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What changed in Great Lakes Dredge & Dock CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Great Lakes Dredge & Dock CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+309 added−314 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-16)

Top changes in Great Lakes Dredge & Dock CORP's 2024 10-K

309 paragraphs added · 314 removed · 242 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

71 edited+13 added−16 removed80 unchanged
Biggest changeEntering the U.S. offshore wind market offers us the opportunity to diversify our client base, enter a different market and grow our bottom line, while also enhancing the Company’s efforts towards sustainability and renewable energy. The Company has already established a first mover advantage in scour protection installation for offshore wind foundations, cables, and offshore substations.
Biggest changeThese additional markets pave the way for the rebranding of our offshore wind division to Offshore Energy. Entering the Offshore Energy market offers us the opportunity to diversify our client base, enter different markets and grow our bottom line.
The transaction generated gross cash proceeds of $29.5 million. Additionally in 2023, the Company retired three scows as part of its ongoing fleet modernization program. Multi Cats. In 2023, the Company took delivery of two Damen multifunctional all-purpose vessels (“Multi Cats”), the Cape Hatteras and the Cape Canaveral in 2023.
The transaction generated gross cash proceeds of $29.5 million. Additionally in 2023, the Company retired three scows as part of its ongoing fleet modernization program. Multi Cats. In 2023, the Company took delivery of two Damen multifunctional all-purpose vessels (“Multi Cats”), the Cape Hatteras and the Cape Canaveral .
The Company continually assesses its need to upgrade and expand its dredging fleet to take advantage of improving technology and to address the changing needs of the dredging market, and retire older, less efficient dredges.
The Company continually assesses its need to upgrade and expand its dredging fleet to take advantage of improving technology, to address the changing needs of the dredging market and to retire older, less efficient dredges.
Compliance with these statutes and regulations can delay appropriation and/or performance of particular projects and increase related project costs. 8 Non-compliance can also result in fines, penalties and claims by third parties seeking damages for alleged personal injury, as well as damages to property and natural resources. Certain environmental laws such as the U.S.
Compliance with these statutes and regulations can delay appropriation and/or performance of particular projects and increase related project costs. Non-compliance can also result in fines, penalties and claims by third parties seeking damages for alleged personal injury, as well as damages to property and natural resources. 8 Certain environmental laws such as the U.S.
Gunsten, Senior Vice President, Project Services and Fleet Engineering Mr. Gunsten was appointed to the position of Senior Vice President, Project Services & Fleet Engineering in July 2022 after serving as Senior Vice President, Project Services. Previously he served as Vice President, International Operations with responsibility for acquiring projects, providing estimation data and leading field supervision of work in progress.
Gunsten, Senior Vice President, Project Services & Fleet Engineering Mr. Gunsten was appointed to the position of Senior Vice President, Project Services & Fleet Engineering in July 2022 after serving as Senior Vice President, Project Services. Previously he served as Vice President, International Operations with responsibility for acquiring projects, providing estimation data and leading field supervision of work in progress.
Hanson was named the Senior Vice President, Market Development in January 2023 after serving as Senior Vice President - Government Relations & Business Development, a position he had held since March 2020. He was named Vice President of the Company in 2004. Mr. Hanson worked for Connolly Pacific of Long Beach, California before joining GLDD in 1988.
Hanson was named Senior Vice President, Market Development in January 2023 after serving as Senior Vice President - Government Relations & Business Development, a position he had held since March 2020. He was named Vice President of the Company in 2004. Mr. Hanson worked for Connolly Pacific of Long Beach, California before joining GLDD in 1988.
The Company continues to expect that future global energy demand will necessitate improvements in the renewable energy infrastructure base and around sources of rich resources and in countries that import or export global energy. 4 For additional details regarding Operations, including financial information regarding our international and U.S. revenues and long-lived assets, see Item 7.
The Company continues to expect that future global energy demand will necessitate improvements in the energy infrastructure base and around sources of rich resources and in countries that import or export global energy. 4 For additional details regarding Operations, including financial information regarding our international and U.S. revenues and long-lived assets, see Item 7.
Generally, inland river and lake projects in the northern U.S. take place in non-winter months because frozen waterways significantly reduce contractors’ ability to operate and transport its equipment in the relevant geographies. Foreign. Foreign capital projects typically involve land reclamations, channel deepening and port infrastructure development.
Generally, inland river and lake projects in the northern U.S. take place in non-winter months because frozen waterways significantly reduce contractors’ ability to operate and transport its equipment in the relevant geographies. 2 Foreign. Foreign capital projects typically involve land reclamations, channel deepening and port infrastructure development.
Many of the Gulf States, including Louisiana, have previously committed to spending a portion of the nearly $20 billion in fines received from the 2015 BP settlement of the Deepwater Horizon oil spill to repair the natural resources impacted by the event including coastal restoration projects that include dredging. • Renewable energy projects.
Many of the Gulf States, including Louisiana, have previously committed to spending a portion of the nearly $20 billion in fines received from the 2015 BP settlement of the Deepwater Horizon oil spill to repair the natural resources impacted by the event including coastal restoration projects that include dredging. • Energy projects.
Schiffer’s specific responsibilities include the oversight of corporate governance, policy and regulatory strategy development, litigation, environmental matters, intellectual property, global corporate compliance and labor and employment laws. Ms. Schiffer was a corporate and securities partner in the global firm of Thompson & Knight, LLP, now Holland & Knight, LLP, from 2003 to 2010.
Schiffer’s specific responsibilities include the oversight of corporate governance, policy and regulatory strategy development, litigation, environmental matters, intellectual property, global corporate compliance, cybersecurity and labor and employment laws. Ms. Schiffer was a corporate and securities partner in the global firm of Thompson & Knight, LLP, now Holland & Knight, LLP, from 2003 to 2010.
Recent years have seen a marked change in weather patterns, particularly in the Northeastern U.S., which has adversely impacted our projects. Backlog The Company’s contract backlog represents its estimate of the revenues that will be realized under the portion of the contracts remaining to be performed.
Recent years have seen a marked change in weather patterns, particularly in the Northeastern U.S., which has adversely impacted some of our projects. Backlog The Company’s contract backlog represents its estimate of the revenues that will be realized under the portion of the contracts remaining to be performed.
In addition, a significant amount of the Company’s backlog relates to federal government contracts, which can be canceled at any time without penalty, subject to the Company’s right, in some cases, to recover the Company’s actual committed costs 7 and profit on work performed up to the date of cancellation.
In addition, a significant amount of the Company’s backlog relates to federal government contracts, which can be canceled at any time without penalty, subject to the Company’s right, in some cases, to recover the Company’s actual committed costs and profit on work performed up to the date of cancellation.
Prior to his work at Connolly Pacific, Mr. Hanson was with the U.S. Army Corps of Engineers. Mr. Hanson serves on several Federal Advisory 10 Committees as well as on boards of groups with national and regional interest to the Company and several academic advisory boards related to ocean and coastal engineering. Mr.
Prior to his work at Connolly Pacific, Mr. Hanson was with the U.S. Army Corps of Engineers. Mr. Hanson serves on several Federal Advisory Committees as well as on boards of groups with national and regional interest to the Company and several academic advisory boards related to ocean and coastal engineering. Mr.
The Company’s backlog may fluctuate significantly from quarter to quarter based upon the type and size of the projects the Company is awarded from the bid market. A quarterly increase or decrease of the Company’s backlog does not necessarily result in an improvement or a deterioration of the Company’s business.
The Company’s backlog may fluctuate significantly from quarter to 7 quarter based upon the type and size of the projects the Company is awarded from the bid market. A quarterly increase or decrease of the Company’s backlog does not necessarily result in an improvement or a deterioration of the Company’s business.
In addition to port work, capital projects also include coastal restoration and land reclamations, trench digging for pipelines, tunnels and cables, and other dredging related to the construction of breakwaters, jetties, canals and other marine structures.
In addition to port and LNG work, capital projects also include coastal restoration and land reclamations, trench digging for pipelines, tunnels and cables and other dredging related to the construction of breakwaters, jetties, canals and other marine structures.
To achieve our goal of attracting and retaining the most talented employees in the industry, we offer a respectful and safe work environment with competitive compensation and benefits that support employees physical, financial, and emotional health.
To achieve our goal of attracting and retaining the most talented employees in the industry, we offer a respectful and safe work environment with competitive compensation and benefits that support employees’ physical, financial and emotional health.
Great Lakes’ domestic dredging fleet is typically positioned on the East and Gulf Coasts, with many of the rivers & lakes dredges on inland rivers and lakes. The mobility of the fleet enables the Company to move equipment in response to changes in demand.
Great Lakes’ domestic dredging fleet is typically positioned on the East and Gulf Coasts, with the rivers & lakes dredges on inland rivers and lakes. The mobility of the fleet enables the Company to move equipment in response to changes in demand.
These vessels will greatly improve the safety and efficiency of pipe and anchor operations. The two vessels are the first Damen Multi Cats to be built in the U.S. and are fully compliant with the U.S. Coast Guard and U.S. Army Corps of Engineers stability criteria. The Company has numerous pieces of smaller equipment that support its dredging operations.
These vessels will greatly improve the safety and efficiency of pipe and anchor operations. The two vessels are the first Damen Multi Cats to be built in the U.S. and are fully compliant with the U.S. Coast Guard and the Corps stability criteria. The Company has numerous pieces of smaller equipment that support its dredging operations.
Although capital work can be impacted by budgetary constraints and economic conditions, these projects typically generate an immediate economic benefit to the ports and surrounding communities. Coastal protection (33% of 2023 revenues). Coastal protection projects generally involve moving sand from the ocean floor to shoreline locations where erosion threatens shoreline assets.
Although capital work can be impacted by budgetary constraints and economic conditions, these projects typically generate an immediate economic benefit to the ports and surrounding communities. Coastal protection (33% of 2024 revenues). Coastal protection projects generally involve moving sand from the ocean floor to shoreline locations where erosion threatens shoreline assets.
Contracts for state and local governments are generally awarded to the lowest qualified bidder. Contracts for private customers are awarded based on, among other things, the contractor’s experience, equipment and schedule, contractual terms, as well as price.
Contracts for state and local governments are generally awarded to the lowest qualified bidder. Contracts for private customers are awarded based on, among other things, the contractor’s experience, equipment and schedule, safety record and contractual terms, as well as price.
Item 1. B usiness. The terms “we,” “our,” “ours,” “us,” “Great Lakes”, “GLDD” and “Company” refer to Great Lakes Dredge & Dock Corporation and its subsidiaries. Organization Great Lakes is the largest provider of dredging services in the United States which is complemented with a long history of performing significant international projects.
Item 1. Business. The terms “we,” “our,” “ours,” “us,” “Great Lakes”, “GLDD” and “Company” refer to Great Lakes Dredge & Dock Corporation and its subsidiaries. Organization Great Lakes is the largest provider of dredging services in the United States which is complemented with a long history of performing significant international projects.
Information about our Executive Officers The following table sets forth the names and ages of all of the Company’s executive officers and the positions and offices presently held by them. Name Age Position Lasse J.
Information about our Executive Officers The following table sets forth the names and ages of all of the Company’s executive officers and the positions and offices currently held by them. Name Age Position Lasse J.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Bidding Activity and Backlog.” Human Capital Management At December 31, 2023, the Company employed 364 full-time salaried and non-exempt personnel in the U.S., including those in a corporate function. In addition, the Company employs U.S. hourly personnel, most of whom are unionized, on a project-by-project basis.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Bidding Activity and Backlog.” Human Capital Management At December 31, 2024, the Company employed 366 full-time salaried and non-exempt personnel in the U.S., including those in a corporate function. In addition, the Company employs U.S. hourly personnel, most of whom are unionized, on a project-by-project basis.
However, many East Coast coastal protection projects are limited by environmental windows that require work to be performed in winter months to protect wildlife habitats.
Moreover, many East Coast coastal protection projects are limited by environmental windows that require work to be performed in winter months to protect wildlife habitats.
Generally, coastal protection projects take place during the fall and winter months to minimize interference with bird and marine life migration and breeding patterns as well as coastal recreation activities. Maintenance (32% of 2023 revenues). Maintenance dredging consists of the re-dredging of previously deepened waterways and harbors to remove silt, sand and other accumulated sediments.
Generally, coastal protection projects take place during the fall and winter months to minimize interference with bird and marine life migration and breeding patterns as well as coastal recreation activities. Maintenance (21% of 2024 revenues). Maintenance dredging consists of the re-dredging of previously deepened waterways and harbors to remove silt, sand and other accumulated sediments.
The Company is also fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company was founded in 1890 as Lydon & Drews Partnership and performed its first project in Chicago, Illinois.
The Company is also fully engaged in expanding its core business into the offshore energy industry. The Company was founded in 1890 as Lydon & Drews Partnership and performed its first project in Chicago, Illinois.
The annual bid market for coastal protection over the three year period ended December 31, 2023 averaged $367 million. • Required maintenance of U.S. ports. The channels and waterways leading to U.S. ports have stated depths on which shippers rely when entering those ports.
The annual bid market for domestic coastal protection over the three-year period ended December 31, 2024 averaged $551 million. • Required maintenance of U.S. ports. The channels and waterways leading to U.S. ports have stated depths on which shippers rely when entering those ports.
Kornblau’s appointment as CFO, he held the roles of acting CFO since 9 December 2017 in addition to his Vice President and Treasurer position at Diamond since January 2017. Mr. Kornblau earned a Bachelor of Arts degree in Accounting from the University of Texas at Austin. Mr. Kornblau is a certified public accountant.
Kornblau’s appointment as CFO, he held the roles of acting CFO since December 2017 in addition to his Vice President and Treasurer position at Diamond since January 2017. Mr. Kornblau earned a Bachelor of Arts degree in Accounting from the University of Texas at Austin. Mr.
For certain projects, including foreign, private, and offshore wind projects, letters of credit or bank guarantees are required as security for the performance and, if applicable, bid or advance payment guarantees. The Company obtains its letters of credit under the Amended Credit Agreement (as defined below). Bid guarantees are usually 2% to 5% of the service provider’s bid.
For certain projects, including foreign, private and offshore energy projects, letters of credit or bank guarantees are required as security for the performance and, if applicable, bid or advance payment guarantees. The Company obtains its letters of credit under the ABL Amendment (as defined below). Bid guarantees are usually 2% to 5% of the service provider’s bid.
Competition on rivers & lakes projects is determined primarily based on geographic reach, project execution capability and price. Great Lakes and three other companies comprised approximately 66% of the Company’s defined bid market related to domestic capital, coastal protection, maintenance and rivers & lakes over the three year period ended December 31, 2023.
Competition on rivers & lakes projects is determined primarily based on geographic reach, project execution capability and price. Great Lakes and two other companies comprised approximately 61% of the Company’s defined bid market related to domestic capital (excluding LNG), coastal protection, maintenance and rivers & lakes over the three-year period ended December 31, 2024.
Navy are responsible for awarding federal contracts with respect to their own facilities. In 2023, approximately 75% of the Company’s dredging revenues were generated from 39 different contracts with federal agencies or third parties operating under contracts with federal agencies.
Navy are responsible for awarding federal contracts with respect to their own facilities. In 2024, approximately 57% of the Company’s dredging revenues were generated from 33 different contracts with federal agencies or third parties operating under contracts with federal agencies.
