10-Q 1 gldd-20230930.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, 2023

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

img152335437_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 November 3, 2023, 66,612,455 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, 2023

INDEX

 

 

 

 

 

Page

 

 

 

 

 

 

 

Part I Financial Information (Unaudited)

 

3

 

 

 

 

 

Item 1

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2023 and 2022

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

16

 

 

 

 

 

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

 

 

 

 

 

 

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,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,093

 

 

$

6,546

 

Accounts receivable—net

 

 

30,342

 

 

 

44,890

 

Contract revenues in excess of billings

 

 

49,290

 

 

 

65,922

 

Inventories

 

 

32,295

 

 

 

29,229

 

Prepaid expenses and other current assets

 

 

41,915

 

 

 

36,254

 

Total current assets

 

 

167,935

 

 

 

182,841

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT—Net

 

 

606,288

 

 

 

543,910

 

OPERATING LEASE ASSETS

 

 

72,801

 

 

 

89,733

 

GOODWILL

 

 

76,576

 

 

 

76,576

 

INVENTORIES—Noncurrent

 

 

87,294

 

 

 

80,044

 

OTHER

 

 

9,396

 

 

 

8,676

 

TOTAL

 

$

1,020,290

 

 

$

981,780

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

74,324

 

 

$

94,077

 

Accrued expenses

 

 

34,464

 

 

 

29,469

 

Operating lease liabilities

 

 

26,204

 

 

 

26,873

 

Billings in excess of contract revenues

 

 

29,392

 

 

 

9,914

 

Total current liabilities

 

 

164,384

 

 

 

160,333

 

 

 

 

 

 

 

LONG-TERM DEBT

 

 

321,933

 

 

 

321,521

 

REVOLVING CREDIT FACILITY

 

 

55,000

 

 

 

 

OPERATING LEASE LIABILITIES—Noncurrent

 

 

48,131

 

 

 

65,010

 

DEFERRED INCOME TAXES

 

 

57,893

 

 

 

59,115

 

OTHER

 

 

6,980

 

 

 

7,581

 

Total liabilities

 

 

654,321

 

 

 

613,560

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 8)

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

Common stock—$.0001 par value; 90,000 authorized, 66,612 and 66,188 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.

 

 

7

 

 

 

6

 

Additional paid-in capital

 

 

315,767

 

 

 

312,091

 

Retained earnings

 

 

48,662

 

 

 

56,314

 

Accumulated other comprehensive income (loss)

 

 

1,533

 

 

 

(191

)

Total equity

 

 

365,969

 

 

 

368,220

 

TOTAL

 

$

1,020,290

 

 

$

981,780

 

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract revenues

 

$

117,185

 

 

$

158,346

 

 

$

407,896

 

 

$

502,123

 

Costs of contract revenues

 

 

108,155

 

 

 

154,547

 

 

 

368,832

 

 

 

454,788

 

Gross profit

 

 

9,030

 

 

 

3,799

 

 

 

39,064

 

 

 

47,335

 

General and administrative expenses

 

 

14,188

 

 

 

13,292

 

 

 

41,667

 

 

 

38,716

 

Gain on sale of assets—net

 

 

(35

)

 

 

(40

)

 

 

(296

)

 

 

(358

)

Operating income (loss)

 

 

(5,123

)

 

 

(9,453

)

 

 

(2,307

)

 

 

8,977

 

Interest expense—net

 

 

(2,762

)

 

 

(3,551

)

 

 

(9,322

)

 

 

(11,000

)

Other income (expense)

 

 

(78

)

 

 

(253

)

 

 

2,173

 

 

 

(1,778

)

Loss before income taxes

 

 

(7,963

)

 

 

(13,257

)

 

 

(9,456

)

 

 

(3,801

)

Income tax benefit

 

 

1,809

 

 

 

3,347

 

 

 

1,804

 

 

 

915

 

Net loss

 

$

(6,154

)

 

$

(9,910

)

 

$

(7,652

)

 

$

(2,886

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share

 

$

(0.09

)

 

$

(0.15

)

 

$

(0.12

)

 

$

(0.04

)

Basic weighted average shares

 

 

66,532

 

 

 

66,111

 

 

 

66,419

 

 

 

66,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

$

(0.09

)

 

$

(0.15

)

 

$

(0.12

)

 

$

(0.04

)

Diluted weighted average shares

 

 

66,532

 

 

 

66,111

 

 

 

66,419

 

 

 

66,010

 

 

See notes to unaudited condensed consolidated financial statements.

