Great Lakes Dredge & Dock Earnings 2019-09-30

GLDD 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Comparables ($MM TTM)
Ticker	M Cap	Assets	Liab	Rev	G Profit	Net Inc	EBITDA	EV	G Margin	EV/EBITDA	ROA
ROAD	740	509	183	762	113	42	82	733	15%	9.0	8%
GLDD	704	869	618	701	162	29	84	901	23%	10.8	3%
DCO	521	680	407	677	138	20	52	746	20%	14.5	3%
WLDN	422	341	194	354	107	6	20	485	30%	24.0	2%
MG	405	733	452	740	214	0	40	663	29%	16.4	0%
VSEC	384	827	480	709	0	36	72	664	0%	9.2	4%
STRL	349	500	325	1,034	103	26	46	362	10%	7.9	5%
HIL	157	281	186	400	126	-16	-5	184	31%	-37.9	-6%
CVU	98	154	55	100	21	4	11	100	21%	9.3	3%
ORN	68	363	230	166	10	-110	-70	148	6%	-2.1	-30%

10-Q 1 gldd-10q_20190930.htm 10-Q gldd-10q_20190930.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, 2019

☐	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 October 31, 2019, 63,919,970 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, 2019

INDEX

		Page

	Part I Financial Information (Unaudited)	3

Item 1	Financial Statements	3

	Condensed Consolidated Balance Sheets at September 30, 2019 and December 31, 2018	3

	Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2019 and 2018	4

	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months ended September 30, 2019 and 2018	5

	Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2019 and 2018	6

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4	Controls and Procedures	28

	Part II Other Information	29

Item 1	Legal Proceedings	29

Item 1A	Risk Factors	29

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3	Defaults Upon Senior Securities	29

Item 4	Mine Safety Disclosures	29

Item 5	Other Information	29

Item 6	Exhibits	30

	Signature	31

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,
	2019			2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	180,855		$	34,458
Accounts receivable—net		31,043			64,779
Contract revenues in excess of billings		25,383			17,953
Inventories		27,547			28,112
Prepaid expenses and other current assets		31,626			36,617
Assets held for sale		—			24,779
Total current assets		296,454			206,698

PROPERTY AND EQUIPMENT—Net		374,798			369,863
OPERATING LEASE ASSETS		72,039			—
GOODWILL AND OTHER INTANGIBLE ASSETS—Net		76,576			76,576
INVENTORIES—Noncurrent		63,007			61,264
OTHER		9,894			15,870
TOTAL	$	892,768		$	730,271

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	77,074		$	71,537
Accrued expenses		49,891			48,351
Operating lease liabilities		20,847			—
Billings in excess of contract revenues		69,387			17,793
Revolving credit facility		—			11,500
Liabilities held for sale		—			13,940
Total current liabilities		217,199			163,121

LONG-TERM DEBT		322,619			321,950
OPERATING LEASE LIABILITIES—Noncurrent		50,969			—
DEFERRED INCOME TAXES		36,526			22,846
OTHER		3,631			7,426
Total liabilities		630,944			515,343

COMMITMENTS AND CONTINGENCIES (Note 10)
EQUITY:
Common stock—$.0001 par value; 90,000 authorized, 63,916 and 62,830 shares issued; 63,916 and 62,552 shares outstanding at September 30, 2019 and December 31, 2018, respectively.		6			6
Treasury stock, at cost		—			(1,433	)
Additional paid-in capital		301,874			295,135
Accumulated deficit		(39,064	)		(74,971	)
Accumulated other comprehensive loss		(992	)		(3,809	)
Total equity		261,824			214,928
TOTAL	$	892,768		$	730,271

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,
	2019			2018			2019			2018

Contract revenues	$	169,775		$	178,671		$	547,223		$	447,564
Costs of contract revenues		137,942			139,087			428,027			371,718
Gross profit		31,833			39,584			119,196			75,846
General and administrative expenses		13,488			14,343			42,926			39,668
(Gain) loss on sale of assets—net		(27	)		1,521			333			265
Operating income		18,372			23,720			75,937			35,913
Interest expense—net		(6,335	)		(8,058	)		(21,074	)		(25,702	)
Other income (expense)		(22	)		71			273			(1,961	)
Income from continuing operations before income taxes		12,015			15,733			55,136			8,250
Income tax provision		(3,204	)		(3,853	)		(14,280	)		(2,196	)
Income from continuing operations		8,811			11,880			40,856			6,054
Loss from discontinued operations, net of income taxes		(859	)		(178	)		(7,490	)		(4,647	)
Net income	$	7,952		$	11,702		$	33,366		$	1,407