Petterson holds both master’s and bachelor’s degrees from the Norwegian University of Technology. Scott Kornblau, Senior Vice President, Chief Financial Officer and Treasurer Mr. Kornblau was named Senior Vice President and Chief Financial Officer (“CFO”) when he joined the Company in October 2021 and was additionally named Treasurer in January 2022.
Petterson holds both master’s and bachelor’s degrees from the Norwegian University of Technology. Scott Kornblau, Senior Vice President and Chief Financial Officer Mr. Kornblau was named Senior Vice President and Chief Financial Officer (“CFO”) when he joined the Company in October 2021, and also served as Treasurer of the Company from January 2022 through April 2024.
At December 31, 2023, the Company employed 2 foreign nationals and 1 local staff to manage and administer its Middle East operations. The Company seeks to attract, select, hire, retain, incentivize, and integrate our existing and future employees.
At December 31, 2024, the Company employed 12 foreign nationals and 3 local staff to manage and administer its Middle East operations. The Company seeks to attract, select, hire, retain, incentivize and integrate our existing and future employees.
Schiffer was named Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Corporate Secretary in December 2020 when she joined the Company. Ms. Schiffer leads the Company's legal, compliance and human resource organizations, providing legal counsel. Ms.
Schiffer, Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Corporate Secretary Ms. Schiffer joined the Company in December 2020 as Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Corporate Secretary. Ms. Schiffer leads the Company's legal, compliance and human resource organizations, providing legal and business counsel. Ms.
Over the last two decades, the Company has performed dredging work in the Middle East, Africa, Australia, the Caribbean and Central and South America. No foreign revenues were recognized during 2023. However, the Company expects to continue targeting foreign capital projects in the future.
Over the last two decades, the Company has performed dredging work in the Middle East, Africa, Australia, the Caribbean and Central and South America. No foreign revenues were recognized during 2024. The Company expects to continue targeting foreign capital projects in the future on a case by case basis.
Additionally, on March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) which includes a provision that lifts caps on the Harbor Maintenance Trust Fund (“HMTF”), thereby allowing full access to future annual revenues.
Additionally, on March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) which includes a provision that lifts caps on the HMTF, thereby allowing full access to future annual revenues. • Gulf coast restoration.
Rivers & lakes (3% of 2023 revenues). Domestic rivers and lakes dredging and related operations typically consist of lake and river dredging, inland levee and construction dredging, environmental restoration and habitat improvement and other marine 2 construction projects.
Rivers & lakes (less than 1% of 2024 revenues). Domestic rivers and lakes dredging and related operations typically consist of lake and river dredging, inland levee and construction dredging, environmental restoration and habitat improvement and other marine construction projects.
These bonds are typically provided by large insurance companies. A bid bond is required to serve as a guarantee so that if a service provider’s bid is chosen, the service provider will sign the contract. The amount of the bond is typically 20% of the service provider’s bid, with a range generally between $1 and $10 million.
These bonds are typically provided by large insurance companies. A bid bond is required to serve as a guarantee so that if a service provider’s bid is chosen, the service provider will sign the contract. Bid bonds are generally obtained for a percentage of bid value and amounts outstanding typically range from $1.0 million to $10.0 million.
The Company has recently taken delivery of a 6,500 cubic yard trailing suction hopper dredge, the Galveston Island , which began operations in February 2024. Additionally, in June 2022 the Company exercised the contract option with the same builder to build a second 6,500 cubic yard trailing suction hopper dredge, the Amelia Island , with expected delivery in 2025.
Additionally, in June 2022 the Company exercised the contract option with the same builder to build a second 6,500 cubic yard trailing suction hopper dredge, the Amelia Island , with expected delivery in the second half of 2025.
The Company experienced an average combined bid market share in the U.S. of 33% over the three year period ended December 31, 2023, including 36%, 56%, 23% and 22% of the domestic capital, coastal protection, maintenance and rivers & lakes sectors, respectively, exclusive of liquefied natural gas (“LNG”) projects.
The Company experienced an average combined bid market share in the U.S. of 31% over the three-year period ended December 31, 2024, including 28%, 59%, 19% and 16% of the domestic capital, coastal protection, maintenance and rivers & lakes sectors, respectively, exclusive of liquefied natural gas (“LNG”) projects. Domestic Capital (46% of 2024 revenues).
David Johanson, Senior Vice President, Project Acquisition and Operations Mr. Johanson was named Senior Vice President, Project Acquisition & Operation in July 2022 after serving as Senior Vice President, Gulf Region. Before that, Mr.
Kornblau is a certified public accountant. 9 David Johanson, Senior Vice President, Project Acquisition & Operations Mr. Johanson was named Senior Vice President, Project Acquisition & Operation in July 2022 after serving as Senior Vice President, Gulf Region. Before that, Mr.
Availability of Information You may read and obtain copies of any materials Great Lakes files with the SEC, including without limitation, the Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, free of charge, at the SEC’s website, www.sec.gov .
Hanson is an Ocean Engineering graduate of Texas A&M University where he was named a distinguished alumnus in 2013. 10 Availability of Information You may read and obtain copies of any materials Great Lakes files with the SEC, including without limitation, the Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, free of charge, at the SEC’s website, www.sec.gov .
He received his Bachelor of Science degree in Civil Engineering from Rutgers University and his MBA from Loyola University Chicago. Eleni Beyko, Senior Vice President, Offshore Wind Ms. Beyko joined Great Lakes in January 2021 as Senior Vice President, Offshore Wind, and is responsible for Offshore Wind strategy and business development, as well as leading the Company's Offshore Wind Operations.
He received his Bachelor of Science degree in Civil Engineering from Rutgers University and his MBA from Loyola University Chicago. Eleni Beyko, Senior Vice President, Offshore Energy Dr. Beyko joined Great Lakes in January 2021 as Senior Vice President, Offshore Wind and currently serves as the Company’s Senior Vice President, Offshore Energy.
Schiffer 64 Senior Vice President, Chief Legal Officer & Chief Compliance Officer William H. Hanson 67 Senior Vice President, Market Development Lasse J. Petterson, President, Chief Executive Officer and Director Mr. Petterson has served as Chief Executive Officer (“CEO”) since May 2017 and was also named President in 2020. Mr.
Schiffer 65 Senior Vice President, Chief Legal Officer, Chief Compliance Officer & Corporate Secretary William H. Hanson 68 Senior Vice President, Market Development Lasse J. Petterson, President, Chief Executive Officer Mr. Petterson has served as Chief Executive Officer (“CEO”) since May 2017, as a member of our board of directors since 2016 and was also named President in 2020. Mr.
Ms. Beyko has over 20 years’ experience in program engineering, business leadership, and project execution for the automobile and offshore oil and gas markets. Her experience has also included Engineering, Technical Manager, Research & Development – Offshore Technology, and offshore projects. She most recently served as Director, Energy Transition for Americas at TechnipFMC.
She is responsible for Offshore Energy strategy, business development and operations. Dr. Beyko has over 20 years’ experience in program engineering, business leadership, and project execution for the automobile and offshore oil and gas markets. Her experience has also included Engineering, Technical Manager, Research & Development – Offshore Technology, and offshore projects.
Domestic Capital (32% of 2023 revenues). Capital dredging consists primarily of port expansion projects, which involve the deepening of channels and berthing basins to allow access by larger, deeper draft ships and the provision of land fill used to expand port facilities.
Capital dredging consists primarily of port expansion projects, which involve the deepening of channels and berthing basins to allow access by larger, deeper draft ships and the provision of land fill used to expand port facilities. This work also includes projects to prepare ports and channels for access by larger vessels into LNG terminals.
However, two unions represent a large majority of our dredging employees - the International Union of Operating Engineers (“IUOE”) Local 25 and the Seafarers International Union. The Company’s master and ancillary contracts with IUOE Local 25 will expire on September 30, 2024 and negotiations will begin in the second quarter of 2024 for a renewal agreement.
However, two unions represent a large majority of our dredging employees - the International Union of Operating Engineers (“IUOE”) Local 25 and the Seafarers International Union (“SIU”). The Company’s master and ancillary contracts with IUOE Local 25 will expire on September 30, 2027. Our agreements with the SIU expire on February 28, 2026.
Petterson 67 President, Chief Executive Officer and Director Scott Kornblau 52 Senior Vice President, Chief Financial Officer & Treasurer David Johanson 52 Senior Vice President, Project Acquisition & Operations Christopher G. Gunsten 54 Senior Vice President, Project Services & Fleet Engineering Eleni Beyko 58 Senior Vice President, Offshore Wind Vivienne R.
Petterson 68 President, Chief Executive Officer Scott Kornblau 53 Senior Vice President, Chief Financial Officer David Johanson 53 Senior Vice President, Project Acquisition & Operations Christopher G. Gunsten 55 Senior Vice President, Project Services & Fleet Engineering Eleni Beyko 59 Senior Vice President, Offshore Energy Vivienne R.
Over the past few years, both the federal government and state and local entities have funded beach work recognizing the essential role these natural barriers play in absorbing storm energy and protecting public and private property.
Growing populations in coastal communities and vital beach tourism are drawing attention to the importance of protecting beachfront assets. Over the past few years, both the federal government and state and local entities have funded beach projects recognizing the essential role these natural barriers play in absorbing storm energy and protecting public and private property.
We expect to continue to build our offshore wind capabilities, win rock installation projects and position for growth in the accelerating U.S. offshore wind market, as many of our European competitors have done in the international offshore wind markets.
We expect to continue to build our offshore energy capabilities, bid on SRI projects and position the Company for growth in the offshore energy markets, as many of our European competitors have done in the international offshore energy markets.
Clamshell dredges with specialized buckets are ideally suited to handle softer silts and maintenance material requiring environmentally controlled excavation and disposal. Additionally, the Company owns an electric clamshell dredge which provides an advantage in those markets with stringent emissions standards. During 2023, the Company retired one mechanical dredge as part of its ongoing fleet modernization program. Scows.
Additionally, the Company owns an electric clamshell dredge which provides an advantage in those markets with stringent emissions standards. During 2023, the Company retired one mechanical dredge as part of its ongoing fleet modernization program. Scows.
There is a wide range of hydraulic dredges from our smaller rivers & lakes vessels that use pipe sizes ranging from 10” to 22” and operate at between 365 and 3,200 total horsepower, while the Company’s other hydraulic dredges use pipe sizes ranging from 18” to 30” and operate at between 1,900 and 16,650 total horsepower. Mechanical Dredges.
Our smaller rivers & lakes hydraulic dredges use pipe sizes ranging from 18” to 22” and operate at between 2,500 and 6,000 total horsepower, while the Company’s other hydraulic dredges use pipe sizes ranging from 18” to 30” and operate at between 1,900 and 16,650 total horsepower.
The 2023 plan contains 73 proposed projects aimed to lower the threat of storm surge and maintain as much of a natural buffer between communities and the Gulf of Mexico as possible.
The 2023 plan marks the fourth released by the agency since it formed in 2005 following Hurricane Katrina. The 2023 plan contains 73 proposed projects aimed to lower the threat of storm surge and maintain as much of a natural buffer between communities and the Gulf of America as possible.
Also, at the end of 2022, the Water Resources Development Act (“WRDA”) of 2022 (“WRDA 2022”), was approved by Congress and signed into law by the President. WRDA 2022 is on a two-year renewal cycle and includes legislation that authorizes the financing of Corps’ projects for flood and hurricane protection, dredging, ecosystem restoration and other construction projects.
The Water Resources Development Act (“WRDA”) is on a two-year renewal cycle and includes legislation that authorizes the financing of Corps’ projects for studies, flood and hurricane protection, dredging, ecosystem restoration and other construction projects aimed at improving rivers and harbors in the United States.
At TechnipFMC, she was responsible for positioning TechnipFMC to support the transition into new and economically viable wind energy resources, and managing the Makani wind-borne energy spar offshore platform installation in partnership with Shell and Google X. Ms. Beyko graduated with a Diploma from National Technical University Athens in Mechanical Engineering, Naval Architecture & Marine Engineering.
She most recently served as Director, Energy Transition for Americas at TechnipFMC. At TechnipFMC, she was responsible for positioning TechnipFMC to support the transition into new and economically viable wind energy resources, and managing the Makani wind-borne energy spar offshore platform installation in partnership with Shell and Google X. Dr.
The Company has bonding agreements with Argonaut Insurance Company, ACE Holdings, Liberty Mutual Insurance Company and Philadelphia Indemnity Insurance Company, (collectively, the “Sureties”) under which the Company can obtain performance, bid and payment bonds. The Company also currently has outstanding bonds with Travelers Casualty and Surety Company of America, Berkley Insurance Company and Zurich American Insurance Company.
The Company has bonding agreements with Argonaut Insurance Company, Liberty Mutual Insurance Company, Philadelphia Indemnity Insurance Company, Ascot Insurance Companies and AXIS Insurance Company, (collectively, the “Sureties”) under which the Company can obtain performance, bid and payment bonds.
She attended the University of Michigan where she earned her MSE, Naval Architecture and Marine Engineering, MSE Applied Mechanics, Mechanical Engineering, Master of Business Administration (MBA) and Ph.D., Naval Architecture and Marine Engineering. Vivienne R. Schiffer, Senior Vice President, Chief Legal Officer and Chief Compliance Officer Ms.
Beyko graduated with a Diploma from National Technical University Athens in Mechanical Engineering, Naval Architecture & Marine Engineering. She attended the University of Michigan where she earned her MSE, Naval Architecture and Marine Engineering, MSE Applied Mechanics, Mechanical Engineering, Master of Business Administration (MBA) and Ph.D., Naval Architecture and Marine Engineering. Vivienne R.
We anticipate these ports will require investments for port improvements that will include some dredging in order to serve as marshaling ports for various offshore wind projects.
Additionally, as the offshore energy market develops in the U.S., port facilities will need to meet specific requirements to be able to service this industry. We anticipate these ports will require investments for port improvements that will include some dredging in order to serve as marshaling ports for various offshore energy projects.
The Company's employees are based across the U.S. with several project locations on the coasts and office locations in Houston, Texas, Oakbrook Terrace, Illinois, Staten Island, New York and Jacksonville, Florida.
Crews are generally available for hire on relatively short notice. During 2024, the Company employed an average of approximately 637 hourly personnel to meet domestic project requirements. The Company's employees are based across the U.S. with several project locations on the coasts and office locations in Houston, Texas, Oakbrook Terrace, Illinois, Staten Island, New York and Jacksonville, Florida.
Great Lakes has never experienced difficulty in obtaining bonding for any of its projects and Great Lakes has never failed to complete a marine project in its 133 year history.
The Company also currently has outstanding bonds with ACE Holdings, Travelers Casualty and Surety Company of America, Berkley Insurance Company and Zurich American Insurance Company. Great Lakes has never experienced difficulty in obtaining bonding for any of its projects and Great Lakes has never failed to complete a marine project in its 135 year history.
The annual bid market for domestic capital dredging, which includes deep port capital dredging and Gulf Coast restoration, averaged $715 million over the three year period ended December 31, 2023. 3 • Substantial need for coastal protection.
The annual bid market for domestic capital dredging, which includes deep port capital dredging and Gulf Coast restoration, averaged $828 million over the three-year period ended December 31, 2024. • Substantial need for coastal protection. Beach erosion is a recurring problem due to the normal ebb and flow of coastlines as well as the effects of severe storm activity.