 

4


 

Great Lakes Dredge & Dock Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(in thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(6,154

)

 

$

(9,910

)

 

$

(7,652

)

 

$

(2,886

)

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

 

$

2,155

 

 

$

(7,222

)

 

$

1,724

 

 

$

(1,363

)

Comprehensive loss

 

$

(3,999

)

 

$

(17,132

)

 

$

(5,928

)

 

$

(4,249

)

 

(1)
Net of income tax (provision) benefit of $(728) and $2,176 for the three months ended September 30, 2023 and 2022, respectively. Net of income tax (provision) benefit of $(583) and $197 for the nine months ended September 30, 2023 and 2022, 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, 2023

 

 

66,188

 

 

$

6

 

 

$

312,091

 

 

$

56,314

 

 

$

(191

)

 

$

368,220

 

Share-based compensation

 

 

45

 

 

 

1

 

 

 

3,728

 

 

 

 

 

 

 

 

 

3,729

 

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

 

 

156

 

 

 

 

 

 

(603

)

 

 

 

 

 

 

 

 

(603

)

Exercise of options and purchases from employee stock plans

 

 

223

 

 

 

 

 

 

551

 

 

 

 

 

 

 

 

 

551

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(7,652

)

 

 

 

 

 

(7,652

)

Other comprehensive income—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,724

 

 

 

1,724

 

BALANCE—September 30, 2023

 

 

66,612

 

 

$

7

 

 

$

315,767

 

 

$

48,662

 

 

$

1,533

 

 

$

365,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Shares of

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—July 1, 2023

 

 

66,492

 

 

$

7

 

 

$

314,321

 

 

$

54,816

 

 

$

(622

)

 

$

368,522

 

Share-based compensation

 

 

12

 

 

 

 

 

 

1,518

 

 

 

 

 

 

 

 

 

1,518

 

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

 

 

 

 

 

 

 

 

(61

)

 

 

 

 

 

 

 

 

(61

)

Exercise of options and purchases from employee stock plans

 

 

108

 

 

 

 

 

 

(11

)

 

 

 

 

 

 

 

 

(11

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(6,154

)

 

 

 

 

 

(6,154

)

Other comprehensive income—net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,155

 

 

 

2,155

 

BALANCE—September 30, 2023

 

 

66,612

 

 

$

7

 

 

$

315,767

 

 

$

48,662

 

 

$

1,533

 

 

$

365,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—July 1, 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

 

 

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)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(7,652

)

 

$

(2,886

)

Adjustments to reconcile net loss to net cash flows provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

32,320

 

 

 

33,977

 

Deferred income taxes

 

 

(1,804

)

 

 

(915

)

Gain on sale of assets

 

 

(296

)

 

 

(358

)

Amortization of deferred financing fees

 

 

724

 

 

 

900

 

Share-based compensation expense

 

 

4,209

 

 

 

2,837

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

15,654

 

 

 

14,284

 

Contract revenues in excess of billings

 

 

16,632

 

 

 

(21,794

)

Inventories

 

 

(10,352

)

 

 

(13,642

)

Prepaid expenses and other current assets

 

 

(3,613

)

 

 

(8,038

)

Accounts payable and accrued expenses

 

 

(11,005

)

 

 

(1,607

)

Billings in excess of contract revenues

 

 

19,478

 

 

 

(9,363

)

Other noncurrent assets and liabilities

 

 

(4,718

)

 

 

(46

)

Cash provided by (used in) operating activities

 

 

49,577

 

 

 

(6,651

)

INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(98,193

)

 

 

(102,568

)

Proceeds from dispositions of property and equipment

 

 

1,215

 

 

 

2,100

 

Cash used in investing activities

 

 

(96,978

)

 

 

(100,468

)

FINANCING ACTIVITIES:

 

 

 

 

 

 

Deferred financing fees

 

 

 

 

 

(828

)

Taxes paid on settlement of vested share awards

 

 

(603

)

 

 

(1,827

)

Exercise of options and purchases from employee stock plans

 

 

551

 

 

 

1,148

 

Borrowing under revolving loans

 

 

120,000

 

 

 

 

Repayments of revolving loans

 

 

(65,000

)

 

 

 

Cash provided by (used in) financing activities

 

 

54,948

 

 

 

(1,507

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

7,547