Form 10-Q - Quarterly report [Sections 13 or 15(d)]
November 05 2024 - 4:01PM
Edgar (US Regulatory)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2024
OR
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☐ |
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)
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Delaware |
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20-5336063 |
(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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9811 Katy Freeway, Suite 1200, Houston, TX |
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77024 |
(Address of principal executive offices) |
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(Zip Code) |
(346) 359-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock (Par Value $0.0001) |
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GLDD |
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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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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☐ |
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Smaller reporting company |
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☐ |
Emerging growth company |
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☐ |
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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 1, 2024, 67,272,067 shares of the Registrant’s Common Stock, par value $.0001 per share, were outstanding.
Great Lakes Dredge & Dock Corporation and Subsidiaries
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period ended September 30, 2024
INDEX
PART I — Financial Information
Item 1. Financial Statements.
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except per share amounts)
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September 30, |
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December 31, |
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2024 |
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2023 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
12,037 |
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$ |
22,841 |
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Accounts receivable—net |
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42,506 |
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54,810 |
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Contract revenues in excess of billings |
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91,799 |
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68,735 |
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Inventories |
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34,961 |
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33,912 |
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Prepaid expenses |
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1,441 |
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1,486 |
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Other current assets |
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31,988 |
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44,544 |
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Total current assets |
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214,732 |
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226,328 |
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|
|
PROPERTY AND EQUIPMENT—Net |
|
|
681,552 |
|
|
|
614,608 |
|
OPERATING LEASE ASSETS |
|
|
66,522 |
|
|
|
88,398 |
|
GOODWILL |
|
|
76,576 |
|
|
|
76,576 |
|
INVENTORIES—Noncurrent |
|
|
84,016 |
|
|
|
86,325 |
|
OTHER |
|
|
21,941 |
|
|
|
18,605 |
|
TOTAL |
|
$ |
1,145,339 |
|
|
$ |
1,110,840 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
Accounts payable |
|
$ |
94,612 |
|
|
$ |
83,835 |
|
Accrued expenses |
|
|
44,062 |
|
|
|
37,361 |
|
Operating lease liabilities |
|
|
23,435 |
|
|
|
28,687 |
|
Billings in excess of contract revenues |
|
|
15,613 |
|
|
|
29,560 |
|
Total current liabilities |
|
|
177,722 |
|
|
|
179,443 |
|
|
|
|
|
|
|
|
LONG-TERM DEBT |
|
|
412,531 |
|
|
|
412,070 |
|
OPERATING LEASE LIABILITIES—Noncurrent |
|
|
44,406 |
|
|
|
61,444 |
|
DEFERRED INCOME TAXES |
|
|
73,501 |
|
|
|
62,232 |
|
OTHER |
|
|
11,770 |
|
|
|
10,103 |
|
Total liabilities |
|
|
719,930 |
|
|
|
725,292 |
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 9) |
|
|
|
|
|
|
EQUITY: |
|
|
|
|
|
|
Common stock—$.0001 par value; 90,000 authorized, 67,272 and 66,623 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively. |
|
|
7 |
|
|
|
6 |
|
Additional paid-in capital |
|
|
320,971 |
|
|
|
317,337 |
|
Retained earnings |
|
|
107,769 |
|
|
|
70,220 |
|
Accumulated other comprehensive loss |
|
|
(3,338 |
) |
