-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wexa2D+/cZfKqcP5x109ma7h/lZAxEZJQ3QesjCu3dWlUc1xUX4YnmPTijjx2nVD G7MeBSe3GZFBgf+LcNBKYA== 0000950131-99-002791.txt : 19990506 0000950131-99-002791.hdr.sgml : 19990506 ACCESSION NUMBER: 0000950131-99-002791 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT LAKES DREDGE & DOCK CORP CENTRAL INDEX KEY: 0000885538 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 133634726 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 333-64687 FILM NUMBER: 99611091 BUSINESS ADDRESS: STREET 1: 2122 YORK ROAD CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 6305743000 MAIL ADDRESS: STREET 1: 2122 YORK RD CITY: OAK BROOK STATE: IL ZIP: 60521 10-K405 1 SPECIAL REPORT ON FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K SPECIAL FINANCIAL REPORT __________________ [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 Commission file number: 333-64687 Great Lakes Dredge & Dock Corporation (Exact name of registrant as specified in its charter) Delaware 13-3634726 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2122 York Road, Oak Brook, Illinois 60521 (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: NONE Securities Registered Pursuant to Section 12(g) of the Act: NONE __________________ Pursuant to Rule 15d-2 of the Act, this annual report contains only financial statements for the fiscal year ended December 31, 1998. 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 [X] No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the voting stock held by non-affiliates of the registrant is $120,300 based on a price of $1.00/share. As of April 28, 1999, there were outstanding 1,636,100 shares of Class A Common Stock, 3,363,900 shares of Class B Common Stock, and 45,000 shares of Preferred Stock. DOCUMENTS INCORPORATED BY REFERENCE NONE Part II Item 8. Financial Statements and Supplementary Data. This Annual Report on Form 10-K for the fiscal year ended December 31, 1998 is being filed pursuant to Rule 15d-2 under the Securities Exchange Act of 1934 and contains only certified financial statements as required by Rule 15d-2. Rule 15d-2 provides generally that, if a registrant files a registration statement under the Securities Act of 1933, as amended, which does not contain certified financial statements for the registrant's last full fiscal year (or for the life of the registrant if less than a full year), than the registrant shall, within 90 days of the effective date of the registration statement, file a special report furnishing certified financial statements for such last fiscal year or other period as the case may be. Rule 15d-2 further provides that such special financial report is to be filed under cover of the facing sheet appropriate for the annual report of the registrant. Great Lakes Dredge & Dock Corporation's Registration Statement on Form S-4 (Registration No. 333-64687), declared effective February 5, 1999, did not contain the certified financial statements for the Registrant's last full fiscal year, that is, the fiscal year ended December 31, 1998. Therefore, as required by Rule 15d-2, certified financial statements for the year ended December 31, 1998 are filed herewith. Part IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) 1. Financial Statements: INDEX TO FINANCIAL STATEMENTS Great Lakes Dredge & Dock Corporation Independent Auditors' Report Consolidated Balance Sheets as of December 31, 1998 and 1997 Consolidated Statements of Operations for the years ended December 31, 1998, 1997 and 1996 Consolidated Statement of Changes in Stockholders' Equity (Deficit) for the years ended December 31, 1998, 1997 and 1996 Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997, and 1996 Notes to Consolidated Financial Statements 2. Financial Statement Schedules: All schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto. 3. Exhibits: (27) Financial Data Schedule All other schedules and exhibits are omitted because they are either not applicable or not required in this filing. (b) Reports on Form 8-K No reports were filed by the Company during the fiscal year ended December 31, 1998. GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 and INDEPENDENT AUDITORS' REPORT INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Great Lakes Dredge & Dock Corporation: We have audited the accompanying consolidated balance sheets of Great Lakes Dredge & Dock Corporation and Subsidiaries (the "Company") as of December 31, 1998 and 1997, and the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Amboy Aggregates (Amboy) joint venture for the year ended December 31, 1998, the Company's investment in which is accounted for using the equity method. The Company's equity of $6.5 million in Amboy's net assets at December 31, 1998 and of $1.0 million in Amboy's net income for the year then ended is included in the accompanying financial statements. The financial statements of Amboy were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for such joint venture, is based solely on the report of such other auditors. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the report of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of Great Lakes Dredge & Dock Corporation and Subsidiaries as of December 31, 1998 and 1997, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1998 in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP Chicago, IL January 28, 1999 GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 1998 and 1997 (in thousands, except share and per share amounts)
ASSETS 1998 1997 --------- -------- Current assets: Cash and equivalents $ 758 $ 1,717 Accounts receivable 37,396 40,299 Contract revenues in excess of billings 15,936 15,508 Inventories 13,427 9,195 Settlement advance - 11,000 Prepaid expenses 1,257 1,968 Other current assets 5,919 8,319 --------- -------- Total current assets 74,693 88,006 Property and equipment, net 134,237 138,716 Inventories 6,905 6,326 Investments in joint ventures 10,507 7,569 Other 8,745 4,938 --------- -------- $ 235,087 $245,555 ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 26,220 $ 31,001 Accrued expenses 18,630 15,419 Billings in excess of contract revenues 4,842 2,974 Current maturities of long-term debt 2,700 200 --------- -------- Total current liabilities 52,392 49,594 Long-term debt 167,700 57,400 Deferred income taxes 45,695 48,322 Foreign income taxes 6,944 5,078 Other 6,496 5,149 --------- -------- Total liabilities 279,227 165,543 Minority interests 4,594 1,856 Commitments and contingencies (Note 17) - - Stockholders' equity (deficit): Preferred stock - 1998: $.01 par value; 250,000 shares authorized; 45,000 issued and outstanding. 1997: 100 shares authorized; none issued. 1 - Common stock - 1998: $.01 par value; 50,000,000 shares authorized; 5,000,000 issued and outstanding. 1997: No par value; 200 shares authorized; 100 issued and outstanding. 50 60,000 Additional paid-in capital 50,457 - Retained earnings (deficit) ( 99,242) 18,156 --------- -------- Total stockholders' equity (deficit) ( 48,734) 78,156 --------- -------- $ 235,087 $245,555 ========= ========
See notes to consolidated financial statements. GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years ended December 31, 1998, 1997 and 1996 (in thousands)