The annual bid market for maintenance dredging over the three year period ended December 31, 2023 averaged $797 million. • Gulf coast restoration. There has been continued focus on restoring the barrier islands and wetlands that provide natural protection from storms in the Gulf Coast area. Many restoration projects have commenced to repair coastal areas.
There has been continued focus on restoring the barrier islands and wetlands that provide natural protection from storms in the Gulf Coast area. Many restoration projects have commenced to repair coastal areas. Several additional projects are being planned by state and local governments to restore natural barriers.
Through the increased appropriation of HMTF monies, the Company has seen increased funding for harbor maintenance projects to be let for bid throughout 2023 and expects this trend to continue in 2024. Corps projects involving deepening, maintenance and coastal dredging are in line for robust funding continuing the trend of recent years.
On December 20, 2024, Congress approved a continuing resolution to provide funding at previously enacted levels through March 14, 2025. Through the increased appropriation of HMTF monies, the Company has seen increased funding for harbor maintenance projects let for bid throughout 2024 and expects this trend to continue in 2025.
By law, the Louisiana Coastal Protection and Restoration Authority (“CPRA”) must update its coastal master plan every six years and let the latest science guide each iteration. The 2023 plan marks the fourth released by the agency since it formed in 2005 following Hurricane Katrina.
The State of Louisiana has proposed an update to its master plan calling for a $50 billion investment in its coastal infrastructure. By law, the Louisiana Coastal Protection and Restoration Authority (“CPRA”) must update its coastal master plan every six years and let the latest science guide each iteration.
The scows are emptied by bottom-dumping, direct pump-out or removal by a crane with a bucket. The backhoe dredge is capable of removing hard-packed sediments, blasted rock and debris and can work in tight areas such as along docks or terminals.
The backhoe dredge is capable of removing hard-packed sediments, blasted rock and debris and can work in tight areas such as along docks or terminals. Clamshell dredges with specialized buckets are ideally suited to handle softer silts and maintenance material requiring environmentally controlled excavation and disposal.
There are two basic types of mechanical dredges: clamshell and backhoe. In both types, the dredge uses a bucket to excavate material from the channel or ocean floor. The dredged material is placed by the bucket into material barges, or “scows,” for transport to the designated disposal area.
During 2024, the Company retired one of its rivers & lakes hydraulic dredges as part of its ongoing fleet modernization program. Mechanical Dredges. There are two basic types of mechanical dredges: clamshell and backhoe. In both types, the dredge uses a bucket to excavate material from the channel or ocean floor.
In turn, several LNG, petrochemical and crude oil projects are creating the need for port development in support of energy exports. Several North American LNG export projects have been delayed over the past couple of years since the pandemic.
Several North American LNG export projects have been delayed over the past couple of years since the pandemic. However, with the increase in LNG prices and sustained worldwide demand, LNG projects are expected to grow over the next several years.
Offshore Wind Market While the Company continues to reinvest in our core dredging business and renew our dredging fleet, we are strategically entering the nascent U.S. offshore wind market.
Offshore Energy Market While the Company continues to reinvest in our core dredging business and renew our dredging fleet, we remain steadfast in our commitment to executing a long-term strategy that maximizes growth opportunities for the Company.
In addition, the Disaster Relief Supplemental Appropriations Act for fiscal year 2023 was approved which included $1.48 billion for the Corps to make necessary repairs to infrastructure impacted by hurricanes and other natural disasters and to initiate coastal protection projects that will increase coastal resiliency. This increased budget and additional funding resulted in a strong bid market in 2023.
The 2023 Disaster Relief Supplemental Appropriations Act allocated $1.5 billion for infrastructure repairs and beach renourishment projects. This increased budget and additional funding resulted in a strong bid market in 2024 and we expect to see additional projects in 2025.
The growth in demand for transportation of energy worldwide has driven the need for dredging to support new terminals, harbors, channels and pipelines. Europe is currently re-evaluating their sourcing of energy after the Russian invasion of Ukraine which will require imports of large quantities of LNG.
The growth in demand for transportation of energy worldwide has driven the need for dredging to support new terminals, harbors, channels and pipelines. In turn, several LNG, petrochemical and crude oil projects are creating the need for port development in support of energy exports.
The Company has worked on several port deepenings along the East and Gulf coasts over the past years, starting with Miami in 2015 and continuing through today, including our current projects in Houston and Corpus Christi.
The Company has worked on several port deepenings along the East and Gulf coasts over the past years, including our current projects in Brownsville, Port Arthur, Freeport and Mobile. The 2025 U.S. Army Corps of Engineers’ (the “Corps”) budget is expected to be another record appropriation. On June 28, 2024, the U.S.
Removed
Over its 133 year history, the Company has grown to be a leader in capital, coastal protection and maintenance dredging in the United States and is one of the oldest and most experienced dredging companies in the country. The Company’s foreign projects are typically categorized in the capital work type, but are not included in the aforementioned bid market.
Added
We believe that Great Lakes has established a unique business position with our subsea rock installation (“SRI”) vessel, the Acadia , the first and only Jones Act SRI vessel being constructed in the United States, targeting the offshore wind, oil and gas and telecommunication industries, both domestically and internationally.
Removed
We are building the first Jones Act compliant rock installation vessel in the U.S. and, in 2022, won the first rock installation contract for the Empire Wind I wind farm.
Added
The Acadia has secured offshore wind rock placement contracts for Equinor’s Empire Wind 1 and Ørsted’s Sunrise Wind projects to protect foundations and cables. In addition, during the fourth quarter, we signed a vessel reservation agreement for the Acadia for another wind project in the United States.
Removed
In December 2023, Great Lakes was awarded another rock installation contract to perform subsea rock cable protection, a new utilization for this vessel, on an offshore wind project off the East Coast of the United States.
Added
All three of these projects are fully permitted and we believe will not be directly impacted by the President’s Executive Order pausing issuance of new offshore wind leases and permits.
Removed
In December 2022, the Omnibus Appropriations Bill for the fiscal year 2023 was passed which included a record budget of $8.66 billion for the U.S. Army Corps of Engineers (the “Corps”). These appropriations funded the continuation of port deepening bids in 2023 for the ports of Sabine, Freeport, Mobile, San Juan, Houston, Corpus Christi and additional phases of Norfolk.
Added
In addition to targeting domestic offshore wind projects, the Acadia is also well suited for work outside of U.S. offshore wind and over the past year we have been broadening our target markets for the Acadia to include international offshore wind projects, as well as projects to protect critical subsea infrastructure such as oil and gas pipelines and telecommunication and power cables.
Removed
WRDA 2022 featured among many other things authorization for New York and New Jersey shipping channels to be deepened to 55 feet, projects which are estimated to be approximately $6 billion. The Company views this legislation as a positive catalyst for the domestic dredging industry as it authorizes funding for critical infrastructure improvements that are needed throughout the U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary The following is a summary of the principal risks that could adversely affect, or have adversely affected, the Company’s business, operating results and financial condition: • A reduction in government funding for dredging and other contracts, or government cancellation of such contracts, or the inability of the Corps to let bids to market; • Our ability to qualify as an eligible bidder under government contract criteria and to compete successfully against other qualified bidders in order to obtain government dredging and other contracts; • Cost over-runs, operating cost inflation and potential claims for liquidated damages, particularly with respect to our fixed cost contracts; • The timing of our performance on contracts and new contracts being awarded to us; • Significant liabilities that could be imposed were we to fail to comply with government contracting regulations; • Project delays related to the increasingly negative impacts of climate change or other unusual, non-historical weather patterns; • Costs necessary to operate and maintain our existing vessels and the construction of new vessels; • Equipment or mechanical failures; • Pandemic, epidemic or outbreak of an infectious disease; • Disruptions to our supply chain for procurement of new vessel build materials or maintenance on our existing vessels; • Capital and operational costs due to environmental regulations; • Market and regulatory responses to climate change, including proposed regulations concerning emissions reporting and future emissions reduction goals; • Contract penalties for any projects that are completed late; • Force majeure events, including natural disasters, war and terrorists’ actions; • Changes in the amount of our estimated backlog; • Significant negative changes attributable to large, single customer contracts; • Our ability to obtain financing for the construction of new vessels, including our new offshore wind vessel; 11 • Our ability to secure contracts to utilize our new offshore wind vessel; • Unforeseen delays and cost overruns related to the construction of our new vessels; • Any failure to comply with the Jones Act provisions on coastwise trade, or if those provisions were modified or repealed; • Fluctuations in fuel prices, particularly given our dependence on petroleum-based products; • Impacts of nationwide inflation on procurement of new build and vessel maintenance materials; • Our ability to obtain bonding or letters of credit and risks associated with draws by the surety on outstanding bonds or calls by the beneficiary on outstanding letters of credit; • Acquisition integration and consolidation, including transaction expenses, unexpected liabilities and operational challenges and risks; • Divestitures and discontinued operations, including retained liabilities from businesses that we sell or discontinue; • Potential penalties and reputational damage as a result of legal and regulatory proceedings; • Any liabilities imposed on us for the obligations of joint ventures, partners and subcontractors; • Increased costs of certain material used in our operations due to newly imposed tariffs; • Unionized labor force work stoppages; • Any liabilities for job-related claims under federal law, which does not provide for the liability limitations typically present under state law; • Operational hazards, including any liabilities or losses relating to personal or property damage resulting from our operations; • Our ability to identify and contract with qualified MBE or DBE contractors to perform as subcontractors; • Our substantial amount of indebtedness, which makes us more vulnerable to adverse economic and competitive conditions; • Restrictions on the operation of our business imposed by financing terms and covenants; • Impacts of adverse capital and credit market conditions on our ability to meet liquidity needs and access capital; • Limitations on our hedging strategy imposed by statutory and regulatory requirements for derivative transactions; • Foreign exchange risks, in particular, as it relates to the new offshore wind vessel build; • Losses attributable to our investments in privately financed projects; • Restrictions on foreign ownership of our common stock; • Restrictions imposed by Delaware law and our charter on takeover transactions that stockholders may consider to be favorable; • Restrictions on our ability to declare dividends imposed by our financing agreements or Delaware law; • Significant fluctuations in the market price of our common stock, which may make it difficult for holders to resell our common stock when they want or at prices that they find attractive; • Changes in previously recorded net revenue and profit as a result of the significant estimates made in connection with our methods of accounting for recognized revenue; • Maintaining an adequate level of insurance coverage; • Our ability to find, attract and retain key personnel and skilled labor; • Disruptions, failures, data corruptions, cyber-based attacks or security breaches of the information technology systems on which we rely to conduct our business; and • Impairments of our goodwill or other intangible assets. 12 Risks Related to our Business A reduction in government funding for dredging or other contracts, or government cancellation of such contracts, or the inability of the Corps to let bids to market could materially adversely affect our business operations, revenues and profits.
Biggest changeRisk Factor Summary The following is a summary of the principal risks that could adversely affect, or have adversely affected, the Company’s business, operating results and financial condition: • A reduction in government funding for dredging and other contracts, or government cancellation of such contracts, or the inability of the Corps to let bids to market; • Our ability to qualify as an eligible bidder under government contract criteria and to compete successfully against other qualified bidders in order to obtain government dredging and other contracts; • The political environment and governmental fiscal and monetary policies; • Cost over-runs, operating cost inflation and potential claims for liquidated damages, particularly with respect to our fixed-price contracts; • The timing of our performance on contracts and new contracts being awarded to us; • Significant liabilities that could be imposed were we to fail to comply with government contracting regulations; • Project delays related to the increasingly negative impacts of climate change or other unusual, non-historical weather patterns; • Costs necessary to operate and maintain our existing vessels and the construction of new vessels, including with respect to changes in applicable regulations or standards; • Equipment or mechanical failures; • Pandemic, epidemic or outbreak of an infectious disease; • Disruptions to our supply chain for procurement of new vessel build materials or maintenance on our existing vessels; • Capital and operational costs due to environmental regulations; • Market and regulatory responses to climate change, including proposed regulations concerning emissions reporting and future emissions reduction goals; • Contract penalties for any projects that are completed late; • Force majeure events, including natural disasters, war and terrorists’ actions; • Changes in the amount of our estimated backlog; • Significant negative changes attributable to large, single customer contracts; • Our ability to obtain financing for the construction of new vessels, including our new offshore energy vessel; 11 • Our ability to secure contracts to utilize our new offshore energy vessel; • Unforeseen delays and cost overruns related to the construction of our new vessels; • Any failure to comply with the Jones Act provisions on coastwise trade, or if those provisions were modified, repealed or interpreted differently; • Our ability to comply with anti-discrimination laws, including those pertaining to diversity, equity and inclusion programs; • Fluctuations in fuel prices, particularly given our dependence on petroleum-based products; • Impacts of nationwide inflation on procurement of new build and vessel maintenance materials; • Our ability to obtain bonding or letters of credit and risks associated with draws by the surety on outstanding bonds or calls by the beneficiary on outstanding letters of credit; • Acquisition integration and consolidation, including transaction expenses, unexpected liabilities and operational challenges and risks; • Divestitures and discontinued operations, including retained liabilities from businesses that we sell or discontinue; • Potential penalties and reputational damage as a result of legal and regulatory proceedings; • Any liabilities imposed on us for the obligations of joint ventures and similar arrangements and subcontractors; • Increased costs of certain material used in our operations due to newly imposed tariffs; • Unionized labor force work stoppages; • Any liabilities for job-related claims under federal law, which does not provide for the liability limitations typically present under state law; • Operational hazards, including any liabilities or losses relating to personal or property damage resulting from our operations; • Our substantial amount of indebtedness, which makes us more vulnerable to adverse economic and competitive conditions; • Restrictions on the operation of our business imposed by financing terms and covenants; • Impacts of adverse capital and credit market conditions on our ability to meet liquidity needs and access capital; • Limitations on our hedging strategy imposed by statutory and regulatory requirements for derivative transactions; • Foreign exchange risks, in particular, related to the new offshore energy vessel build; • Losses attributable to our investments in privately financed projects; • Restrictions on foreign ownership of our common stock; • Restrictions imposed by Delaware law and our charter on takeover transactions that stockholders may consider to be favorable; • Restrictions on our ability to declare dividends imposed by our financing agreements or Delaware law; • Significant fluctuations in the market price of our common stock, which may make it difficult for holders to resell our common stock when they want or at prices that they find attractive; • Changes in previously recorded net revenue and profit as a result of the significant estimates made in connection with our methods of accounting for recognized revenue; • Maintaining an adequate level of insurance coverage; • Our ability to find, attract and retain key personnel and skilled labor; • Disruptions, failures, data corruptions, cyber-based attacks or security breaches of the information technology systems on which we rely to conduct our business; and • Impairments of our goodwill or other intangible assets. 12 Risks Related to our Business A reduction in government funding for dredging or other contracts, or government cancellation of such contracts, or the inability of the Corps to let bids to market could materially adversely affect our business operations, revenues and profits.
We have remediated known releases and discharges as deemed necessary, but there can be no guarantee that additional costs will not be incurred if, for example, third party claims arise or new conditions are discovered. 16 Our projects may involve excavation, remediation, demolition, transportation, management and disposal of hazardous waste and other regulated materials.