|
|
(2,015 |
) |
Total equity |
|
|
425,409 |
|
|
|
385,548 |
|
TOTAL |
|
$ |
1,145,339 |
|
|
$ |
1,110,840 |
|
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, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract revenues |
|
$ |
191,173 |
|
|
$ |
117,185 |
|
|
$ |
559,919 |
|
|
$ |
407,896 |
|
Costs of contract revenues |
|
|
154,940 |
|
|
|
108,155 |
|
|
|
448,272 |
|
|
|
368,832 |
|
Gross profit |
|
|
36,233 |
|
|
|
9,030 |
|
|
|
111,647 |
|
|
|
39,064 |
|
General and administrative expenses |
|
|
19,815 |
|
|
|
14,188 |
|
|
|
52,087 |
|
|
|
41,667 |
|
Other gains |
|
|
(276 |
) |
|
|
(35 |
) |
|
|
(3,198 |
) |
|
|
(296 |
) |
Operating income (loss) |
|
|
16,694 |
|
|
|
(5,123 |
) |
|
|
62,758 |
|
|
|
(2,307 |
) |
Interest expense—net |
|
|
(4,888 |
) |
|
|
(2,762 |
) |
|
|
(12,977 |
) |
|
|
(9,322 |
) |
Other income (expense) |
|
|
200 |
|
|
|
(78 |
) |
|
|
753 |
|
|
|
2,173 |
|
Income (loss) before income taxes |
|
|
12,006 |
|
|
|
(7,963 |
) |
|
|
50,534 |
|
|
|
(9,456 |
) |
Income tax (provision) benefit |
|
|
(3,154 |
) |
|
|
1,809 |
|
|
|
(12,985 |
) |
|
|
1,804 |
|
Net income (loss) |
|
$ |
8,852 |
|
|
$ |
(6,154 |
) |
|
$ |
37,549 |
|
|
$ |
(7,652 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
|
$ |
0.13 |
|
|
$ |
(0.09 |
) |
|
$ |
0.56 |
|
|
$ |
(0.12 |
) |
Basic weighted average shares |
|
|
67,217 |
|
|
|
66,532 |
|
|
|
67,021 |
|
|
|
66,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share |
|
$ |
0.13 |
|
|
$ |
(0.09 |
) |
|
$ |
0.55 |
|
|
$ |
(0.12 |
) |
Diluted weighted average shares |
|
|
67,830 |
|
|
|
66,532 |
|
|
|
67,687 |
|
|
|
66,419 |
|
See notes to unaudited condensed consolidated financial statements.
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, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
8,852 |
|
|
$ |
(6,154 |
) |
|
$ |
37,549 |
|
|
$ |
(7,652 |
) |
Net change in cash flow derivative hedges—net of tax (1) |
|
|
(2,661 |
) |
|
|
2,155 |
|
|
|
(1,323 |
) |
|
|
1,724 |
|
Comprehensive income (loss) |
|
$ |
6,191 |
|
|
$ |
(3,999 |
) |
|
$ |
36,226 |
|
|
$ |
(5,928 |
) |
(1)Net of income tax benefit (provision) of $900 and $(728) for the three months ended September 30, 2024 and 2023, respectively. Net of income tax benefit (provision) of $447 and $(583) for the nine months ended September 30, 2024 and 2023, 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 |
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
|
|
|
|
Common |
|
|
Common |
|
|
Paid-In |
|
|
Retained |
|
|
Comprehensive |
|
|
|
|
|
|
Stock |
|
|
Stock |
|
|
Capital |
|
|
Earnings |
|
|
(Loss) Income |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE—January 1, 2024 |
|
|
66,623 |
|
|
$ |
6 |
|
|
$ |
317,337 |
|
|
$ |
70,220 |
|
|
$ |
(2,015 |
) |
|
$ |
385,548 |
|
Share-based compensation |
|
|
29 |
|
|
|
1 |
|
|
|
3,338 |
|
|
|
— |
|
|
|
— |
|
|
|
3,339 |
|
Vesting of restricted stock units and impact of shares withheld for taxes |
|
|
411 |
|
|
|
— |
|
|
|
(1,332 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,332 |
) |
Exercise of options and purchases from employee stock plans |
|
|
209 |
|
|
|
— |
|
|
|
1,628 |
|
|
|
— |
|
|
|
— |
|
|
|
1,628 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
37,549 |
|
|
|
— |
|
|
|
37,549 |
|
Other comprehensive loss—net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,323 |
) |
|
|
(1,323 |
) |
BALANCE—September 30, 2024 |
|
|
67,272 |
|
|
$ |
7 |
|
|
$ |
320,971 |
|
|
$ |
107,769 |
|
|
$ |
(3,338 |
) |
|
$ |
425,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
Shares of |
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
|
|
|
|
Common |
|
|
Common |
|
|
Paid-In |
|
|
Retained |
|
|
Comprehensive |
|
|
|
|
|
|
Stock |
|
|
Stock |
|
|
Capital |
|
|
Earnings |
|
|
(Loss) Income |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE—June 30, 2024 |
|
|
67,189 |
|
|
$ |
7 |
|
|
$ |
319,776 |
|
|
$ |
98,917 |
|
|
$ |
(677 |
) |
|
$ |
418,023 |
|
Share-based compensation |
|
|
8 |
|
|
|
— |
|
|
|
942 |
|
|
|
— |
|
|
|
— |
|
|
|
942 |
|
Vesting of restricted stock units and impact of shares withheld for taxes |
|
|
- |
|
|
|
— |
|
|
|
(362 |
) |
|
|
— |
|
|
|
— |
|
|
|
(362 |
) |
Exercise of options and purchases from employee stock plans |
|
|
75 |
|
|
|
— |
|
|
|
615 |
|
|
|
— |
|
|
|
— |
|
|
|
615 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,852 |
|
|
|
— |
|
|
|
8,852 |
|
Other comprehensive loss—net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,661 |
) |
|
|
(2,661 |
) |
BALANCE—September 30, 2024 |
|
|
67,272 |
|
|
$ |
7 |
|
|
$ |
320,971 |
|
|
$ |
107,769 |
|
|
$ |
(3,338 |
) |
|
$ |
425,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE—June 30, 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 |
|
See notes to unaudited condensed consolidated financial statements.
