

 

 

(1,827

)

Exercise of options and purchases from employee stock plans

 

 

179

 

 

 

 

 

1,148

 

 

 

 

 

 

 

1,148

 

Net loss

 

 

 

 

 

 

 

 

(2,886

)

 

 

 

 

(2,886

)

Other comprehensive loss—net of tax

 

 

 

 

 

 

 

 

 

 

(1,363

)

 

 

(1,363

)

BALANCE—September 30, 2022

 

 

66,167

 

 

$

6

 

 

$

310,640

 

 

$

87,483

 

 

$

(1,223

)

 

$

396,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Shares of

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

Total

 

BALANCE—June 30, 2022

 

 

66,083

 

 

 

6

 

 

 

308,790

 

 

 

97,393

 

 

 

5,999

 

 

$

412,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

14

 

 

 

 

 

1,285

 

 

 

 

 

 

 

1,285

 

Exercise of options and purchases from employee stock plans

 

 

70

 

 

 

 

 

565

 

 

 

 

 

 

 

565

 

Net loss

 

 

 

 

 

 

 

 

(9,910

)

 

 

 

 

(9,910

)

Other comprehensive loss—net of tax

 

 

 

 

 

 

 

 

 

 

(7,222

)

 

 

(7,222

)

BALANCE—September 30, 2022

 

$

66,167

 

 

$

6

 

 

$

310,640

 

 

$

87,483

 

 

$

(1,223

)

 

$

396,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—June 30, 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 loss—net of tax