We have remediated known releases and discharges as deemed necessary, but there can be no guarantee that additional costs will not be incurred if, for example, third party claims arise or new conditions are discovered. Our projects may involve excavation, remediation, demolition, transportation, management and disposal of hazardous waste and other regulated materials.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Primary Factors that Determine Operating Profitability.” If we fail to comply with government contracting regulations, we could be subject to significant potential liabilities and loss of revenue. Our contracts with federal, state, local and foreign governmental customers are subject to various procurement regulations and contract provisions.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Primary Factors that Determine Operating Profitability.” 14 If we fail to comply with government contracting regulations, we could be subject to significant potential liabilities and loss of revenue. Our contracts with federal, state, local and foreign governmental customers are subject to various procurement regulations and contract provisions.
However, in the future, other defaults (or alleged defaults) triggered under any of our surety bonds could have a material adverse effect on our business, results of operations, cash flows or financial condition. 20 Acquisitions involve integration, consolidation and strategic risks and may involve significant transaction expenses and unexpected liabilities, which could adversely affect our business and results of operations.
However, in the future, other defaults (or alleged defaults) triggered under any of our surety bonds could have a material adverse effect on our business, results of operations, cash flows or financial condition. Acquisitions involve integration, consolidation and strategic risks and may involve significant transaction expenses and unexpected liabilities, which could adversely affect our business and results of operations.
Coast Guard enacts new standards, we may be required to incur expenditures for alterations or the addition of new equipment (e.g. more fuel-efficient engines). In order to satisfy any such requirements, we may need to take our vessels out of service for extended periods of time, with corresponding losses of revenues.
Coast Guard enacts new standards, we may be required to incur expenditures for alterations or the addition of new equipment (e.g., more fuel-efficient engines). In order 15 to satisfy any such requirements, we may need to take our vessels out of service for extended periods of time, with corresponding losses of revenues.
Such obligations may include investigation and remediation of releases and discharges of regulated materials, and also impose liability for related damages to natural resources. Our past and ongoing operations involve the use, and from time to time the release or discharge, of regulated materials which could result in liability under these and other environmental laws.
Such obligations may include investigation and remediation of releases and discharges of regulated materials, and also impose liability for related damages to natural resources. Our past and ongoing operations involve the use, and from time to time the release or discharge, of regulated materials which could result in liability under 16 these and other environmental laws.
Our international contracts may be denominated in foreign currencies, which will result in additional risk of fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange. Changes in the value of foreign currencies could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations.
Our international contracts may be denominated in foreign currencies, which will result in additional risk of fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange. Changes in the value of foreign currencies could increase our U.S. dollar costs for, or reduce our U.S. dollar 25 revenues from, our foreign operations.
The Company’s IT systems may also be subject to cybersecurity attacks including malware, other computer viruses or malicious software, spoofing or phishing email attacks, attempts to gain unauthorized access to our data, the unauthorized release, corruption or loss of its data, loss or damage to its data delivery systems and other electronic security breaches.
The Company’s IT systems may also be subject to cybersecurity attacks including malware, other computer viruses or malicious software, spoofing or phishing email attacks, attempts to gain unauthorized access to our data, the unauthorized release, corruption or loss of our data, loss or damage to our data delivery systems and other electronic security breaches.
In order to fund the draw on the letter of credit, we had to increase the borrowings on our revolving credit facility. As the outstanding letters of credit previously reduced our availability under the revolving credit facility, this draw down on our letter of credit did not impact our liquidity or capital availability.
In order to fund the draw on the letter of credit, we had to increase the borrowings on our revolving credit facility. As 20 the outstanding letters of credit previously reduced our availability under the revolving credit facility, this draw down on our letter of credit did not impact our liquidity or capital availability.
In connection with the sale of our historical demolition business, we were obligated to keep in place the surety bonds on pending demolition projects for the period required under the respective contract for a project.
In connection with the sale of our historical 21 demolition business, we were obligated to keep in place the surety bonds on pending demolition projects for the period required under the respective contract for a project.
The primary foreign currencies to which the Company has exposure are the Bahraini Dinar and the Euro. We have unhedged foreign currency exposure related to the 25 new inclined fall-pipe vessel for subsea rock installation build.
The primary foreign currencies to which the Company has exposure are the Bahraini Dinar and the Euro. We have unhedged foreign currency exposure related to the new inclined fall-pipe vessel for subsea rock installation build.
If our estimates prove inaccurate, if there are errors or ambiguities as to contract specifications, or if circumstances change due to, among other things, unanticipated conditions or technical problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions, inclement or hazardous weather conditions, changes in cost of equipment or materials, or our suppliers’ or subcontractor’s inability to perform, then cost over-runs and delays in performance are likely to occur.
If our estimates prove inaccurate, if there are errors or ambiguities as to contract specifications or if circumstances change due to, among other things, unanticipated conditions or technical problems, difficulties in obtaining permits or approvals, changes in local laws or labor conditions, inclement or hazardous weather conditions, changes in cost of equipment or materials or our suppliers’ or subcontractors’ inability to perform, then cost over-runs and delays in performance are likely to occur.
Liabilities for the obligations of our joint ventures, partners and subcontractors could materially decrease our profitability and liquidity. Some of our projects are performed through joint ventures and similar arrangements with other parties.
Liabilities for the obligations of our joint ventures and similar arrangements and subcontractors could materially decrease our profitability and liquidity. Some of our projects are performed through joint ventures and similar arrangements with other parties.
General Risk Factors Our methods of accounting for recognizing revenue involve significant estimates and could result in a change in previously recorded revenue and profit. We recognize revenue on our projects using generally accepted accounting principles in the United States (“GAAP”) including guidance from Revenue from Contracts with Customers, as amended (commonly referred to as ASC 606).
General Risk Factors Our methods of accounting for recognized revenue involve significant estimates and could result in a change in previously recorded revenue and profit. We recognize revenue on our projects using generally accepted accounting principles in the United States (“GAAP”) including guidance from Revenue from Contracts with Customers, as amended (commonly referred to as ASC 606).
Our business could suffer in the event of a work stoppage by our unionized labor force. We are a party to numerous collective bargaining agreements in the U.S. that govern our industry’s relationships with our unionized hourly workforce. Two unions represent approximately 69% of our hourly dredging employees—the IUOE Local 25 and the Seafarers International Union.
Our business could suffer in the event of a work stoppage by our unionized labor force. We are a party to numerous collective bargaining agreements in the U.S. that govern our industry’s relationships with our unionized hourly workforce. Two unions represent approximately 73% of our hourly dredging employees—the IUOE Local 25 and the Seafarers International Union.
In the past, CBP has issued letter rulings which have the potential to adversely impact Jones Act qualified vessels to be the exclusive operators in certain sectors of the new United States offshore wind industry. The Company has challenged these CBP letter rulings in federal court in Houston, Texas, citing the “Plain Language” of the Jones Act.
In the past, CBP has issued letter rulings which have the potential to adversely impact Jones Act qualified vessels to be the exclusive operators in certain sectors of the new United States offshore energy industry. The Company challenged these CBP letter rulings in federal court in Houston, Texas, citing the “Plain Language” of the Jones Act.
Unforeseen issues could arise in our ability to obtain secure financing or to obtain secure financing on terms favorable to us for building such vessels. This includes our new offshore wind vessel, the second new build hopper dredge, and other potential future vessels.
Unforeseen issues could arise in our ability to obtain secure financing or to obtain secure financing on terms favorable to us for building such vessels. This includes our new offshore energy vessel, the second new build hopper dredge, and other potential future vessels.
We are generally required to post bonds in connection with our domestic dredging contracts and bonds or letters of credit with our foreign dredging contracts, certain private domestic dredging contracts, and offshore wind contracts to ensure job completion if we ever fail to finish a project.
We are generally required to post bonds in connection with our domestic dredging contracts and bonds or letters of credit with our foreign dredging contracts, certain private domestic dredging contracts, and offshore energy contracts to ensure job completion if we ever fail to finish a project.
The covenants in the credit agreement governing our senior revolving credit facility and the indenture governing our senior notes, subject to specified exceptions and to varying degrees, restrict our ability to, among other things: • incur additional indebtedness; • create, incur, assume or permit to exist any liens; • enter into sale and leaseback transactions; • enter into operating and finance leases; • make investments, loans and advancements; • merge, consolidate or reorganize with, or dispose of all or substantially all assets to, a third party; • sell assets; • make acquisitions; 24 • pay dividends; • enter into transactions with affiliates; • prepay or redeem other indebtedness; and • issue certain types of capital stock.
The covenants in the credit agreements governing our senior revolving credit facility and second lien credit facility, as well as the indenture governing our senior notes, subject to specified exceptions and to varying degrees, restrict our ability to, among other things: • incur additional indebtedness; • create, incur, assume or permit to exist any liens; • enter into sale and leaseback transactions; • enter into operating and finance leases; • make investments, loans and advancements; • merge, consolidate or reorganize with, or dispose of all or substantially all assets to, a third party; • sell assets; • make acquisitions; • pay dividends; • enter into transactions with affiliates; 24 • prepay or redeem other indebtedness; and • issue certain types of capital stock.
Towards the end of 2023, the Company saw several cancellations of Power Purchase Agreements (“PPA’s”) that were entered into in 2018 and 2019, as inflation and interest rate hikes eroded the profitability of these PPA’s. This led our clients, Equinor and bp, to terminate our Empire Wind II contract and reset their plan for the related wind farm.
Towards the end of 2023, the Company saw several cancellations of Power Purchase Agreements (“PPAs”) that were entered into in 2018 and 2019, as inflation and interest rate hikes eroded the profitability of these PPAs. This led our clients, Equinor and bp, to terminate our Empire Wind II contract and reset their plan for the related wind farm.
Our business would be adversely affected if we failed to comply with Jones Act provisions on coastwise trade, or if those provisions were modified or repealed.
Our business would be adversely affected if we failed to comply with Jones Act provisions on coastwise trade, or if those provisions were modified, repealed or interpreted differently.
Below is our backlog from federal government contracts as of December 31, 2023, 2022, and 2021 and the percentage of those contracts to total backlog as of the same date.
Below is our backlog from federal government contracts as of December 31, 2024, 2023, and 2022 and the percentage of those contracts to total backlog as of the same date.
Our ability to pay dividends is restricted by the agreements governing our debt, including our Amended Credit Agreement, our bonding agreements and the indenture governing our senior unsecured notes.
Our ability to pay dividends is restricted by the agreements governing our debt, including our ABL Credit Agreement, our bonding agreements and the indenture governing our senior unsecured notes.
Unforeseen delays and cost overruns could delay or halt plans to build new vessels and, as a result, negatively impact our business strategy. We have previously disclosed our plans to build new vessels. Unknown mechanical or engineering issues involving new vessels could adversely affect the Company’s business, operating results, cash flows or financial condition.
Unforeseen delays and cost overruns could postpone delivery of or halt plans to build new vessels and, as a result, negatively impact our business strategy. We have previously disclosed our plans to build new vessels. Unknown mechanical or engineering issues involving new vessels could adversely affect the Company’s business, operating results, cash flows or financial condition.
These provisions include: • limitations on the ability of stockholders to amend our charter documents, including stockholder supermajority voting requirements; • the inability of stockholders to call special meetings; • a classified board of directors with staggered three-year terms; • advance notice requirements for nominations for election to the board of directors and for stockholder proposals; and • the authority of our board of directors to issue, without stockholder approval, up to 1,000,000 shares of preferred stock with such terms as the board of directors may determine and to issue additional shares of our common stock.
These provisions include: • limitations on the ability of stockholders to amend our charter documents, including stockholder supermajority voting requirements; • the inability of stockholders to call special meetings; • advance notice requirements for nominations for election to the board of directors and for stockholder proposals; and • the authority of our board of directors to issue, without stockholder approval, up to 1,000,000 shares of preferred stock with such terms as the board of directors may determine and to issue additional shares of our common stock.
Equipment or mechanical failures could result in increased costs, project delays and reduced revenues. The successful performance of contracts requires a high degree of reliability of our vessels, barges and other equipment. The average age of our marine fleet as of December 31, 2023 was 25 years.
Equipment or mechanical failures could result in increased costs, project delays and reduced revenues. The successful performance of contracts requires a high degree of reliability of our vessels, barges and other equipment. The average age of our marine fleet as of December 31, 2024 was 28 years.
With respect to our foreign dredging, certain private domestic dredging, and our offshore wind business, we generally obtain letters of credit under our Amended Credit Agreement. However, access to our senior credit facility under our Amended Credit Agreement may be limited by failure to meet certain levels of availability or other defined financial or other requirements.
With respect to our foreign dredging, certain private domestic dredging and our offshore energy business, we generally obtain letters of credit under our ABL Credit Agreement. However, access to our senior credit facility under our ABL Credit Agreement may be limited by failure to meet certain levels of availability or other defined financial or other requirements.
Revenues related to dredging contracts with federal agencies or companies operating under contracts with federal agencies and the percentage as a total of dredging revenue for the years ended December 31, 2023, 2022 and 2021 were as follows: Year Ended December 31, 2023 2022 2021 Federal government revenue (in US $1,000) $ 438,790 $ 431,705 $ 568,980 Percent of revenue from federal government 74 % 67 % 78 % Amounts spent by the federal government on dredging are subject to the budgetary and legislative processes.
Revenues related to dredging contracts with federal agencies or companies operating under contracts with federal agencies and the percentage as a total of dredging revenue for the years ended December 31, 2024, 2023 and 2022 were as follows: Year Ended December 31, 2024 2023 2022 Federal government revenue (in US $1,000) $ 430,980 $ 438,790 $ 431,705 Percent of revenue from federal government 57 % 74 % 67 % Amounts spent by the federal government on dredging are subject to the budgetary and legislative processes.
In addition, a significant amount of our backlog (34% as of December 31, 2023) relates to federal government contracts, which can be canceled at any time without penalty to the government, subject, in most cases, to our contractual right to recover our actual committed costs and profit on work performed up to the date of cancellation.
In addition, a significant amount of our total backlog (53% as of December 31, 2024) relates to federal government contracts, which can be canceled at any time without penalty to the government, subject, in most cases, to our contractual right to recover our actual committed costs and profit on work performed up to the date of cancellation.
The failure or disruption of our IT systems to perform as anticipated for any reason could disrupt our business and result in decreased performance, significant remediation costs, transaction errors, loss of data, processing inefficiencies, downtime, failure to properly estimate the work or costs associated with projects, litigation and the loss of customers or suppliers.
The failure or disruption of our IT systems to perform as anticipated for any reason could disrupt our business and result in decreased performance, significant remediation costs, transaction errors, loss of data, processing inefficiencies, downtime, failure to properly estimate the work or costs associated with projects, litigation, the loss of customers or suppliers and enforcement actions by regulatory agencies.
If another pandemic, epidemic or outbreak of an infectious disease or other public health crisis were to affect our markets or facilities or those of our suppliers, our business could be adversely affected.
A pandemic, epidemic or outbreak of an infectious disease affecting our markets or impacting our facilities or suppliers could adversely impact our business. If another pandemic, epidemic or outbreak of an infectious disease or other public health crisis were to affect our markets or facilities or those of our suppliers, our business could be adversely affected.
Great Lakes may have the opportunity to re-tender this project, if Equinor re-bids their PPA for this development. If there are additional cancellations of PPA’s, the Company’s ability to utilize its new offshore wind vessel may be adversely impacted.