1998 1997 1996 -------- -------- -------- Contract revenues $289,212 $258,296 $235,871 Costs of contract revenues 240,578 228,383 208,717 -------- -------- -------- Gross profit 48,634 29,913 27,154 General and administrative expenses 22,672 18,922 16,391 Equity incentive plan and other compensation expenses 8,169 - - Recapitalization related expenses 9,527 - - -------- -------- -------- Operating income 8,266 10,991 10,763 Other income (expense): Interest income 312 316 138 Interest expense (10,175) ( 6,303) ( 6,182) Equity in earnings of joint ventures 1,218 3,132 1,139 -------- -------- -------- Income (loss) before income taxes, minority interests, discontinued operations and extraordinary item ( 379) 8,136 5,858 Income tax expense ( 636) ( 2,667) ( 2,324) Minority interests ( 2,738) ( 1,667) ( 419) -------- -------- -------- Income (loss) from continuing operations before extraordinary item ( 3,753) 3,802 3,115 Discontinued operations, net of tax benefit of $739 - - ( 1,109) Extraordinary item, net of tax benefit of $543 ( 925) - - -------- -------- -------- Net income (loss) $( 4,678) $ 3,802 $ 2,006 ======== ======== ========
See notes to consolidated financial statements. GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) Years ended December 31, 1998, 1997 and 1996 (in thousands, except share amounts)
Number of shares ------------------- Additional Common Preferred Paid-in Retained Common Preferred Stock Stock Capital Earnings Total ----------- --------- --------- --------- ---------- --------- --------- Balance at January 1, 1996 100 - $ 60,000 $ - $ - $ 12,348 $ 72,348 Net income - - - - - 2,006 2,006 ---------- --------- --------- ---------- --------- --------- --------- Balance at December 31, 1996 100 - 60,000 - - 14,354 74,354 Net income - - - - - 3,802 3,802 ---------- --------- --------- ---------- --------- --------- --------- Balance at December 31, 1997 100 - 60,000 - - 18,156 78,156 Exercise of stock options 8 - 4,516 - - - 4,516 Tax benefit on tax compensation expense related to stock options exercised - - 944 - - - 944 Assignment of settlement advance receivable - - - - - (11,000) ( 11,000) Common stock purchased 3,552,190 - 8,704 - - - 8,704 Issuance of preferred stock - 34,420 - 34,420 - - 34,420 Conversion of common shares to preferred shares ( 7) 10,580 ( 8,656) 10,580 - ( 1,924) - Redemption of common shares (100) - (60,000) - - (99,796) (159,796) Record shares at par value 1,447,809 - ( 5,458) (44,999) 50,457 - - Net loss - - - - - ( 4,678) ( 4,678) ---------- --------- --------- --------- --------- --------- --------- Balance at December 31, 1998 5,000,000 45,000 $ 50 $ 1 $ 50,457 $ (99,242) $( 48,734) ========== ========= ========= ========= ========= ========= =========
See notes to consolidated financial statements.
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 1998, 1997 and 1996 (in thousands) 1998 1997 1996 --------- ---------- --------- OPERATING ACTIVITIES Net income (loss) $( 4,678) $ 3,802 $ 2,006 Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation 13,950 13,615 13,881 Earnings of joint ventures ( 1,218) ( 3,132) ( 1,139) Minority interests 2,738 1,667 419 Deferred income taxes ( 2,733) ( 3,963) ( 3,796) Foreign income taxes 1,866 2,696 2,382 Pension curtailment and settlement - - ( 1,688) Loss (gain) on dispositions of property and equipment 717 ( 3,308) ( 467) Compensation expense related to exercise of options 5,152 - - Extraordinary item 925 - - Other, net 921 ( 238) 217 Changes in assets and liabilities: Accounts receivable 2,903 (12,242) 20,945 Contract revenues in excess of billings ( 428) ( 4,256) 3,094 Inventories ( 4,811) 1,264 3,915 Prepaid expenses and other current assets 4,712 ( 250) 3,107 Accounts payable and accrued expenses ( 1,654) 15,315 (15,881) Billings in excess of contract revenues 1,868 2,648 ( 2,321) --------- --------- --------- Net cash flows from operating activities 20,230 13,618 24,674 INVESTING ACTIVITIES Purchases of property and equipment ( 29,129) (11,494) ( 5,411) Dispositions of property and equipment 20,213 5,437 7,820 Distributions from joint ventures - 1,000 750 Investments in joint ventures ( 1,720) ( 630) ( 755) Distributions to minority interests - ( 3,025) ( 700) Deposit - 2,500 ( 2,500) --------- ---------- --------- Net cash flows from investing activities ( 10,636) ( 6,212) ( 796) FINANCING ACTIVITIES Proceeds from long-term debt issued 55,000 8,000 - Repayments of long-term debt ( 200) (28,836) (18,317) Borrowing (repayments) of revolving loans, net ( 57,000) 26,000 ( 6,000) Proceeds from 11 1/4% subordinated debt issued 115,000 - - Exercise of options 4,516 - - Common stock purchased 3,552 - - Issuance of preferred stock 34,420 - - Financing fees ( 6,045) ( 1,740) - Redemption of shares (159,796) - - Settlement advance - (11,000) - --------- --------- --------- Net cash flows from financing activities ( 10,553) ( 7,576) (24,317) --------- --------- --------- Net decrease in cash and equivalents ( 959) ( 170) ( 439) Cash and equivalents at beginning of year 1,717 1,887 2,326 --------- --------- --------- Cash and equivalents at end of year $ 758 $ 1,717 $ 1,887 ========= ========= ========= SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest $ 4,928 $ 5,407 $ 6,131 ========= ========= ========= Cash paid for taxes $ 3,276 $ 4,588 $ 1,492 ========= ========= =========
See notes to consolidated financial statements. GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share amounts) 1. Summary of significant accounting policies Organization and recapitalization Great Lakes Dredge & Dock Corporation and its subsidiaries (the Company) are in the business of marine construction, primarily dredging. The Company's primary customers are domestic and foreign government agencies. Prior to August 19, 1998, Great Lakes Dredge & Dock Corporation (GLD Corporation) was wholly owned by Blackstone Limited Partnerships (Blackstone). On August 19, 1998, Great Lakes Dredge & Dock Corporation effected a recapitalization whereby (i) management exercised vested options representing 7% of the Company's then outstanding common stock, (ii) a portion of those shares of common stock held by management was purchased directly by Vectura Holding Company, LLC (Vectura), (iii) newly issued common stock and preferred stock was sold to Vectura and certain additional members of management, (iv) the common stock formerly held by Blackstone was redeemed, and (v) a portion of the common stock held by management and Vectura was converted into preferred stock. The redemption of the common stock formerly held by Blackstone was financed using a portion of the proceeds from $115,000 of senior subordinated debt, $110,000 new bank credit facility, and $45,000 of preferred stock and $3,552 of common stock sold to Vectura and certain members of management. As a result of the recapitalization, certain members of Company management own approximately 16% of the outstanding common stock and Vectura owns approximately 84%. Principles of consolidation and basis of presentation The consolidated financial statements include the accounts of GLD Corporation and its subsidiaries. All significant intercompany accounts and transactions are eliminated. The Company is a joint venture partner in Amboy Aggregates and Riovia S.A., which are accounted for under the equity method. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Revenue and cost recognition on contracts Contract revenues are recognized under the percentage-of-completion method, based on the Company's engineering estimates of the physical percentage completed of each project. Billings on contracts are generally submitted after verification with the customers of physical quantities completed. Costs of contract revenues are adjusted to reflect the gross profit percentage expected to be achieved upon ultimate completion of each project. Significant expenditures incurred incidental to major contracts are deferred and recognized as contract costs based on contract performance over the duration of the related project. These expenditures are reported as prepaid expenses. Provisions for estimated losses on contracts in progress are made in the period in which such losses are determined. Claims for additional compensation due the Company are not recognized in contract revenues until such claims are settled. Classification of current assets and liabilities The Company includes in current assets and liabilities amounts realizable and payable in the normal course of contract completion unless completion of such contracts extends significantly beyond one year. Cash equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Inventories Inventories are recorded at the lower of first-in, first-out cost or market. Inventories consist mainly of pipe, purchased spare parts and supplies. Depreciation Depreciation is provided over the estimated useful lives of property and equipment using the straight-line method. The estimated useful lives by class of assets are 5 to 10 years for furniture and fixtures and 3 to 25 years for operating equipment. Income Taxes The Company records income taxes based upon SFAS 109, "Accounting for Income Taxes," which requires the use of the liability method of accounting for deferred income taxes. The provision for income taxes includes federal, foreign and state income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. Fair value of financial instruments The carrying value of financial instruments included in current assets and liabilities approximates fair values due to the short-term maturities of these instruments. The carrying value of long-term bank debt is a reasonable estimate of its fair value as interest rates are variable, based on the prevailing market rates. The fair value of the Company's $115,000 long term subordinated notes was $117,875 at December 31, 1998, based on quoted market prices. The contract amount of letters of credit and guarantees is a reasonable estimate of their fair value as the value for each is fixed over the life of the commitment. Long-lived assets Long-lived assets are reviewed for possible impairment whenever events indicate that the carrying amount of such assets may not be recoverable by comparing the undiscounted cash flows associated with the assets to their carrying amounts. If such a review indicates an impairment, the carrying amount would be reduced to estimated recoverable value. Capital stock As part of the recapitalization, the Company authorized and issued 250,000 and 45,000 shares, respectively, of preferred stock. The preferred stock is entitled to annual dividends, if declared, which dividends are cumulative, whether or not earned or declared, and accrue at the rate of 12%, compounding annually. At December 31, 1998, dividends in arrears on the preferred stock were $1,982. Additionally, the Company authorized and issued 25,000,000 and 1,636,100 shares, respectively, of class A voting common stock, and 25,000,000 and 3,363,900 shares, respectively, of class B nonvoting common stock, with a par value of $.01 per share. Previously, authorized and issued common stock had no par value. Recent accounting pronouncements In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133), which is effective for all fiscal quarters for fiscal years beginning after June 15, 1999. SFAS 133 requires that all derivative instruments be recognized as either assets or liabilities in the statement of financial position and be measured at fair value. SFAS 133 additionally requires changes in the fair value of derivatives to be recorded in current earnings or comprehensive income based on the intended use of the derivatives. Management is in the process of evaluating the impact of SFAS 133 on the Company's financial position, results of operations and cash flows. Reclassifications Certain amounts in the 1997 balance sheet and the 1997 and 1996 statements of cash flows have been reclassified to conform to the 1998 presentation. 2. Accounts receivable Accounts receivable are as follows:
1998 1997 ------- ------- Completed contracts $12,682 $13,797 Contracts in progress 21,420 22,831 Retainage 4,193 4,121 ------- ------- 38,295 40,749 Allowance for doubtful accounts (899) (450) ------- ------- $37,396 $40,299 ======= =======
3. Contracts in progress The components of contracts in progress are as follows:
1998 1997 -------- -------- Costs and earnings in excess of billings: Costs and earnings for contracts in progress $108,064 $ 56,981 Prepaid contract costs - (1,053) Amounts billed (93,431) (45,575) -------- -------- Costs and earnings in excess of billings for contracts in progress 14,633 10,353 Costs and earnings in excess of billings for completed contracts 1,303 5,155 -------- -------- $ 15,936 $ 15,508 ======== ======== Billings in excess of costs and earnings: Amounts billed $(45,808) $(44,870) Costs and earnings for contracts in progress 40,966 41,896 -------- -------- $ (4,842) $ (2,974) ======== ========
4. Property and equipment Property and equipment are as follows:
1998 1997 -------- --------- Land $ 3,066 $ 2,604 Furniture and fixtures 4,546 5,652 Operating equipment 212,390 203,784 --------- --------- 220,002 212,040 Accumulated depreciation ( 85,765) ( 73,324) --------- --------- $ 134,237 $ 138,716 ========= =========
Performance bonds are customarily required for dredging and marine construction projects. The Company obtains its performance bonds through a bonding agreement with a group of insurance companies that have been granted a security interest in a substantial portion of the Company's operating equipment with a net book value of approximately $62,198 at December 31, 1998. The bonding agreement contains financial and operating covenants that limit the ability of the Company to incur indebtedness, create liens, pay dividends and take certain other actions. In 1996, the Company paid $2,500 for an option to purchase a used hopper dredge. In 1997, the Company recovered this amount through a lease transaction. 5. Investments in joint ventures The Company has a 50% ownership interest in Amboy Aggregates (Amboy), whose primary business is the dredge mining and sale of fine aggregate, and a 17% ownership interest in Riovia S.A., a venture whose sole business is the performance of a dredging contract in Argentina and Uruguay. The Company's share of earnings of these joint ventures is included in income as earned. Financial information for Riovia S.A. is provided as of November 30, 1998 and for the eleven months ended November 30, 1998, the most recently available information for preparation of the Company's 1998 financial statements. Summarized information for the joint ventures is as follows:
1998 1997 1996 -------- -------- -------- Current assets $ 44,310 $ 37,121 Non-current assets 15,928 18,098 -------- -------- Total assets 60,238 55,219 Current liabilities (14,807) (17,875) Non-current liabilities ( 8,545) (10,737) -------- -------- Equity $ 36,886 $ 26,607 ======== ======== Revenue 55,207 68,125 23,927 Costs and expenses (52,739) (58,070) (20,691) -------- -------- -------- Net income $ 2,468 $ 10,055 $ 3,236 ======== ======== ========
Amboy has a mortgage loan with a bank, which contains certain restrictive covenants, including limitations on the amount of distributions to its joint venture partners. The Company has guaranteed 50% of the outstanding mortgage principal and accrued interest which at December 31, 1998 totaled $4,989. In 1997, the Company paid royalties of $1,549 to Amboy for the right to mine sand related to the performance of a contract of the Company. In 1996, the Company provided dredging and towing services to Amboy and recorded revenues of $735. 6. Accrued expenses Accrued expenses are as follows:
1998 1997 -------- -------- Payroll and employee benefits $ 5,817 $ 2,835 Insurance 5,424 5,501 Interest 5,195 429 Income and other taxes 1,174 5,138 Other 1,020 1,516 -------- -------- $ 18,630 $ 15,419 ======== ========
7. Long-term debt Long-term debt is as follows:
1998 1997 --------- -------- Bank debt: Revolving loan (prior credit agreement) $ - $ 57,000 New term loan 55,000 - New revolving loan - - 11 1/4% subordinated debt 115,000 - Other debt 400 600 --------- -------- 170,400 57,600 Current maturities of long-term debt ( 2,700) ( 200) --------- -------- $ 167,700 $ 57,400 ========= ========
In August 1998, the Company entered into a new bank credit agreement (Credit Agreement). The Credit Agreement, expiring in 2004, consists of a $55,000 term loan and a $55,000 aggregate revolving credit facility which may be used for borrowings or for letters of credit. At December 31, 1998, availability under the aggregate revolving credit facility was $49,145. The terms of the Credit Agreement provide for interest rate spreads based on the Company's debt level compared to earnings, as defined, and allow for various interest rate options for loan amounts and periods that are selected at the discretion of the Company. At December 31, 1998 and 1997, the average borrowing rate was 8.8% and 8.0%, respectively, including amortization of financing fees. The Company also pays an annual commitment fee of up to 0.5% on the average daily unused capacity available under the revolving credit facility. The Credit Agreement contains provisions that require the Company to maintain a minimum net worth and certain other financial ratios, limit payment of dividends and restrict certain other transactions. Borrowings under the Credit Agreement are secured by first lien mortgages on certain operating equipment of the Company with a net book value of $34,159 at December 31, 1998 and are guaranteed by certain subsidiaries of the Company. Beginning September 30, 1999, quarterly principal payments of the term loan are required as specified in the Credit Agreement. Annual prepayments of principal may be required to the extent the Company has excess cash, as defined, and voluntary prepayments are allowed. All prepayments modify the requirements for scheduled principal payments. Scheduled long-term debt maturities for the five years ending December 31 are as follows:
1999 $ 2,700 2000 6,700 2001 9,000 2002 11,000 2003 12,000
On August 19, 1998, the Company issued $115,000 of senior subordinated notes (Notes) which will mature on August 15, 2008. Interest on the Notes accrues at a rate of 11 1/4% per annum and is payable semi-annually beginning on February 15, 1999. The Notes are general unsecured obligations of the Company, subordinated in right of payment to all existing and future senior debt, including borrowings under the Credit Agreement. The Company's obligation under the Notes are guaranteed on a senior subordinated basis by the Company's wholly owned domestic subsidiaries. 8. Income taxes The provision for income taxes is as follows:
1998 1997 1996 ------- ------- ------- Federal: Current $ 703 $ 2,372 $ 3,070 Current foreign 1,741 3,112 2,268 Deferred (2,451) (3,386) (3,396) State: Current 925 1,146 782 Deferred ( 282) ( 577) ( 400) ------- ------- ------- Income tax expense $ 636 $ 2,667 $ 2,324 ======= ======= =======
The Company's income tax provision reconciles to the provision at the statutory U.S. federal income tax rate as follows:
1998 1997 1996 ------- ------- ------- Tax (benefit) expense at statutory U.S federal income tax rate $ ( 108) $ 2,848 $ 2,050 State income tax, net of federal income tax benefit 367 370 253 Partnership gain allocated to minority interest ( 863) ( 485) ( 35) Nondeductable recapitalization related expenses 1,185 - - Other 55 ( 66) 56 ------- ------- ------- Income tax provision $ 636 $ 2,667 $ 2,324 ======= ======= =======
The deferred tax liabilities (assets) are as follows:
1998 1997 --------- -------- Gross deferred tax liabilities: Depreciation $ 45,094 $ 47,435 Other 3,177 2,509 -------- -------- 48,271 49,944 Gross deferred tax assets: Accrued liabilities ( 4,979) ( 3,919) -------- -------- 43,292 46,025 Net current deferred tax assets (included in other current assets) 2,403 2,297 -------- -------- Net non-current deferred tax liabilities $ 45,695 $ 48,322 ======== ========
9. Recapitalization related expenses In August 1998, pursuant to the terms of the agreement for the recapitalization, the Company paid fees and expenses of $3,606 and bonuses to certain members of management of $5,921. 10. Other compensation expenses In September 1998, the Company approved and paid discretionary bonuses of $3,017 to certain members of management. 11. Discontinued operations In April 1997, the Company completed the sale of its non-core aggregate towing business. Revenues from the discontinued segment were $1,575 for 1996. The loss on sale of the assets of the discontinued operations, recorded in 1996, was not material. 12. Extraordinary item In August 1998, as a result of entering into a new credit agreement, deferred financing fees associated with the Company's prior credit agreement of $1,468 ($925 net of income tax benefit) were written off as an extraordinary item. 13. Lease commitments The Company leases certain operating equipment and office facilities under long- term operating leases expiring at various dates through 2011. The leases contain renewal or purchase options which specify prices at the then fair market value upon the expiration of the equipment leases. Future minimum lease payments for the year ending December 31 are as follows:
1999 $ 7,978 2000 7,942 2001 7,893 2002 7,830 2003 7,834 Thereafter 32,227 -------- Total minimum lease payments $ 71,704 ========
Total rent expense for the years ended December 31, 1998, 1997 and 1996 was $12,651, $16,457 and $19,926, respectively. 14. Retirement plans The Company sponsors a 401(k) savings plan (Plan) covering substantially all non-union employees. Under the Plan, individual employees may contribute a percentage of compensation and the Company will match a portion of the employees' contributions. Additionally, the Plan includes a profit-sharing component, permitting the Company to make discretionary employer contributions to all eligible employees of the Plan. The Company's expense for matching and discretionary contributions for 1998, 1997 and 1996 was $2,087, $1,732 and $716, respectively. The Company also contributes to various multi-employer pension plans pursuant to collective bargaining agreements. In the event of a plan's termination or Company withdrawal from a plan, the Company may be liable for a portion of the plan's unfunded vested benefits. As of December 31, 1998, unfunded amounts, if any, are not significant. Contributions to multi-employer pension plans for the years ended December 31, 1998, 1997 and 1996 were $1,816 , $2,173 and $2,593, respectively. During 1996, the Company terminated a non-contributory defined benefit pension plan that covered substantially all non-union employees. The pension plan's liabilities were settled in 1996 through a combination of lump sum payouts and rollovers, and a group annuity contract. The Company recognized a $2,440 curtailment gain and a $752 settlement loss