Great Lakes Dredge & Dock Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
2024 |
|
|
2023 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
37,549 |
|
|
$ |
(7,652 |
) |
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
32,217 |
|
|
|
32,320 |
|
Deferred income taxes |
|
|
11,716 |
|
|
|
(1,804 |
) |
Gain on sale of assets |
|
|
(3,097 |
) |
|
|
(296 |
) |
Amortization of capitalized contract costs |
|
|
12,841 |
|
|
|
6,582 |
|
Amortization of deferred financing fees |
|
|
1,723 |
|
|
|
724 |
|
Share-based compensation expense |
|
|
6,096 |
|
|
|
4,209 |
|
Changes in assets and liabilities: |
|
|
|
|
|
- |
|
Accounts receivable |
|
|
12,304 |
|
|
|
15,654 |
|
Contract revenues in excess of billings |
|
|
(23,064 |
) |
|
|
16,632 |
|
Inventories |
|
|
1,260 |
|
|
|
(10,352 |
) |
Prepaid expenses and other current assets |
|
|
(1,289 |
) |
|
|
(10,195 |
) |
Accounts payable and accrued expenses |
|
|
12,255 |
|
|
|
(11,005 |
) |
Billings in excess of contract revenues |
|
|
(13,947 |
) |
|
|
19,478 |
|
Other noncurrent assets and liabilities |
|
|
(2,983 |
) |
|
|
(4,718 |
) |
Cash provided by operating activities |
|
|
83,581 |
|
|
|
49,577 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(102,532 |
) |
|
|
(98,193 |
) |
Proceeds from dispositions of property and equipment |
|
|
9,329 |
|
|
|
1,215 |
|
Cash used in investing activities |
|
|
(93,203 |
) |
|
|
(96,978 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Deferred financing fees |
|
|
(10,897 |
) |
|
|
— |
|
Taxes paid on settlement of vested share awards |
|
|
(1,332 |
) |
|
|
(603 |
) |
Exercise of options and purchases from employee stock plans |
|
|
1,628 |
|
|
|
551 |
|
Borrowing under revolving loans |
|
|
31,000 |
|
|
|
120,000 |
|
Borrowing under Second Lien Credit Agreement |
|
|
100,000 |
|
|
|
— |
|
Repayments of revolving loans |
|
|
(121,000 |
) |
|
|
(65,000 |
) |
Payments on finance lease obligations |
|
|
(1,501 |
) |
|
|
— |
|
Cash (used in) provided by financing activities |
|
|
(2,102 |
) |
|
|
54,948 |
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
|
(11,724 |
) |
|
|
7,547 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
23,761 |
|
|
|
6,546 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
12,037 |
|
|
$ |
14,093 |
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
17,452 |
|
|
$ |
10,742 |
|
Cash paid for income taxes |
|
$ |
1,491 |
|
|
$ |
281 |
|
|
|
|
|
|
|
|
Non-cash Investing and Financing Activities |
|
|
|
|
|
|
Property and equipment purchased but not yet paid |
|
$ |
3,320 |
|
|
$ |
5,191 |
|
See notes to unaudited condensed consolidated financial statements.
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(dollar amounts in thousands, except per share amounts or as otherwise noted)
The unaudited condensed consolidated financial statements and notes herein should be read in conjunction with the audited consolidated financial statements of Great Lakes Dredge & Dock Corporation and Subsidiaries (the “Company” or “Great Lakes”) and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations, although management believes that the disclosures are adequate and make the information presented not misleading. In the opinion of management, all adjustments, which are of a normal and recurring nature (except as otherwise noted), that are necessary to present fairly the Company’s financial position as of September 30, 2024 and December 31, 2023, and its results of operations for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023 have been included.
The components of costs of contract revenues include labor, equipment (including depreciation, maintenance, insurance and long-term rentals), subcontracts, fuel, supplies, short-term rentals and project overhead. Hourly labor is generally hired on a project-by-project basis. Costs of contract revenues vary significantly depending on the type and location of work performed and assets utilized.