Great Lakes may have the opportunity to re-tender this project if Equinor re-bids their PPA for this development. If there are 18 additional cancellations of PPAs, the Company’s ability to utilize its new offshore energy vessel may be adversely impacted.
The credit agreement governing our senior revolving credit facility and the indenture governing our senior notes contain, and any of our other future financing agreements may contain terms and covenants imposing operating and financial restrictions on our business.
The credit agreements governing our senior revolving credit facility and second lien credit facility, as well as the indenture governing our senior notes, contain, and any of our other future financing agreements may contain, terms and covenants imposing operating and financial restrictions on our business.
For example, the maximum borrowing capacity under the Amended Credit Agreement is determined by a formula and may fluctuate depending on the value of the collateral included in such formula at the time of determination.
For example, the maximum borrowing capacity under the ABL Amendment is determined by a formula and may fluctuate depending on the value of the collateral included in such formula at the time of determination.
The inability to obtain favorable financing may also impact our ability to bring the new vessels into service within the timeline anticipated by the Company, which may have an adverse effect on our business, financial position and/or results of operations. 18 Inability to secure contracts to utilize new offshore wind vessel.
The inability to obtain favorable financing may also impact our ability to bring the new vessels into service within the timeline anticipated by the Company, which may have an adverse effect on our business, financial position and/or results of operations.
Year Ended December 31, 2023 2022 2021 Federal government backlog (in US $1,000) $ 350,242 $ 290,694 $ 341,768 Percentage of backlog from federal government 34 % 77 % 62 % Although we do not currently have any international projects, if we were to engage in a new foreign project, we may have backlog with foreign governments that use local laws and regulations to change terms of a contract in backlog or to limit our ability to receive payment on a timely basis.
Year Ended December 31, 2024 2023 2022 Federal government backlog (in US $1,000) $ 662,933 $ 350,242 $ 290,694 Percentage of total backlog from federal government 53 % 32 % 77 % Although we do not currently have any international projects, if we were to engage in a new foreign project, we may have backlog with foreign governments that use local laws and regulations to change the terms of a contract in backlog or to limit our ability to receive payment on a timely basis.
If the shipyards with which we contract were affected by an outbreak of infectious disease, repairs of our vessels as well as new construction may be delayed and we may incur increased labor and materials costs.
If the shipyards with which we contract were affected by an outbreak of infectious disease, repairs of our vessels as well as new construction may be delayed and we may incur increased labor and materials costs and our ability to perform our projects on time may be adversely affected.
Force majeure or extraordinary events beyond the control of the contracting parties, such as natural and man-made disasters, as well as terrorist actions, could negatively impact the economies in which we operate.
Force majeure events could negatively impact our business, operations, revenues, cash flows and profits. Force majeure or extraordinary events beyond the control of the contracting parties, such as natural and man-made disasters, as well as terrorist actions, could negatively impact the economies in which we operate.
The only parties privy to the information in the complaint are the complainant, the U.S. government and the court. Therefore, it is possible that qui tam actions have been filed against us.
The only parties privy to the information in the complaint are the complainant, the U.S. government and the court. Therefore, it is possible that qui tam actions have been filed against us and it is possible that we are subject to liability exposure arising out of qui tam actions.
Changes in governmental regulations, safety or other equipment standards, as well as compliance with standards imposed by maritime self-regulatory organizations and customer requirements or competition, could also substantially increase the cost of such construction beyond what we currently expect such costs to be. We have previously disclosed our plans to expand into the offshore wind market.
Changes in governmental regulations, safety or other equipment standards, as well as compliance with standards imposed by maritime self-regulatory organizations and customer requirements or competition, could also substantially increase the cost of such construction beyond what we currently expect such costs to be.
As noted above, if there should be a default (or alleged default) triggered under any of the surety bonds for the historical demolition business, it could have a material adverse effect on our ability to obtain bonds and on our business, results of operations, cash flows or financial condition. 21 During the second quarter of 2019, the Company completed the sale of the historical environmental & infrastructure business.
As noted above, if there should be a default (or alleged default) triggered under any of the surety bonds for the historical demolition business, it could have a material adverse effect on our ability to obtain bonds and on our business, results of operations, cash flows or financial condition.
While we did not experience any significant delays in 2023, we expect that the severity of unusual storms and weather patterns will continue to fluctuate and may continue to adversely impact our ability to complete projects on time and on budget and therefore could materially adversely affect our business operations, revenues and profits.
We expect that the severity of unusual storms and weather patterns will continue to fluctuate and may continue to adversely impact our ability to complete projects on time and on budget and therefore could materially adversely affect our business operations, revenues and profits.
Our future revenues and profitability will also be impacted to some extent if we are unable to obtain favorable steel prices or unable to obtain secure financing for new offshore wind vessels and bring them into service within the timeline anticipated by the Company.
Our future revenues and profitability will also be impacted to some extent if we are unable to bring our new offshore energy vessels into service within the timeline anticipated by the Company as a result of an inability to obtain favorable steel prices or secure appropriate financing.
Delays, such as those we experienced in 2022, may affect our ability to perform on our projects or increase the cost of our performing certain projects, and may result in our inability to perform certain projects on time and on budget.
Delays, such as those we experienced in 2022, may affect our ability to perform on our projects or increase the cost of our performing certain projects, and may result in our inability to perform certain projects on time and on budget. We attempt to plan for all scenarios and assign risk when bidding on projects.
The Company retained responsibility for pre-closing liabilities and indemnification for breaches of our representations and warranties in the sale agreement. If the buyer made a claim against any of our indemnifications or if any payments became due in connection with any pre-closing liability, they could be material to results of operations, cash flows or financial condition.
If the buyer made a claim against any of our indemnifications or if any payments became due in connection with any pre-closing liability, they could be material to results of operations, cash flows or financial condition.
The average age of our more significant vessels as of December 31, 2023, by equipment type, is as follows: Type of Equipment Quantity Average Age in Years Hydraulic Dredges 8 45 Hopper Dredges 5 23 Mechanical Dredges 4 35 Unloaders 1 40 Drillboats 1 40 Material and Other Barges 86 22 Total 105 25 Remaining economic life has not been presented, because it is not reasonably quantifiable.
The average age of our more significant vessels as of December 31, 2024, by equipment type, is as follows: Type of Equipment Quantity Average Age in Years Hydraulic Dredges 7 47 Hopper Dredges 5 25 Mechanical Dredges 4 52 Unloaders 1 41 Drillboats 1 41 Material and Other Barges 91 25 Total 109 28 Remaining economic life has not been presented, because it is not reasonably quantifiable.
Under current accounting guidelines, we must assess, at least annually and potentially more frequently, whether the value of our goodwill and other intangible assets have been impaired.
Impairments to our goodwill or other intangible assets could negatively affect our financial condition and results of operations. Under current accounting guidelines, we must assess, at least annually and potentially more frequently, whether the value of our goodwill and other intangible assets have been impaired.
The timely and efficient performance of our projects are dependent on weather conditions. Severe storms or other weather-related problems, which are becoming increasing variable and which deviate from expected historical weather patterns as a result of climate change or other factors, can, and have, caused substantial delays on our projects.
Severe storms or other weather-related problems may deviate from expected historical weather patterns as a result of climate change or other factors, and can, and have, caused substantial delays on our projects.
Unknown changes to environmental needs and regulations and changes in the policies of the U.S. Presidential Administration could delay or halt plans to expand our new offshore wind projects, which would adversely impact our business strategy and affect the Company’s operating results, cash flows or financial condition.
Further, the possibility of future changes to environmental requirements and regulations and changes in the policies of the U.S. presidential administration could delay or halt plans for U.S. offshore wind projects, which would adversely impact our business strategy and could have a material adverse effect on the Company’s operating results, cash flows or financial condition.
We have previously disclosed the build of our new offshore wind vessel that is in progress. Our ability to obtain customers and/or contracts on terms favorable to the Company to utilize this new vessel for subsea rock installation for wind turbines could be impacted by unforeseen market conditions.
Our ability to obtain customers and/or contracts on terms favorable to the Company to utilize this new vessel for subsea rock installation for wind turbines could be impacted by unforeseen market conditions or changing political climates.
Additionally, in our normal course of operations, we use a significant amount of fossil fuels. The costs of controlling our GHG emissions or obtaining required emissions allowances in response to any regulatory change in our industry could increase materially.
Additionally, in our normal course of operations, we use a significant amount of fossil fuels. The costs of controlling our GHG emissions or obtaining required emissions allowances in response to any regulatory change in our industry could increase materially. Many jurisdictions, including the European Union and California, have regulations which would require us to report emissions data from our operations.
Thus, it is possible that we are subject to liability exposure arising out of qui tam actions. 14 Project delays related to the increasingly negative impacts of climate change or other unusual, non-historical weather patterns has and may continue to impact our ability to perform projects on time and on budget and therefore could materially adversely affect our business operations, revenues and profits.
Project delays related to the increasingly negative impacts of climate change or other unusual, non-historical weather patterns have and may continue to impact our ability to perform projects on time and on budget and therefore could materially adversely affect our business operations, revenues and profits. The timely and efficient performance of our projects are dependent on weather conditions.
Fixed-price contracts carry inherent risks, including risks of losses from underestimating costs, weather delays, operational difficulties, and other changes that can occur over the contract period.
Most dredging contracts are fixed-price contracts where the customer pays a fixed price per unit (e.g., cubic yard) of material dredged. Fixed-price contracts carry inherent risks, including risks of losses from underestimating costs, weather delays, operational difficulties and other changes that can occur over the contract period.
The prices of steel and other materials to build and develop new vessels, as well as to maintain and/or repair our existing vessels, fluctuate based on market events outside of our control. This had an adverse effect on our results of operations in 2022, however did not have a material adverse effect on our results of operations in 2023.
The prices of steel and other materials to build and develop new vessels, as well as to maintain and/or repair our existing vessels, fluctuate based on market events outside of our control.
Overall, the potential impact of a pandemic, epidemic or outbreak of an infectious disease with respect to our markets or our facilities is difficult to predict and could adversely impact our business. We have experienced, and may continue to experience, project delays and supply chain issues as a result of COVID-19 and its variants.
Overall, the potential impact of a pandemic, epidemic or outbreak of an infectious disease with respect to our markets or our facilities is difficult to predict and could adversely impact our business.
Breakdowns not only add to the costs of executing a project, but they can also delay the completion of subsequent contracts, which are scheduled to utilize the same assets.
Breakdowns not only add to the costs of executing a project, but they can also delay the completion of subsequent contracts, which are scheduled to utilize the same assets. We operate a scheduled maintenance program in order to keep all assets in good working order, but despite this, breakdowns can and do occur, resulting in loss of revenue.
If we subsequently fail to complete the project as scheduled, we may be liable for any customer losses resulting from such delay, generally in the form of contractually agreed-upon liquidated damages. In addition, failure to maintain a required schedule could cause us to default on our government contracts, giving rise to a variety of potential damages.
In many instances, including in our fixed-price contracts, we guarantee that we will complete a project by a scheduled date. If we subsequently fail to complete the project as scheduled, we may be liable for any customer losses resulting from such delay, generally in the form of contractually agreed-upon liquidated damages.
In March 2023, S&P Global Ratings (“S&P”) downgraded our corporate credit rating to CCC+ with a negative outlook from B with a stable outlook, and Moody’s Investor Services (“Moody’s”) downgraded our corporate credit rating to B3 with a negative outlook from B2 with a stable outlook. These credit ratings are below investment grade and could raise our cost of financing.
In the third quarter of 2024, S&P Global Ratings upgraded our corporate credit rating from CCC+ to B- and reaffirmed our outlook as stable. These credit ratings are below investment grade and could raise our cost of financing.
An adverse ruling in this suit, as well as other 19 adverse letter rulings by CBP, may adversely impact our competitive advantage in the United States offshore wind industry, which could have a material adverse effect on our business, results of operations, cash flows or financial condition.
These adverse rulings, as well as other adverse letter rulings by CBP, may adversely impact our competitive advantage in the United States offshore energy industry, which could have a material adverse effect on our business, results of operations, cash flows or financial condition. 19 If we fail to comply with anti-discrimination laws, including those pertaining to diversity, equity and inclusion programs, we could be subject to legal action and reputational risk.
Adverse experience with hazards and claims could have a negative effect on our reputation with our existing or potential new customers and our prospects for future work.
Adverse experience with hazards and claims could have a negative effect on our reputation with our existing or potential new customers and our prospects for future work. 23 Risks Related to our Financing We have substantial indebtedness, which makes us more vulnerable to adverse economic and competitive conditions. We currently have a substantial amount of indebtedness.
If internal sources of liquidity prove to be insufficient, we may not be able to successfully obtain additional financing on favorable terms, or at all.
If internal sources of liquidity prove to be insufficient, we may not be able to successfully obtain additional financing on favorable terms, or at all. During the second quarter of 2024, Moody’s Investor Services changed our outlook from negative to stable and reaffirmed our corporate credit rating at B2.
To the extent that these events occur, the total costs of the project could exceed our original estimates, and we could experience reduced profits or, in some cases, a loss for that project. Force majeure events could negatively impact our business, operations, revenues, cash flows and profits.
In addition, failure to maintain a required schedule could cause us to default on our government contracts, giving rise to a variety of potential damages. To the extent that these events occur, the total costs of the project could exceed our original estimates, and we could experience reduced profits or, in some cases, a loss for that project.
In addition, our inability to qualify as an eligible bidder, or to compete successfully when bidding for certain government contracts and to win those contracts, could materially adversely affect our business, operations, revenues and profits. 13 Our significant number of fixed-price contracts subjects us to risks associated with cost over-runs, operating cost inflation and potential claims for liquidated damages.
In addition, our inability to qualify as an eligible bidder, or to compete successfully when bidding for certain government contracts and to win those contracts, could materially adversely affect our business, operations, revenues and profits. 13 Our business and operating results could be adversely affected by the political environment and governmental fiscal and monetary policies .
This challenge was rejected at the District Court level and the Company has appealed to the 5th Circuit.
The challenge was rejected at the District Court level and at the 5th Circuit based upon the courts’ findings that the Company lacked standing.
Significant cost overruns or delays for vessels under construction could also adversely affect the Company’s business, operating results, cash flows or financial condition.
Significant cost overruns or delays for vessels under construction could also adversely affect the Company’s business, operating results, cash flows or financial condition. For example, the Company has experienced delays from the shipyard in the build of its in process SRI vessel, now expected to be operational in the first half of 2026.
If the government of Bahrain or Saudi Arabia further curtails its infrastructure investment or diversifies its use of dredging vendors, our revenue from these customers could decline further. Inability to obtain secure financing or financing on favorable terms for our new vessels. We have previously disclosed our plans to build new vessels which requires significant capital expenditures.
Inability to obtain secure financing or financing on favorable terms for our new vessels could negatively impact our business, financial position and/or results of operations. We have previously disclosed our plans to build new vessels which requires significant capital expenditures.
The Company’s master and ancillary contracts with IUOE Local 25 expire in September 2024 and negotiations will begin in the second quarter of 2024 for a renewal agreement. Our agreements with the Seafarers International Union expire in February 2026.
The Company’s master and ancillary contracts with IUOE Local 25 expire on September 30, 2027. Our agreements with the Seafarers International Union expire on February 28, 2026. While we expect that the membership will have a tentative agreement before expiration of the current agreement, we cannot be certain that will occur.