on the termination of the pension plan. 15. Stock plans The Equity Incentive Plan of Great Lakes Dredge & Dock Corporation provided for the grant of options and other stock-based awards to management personnel. On January 1, 1992, options were granted for approximately 7.5 shares of common stock at an exercise price of $600,000 per share, representing the estimated fair market value of the shares on the grant date (as defined in the Agreement). As of December 31, 1997, all options granted were fully vested and outstanding. On August 19, 1998, all options granted under the Equity Incentive Plan were exercised which represented 7% of the common stock outstanding after the exercise. Subsequently, a portion of these shares, representing 4.8% of common stock outstanding, was sold to Vectura in conjunction with the recapitalization, resulting in non-cash compensation expense of $5,152. The Equity Incentive Plan was terminated as of the date of recapitalization. Additionally, in August as part of the recapitalization, the Great Lakes Dredge & Dock Corporation Employee Stock Purchase Plan was terminated. There were no options granted or outstanding at the time of termination. The Company used Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for its employee stock options. Statements of Financial Accounting Standards No. 123, "Accounting for Stock- Based Compensation" (SFAS 123) requires disclosures of the effect to net income as if SFAS 123 had been adopted. The effects of applying SFAS 123 were not material to the Company's financial statements. 16. Segment information and concentrations of risk The Company and its subsidiaries operate in one reportable segment of providing dredging services, which includes three primary types of work: capital, maintenance and beach nourishment. Revenues by type of work for the years ended December 31, are as follows:
1998 1997 1996 --------- --------- --------- Capital $ 146,253 $ 111,482 $ 92,588 Beach nourishment 80,947 59,036 65,838 Maintenance 60,593 74,379 47,014 Other 1,419 13,399 30,431 --------- --------- --------- $ 289,212 $ 258,296 $ 235,871 ========= ========= =========
In 1998, 1997 and 1996, 44.2%, 47.4% and 35.8%, respectively, of contract revenues were earned from contracts with federal government agencies. In 1998, 1997 and 1996, 17.1%, 10.1% and 11.8%, respectively, of contract revenues were earned from a contract with a state port authority. In 1997 and 1996, an additional 9.5% and 10.9%, respectively, were earned from contracts with a foreign government. The Company derived revenues and gross profit from foreign project operations for the years ended December 31, as follows:
1998 1997 1996 --------- --------- --------- Contract revenues $ 57,591 $ 55,919 $ 58,166 Costs of contract revenues (54,292) (48,695) (49,324) --------- --------- --------- Gross profit $ 3,299 $ 7,224 $ 8,842 ========= ========= =========
17. Commitments and contingencies At December 31, 1998, the Company is liable, in the normal course of business, for $1,237 in letters of credit related to contract performance guarantees. During 1998, the Company entered into a contract to build a backhoe dredge for approximately $18,000 for delivery in mid 1999. In October 1998, the Company sold $5,687 of related construction in progress expenditures and entered into a construction agency agreement to complete the backhoe construction and a long term operating lease to operate the dredge upon completion. In 1992, an underwater utility tunnel failed adjacent to a construction site completed by Great Lakes Dredge & Dock Company (GLDD), a wholly owned subsidiary of GLD Corporation. The failure resulted in a flooding of the tunnel and building basements serviced by the tunnel. Numerous suits were filed against GLDD for claims of flood damage to building basements and losses due to business interruption. During 1997, all outstanding claims were settled related to the flood litigation. Settlement payments totaling $11,000 were advanced by the Company. As part of the recapitalization, the right to receive the $11,000 settlement advance was retained by the Blackstone Limited Partnerships. In the normal course of business, the Company is a defendant in various other legal proceedings. Resolution of these claims is not expected to have a material impact on the financial position or operations of the Company. As is customary with negotiated contracts with the federal government, the government has the right to audit the books and records of the Company to ensure compliance with such contracts and applicable federal laws. The government has the ability to seek a price adjustment based on the results of such audit. Any such audits are not expected to have a material impact on the financial position or operations of the Company. 18. Related party transactions In August 1998, the Company made recourse loans totaling $4,516 to certain members of management in connection with the exercise of their options. The loans were immediately repaid to the Company from proceeds received by management upon the sale of a portion of their common stock to Vectura. 19. Supplemental condensed consolidating financial information The payment obligations of the Company under the 11 1/4% subordinated debt are guaranteed by the Company's wholly-owned domestic subsidiaries ("Subsidiary Guarantors"). Such guarantees are full, unconditional and joint and several. Separate financial statements of the Subsidiary Guarantors are not presented because the Company's management has determined that they would not be material to investors. The following supplemental financial information sets forth, on a combined basis, balance sheets, statements of income and statements of cash flows for the Subsidiary Guarantors, the Company's non-guarantor subsidiaries and for GLD Corporation. During the fourth quarter of 1998, Great Lakes International, Inc. (GLI), a wholly owned guarantor subsidiary of the Company, was merged into GLD Corporation. Therefore, the amounts presented in the following columns for GLD Corporation include GLI amounts and activity as if it had been merged into GLD Corporation as of January 1, 1996. GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Balance Sheet at December 31, 1998
Guarantor Other GLD Consolidated ASSETS Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Current assets: Cash and equivalents............................ $ 490 $ 268 $ -- $ -- $ 758 Accounts receivable............................. 33,601 3,789 6 -- 37,396 Receivables from affiliates..................... 5,664 16,148 111 (21,923) -- Current portion of net investment in direct financing leases....................... -- 4,767 3,228 (7,995) -- Contract revenues in excess of billings......... 13,350 2,586 -- -- 15,936 Inventories..................................... 10,111 3,316 -- -- 13,427 Prepaid expenses and other current assets....... 4,856 168 2,152 -- 7,176 ------------ ------------ ----------- ------------ ------------ Total current assets............... 68,072 31,042 5,497 (29,918) 74,693 Property and equipment, net....................... 71,021 16,265 46,951 -- 134,237 Net investment in direct financing leases......... -- 8,829 5,766 (14,595) -- Investments in subsidiaries....................... 18,957 -- 120,177 139,134 -- Notes receivable from affiliates.................. 27,902 1,204 -- (29,106) -- Inventories....................................... 6,905 -- -- -- 6,905 Investments in joint ventures..................... 10,507 -- -- -- 10,507 Other............................................. 