The Company has one operating segment which is also the Company’s reportable segment and reporting unit of which the Company tests goodwill for impairment. When conducting the annual impairment test for goodwill, the Company can choose to assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is below its carrying value. If a qualitative assessment determines an impairment is more likely than not, the Company is required to perform a quantitative impairment test. Otherwise, no further analysis is required. The Company also may elect to forego the qualitative and move directly to the quantitative impairment test. The Company performed its annual test of impairment as of July 1, 2024. The Company assessed qualitative factors for any indications of potential impairment of the reporting unit. Upon completing this assessment, it was determined that the fair value of the reporting unit is more likely than not greater than its carrying value as of the assessment date and, as a result, a quantitative test was not performed. The Company will continue to monitor for changes in facts or circumstances that may impact its estimates. The Company will perform its next scheduled annual impairment test of goodwill in the third quarter of 2025 should no triggering events occur which would require a test prior to the next annual test.
The condensed consolidated statements of operations and comprehensive income (loss) for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year.
Recently Issued Accounting Pronouncements—In December 2023, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740)” (“ASU 2023-09”). The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. One of the amendments in ASU 2023-09 includes disclosure of, on an annual basis, a tabular rate reconciliation of (i) the reported income tax expense (or benefit) from continuing operations, to (ii) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate of the jurisdiction of domicile using specific categories, including separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold of 5%. ASU 2023-09 also requires disclosure of, on an annual basis, the year to date amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign jurisdictions, including additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, and should be applied prospectively. Management is currently evaluating the impact of this guidance.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280)” (“ASU 2023-07”). The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. ASU 2023-07 requires a public entity to report a measure of segment profit or loss that the chief operating decision maker (CODM) uses to assess segment performance and make decisions about allocating resources. ASU 2023-07 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in ASU 2023-07 also do not
change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, adopted retrospectively. ASU 2023-07 will not have an impact on our consolidated balance sheets, statements of operations or cash flows, but will affect our financial statement disclosures as discussed above.
Reclassifications—Certain reclassifications have been made to prior period condensed consolidated statements of cash flows to conform to current period presentation. These reclassifications have no effect on net cash flows.
2.Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock.
The computations for basic and diluted earnings (loss) per share are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
8,852 |
|
|
$ |
(6,154 |
) |
|
$ |
37,549 |
|
|
$ |
(7,652 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding — basic |
|
|
67,217 |
|
|
|
66,532 |
|
|
|
67,021 |
|
|
|
66,419 |
|
Effect of stock options and restricted stock units |
|
|
613 |
|
|
|
— |
|
|
|
666 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding — diluted |
|
|
67,830 |
|
|
|
66,532 |
|
|
|
67,687 |
|
|
|
66,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share — basic |
|
$ |
0.13 |
|
|
$ |
(0.09 |
) |
|
$ |
0.56 |
|
|
$ |
(0.12 |
) |
Earnings (loss) per share — diluted |
|
$ |
0.13 |
|
|
$ |
(0.09 |
) |
|
$ |
0.55 |
|
|
$ |
(0.12 |
) |
For the three and nine months ended September 30, 2023, respectively, 652 and 427 stock options (“NQSOs”) and restricted stock units (“RSUs”) were excluded from the diluted weighted average common shares outstanding because the Company incurred a loss during these periods.
For the three and nine months ended September 30, 2024, respectively, there were 56 and 59 stock options and restricted stock units excluded from the calculation of diluted earnings per share, based on the application of the treasury stock method, as such NQSOs and RSUs were determined to be anti-dilutive. For the three and nine months ended September 30, 2023, respectively, there were no NQSOs and RSUs excluded from the calculation of diluted earnings per share, based on the application of the treasury stock method, as such NQSOs and RSUs were determined to be anti-dilutive.