Most of our new build contracts do not allow us to adjust our pricing for higher material costs during a contract term. When renewing contracts, we may be unable to secure price increases reflecting the rising costs of inflation.
When renewing contracts, we may be unable to secure price increases reflecting the rising costs of inflation or the impact of tariffs.
If we are unable to accurately estimate our project costs our profitability could suffer. We conduct our business under various types of contracts where costs are estimated in advance of our performance. Most dredging contracts are fixed-price contracts where the customer pays a fixed price per unit (e.g., cubic yard) of material dredged.
Our significant number of fixed-price contracts subjects us to risks associated with cost over-runs, operating cost inflation and potential claims for liquidated damages. If we are unable to accurately estimate our project costs our profitability could suffer. We conduct our business under various types of contracts where costs are estimated in advance of our performance.
As of December 31, 2023, approximately 50% of the Company’s backlog is from two private customers. Loss of a single customer contract could significantly decrease revenue. Prospective customers may be incentivized to use another dredging company other than the Company. The Company could lose future contracts for work to competitors or could be forced to accept lower margins on contracts.
As of December 31, 2024, approximately 29% of the Company’s total backlog is from two private customers. Loss of a single customer contract could significantly decrease revenue. Our individual customer contracts may relate to large-scale projects that can be responsible for a significant portion of our revenue and/or backlog.
Lower utilization, workforce reductions or asset relocations could have a material adverse effect on our business, operating results, cash flows or financial condition. While the Company does not currently have significant operations or equipment in the Middle East, we may seek contracts there in the future.
Loss of any current customer contract could significantly decrease our revenue or expected revenue. Lower utilization, workforce reductions or asset relocations, resulting from the loss of a customer contract or otherwise, could have a material adverse effect on our business, operating results, cash flows or financial condition.
As of December 31, 2023, we had approximately $49.8 million of undrawn letters of credit, leaving $122.3 million of additional borrowing capacity under our revolving credit facility. These figures exclude contingent obligations, including $960.9 million of performance bonds outstanding under the Company’s agreements with the Sureties and other bonding agreements.
These figures exclude contingent obligations, including $1.32 billion of performance bonds outstanding under the Company’s agreements with the Sureties and other bonding agreements.
A significant disruption or failure could have a material adverse effect on our business, operating results, cash flows or financial condition. 28 Impairments to our goodwill or other intangible assets could negatively affect our financial condition and results of operations.
Any such action could have a material adverse effect on our business, results of operations, cash flows or financial condition, as well as impact our ability to secure contracts with our customers and to hire and retain employees, distract our management team and negatively impact our reputation in the market and our industry.
Both the Securities Exchange Commission and the Federal Acquisition Regulatory Council have proposed regulations which would require us to report emissions data from our operations. If implemented, these regulations may require a substantial outlay of capital by the Company, as well as management time and attention to ensure the Company's compliance.
If we were to perform projects in jurisdictions with emissions reporting requirements, it may require a substantial outlay of capital by the Company, as well as management time and attention to ensure the Company's compliance. Penalties for late completion of contracts could reduce our profits.
Risks Related to our Financing We have substantial indebtedness, which makes us more vulnerable to adverse economic and competitive conditions. We currently have a substantial amount of indebtedness. As of December 31, 2023, we had indebtedness of $415.0 million, consisting of our senior subordinated notes and borrowings on our revolving credit facility.
As of December 31, 2024, we had indebtedness of $460.0 million, consisting of our senior subordinated notes, our second lien credit agreement and borrowings on our revolving credit facility. As of December 31, 2024, we had approximately $43.5 million of undrawn letters of credit, leaving $221.2 million of additional borrowing capacity under our revolving credit facility.
Removed
The Company did not experience any material adverse effect on its operations in 2023 as a result of the U.S. federal government operating under a continuing resolution until December 2022. Currently, the government is operating under a continuing resolution until the 2024 budget is approved.
Added
An unpredictable or volatile political environment in the United States, including any social unrest and uncertainty as a result of the 2024 U.S. presidential election, could negatively impact business and market conditions, economic growth, financial stability, and business, consumer, investor and regulatory sentiments, any one or more of which in turn could cause our business and financial results to be adversely impacted.
Removed
While we attempt to plan for all scenarios when bidding on projects, weather events caused by climate change or other unanticipated variables have made that planning increasing difficult.
Added
It is difficult to predict the legislative and regulatory impacts that may result from the change in presidential administration or the change in the make-up of either the Senate or House of Representatives, and such changes may cause broader economic impacts due to shifts in governing ideology and governing style, and we may be subject to new or changing laws or regulations that may be promulgated in the future.
Removed
We operate a scheduled maintenance program in order to keep all assets in good working order, but despite this, breakdowns can and do occur, resulting in loss of revenue. 15 A pandemic, epidemic or outbreak of an infectious disease affecting our markets or impacting our facilities or suppliers could adversely impact our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe are in the process of imposing the new regulatory security requirements upon our suppliers, which will include: maintaining an effective security management program, abiding by information handling and asset management requirements and notifying us in the event of any known or suspected cyber incident. 29 The status of our cybersecurity is reported to senior management as needed, and formal incident reports are made for incidents with risk of significant impact to the Company.
Biggest changeWe are in the process of imposing the new regulatory security requirements upon our suppliers, which will include: maintaining an effective security management program, abiding by information handling and asset management requirements and notifying us in the event of any known or suspected cyber incident.
We have also implemented a cybersecurity enhancement program, focusing on special initiatives which include automating security incident response, including systems that can provide quicker business recovery from multi-geographical locations, strengthening the governance framework, upgrading the hybrid server environment on our vessels and improving wireless communication system resilience.
We have also implemented a cybersecurity enhancement program, focusing on special initiatives which include automating security incident response, including systems that can provide quicker business recovery from multi-geographical locations, strengthening the governance framework, upgrading the hybrid server environment on our vessels and improving wireless 29 communication system resilience.
The CTO and Chief Legal Officer (“CLO”) are key members of management responsible for strategic cybersecurity leadership. They lead tactical threat assessment, keep an updated risk register and develop and maintain governance and procedures. The CTO reports to the CFO and presents at least annually to the Audit Committee and the full board of directors on cybersecurity processes.
The CISO and Chief Legal Officer (“CLO”) are key members of management responsible for strategic cybersecurity leadership. They lead tactical threat assessment, keep an updated risk register and develop and maintain governance and procedures. The CISO reports to the CFO and presents at least annually to the Audit Committee and the full board of directors on cybersecurity processes.
Our CTO has a comprehensive background in various enterprise-wide information technology and cybersecurity leadership roles within the global energy and oil and gas sectors, and strategy consulting. The Audit Committee receives a report from our Director of Internal Audit on the ERM risk register at least three times a year.
Our CISO has a comprehensive background in various enterprise-wide information technology and cybersecurity leadership roles within the global energy and oil and gas sectors and strategy consulting. The Audit Committee receives a report from our Director of Internal Audit on the ERM risk register at least three times a year.
This involves collaboration with key personnel, including the Chief Financial Officer (“CFO”), the Chief Technology Officer (“CTO”), IT operational management, and Internal Audit. We also have a cross-functional team led by the CTO, which meets weekly with a fixed agenda to discuss mitigation and action-items related to ERM cyber risk updates, cyber statistics dashboards, and threat vectors.
This involves collaboration with key personnel, including the Chief Financial Officer (“CFO”), the Chief Information Security Officer (“CISO”), IT operational management and Internal Audit. We also have a cross-functional team led by the CISO, which meets weekly with a fixed agenda to discuss mitigation and action-items related to ERM cyber risk updates, cyber statistics dashboards and threat vectors.
Added
The status of our cybersecurity is reported to senior management as needed, and formal incident reports are made for incidents with risk of significant impact to the Company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties. The Company owns or leases the properties described below. The Company believes that its existing facilities are adequate for its operations. The Company’s headquarters are located at 9811 Katy Freeway, Suites 1000 and 1200, Houston, Texas 77024 with approximately 31,336 square feet of office space that it leases with a term expiring in 2030.
Biggest changeItem 2. Pr operties. The Company owns or leases the properties described below. The Company believes that its existing facilities are adequate for its operations. The Company’s headquarters are located at 9811 Katy Freeway, Suite 1200, Houston, Texas 77024 with approximately 31,336 square feet of office space that it leases with a term expiring in 2030.
As of December 31, 2023, the Company owns or leases the following additional facilities: Location Type of Facility Size Leased or Owned Staten Island, NY Yard 4.4 Acres Owned Morgan City, LA Yard 6.4 Acres Owned Norfolk, VA Yard 15.3 Acres Owned Norfolk, VA Yard 16.2 Acres Leased Little Rock, AR Yard 11.8 Acres Leased Cape Girardeau, MO Office 726 Square feet Owned Cape Girardeau, MO Storage 7,200 Square feet Owned Cape Girardeau, MO Yard 18.4 Acres Owned Jacksonville, FL Office 4,171 Square feet Leased Oakbrook Terrace, IL Office 44,219 Square feet Leased
As of December 31, 2024, the Company owns or leases the following additional facilities: Location Type of Facility Size Leased or Owned Staten Island, NY Yard 4.4 Acres Owned Morgan City, LA Yard 6.4 Acres Owned Norfolk, VA Yard 15.3 Acres Owned Norfolk, VA Yard 16.2 Acres Leased Little Rock, AR Yard 11.8 Acres Leased Cape Girardeau, MO Office 726 Square feet Owned Cape Girardeau, MO Storage 7,200 Square feet Owned Cape Girardeau, MO Yard 18.4 Acres Owned Jacksonville, FL Office 4,171 Square feet Leased Oakbrook Terrace, IL Office 30,448 Square feet Leased

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAGX Badger Infrastructure Solutions Ltd. BADFF Construction Partners Inc ROAD Helix Energy Solutions Group, Inc. HLX Helmerich & Payne, Inc. HP Hill International, Inc. HIL IES Holdings Inc. IESC Infrastructure & Energy Alternatives (prior to acquisition by MasTec Inc on October 7, 2022) IEA Limbach Holdings, Inc. LMB Logistec Corporation LGT Matrix Service Company MTRX Mistras Group, Inc.
Biggest changeAGX Badger Infrastructure Solutions Ltd. BADFF Construction Partners Inc ROAD Forum Energy Technologies, Inc. FET Helix Energy Solutions Group, Inc. HLX KLX Energy Services Holdings, Inc. KLXE Limbach Holdings LMB Logistec Corporation LGT Matrix Service Company MTRX Mistras Group MG Northwest Pipe Company NWPX NPK International Inc. NPKI NV5 Global Inc NVEE Oil States International, Inc.
Accordingly, the Company cannot ensure the size of any such dividend or that the Company will pay any future dividend. Issuer Purchases of Equity Securities The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2023. Item 6. [ Reserved] Not applicable. 32
Accordingly, the Company cannot ensure the size of any such dividend or that the Company will pay any future dividend. Issuer Purchases of Equity Securities The Company did not repurchase any shares of its common stock during the quarter ended December 31, 2024. Item 6. [ Reserved] Not applicable. 32
The graph below shows the cumulative total return to stockholders of the Company’s common stock during a five year period ended December 29, 2023, the last trading day of our 2023 fiscal year, compared with the return on the NASDAQ Composite Index and a group of our peers which we use internally as a benchmark for our performance.
The graph below shows the cumulative total return to stockholders of the Company’s common stock during a five year period ended December 31, 2024, the last trading day of our 2024 fiscal year, compared with the return on the NASDAQ Composite Index and a group of our peers which we use internally as a benchmark for our performance.
Holders of Record As of February 13, 2024, the Company had approximately 17 shareholders of record of the Company’s common stock. A substantial number of holders of the Company’s common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
Holders of Record As of February 17, 2025, the Company had approximately 16 shareholders of record of the Company’s common stock. A substantial number of holders of the Company’s common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
The graph assumes initial investments of $100 each on December 31, 2018, in GLDD stock (assuming reinvestment of all dividends paid during the period), the NASDAQ Composite Index and the peer group companies, collectively. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Great Lakes Dredge & Dock Corp $ 100.00 $ 171.15 $ 198.94 $ 237.46 $ 89.88 $ 116.01 Peer Average (see below) 100.00 113.90 143.93 159.34 168.41 301.90 NASDAQ Composite Index 100.00 135.23 194.24 235.78 157.74 226.24 31 The peer group in the graph above is composed of the following member companies: Company Ticker Ameresco AMRC Argan, Inc.
The graph assumes initial investments of $100 each on December 31, 2019, in GLDD stock (assuming reinvestment of all dividends paid during the period), the NASDAQ Composite Index and the peer group companies, collectively. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Great Lakes Dredge & Dock Corp $ 100.00 $ 116.24 $ 138.75 $ 52.52 $ 67.78 $ 99.65 Peer Average (see below) 100.00 83.32 71.68 77.80 104.33 153.26 NASDAQ Composite Index 100.00 143.64 174.36 116.65 167.30 215.22 31 The peer group in the graph above is composed of the following member companies: Company Ticker Ameresco AMRC Argan, Inc.
Removed
MG MYR Group Inc. MYRG NV5 Global Inc NVEE Oceaneering International, Inc. OII Orion Group Holdings, Inc. ORN Sterling Infrastructure, Inc. STRL Team, Inc. TISI Tidewater Inc.
Added
OIS Orion Marine Group, Inc. ORN ProPetro Holding Corp. PUMP Sterling Construction Company, Inc. STRL Team, Inc. TISI Tidewater Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following is a reconciliation of Adjusted EBITDA to net income (loss) from continuing operations of Great Lakes Dredge & Dock Corporation (in thousands): Year Ended December 31, 2023 2022 2021 Net income (loss) $ 13,906 $ (34,055 ) $ 49,432 Adjusted for: Interest expense—net 12,140 14,108 21,601 Income tax provision (benefit) 4,406 (9,360 ) 13,391 Depreciation expense 42,525 46,273 43,016 Adjusted EBITDA $ 72,977 $ 16,966 $ 127,440 37 Components of Contract Revenues The following table sets forth, by type of work, the Company’s contract revenues for the years ended December 31, (in thousands): Revenues 2023 2022 2021 Dredging: Capital—U.S. $ 186,715 $ 342,461 $ 397,034 Capital—foreign — 149 6,596 Coastal protection 196,343 192,567 169,678 Maintenance 187,586 98,077 132,551 Rivers & lakes 16,318 15,527 20,290 Total dredging revenues $ 586,962 $ 648,781 $ 726,149 Offshore Wind 2,663 — — Total revenues $ 589,625 $ 648,781 $ 726,149 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Total revenue was $589.6 million in 2023, a decrease of $59.2 million, or 9.1%, from 2022 total revenue of $648.8 million.
Biggest changeThe following is a reconciliation of Adjusted EBITDA to net income (loss) from continuing operations of Great Lakes Dredge & Dock Corporation (in thousands): 2024 2023 2022 (in thousands) Net income (loss) $ 57,265 $ 13,906 $ (34,055 ) Adjusted for: Interest expense—net 17,880 12,140 14,108 Income tax provision (benefit) 18,120 4,406 (9,360 ) Depreciation and amortization 42,699 42,525 46,273 Adjusted EBITDA $ 135,964 $ 72,977 $ 16,966 37 Components of Contract Revenues The following table sets forth, by type of work, the Company’s contract revenues for the years ended December 31, 2024, 2023 and 2022 (in thousands): Revenues (in thousands) 2024 2023 2022 Dredging: Capital—U.S. $ 348,085 $ 186,715 $ 342,461 Coastal protection 253,360 196,343 192,567 Maintenance 158,882 187,586 98,077 Rivers & lakes 2,366 16,318 15,527 Capital—foreign - - 149 Total dredging revenues 762,693 586,962 648,781 Offshore energy - 2,663 - Total revenues $ 762,693 $ 589,625 $ 648,781 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Total revenue was $762.7 million in 2024, an increase of $173.1 million, or 29%, from 2023 total revenue of $589.6 million.