3,647 -- 5,098 -- 8,745 ------------ ------------ ----------- ------------ ------------ $ 207,011 $ 57,340 $ 183,489 $ (212,753) $ 235,087 ============ ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable................................ $ 21,578 $ 4,509 123 10 $ 26,220 Payables to affiliates.......................... 16,624 2,747 2,552 (21,923) -- Accrued expenses and other...................... 11,757 1,165 5,708 -- 18,630 Current portion of obligations under capital -- 7,995 -- (7,995) -- leases......................................... Billings in excess of contract revenues......... 3,533 1,309 -- -- 4,842 Current maturities of long-term debt............ 200 -- 2,500 -- 2,700 ------------- ----------- ------------- ------------- ------------ Total current liabilities.......... 53,692 17,725 10,883 (29,908) 52,392 Long-term debt.................................... 200 -- 167,500 -- 167,700 Obligations under capital leases.................. -- 14,595 -- (14,595) -- Note payable to affiliate......................... -- -- 29,106 (29,106) -- Deferred income taxes............................. 26,833 2,572 16,290 -- 45,695 Foreign income taxes.............................. -- -- 6,944 -- 6,944 Other............................................. 4,567 429 1,500 -- 6,496 ------------- ----------- ------------- ------------- ------------ Total liabilities.................. 85,292 35,321 232,223 (73,609) 279,227 Minority interests................................ -- -- -- 4,594 4,594 Stockholders' equity (deficit).................... 121,719 22,019 (48,734) (143,738) (48,734) ------------- ----------- ------------- ------------- ------------ 207,011 $ 57,340 $ 183,489 $ (212,753) $ 235,087 ============= ========== ============= ============= ============
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Balance Sheet at December 31, 1997
Guarantor Other GLD Consolidated ASSETS Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Current assets: Cash and equivalents................................... $ 1,285 $ 432 $ -- $ -- $ 1,717 Accounts receivable.................................... 37,043 3,132 124 -- 40,299 Receivables from affiliates............................ 18,716 9,713 -- (28,429) -- Current portion of net investment in direct financing leases............................ -- 4,121 2,938 (7,059) -- Contract revenues in excess of billings................ 14,623 885 -- -- 15,508 Inventories............................................ 7,016 2,179 -- -- 9,195 Settlement advance..................................... 11,000 -- -- -- 11,000 Prepaid expenses and other current assets.............. 9,280 178 829 -- 10,287 -------- ------- -------- --------- -------- Total current assets...................... 98,963 20,640 3,891 (35,488) 88,006 Property and equipment, net............................... 73,208 16,574 48,934 -- 138,716 Net investment in direct financing leases................. -- 13,596 8,994 (22,590) -- Investments in subsidiaries............................... 11,921 -- 131,229 (143,150) -- Note receivable from affiliate............................ 26,717 1,893 -- (28,610) -- Inventories............................................... 6,326 -- -- -- 6,326 Investments in joint ventures............................. 7,569 -- -- -- 7,569 Other..................................................... 3,633 -- 1,305 -- 4,938 -------- ------- -------- --------- -------- $228,337 $52,703 $194,353 $(229,838) $245,555 ======== ======= ======== ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable....................................... $ 26,879 $ 4,106 $ 16 $ -- $ 31,001 Payables to affiliates................................. 23,614 2,371 2,444 (28,429) -- Accrued expenses and other............................. 9,853 2,144 3,422 -- 15,419 Billings in excess of contract revenues................ 2,974 -- -- -- 2,974 Current portion of obligations under capital leases.... -- 7,059 -- (7,059) -- Current maturities of long-term debt................... 200 -- -- -- 200 -------- ------- -------- --------- -------- Total current liabilities................. 63,520 15,680 5,882 (35,488) 49,594 Long-term debt............................................ 400 -- 57,000 -- 57,400 Obligations under capital leases.......................... -- 22,590 -- (22,590) -- Note payable to affiliate................................. -- -- 28,610 (28,610) -- Deferred income taxes..................................... 27,110 3,023 18,189 -- 48,322 Foreign income taxes...................................... -- -- 5,078 -- 5,078 Other..................................................... 3,643 68 1,438 -- 5,149 -------- ------- -------- --------- -------- Total liabilities......................... 94,673 41,361 116,197 (86,688) 165,543 Minority interests........................................ -- -- -- 1,856 1,856 Stockholders' equity...................................... 133,664 11,342 78,156 (145,006) 78,156 -------- ------- -------- --------- -------- $228,337 $52,703 $194,353 $(229,838) $245,555 ======== ======= ======== ========= ========
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Statement of Income for the Year Ended December 31, 1998
Guarantor Other GLD Consolidated Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Contract revenues......................................... $ 238,894 $ 51,118 $ - $ (800) $ 289,212 Costs of contract revenues................................ (203,954) (34,967) (2,457) 800 (240,578) --------- -------- -------- -------- --------- Gross profit........................................... 34,940 16,151 (2,457) - 48,634 General and administrative expenses....................... (17,774) (4,558) (340) - (22,672) Equity incentive plan and other compensation expenses................................... - - (8,169) - (8,169) Recapitalization related expenses......................... (5,922) - (3,605) - (9,527) --------- -------- -------- -------- --------- Operating income (loss)................................ 11,244 11,593 (14,571) - 8,266 Interest, net............................................. (385) (204) (9,274) - (9,863) Equity in earnings of subsidiaries........................ 6,929 - 12,867 (19,796) - Equity in earnings of joint ventures...................... 1,218 - - - 1,218 --------- -------- -------- -------- --------- Income (loss) before income taxes, minority interests and extraordinary item............. 19,006 11,389 (10,978) (19,796) (379) Income tax (expense) benefit.............................. (7,151) (710) 7,225 - (636) Minority interests........................................ - - - (2,738) (2,738) --------- -------- -------- -------- --------- Net income (loss) before extraordinary item............ 11,855 10,679 (3,753) (22,534) (3,753) Extraordinary item (net of income tax benefit of $543)........................................ - - (925) - (925) --------- -------- -------- -------- --------- Net income (loss)..................................... $ 11,855 $ 10,679 $ (4,678) $(22,534) $ (4,678) ========= ======== ======== ======== =========
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Statement of Income for the Year Ended December 31, 1997