Basic earnings per share attributable to continuing operations	$	0.14		$	0.19		$	0.64		$	0.10
Basic loss per share attributable to discontinued operations, net of tax		(0.02	)		—			(0.12	)		(0.08	)
Basic earnings per share	$	0.12		$	0.19		$	0.52		$	0.02
Basic weighted average shares		63,861			62,358			63,449			62,147

Diluted earnings per share attributable to continuing operations	$	0.14		$	0.19		$	0.63		$	0.10
Diluted loss per share attributable to discontinued operations, net of tax		(0.02	)		—			(0.12	)		(0.08	)
Diluted earnings per share	$	0.12		$	0.19		$	0.51		$	0.02
Diluted weighted average shares		65,071			63,260			64,860			63,340

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,
	2019			2018			2019		2018

Net income	$	7,952		$	11,702		$	33,366	$	1,407
Currency translation adjustment—net of tax (1)		—			(14	)		—		1,290
Net change in cash flow derivative hedges—net of tax (2)		(160	)		(201	)		2,817		(1,062	)
Other comprehensive income (loss)—net of tax		(160	)		(215	)		2,817		228
Comprehensive income	$	7,792		$	11,487		$	36,183	$	1,635

(1)	Net of income tax benefit (provision) of $21 and $(551) for the three and nine months ended September 30, 2018, respectively.

(2)	Net of income tax provision of $57 and $242 for the three months ended September 30, 2019 and 2018, respectively. Net of income tax benefit (provision) of $998 and $(1,191) for the nine months ended September 30, 2019 and 2018 respectively.

See notes to unaudited condensed consolidated financial statements.

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands)

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

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		60			—		—			—			6,720			—			—			6,720
Vesting of restricted stock units, including impact of shares withheld for taxes		605			—		—			—			(3,164	)		—			—			(3,164	)
Exercise of options and purchases from employee stock plans		699			—		—			—			4,355			—			—			4,355
Cancellation of treasury stock		(278	)		—		278			1,433			(1,172	)		(261	)		—			—
Net income		—			—		—			—			—			33,366			—			33,366
Other comprehensive income—net of tax		—			—		—			—			—			—			2,817			2,817
BALANCE—September 30, 2019		63,916		$	6		—		$	—		$	301,874		$	(39,064	)	$	(992	)	$	261,824

BALANCE—January 1, 2018		61,897		$	6		(278	)	$	(1,433	)	$	289,821		$	(67,101	)	$	3		$	221,296

Cumulative effect of recent accounting pronouncements		—			—		—			—			—			(1,577	)		—			(1,577	)
Share-based compensation		105			—		—			—			3,294			—			—			3,294
Vesting of restricted stock units, including impact of shares withheld for taxes		492			—		—			—			(1,075	)		—			—			(1,075	)
Exercise of options and purchases from employee stock plans		236			—		—			—			862			—			—			862
Net income		—			—		—			—			—			1,407			—			1,407
Other comprehensive income—net of tax		—			—		—			—			—			—			228			228
BALANCE—September 30, 2018		62,730		$	6		(278	)	$	(1,433	)	$	292,902		$	(67,271	)	$	231		$	224,435

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

BALANCE—July 1, 2019		63,769		$	6		—		$	—		$	299,320		$	(47,016	)	$	(832	)	$	251,478

Share-based compensation		15			—		—			—			2,190			—			—			2,190
Vesting of restricted stock units, including impact of shares withheld for taxes		51			—		—			—			(235	)		—			—			(235	)
Exercise of options and purchases from employee stock plans		81			—		—			—			599			—			—			599
Net income		—			—		—			—			—			7,952			—			7,952
Other comprehensive income—net of tax		—			—		—			—			—			—			(160	)		(160	)
BALANCE—September 30, 2019		63,916		$	6		—		$	—		$	301,874		$	(39,064	)	$	(992	)	$	261,824

BALANCE—July 1, 2018		62,583		$	6		(278	)

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$0.00	65	$704

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

8-K	2020-01-07	Officers, Exhibits
8-K	2019-11-05	Earnings, Exhibits
8-K	2019-07-31	Earnings, Exhibits
8-K	2019-05-03	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2019-05-02	Shareholder Vote
8-K	2019-04-30	Earnings, Exhibits
8-K	2019-02-20	Earnings, Exhibits
8-K	2018-11-06	Earnings, Exhibits
8-K	2018-08-01	Earnings, Exhibits
8-K	2018-05-02	Earnings, Exhibits
8-K	2018-05-02	Shareholder Vote
8-K	2018-03-07	Officers
8-K	2018-02-20	Earnings, Exhibits

EX-31.1	gldd-ex311_201.htm
EX-31.2	gldd-ex312_202.htm
EX-32.1	gldd-ex321_200.htm
EX-32.2	gldd-ex322_199.htm