Other The future declaration and payment of dividends will be at the discretion of the Company’s board of directors and will depend on many factors, including general economic and business conditions, our strategic plans, our financial results and condition and legal requirements, including restrictions and limitations contained in the Amended Credit Agreement, surety bonding agreement and the indenture relating to our senior notes.
Other The future declaration and payment of dividends will be at the discretion of the Company’s board of directors and will depend on many factors, including general economic and business conditions, our strategic plans, our financial results and condition and legal requirements, including restrictions and limitations contained in the ABL Credit Agreement, surety bonding agreement and the indenture relating to our senior notes.
At December 31, 2023 and 2022, our goodwill was $76.6 million. 36 Results of Operations—Fiscal Years Ended December 31, 2023, 2022 and 2021 The following table sets forth the components of net income (loss) from continuing operations and Adjusted EBITDA, as defined below, as a percentage of contract revenues for the years ended December 31 2023, 2022 and 2021.
At December 31, 2024 and 2023, our goodwill was $76.6 million. 36 Results of Operations—Fiscal Years Ended December 31, 2024, 2023 and 2022 The following table sets forth the components of net income (loss) from continuing operations and Adjusted EBITDA, as defined below, as a percentage of contract revenues for the years ended December 31 2024, 2023 and 2022.
The Company is a party to numerous collective bargaining agreements in the U.S. that govern our relationships with our unionized hourly workforce. 34 Primary Factors that Determine Operating Profitability The Company’s results of operations for a calendar or quarterly period are generally determined by the following three factors: • Bid wins and dredge employment — The Company recognizes backlog upon a project being awarded.
The Company is a party to numerous collective bargaining agreements in the U.S. that govern our relationships with our unionized hourly workforce. 34 Primary Factors that Determine Operating Profitability The Company’s results of operations for an annual or quarterly period are generally determined by the following three factors: • Bid wins and dredge employment — The Company recognizes backlog upon a project being awarded.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations. Overview Great Lakes is the largest provider of dredging services in the United States which is complemented with a long history of performing significant international projects. The Company is also fully engaged in expanding its core business into the rapidly developing offshore wind energy industry.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations. Overview Great Lakes is the largest provider of dredging services in the United States which is complemented with a long history of performing significant international projects. The Company is also fully engaged in expanding its core business into the offshore energy industry.
Army Corps of Engineers (the “Corps”), which has responsibility for federally funded projects related to navigation and flood control of U.S. waterways. Multi-jurisdictional cost sharing arrangements are allowing the Corps to utilize funds from sources other than the federal budget to prioritize additional projects where waterway infrastructure improvements can have an impact to large regions.
Army Corps of Engineers (the “Corps”), which has responsibility for federally funded projects related to navigation and flood control of U.S. waterways. Multi-jurisdictional cost sharing arrangements allow the Corps to utilize funds from sources other than the federal budget to prioritize additional projects where waterway infrastructure improvements can have an impact to large regions.
Additionally, in June 2022 the Company exercised the 41 contract option with the same builder to build a second 6,500 cubic yard trailing suction hopper dredge, the Amelia Island , with expected delivery in 2025.
Additionally, in June 2022 41 the Company exercised the contract option with the same builder to build a second 6,500 cubic yard trailing suction hopper dredge, the Amelia Island , with expected delivery in the second half of 2025.
Commitments, contingencies and liquidity matters Refer to Note 6, “Long-term debt,” in the Company’s consolidated financial statements for discussion of the Company’s Amended Credit Agreement and Senior Notes. Refer to Note 4, “Leases,” in the Company’s consolidated financial statements for discussion of the Company’s leases.
Commitments, contingencies and liquidity matters Refer to Note 6, “Long-term debt,” in the Company’s consolidated financial statements for discussion of the Company’s ABL Credit Agreement and Senior Notes. Refer to Note 4, “Leases,” in the Company’s consolidated financial statements for discussion of the Company’s leases.
The Company will continue to monitor for changes in facts or circumstances that may impact our estimates. The Company will perform its next scheduled annual test of goodwill in the third quarter of 2024 should no triggering events occur which would require a test prior to the next annual test.
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 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 selected financial data presented below have been derived from the Company’s consolidated financial statements; items may not sum due to rounding. 2023 2022 2021 Contract revenues 100.0 % 100.0 % 100.0 % Costs of contract revenues (86.8 ) (95.2 ) (80.0 ) Gross profit 13.2 4.8 20.0 General and administrative expenses (9.7 ) (7.9 ) (8.6 ) Other (Gains) losses (1.3 ) 1.2 — Operating income (loss) 4.8 (4.3 ) 11.4 Interest expense—net (2.1 ) (2.2 ) (3.0 ) Other income (expense) 0.4 (0.2 ) 0.1 Income (loss) before income taxes 3.1 (6.7 ) 8.5 Income tax (provision) benefit (0.7 ) 1.4 (1.8 ) Net income (loss) 2.4 (5.3 ) 6.7 Adjusted EBITDA 12.4 % 2.6 % 17.6 % Adjusted EBITDA, as provided herein, represents net income (loss) from continuing operations of Great Lakes Dredge & Dock Corporation, adjusted for net interest expense, income taxes, depreciation and amortization expense, debt extinguishment, accelerated maintenance expense for new international deployments, goodwill or asset impairments and gains on bargain purchase acquisitions.
The selected financial data presented below have been derived from the Company’s consolidated financial statements; items may not sum due to rounding. 2024 2023 2022 Contract revenues 100.0 % 100.0 % 100.0 % Costs of contract revenues (78.9 ) (86.8 ) (95.2 ) Gross profit 21.1 13.2 4.8 General and administrative expenses 9.3 9.7 7.9 Other (gains) losses (0.4 ) (1.3 ) 1.2 Operating income (loss) 12.2 4.8 (4.3 ) Interest expense—net (2.3 ) (2.1 ) (2.2 ) Other income (expense) 0.1 0.4 (0.2 ) Income (loss) before income taxes 10.0 3.1 (6.7 ) Income tax (provision) benefit (2.4 ) (0.7 ) 1.4 Net income (loss) 7.6 2.4 (5.3 ) Adjusted EBITDA 17.8 % 12.4 % 2.6 % Adjusted EBITDA, as provided herein, represents net income (loss) from continuing operations of Great Lakes Dredge & Dock Corporation, adjusted for net interest expense, income taxes, depreciation and amortization expense, debt extinguishment, accelerated maintenance expense for new international deployments, goodwill or asset impairments and gains on bargain purchase acquisitions.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For a discussion comparing our consolidated operating results from the year ended December 31, 2022 with the year ended December 31, 2021, refer to Part II, Item 7.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 For a discussion comparing our consolidated operating results from the year ended December 31, 2023 with the year ended December 31, 2022, refer to Part II, Item 7.
Our backlog includes only those projects for which we have obtained a signed contract with the customer. Approximately 60% of the Company’s dredging backlog at December 31, 2023 is expected to be completed and converted to revenue in 2024. This amount may fluctuate as vessel schedules are adjusted in the future.
Our backlog includes only those projects for which we have obtained a signed contract with the customer. Approximately 60% of the Company’s dredging backlog at December 31, 2024 is expected to be completed and converted to revenue in 2025 with the remainder to be completed in 2026. This amount may fluctuate as vessel schedules are adjusted in the future.
Also, 34% of our December 31, 2023 dredging backlog relates to federal government contracts, which can be canceled at any time without penalty to the government, subject to our contractual right to recover our actual committed costs and profit on work performed up to the date of cancellation.
Also, 56% of our December 31, 2024 dredging backlog relates to federal government contracts, which can be canceled at any time without penalty to the government, subject to our contractual right to recover our actual committed costs and profit on work performed up to the date of cancellation.
Although some of a project’s funding may ultimately be derived from multiple sources, the Corps maintains the authority over the project and is our customer. In 2023, our revenues earned from contracts with federal government agencies were approximately 75% of total revenue, consistent with the average of the three-year period ended December 31, 2023 of 74%.
Although some of a project’s funding may ultimately be derived from multiple sources, the Corps maintains the authority over the project and is our customer. In 2024, our revenues earned from contracts with federal government agencies were approximately 57% of total revenue, down from the average of the three-year period ended December 31, 2023 of 74%.
The Company’s net cash provided by operating activities for the years ended December 31, 2023, 2022 and 2021 totaled $47.4 million, $1.7 million and $49.0 million, respectively. Normal increases or decreases in the level of working capital relative to the level of operational activity impact cash flow from operating activities.
The Company’s net cash provided by operating activities for the years ended December 31, 2024, 2023 and 2022 totaled $70.1 million, $47.4 million and $1.7 million, respectively. Normal increases or decreases in the level of working capital relative to the level of operational activity impact cash flow from operating activities.
The Company won 34% of the overall 2023 domestic bid market, up from a 26% win rate of the overall 2022 domestic bid market and consistent with the win rate of 33% over the three year period ended December 31, 2023. Variability in contract wins from period to period is not unusual.
The Company won 33% of the overall 2024 domestic bid market, consistent with the 34% win rate of the overall 2023 domestic bid market and with the win rate of 31% over the three-year period ended December 31, 2024. Variability in contract wins from period to period is not unusual.
“Management’s Discussion and Analysis of Financial Condition and Results of Operation – Year Ended December 31, 2022 Compared to Year Ended December 31, 2021” in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Commission on February 17, 2023.
“Management’s Discussion and Analysis of Financial Condition and Results of Operation – Year Ended December 31, 2023 Compared to Year Ended December 31, 2022” in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Commission on February 16, 2024.
The Company expects to perform on its offshore wind contracts using the inclined fall-pipe vessel for subsea rock installation, which is expected to be delivered and operational in 2025. 39 The Company’s contract backlog represents our estimate of the revenues that will be realized under the portion of the contracts remaining to be performed.
The Company expects to perform on its offshore energy contracts using the Acadia , an inclined fall-pipe vessel for subsea rock installation currently under construction, which is expected to be delivered and operational in 2026. 39 The Company’s contract backlog represents our estimate of the revenues that will be realized under the portion of the contracts remaining to be performed.
The increase in cash provided by operating activities during 2023 compared to the same period in the prior year was driven by a increases in net income and billings in excess of contract revenues offset by an increase in accounts receivable during the current year when compared to the same period in the prior year.
The increase in cash provided by operating activities during 2023 compared to 2022 was driven by a increases in net income and billings in excess of contract revenues offset by an increase in accounts receivable during 2023 when compared to 2022.
The Company’s net cash flows provided by financing activities for the year ended December 31, 2023 totaled $89.9 million. The Company’s net cash flows used in financing activities for the years ended December 31, 2022 and 2021 totaled, $1.7 million and $5.9 million, respectively.
The Company’s net cash flows provided by financing activities for the year ended December 31, 2023 totaled $89.9 million. The Company’s net cash flows used in financing activities for the year ended December 31, 2022 totaled $1.7 million.
Beyond the next twelve months, our ability to fund our working capital needs, planned capital expenditures, scheduled debt payments and dividends, if any, and to comply with all the financial terms and covenants required under the Amended 42 Credit Agreement, depends on our future operating performance and cash flows, which in turn are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.
Beyond the next twelve months, the Company’s ability to fund its working capital needs, planned capital expenditures, scheduled debt payments and dividends, if any, and to comply with all the financial terms and covenants required under the ABL Amendment, Second Lien Credit Agreement and bonding agreements, depends on its future operating performance and cash flows, which in turn are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond the Company’s control.
Other Off-Balance Sheet and Contingent Obligations The Company had outstanding letters of credit relating to contract guarantees and insurance payment liabilities totaling $49.8 million at December 31, 2023. We have granted liens on a substantial portion of the owned operating equipment as security for borrowings under the Amended Credit Agreement and other indebtedness.
Other Off-Balance Sheet and Contingent Obligations The Company had outstanding letters of credit relating to contract guarantees and insurance payment liabilities totaling $43.5 million at December 31, 2024. We have granted liens on a substantial portion of the owned operating equipment as security for borrowings and letter of credits under the ABL Credit Agreement and other indebtedness.
Total domestic dredging bid market for the current year period included awards for eleven domestic capital projects in Florida, Virginia, New Jersey, Alabama and Texas, eighteen coastal protection projects in Florida, Pennsylvania, Alabama, New York, New Jersey, North Carolina, Virginia, Louisiana and Delaware, forty six maintenance projects in Texas, Louisiana, Delaware, Florida, South Carolina, Alabama, Massachusetts, Maryland, New York, Georgia and Pennsylvania, and eleven rivers & lakes projects in Louisiana, Mississippi, North Carolina and Texas.
The total domestic dredging bid market for the current year period included awards for eighteen domestic capital projects in Alabama, Florida, Georgia, Louisiana, Maine, Texas, and Virginia, twenty three coastal protection projects in Florida, Massachusetts, New Jersey, New York, North Carolina, and South Carolina, forty seven maintenance projects in Alabama, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, New Jersey, New York, North Carolina, Oregon, and Texas, and three rivers & lakes projects in Alabama, Mississippi, and Tennessee.
In November 2021, the Company entered into a $197 million contract with Philly Shipyard to build the Acadia, the first U.S. flagged Jones Act compliant, inclined fall-pipe vessel for subsea rock installation for wind turbine foundations to support the new U.S. offshore wind industry which is expected to be delivered and operational in 2025.
In November 2021, the Company entered into a $197 million contract with Philly Shipyard to build the Acadia, the first U.S. flagged Jones Act compliant, inclined fall-pipe subsea rock installation vessel to support the offshore energy industry, which is expected to be delivered and operational in the first half of 2026.
We believe trends in our win rate over the prior three-year periods provide a historical background against which current year results can be compared. The Company’s December 31, 2023 contracted dredging backlog was $1.04 billion. This represents an increase of $662.0 million, or 175.5%, over our December 31, 2022 backlog of $377.1 million.
We believe trends in our win rate over the prior three-year periods provide a historical background against which current year results can be compared. The Company’s December 31, 2024 contracted dredging backlog was $1.19 billion. This represents an increase of $155.1 million, or 14.9%, over our December 31, 2023 dredging backlog of $1.04 billion.
We experienced an average combined bid market share in the U.S. of 33% over the three-year period ended December 31, 2023, including 36%, 56%, 23% and 22% of the domestic capital, coastal protection, maintenance and rivers & lakes sectors, respectively. The Company’s largest domestic customer is the U.S.
We experienced an average combined bid market share in the U.S. of 31% over the three-year period ended December 31, 2024, including 28%, 59%, 19% and 16% of the domestic capital, coastal protection, maintenance and rivers & lakes sectors, respectively. The Company’s largest domestic customer is the U.S.
The increased expense was due to the increase in pretax net income. The effective tax rate for the year ended December 31, 2023 was 24.1% compared to 21.3% for the year ended December 31, 2022.