Guarantor Other GLD Consolidated Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Contract revenues....................................... $ 216,388 $ 53,504 $ -- $(11,596) $ 258,296 Costs of contract revenues.............................. (195,954) (41,552) (2,473) 11,596 (228,383) --------- -------- ------- -------- --------- Gross profit........................................ 20,434 11,952 (2,473) -- 29,913 General and administrative expenses..................... (14,544) (3,863) (515) -- (18,922) --------- -------- ------- -------- --------- Operating income (loss)............................. 5,890 8,089 (2,988) -- 10,991 Interest, net........................................... (1,254) 148 (4,881) -- (5,987) Equity in earnings of subsidiaries...................... 1,559 -- 8,913 (10,472) -- Equity in earnings of joint ventures.................... 3,132 -- -- -- 3,132 --------- -------- ------- -------- --------- Income before income taxes and minority interests............................... 9,327 8,237 1,044 (10,472) 8,136 Income tax (expense) benefit............................ (4,335) (1,090) 2,758 -- (2,667) Minority interests...................................... -- -- -- (1,667) (1,667) --------- -------- ------- -------- --------- Net income ......................................... $ 4,992 $ 7,147 $ 3,802 $(12,139) $ 3,802 ========= ======== ======= ======== =========
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Statement of Income for the Year Ended December 31, 1996
Guarantor Other GLD Consolidated Subsidiaries Subsidiaries Corporation Eliminations Totals ------------- ----------- ----------- ------------- ------------- Contract revenues.......................................... $ 202,863 $ 44,720 $ 1 $(11,713) $ 235,871 Costs of contract revenues................................. (180,178) (37,805) (2,447) 11,713 (208,717) --------- --------- ------- -------- --------- Gross profit........................................... 22,685 6,915 (2,446) -- 27,154 General and administrative expenses........................ (13,802) (3,298) 709 -- (16,391) --------- --------- ------- -------- --------- Operating income....................................... 8,883 3,617 (1,737) -- 10,763 Interest, net.............................................. (1,249) (271) (4,524) -- (6,044) Equity in earnings of subsidiaries......................... 948 -- 7,299 (8,247) Equity in earnings of joint ventures....................... 1,139 -- -- -- 1,139 --------- --------- ------- -------- --------- Income before income taxes, minority interests and discontinued operations............................ 9,721 3,346 1,038 (8,247) 5,858 Income tax (expense) benefit............................... (3,290) (1,111) 2,077 -- (2,324) Minority interests......................................... -- -- -- (419) (419) --------- --------- ------- -------- --------- Income from continuing operations...................... 6,431 2,235 3,115 (8,666) 3,115 Discontinued operations, net of tax benefit of $695........ -- -- (1,109) -- (1,109) --------- --------- ------- -------- --------- Net income ............................................ $ 6,431 $ 2,235 $ 2,006 $ (8,666) $ 2,006 ========= ======== ======= ======== =========
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Cash Flows for the Year Ended December 31, 1998
Guarantor Other GLD Consolidated Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Operating Activities Net income (loss)................................... $ 11,855 $ 10,679 $ (4,678) $ (22,534) $ (4,678) Adjustments to reconcile net income to net cash flows from operating activities: Depreciation..................................... 7,649 4,049 2,252 -- 13,950 Earnings of subsidiaries and joint ventures...... (8,147) -- (12,867) 19,796 (1,218) Minority interests............................... -- -- -- 2,738 2,738 Deferred income taxes............................ (382) (451) (1,900) -- (2,733) Gain on dispositions of property and equipment... 717 -- -- -- 717 Foreign income taxes............................. -- -- 1,866 -- 1,866 Compensation expense related to exercise of options........................... -- -- 5,152 -- 5,152 Extraordinary item............................... -- -- 925 -- 925 Other, net....................................... 439 -- 482 -- 921 Changes in assets and liabilities: Accounts receivable........................... 9,878 (7,093) 118 -- 2,903 Contract revenues in excess of billings....... 1,273 (1,701) -- -- (428) Inventories................................... (3,674) (1,137) -- -- (4,811) Prepaid expenses and other current assets..... 4,269 185 258 -- 4,712 Accounts payable and accrued expenses......... (4,553) 389 2,510 -- (1,654) Billings in excess of contract revenues....... 559 1,309 -- -- 1,868 ------------ ------------ ----------- ------------ ------------ Net cash flows from operating activities......... 19,883 6,229 (5,882) -- 20,230 Investing Activities Purchases of property and equipment.................. (24,985) (4,144) -- -- (29,129) Proceeds from dispositions of property and equipment.................................... 20,213 -- -- -- 20,213 Investments in and distributions from joint venture.. (1,720) -- -- -- (1,720) Principal (payments) receipts on direct financing leases................................. -- 4,121 (4,121) -- -- (Payments) receipts on note with affiliate........... -- 689 (689) -- -- ------------ ------------ ----------- ------------ ------------ Net cash flows from investing activities......... (6,492) 666 (4,810) -- (10,636) Financing Activities Proceeds from long-term debt......................... -- -- 55,000 -- 55,000 Repayments of long-term debt......................... (200) -- -- -- (200) Borrowing (repayments) of revolving loans, net....... -- -- (57,000) -- (57,000) Proceeds from 11 1/4% subordinated debt.............. -- -- 115,000 -- 115,000 Exercise of options.................................. -- -- 4,516 -- 4,516 Common stock purchased............................... -- -- 3,552 -- 3,552 Issuance of preferred stock.......................... -- -- 34,420 -- 34,420 Financing fees....................................... -- -- (6,045) -- (6,045) Principal receipts (payments) on capital leases...... -- (7,059) 7,059 -- -- Net change in accounts with affiliates............... (1,186) -- 1,186 -- -- Redemption of shares ................................ -- -- (159,796) -- (159,796) Dividends............................................ (12,800) -- 12,800 -- -- ------------ ------------ ----------- ------------ ------------ Net cash flows from financing activities......... (14,186) (7,059) 10,692 -- (10,553) ------------ ------------ ----------- ------------ ------------ Net increase (decrease) in cash and equivalents.. (795) (164) -- -- (959) Cash and equivalents at beginning of year........ 1,285 432 -- -- 1,717 ------------ ------------ ----------- ------------ ------------ Cash and equivalents at end of year.............. $ 490 $ 268 $ -- $ -- $ 758 ============ ============ =========== ============ ============
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Cash Flows for the Year Ended December 31, 1997