Property and equipment at September 30, 2024 and December 31, 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Land |
|
$ |
9,348 |
|
|
$ |
9,348 |
|
Buildings and improvements |
|
|
1,314 |
|
|
|
1,314 |
|
Furniture and fixtures |
|
|
20,644 |
|
|
|
20,090 |
|
Operating equipment |
|
|
920,618 |
|
|
|
803,954 |
|
Construction in progress |
|
|
235,942 |
|
|
|
264,674 |
|
Total property and equipment |
|
|
1,187,866 |
|
|
|
1,099,380 |
|
Accumulated depreciation |
|
|
(506,314 |
) |
|
|
(484,772 |
) |
Property and equipment—net |
|
$ |
681,552 |
|
|
$ |
614,608 |
|
Accrued expenses at September 30, 2024 and December 31, 2023 were as follows:
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Payroll and employee benefits |
|
$ |
15,268 |
|
|
$ |
11,986 |
|
Insurance |
|
|
14,397 |
|
|
|
12,521 |
|
Interest |
|
|
5,962 |
|
|
|
2,388 |
|
Fuel hedge contracts |
|
|
3,467 |
|
|
|
2,918 |
|
Income and other taxes |
|
|
2,082 |
|
|
|
1,900 |
|
Finance lease liabilities |
|
|
1,793 |
|
|
|
1,047 |
|
Contract reserves |
|
|
- |
|
|
|
3,964 |
|
Other |
|
|
1,093 |
|
|
|
637 |
|
Total accrued expenses |
|
$ |
44,062 |
|
|
$ |
37,361 |
|
Second lien credit agreement
On April 24, 2024, the Company, Great Lakes Dredge & Dock Company, LLC, NASDI Holdings, LLC, Great Lakes Environmental & Infrastructure Solutions, LLC, Great Lakes U.S. Fleet Management, LLC, and Drews Services LLC (collectively, the “Credit Parties”) entered into a $150.0 million second lien credit agreement (as amended, supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”) with Guggenheim Corporate Funding, LLC, on behalf of one or more clients, as the lender, and Guggenheim Credit Services, LLC as Administrative Agent, Collateral Agent and Lead Arranger (“GCS”). The material terms of the Second Lien Credit Agreement are summarized below.
The Second Lien Credit Agreement provides for (i) a senior secured second-lien term loan facility in an aggregate principal amount of $100.0 million, which was funded in full on the initial closing date (the “Closing Date”) and (ii) a senior secured second-lien delayed draw term loan facility in the aggregate principal amount up to $50.0 million, which is available to the Company for a period of 12 months following the Closing Date, subject to the terms and conditions as set forth therein. Net proceeds to the Company, after payment of original discount on the initial loans, a closing fee on the delayed draw facility and other debt issuance costs, including those associated with the ABL Amendment described below, were approximately $88.7 million.
The Second Lien Credit Agreement contains customary representations, mandatory prepayments and affirmative and negative covenants, including a minimum liquidity covenant that requires the Credit Parties to maintain consolidated liquidity of (a) $12.5 million at any time the fixed charge coverage ratio for the most recently ended four fiscal quarter period is less than 1.10 to 1.00 and (b) $50.0 million at any time the fixed charge coverage ratio for the most recently ended four fiscal quarters is greater than or equal to 1.10 to 1.00. For the first 18 months following the Closing Date, the Company may prepay all or a part of the loans under the Second Lien Credit Agreement by paying the principal amount of the loans to be prepaid plus a customary “make-whole” premium, subject to a make-whole carveout of up to $25.0 million (less the amount of any undrawn delayed draw term loan commitments at such time) at 103% with proceeds from a qualifying Maritime Administration (“MARAD”) financing. Thereafter, the Company may prepay all or a part of the loans under the Second Lien Credit Agreement by paying, (i) in months 19-30 following the Closing Date, 103% of the principal amount of the loans to be prepaid, plus accrued and unpaid interest and (ii) in months 31 to 42 after the Closing Date, 101% of the principal amount of loans to be prepaid, plus accrued and unpaid interest.
The Second Lien Credit Agreement also contains customary events of default (including non-payment of principal or interest on any material debt and breaches of covenants) as well as events of default relating to certain actions by the Company’s surety bonding providers. The obligations of the Credit Parties under the Second Lien Credit Agreement are unconditionally guaranteed, on a joint and several basis, by each borrower (other than the Company) and subsidiary guarantor under the ABL Credit Agreement (as defined below), each existing or future issuer or guarantor under the indenture governing the Company’s 5.25% Senior Notes due 2029, and each other existing and subsequently acquired or formed material direct or indirect wholly-owned domestic subsidiary of the Company.
The loans under the Second Lien Credit Agreement funded on the Closing Date were used to repay amounts outstanding under the ABL Credit Agreement, to pay fees and expenses associated with the transactions and for general corporate purposes, including to fund upcoming new build payments. The delayed draw portion of the term loans, if funded, will be used to fund future new build payments, ongoing working capital and for other general corporate purposes. The Second Lien Credit Agreement matures on the
earlier of April 24, 2029</