Guarantor Other GLD Consolidated Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Operating Activities Net income ................................................... $ 4,992 $ 7,147 $ 3,802 $(12,139) $ 3,802 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation.............................................. 7,638 3,716 2,261 -- 13,615 Earnings of subsidiaries and joint ventures............... (4,691) -- (8,913) 10,472 (3,132) Minority interests........................................ -- -- -- 1,667 1,667 Deferred income taxes..................................... (1,639) (355) (1,969) -- (3,963) (Gain) loss on dispositions of property and equipment........................................ (3,468) -- 160 -- (3,308) Foreign income taxes...................................... -- -- 2,696 -- 2,696 Other, net................................................ (873) -- 635 -- (238) Changes in assets and liabilities: Accounts receivable................................... (13,655) 1,469 (56) -- (12,242) Contract revenues in excess of billings............... (5,729) 1,473 -- -- (4,256) Inventories........................................... 1,264 -- -- -- 1,264 Prepaid expenses and other current assets............. 564 (482) (332) -- (250) Accounts payable and accrued expenses................. 10,838 2,064 2,413 -- 15,315 Billings in excess of contract revenues............... 2,772 (124) -- -- 2,648 -------- -------- -------- -------- -------- Net cash flows from operating activities.................. (1,987) 14,908 697 -- 13,618 Investing Activities Purchases of property and equipment........................... (7,703) (3,791) -- -- (11,494) Proceeds from dispositions of property and equipment.............................................. 5,437 -- -- -- 5,437 Distributions from joint venture.............................. 1,000 -- -- -- 1,000 Investments in joint venture.................................. (630) -- -- -- (630) Distributions to minority interests........................... -- (3,025) -- -- (3,025) Deposit....................................................... 2,500 -- -- -- 2,500 Principal (payments) receipts on direct financing leases........................................... -- 3,570 (3,570) -- -- (Payments) receipts on notes with affiliate................... -- 1,371 (1,371) -- -- -------- -------- -------- -------- -------- Net cash flows from investing activities.................. 604 (1,875) (4,941) -- (6,212) Financing Activities Proceeds from long--term debt.................................. -- -- 8,000 -- 8,000 Repayments of long--term debt.................................. -- -- (28,836) -- (28,836) Borrowing (repayments) of revolving loans, net................ -- -- 26,000 -- 26,000 Principal receipts (payments) on capital leases............... -- (6,243) 6,243 -- -- Net change in accounts with affiliates........................ 5,423 -- (5,423) -- -- Financing fees................................................ -- -- (1,740) -- (1,740) Settlement advance............................................ (11,000) -- -- -- (11,000) Dividends .................................................... 7,675 (7,675) -- -- -- -------- -------- -------- -------- -------- Net cash flows from financing activities................... 2,098 (13,918) 4,244 -- (7,576) -------- -------- -------- -------- -------- Net increase (decrease) in cash and equivalents............ 715 (885) -- -- (170) Cash and equivalents at beginning of year.................. 570 1,317 -- -- 1,887 -------- -------- -------- -------- -------- Cash and equivalents at end of year........................ $ 1,285 $ 432 $ -- $ -- $ 1,717 ======== ======== ======== ======== ========
GREAT LAKES DREDGE & DOCK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidating Cash Flows for the Year Ended December 31, 1996
Guarantor Other GLD Consolidated Subsidiaries Subsidiaries Corporation Eliminations Totals ------------ ------------ ----------- ------------ ------------ Operating Activities Net income ........................................... $ 6,431 $ 2,235 $ 2,006 $(8,666) $ 2,006 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation...................................... 7,933 3,690 2,258 -- 13,881 Earnings of subsidiaries and joint ventures....... (2,087) -- (7,299) 8,247 (1,139) Minority interests................................ -- -- -- 419 419 Deferred income taxes............................. (2,596) (335) (865) -- (3,796) (Gain) loss on dispositions of property and equipment.................................. (640) -- 173 -- (467) Foreign income taxes.............................. -- -- 2,382 -- 2,382 Pension curtailment and settlement................ -- -- (1,688) -- (1,688) Other, net........................................ 104 -- 113 -- 217 Changes in assets and liabilities: -- -- -- Accounts receivable............................ 20,942 (11) 14 -- 20,945 Contract revenues in excess of billings........ 3,033 61 -- -- 3,094 Inventories.................................... 3,915 -- -- -- 3,915 Prepaid expenses and other current assets...... (7) (121) 3,235 -- 3,107 Accounts payable and accrued expenses.......... (16,822) 1,193 (252) -- (15,881) Billings in excess of contract revenues........ (2,445) 124 -- -- (2,321) ------------ ------------ ----------- ------------ ------------ Net cash flows from operating activities.......... 17,761 6,836 77 -- 24,674 Investing Activities Purchases of property and equipment................... (4,023) (1,388) -- -- (5,411) Proceeds from dispositions of property and equipment..................................... 7,820 -- -- -- 7,820 Distributions from joint venture...................... 750 -- -- -- 750 Investments in joint venture.......................... (755) -- -- -- (755) Distributions to minority interests................... -- (700) -- -- (700) Deposit............................................... (2,500) -- -- -- (2,500) Principal (payments) receipts on direct financing leases.................................. -- 3,100 (3,100) -- -- (Payments) receipts on notes with affiliate........... -- 1,371 (1,371) -- -- ------------ ------------ ----------- ------------ ------------ Net cash flows from investing activities.......... 1,292 2,383 (4,471) -- (796) Financing Activities Proceeds from long-term debt.......................... -- -- -- -- -- Repayments of long-term debt.......................... (2,817) -- (15,500) -- (18,317) Borrowing (repayments) of revolving loans, net........ -- -- (6,000) -- (6,000) Principal receipts (payments) on capital leases....... -- (5,533) 5,533 -- -- Net change in accounts with affiliates................ (13,844) -- 13,844 -- -- Dividends ............................................ (3,700) (2,800) 6,500 -- -- ------------ ------------ ----------- ------------ ------------ Net cash flows from financing activities.......... (20,361) (8,333) 4,377 -- (24,317) ------------ ------------ ----------- ------------ ------------ Net increase (decrease) in cash and equivalents... (1,308) 886 (17) -- (439) Cash and equivalents at beginning of year......... 1,878 431 17 -- 2,326 ------------ ------------ ----------- ------------ ------------ Cash and equivalents at end of year............... $ 570 $ 1,317 $ -- $ -- $ 1,887 ============ ============ =========== ============ ============
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GREAT LAKES DREDGE & DOCK CORPORATION By: /s/ Douglas B. Mackie ---------------------------------- Douglas B. Mackie President, Chief Executive Officer and Director Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Date Title /s/ Douglas B. Mackie - ------------------------- Douglas B. Mackie 5/4/99 President, Chief Executive Officer and Director /s/ Deborah A. Wensel - ------------------------- Deborah A. Wensel 5/3/99 Vice President, Chief Financial Officer and Treasurer /s/ Michael A. Delaney - -------------------------- Michael A. Delaney 5/4/99 Director /s/ David Wagstaff III - -------------------------- David Wagstaff III 5/3/99 Director EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 YEAR DEC-31-1998 JAN-01-1998 DEC-31-1998 758 0 54,231 899 20,322 74,693 220,002 85,765 235,087 52,392 167,700 0 1 50 (48,785) 235,087 0 289,212 0 240,578 0 783 10,175 (379) 636 (3,753) 0 (925) 0 (4,678) 0 0
-----END PRIVACY-ENHANCED MESSAGE-----