The increased expense was due to the increase in pretax net income. The effective tax rate for the year ended December 31, 2024 was 24.0% compared to 24.1% for the year ended December 31, 2023. For the year ended December 31, 2024, net income was $57.3 million compared to $13.9 million for the year ended December 31, 2023.
This flexible approach to our fleet utilization, driven by the project scope and equipment, enables us to move equipment in response to changes in demand for dredging services to take advantage of the most attractive opportunities.
Our fleet of dredging equipment can be utilized on one or many types of work and in various geographic locations. This flexible approach to our fleet utilization, driven by the project scope and equipment, enables us to move equipment in response to changes in demand for dredging services to take advantage of the most attractive opportunities.
At December 31, 2023, the Company had outstanding performance bonds with a notional amount of $960.9 million. The revenue value remaining in backlog related to the projects totaled $546.8 million.
At December 31, 2024, the Company had outstanding performance bonds with a notional amount of $1.32 billion. The revenue value remaining in backlog related to the projects totaled $904.1 million.
During the fourth quarter of 2023, the Company returned to work the vessel that was dry docked for regulatory inspections as of September 30, 2023. The Company experienced regulatory dry dock inspections on four dredges in 2023.
During the fourth quarter of 2023, the Company returned to work the vessel that was dry docked for regulatory inspections as of September 30, 2023.The Company experienced regulatory dry dock inspections on 4 dredges in both 2024 and 2023. As of the end of the fourth quarter of 2024, the Company had one dredge cold stacked.
Total dredging backlog at the end of 2023 does not reflect approximately $44.6 million of performance obligations related to offshore wind contracts or approximately $179.4 million of domestic low bids pending formal award and additional phases (“options”) pending on projects currently in dredging backlog. At December 31, 2022, the amount of domestic low bids pending award was $584.7 million.
Total dredging backlog at the end of 2024 does not reflect approximately $44.9 million of performance obligations related to offshore energy contracts or approximately $282.1 million of domestic low bids pending formal award and additional phases (“options”) pending on projects currently in dredging backlog and $12.7 million of offshore energy options pending at December 31, 2024.
If we experience any of these events and circumstances, the completion of a project will often be accelerated or delayed, as applicable, and, consequently, we will experience project results that are better or worse than our estimates. We do our best to estimate for events and circumstances that are not within our control; however, these situations are inherent in dredging.
If we experience any of these events and circumstances, the completion of a project will often be accelerated or delayed, as applicable, and, consequently, we will experience project results that are better or worse than our as-bid project estimates.
Due to the fact that there are no public companies that are direct competitors, the Company weighs the results of this approach less than the income approach. In the current year, the Company performed a quantitative goodwill impairment test.
Due to the fact that there are no public companies that are direct competitors, the Company weighs the results of this approach less than the income approach. In 2024, the Company performed a qualitative goodwill impairment test. The Company performed its annual test of impairment as of July 1, 2024 with no indication of impairment as of the test date.
Contract Revenues Most of the Company’s contracts are obtained through competitive bidding on terms specified by the party inviting the bid. The types of equipment required to perform the specified service, project site conditions, the estimated project duration, seasonality, location and complexity of a project affect the cost of performing the contract and the price that contractors will bid.
The types of equipment required to perform the specified service, project site conditions, the estimated project duration, seasonality, location and complexity of a project affect the cost of performing the contract and the price that contractors will bid.
We expect substantially all of our rivers & lakes dredging backlog at December 31, 2023 to be performed in 2024. Liquidity and Capital Resources The Company’s principal sources of liquidity are net cash flows provided by operating activities, availability under our revolving credit facility and proceeds from issuances of long-term debt.
During 2024, the Company continued to earn revenue on a project Arkansas which was in dredging backlog at December 31, 2023. Liquidity and Capital Resources The Company’s principal sources of liquidity are net cash flows provided by operating activities, availability under our revolving credit facility and proceeds from issuances of long-term debt.
The increase in maintenance revenue during the current year was mostly attributable to higher revenue earned on projects in Florida, North Carolina, Alabama, Texas, Mississippi and Puerto Rico in the current year compared to the prior year. This increase was partially offset by decreased revenue earned on projects in Louisiana in the current year.
The decrease in maintenance revenues during the current year was primarily attributable to a decrease in revenue earned on projects in North Carolina, South Carolina and Alabama when compared with prior year. This decrease was offset by an increase in revenue earned on projects in Louisiana, Mississippi and Puerto Rico in the current year.
The 2023 domestic dredging bid market, excluding LNG projects, totaled $2.22 billion, an increase of $247 million, or 12.5%, compared to the 2022 bid market total of $1.97 billion.
The 2024 domestic dredging bid market, excluding LNG projects, totaled $2.93 billion, an increase of $710 million, or 32.0%, compared to the 2023 bid market total of $2.22 billion.
Included in the December 31, 2023 backlog are two LNG projects, including the Rio Grande LNG project, which will be the largest project undertaken in the Company's history, and the Port Arthur LNG Phase 1 project for Marine Dredging and Disposal. Subcontractor work on the Rio Grande LNG project began in January 2024.
Included in the Company’s backlog at December 31, 2024 are two LNG projects, including the Brownsville Ship Channel project for Next Decade Corporation’s Rio Grande LNG project, which is the largest project undertaken in the Company's history, and the Port Arthur LNG Phase 1 project for Marine Dredging and Disposal.
Bidding Activity and Backlog The following table sets forth, by type of work, the Company’s backlog as of the dates indicated (in thousands): December 31, December 31, December 31, Dredging backlog 2023 2022 2021 Capital—U.S. $ 741,839 $ 148,429 $ 398,748 Coastal protection 138,394 97,819 99,048 Maintenance 152,104 125,671 50,966 Rivers & lakes 6,765 5,221 2,826 Total dredging backlog $ 1,039,102 $ 377,140 $ 551,588 Total dredging backlog does not include $44.6 million of performance obligations related to offshore wind contracts or $179.4 million of domestic low bids pending formal award and additional phases (“options”) pending on projects currently in dredging backlog at December 31, 2023.
Bidding Activity and Backlog The following table sets forth, by type of work, the Company’s backlog as of the dates indicated (in thousands): Backlog (in thousands) 2024 2023 2022 Dredging: Capital - U.S. $ 799,565 $ 741,839 $ 148,429 Coastal protection 328,073 138,394 97,819 Maintenance 60,243 152,104 125,671 Rivers & lakes 6,318 6,765 5,221 Total Dredging Backlog 1,194,199 1,039,102 377,140 Offshore energy 44,945 44,604 - Total Backlog $ 1,239,144 $ 1,083,706 $ 377,140 Total backlog does not include $282.1 million of domestic low bids pending formal award and additional phases (“options”) pending on projects currently in dredging backlog and $12.7 million of offshore energy options pending at December 31, 2024.
In 2022, we moved out of foreign operations to focus on domestic projects and do not anticipate any foreign capital project revenue in the immediate future. Coastal protection revenues were $196.3 million in 2023, an increase of $3.7 million, or 1.9%, from $192.6 million in 2022.
We did not earn revenues from foreign dredging operations in 2024 or 2023. Revenues from foreign dredging operations in 2022 were $0.1 million. In 2022, we moved out of foreign operations to focus on domestic projects and do not anticipate any foreign capital project revenue in the immediate future. The Company did not earn revenues from offshore energy in 2024.
Critical Accounting Policies and Estimates The Company’s significant accounting policies are discussed in the Notes to the consolidated financial statements included in Item 15 of this Annual Report on Form 10-K.
We do our best to estimate for events and circumstances that are not within our control; however, these situations are inherent in dredging. Critical Accounting Policies and Estimates The Company’s significant accounting policies are discussed in the Notes to the consolidated financial statements included in Item 15 of this Annual Report on Form 10-K.
We have contracted dredging backlog related to coastal protection of $138.4 million at December 31, 2023 compared to $97.8 million at the end of 2022. During the year ended December 31, 2023, the Company continued to earn revenue on coastal protection projects in North Carolina, Florida, New York and New Jersey which were in dredging backlog at December 31, 2022.
During 2024, the Company was awarded eleven coastal protection projects in New Jersey, New York, Massachusetts, Florida and South Carolina. We have contracted dredging backlog related to coastal protection of $328.1 million at December 31, 2024 compared to $138.4 million at the end of 2023.
On March 27, 2020, the U.S. government enacted the CARES Act which includes a provision that lifts caps on the HMTF, thereby allowing full access to future annual revenues.
Past WRDA bills called for full use of the HMTF for its intended purpose of maintaining future access to the waterways and ports that support our nation’s economy. On March 27, 2020, the U.S. government enacted the CARES Act which includes a provision that lifts caps on the HMTF, thereby allowing full access to future annual revenues.
Through the increased appropriation of HMTF monies, the Company has seen increased funding for harbor maintenance projects to be let for bid throughout 2023 and expects this trend to continue in 2024.
Through the increased appropriation of HMTF monies, the Company has seen increased funding for harbor maintenance projects to be let for bid throughout 2024 and expects this trend to continue in 2025. The Company did not win any of the rivers & lakes projects awarded in the markets where the group operates during the current year or prior year.
Investing activities in all periods primarily relate to normal course upgrades and capital maintenance of our dredging fleet. The Company took delivery of a 6,500 cubic yard trailing suction hopper dredge, the Galveston Island , which began operations in February 2024.
The Company took delivery of a 6,500 cubic yard trailing suction hopper dredge, the Galveston Island , which began operations in February 2024.
Strong hurricane and storm seasons have resulted in an increase in beach erosion and other damage which adds to the recurring nature of our business and the need for more frequent coastal protection and port maintenance projects. As a result of the extreme storm systems in prior years involving Hurricanes Harvey, Irma, and Maria, the U.S.
Coastal protection and storm impacts continue to provide the major impetus for coastal project investment at federal and state levels. Strong hurricane and storm seasons have resulted in an increase in beach erosion and other damage which adds to the recurring nature of our business and the need for more frequent coastal protection and port maintenance projects.
In March 2023, S&P Global Ratings (“S&P”) downgraded our corporate credit rating to CCC+ with a negative outlook from B with a stable outlook, and Moody’s Investor Services (“Moody’s”) downgraded our corporate credit rating to B3 with a negative outlook from B2 with a stable outlook. These credit ratings are below investment grade and could raise our cost of financing.
In the third quarter of 2024, S&P Global Ratings upgraded our corporate credit rating from CCC+ to B- and reaffirmed our outlook as stable. These credit ratings are below investment grade and could raise our cost of financing.
The Company anticipates that remaining new build program payments will be made with cash on hand, future cash flows generated from operations, revolver availability, and possible future financing transactions. In 2023, 2022 and 2021, we received $30.7 million, $2.1 million and $4.5 million, respectively, in proceeds from dispositions of property and equipment.
During the year ended December 31, 2024, the Company invested $5.4 million and $41.0 million in the Galveston Island and Amelia Island , respectively, and $72.7 million in the Acadia . The Company anticipates that remaining new build program payments will be made with cash on hand, future cash flows generated from operations, revolver availability, and possible future financing transactions.
During 2023, the Company earned revenue from deepening projects in Texas, Virginia and Louisiana, which were in dredging backlog at December 31, 2022. We expect approximately 50% of our domestic capital dredging backlog at December 31, 2023 to be performed in 2024, with the remainder performed in 2025 and 2026.
During the year ended December 31, 2024, the Company continued to earn revenue on coastal protection projects in New York, New Jersey, Alabama and Florida which were in dredging backlog at December 31, 2023. We expect approximately 87% of our coastal protection dredging backlog at December 31, 2024 to be performed in 2025, with the remainder performed in 2026.
The increase in operating income during the year ended December 31, 2023 was a result of higher gross profit and an increase in other gains and losses. This is partially offset by an increase in general and administrative expenses, as described above. The Company’s net interest expense for 2023 totaled $12.1 million compared to $14.1 million in 2022.
The $64.6 million increase was a result of higher gross profit in the current year when compared to prior year, partially offset by higher general and administrative expenses in the current year when compared to prior year. The Company’s net interest expense for 2024 totaled $17.9 million compared to $12.1 million in 2023.
At the end of 2022, the Water Resources Development Act (“WRDA”) of 2022 (“WRDA 2022”), was approved by Congress and signed into law by the President. WRDA 2022 is on a two-year renewal cycle and includes legislation that authorizes the financing of Corps' projects for flood and hurricane protection, dredging, ecosystem restoration and other construction projects.
Dredging on both projects began during the third quarter of 2024. The Water Resources Development Act (“WRDA”) is on a two-year renewal cycle and includes legislation that authorizes the financing of Corps’ projects for studies, flood and hurricane protection, dredging, ecosystem restoration and other construction projects aimed at improving rivers and harbors in the United States.
If internal sources of liquidity prove to be insufficient, we may not be able to successfully obtain additional financing on favorable terms, or at all.
If internal sources of liquidity prove to be insufficient, we may not be able to successfully obtain additional financing on favorable terms, or at all. During the second quarter of 2024, Moody’s Investor Services changed our outlook from negative to stable and reaffirmed our corporate credit rating at B2.
During the year ended December 31, 2023, the Company continued to earn revenue on projects in Florida, Louisiana, Mississippi and North and South Carolina which were in dredging backlog at December 31, 2022. Our contracted maintenance dredging backlog at December 31, 2023 of $152.1 million is $26.4 million higher than the backlog of $125.7 million at December 31, 2022 .
During 2024 the Company was awarded two maintenance projects in Florida and Texas. During the year ended December 31, 2024, the Company continued to earn revenue on projects in Louisiana, Texas, Mississippi, Puerto Rico and Florida which were in dredging backlog at December 31, 2023.
The Company believes our cash and cash equivalents, our anticipated cash flows from operations and availability under our revolving credit facility will be sufficient to fund our operations, capital expenditures and the scheduled debt service requirements for the next twelve months.
Accordingly, we cannot make any assurances as to the size of any such dividend or that it will pay any such dividend in future quarters. 42 The Company believes its cash and cash equivalents, its anticipated cash flows from operations and availability under its revolving credit facility and the option to borrow additional funds under the Second Lien Credit Agreement will be sufficient to fund the Company’s operations, capital expenditures and the scheduled debt service requirements for the next twelve months.
Great Lakes has established a unique business position in the U.S. offshore wind market, and we continue to pursue and tender bids, both domestically and internationally, on multiple offshore wind projects for the Acadia , which will be the first and only Jones Act compliant subsea rock installation vessel in the United States.
We believe that Great Lakes has established a unique business position with our subsea rock installation (“SRI”) vessel, the Acadia , the first and only Jones Act SRI vessel being constructed in the United States, targeting the offshore wind, oil and gas and telecommunication industries, both domestically and internationally.
The increase in cash provided by financing activities primarily relates to $208.0 million of revolving debt facility borrowings, partially offset by $118.0 million of revolving debt facility repayments. The Company expects to spend between approximately $170 million and $195 million on capital expenditures in 2024 which is comprised of vessels in our new build program and maintenance capital expenditures.
The cash provided by financing activities in 2023 primarily relates to $208.0 million of revolving debt facility borrowings, partially offset by $118.0 million of revolving debt facility repayments.
Other gains and losses for the year ended December 31, 2023 was a gain of $7.5 million, as compared to a loss of $7.8 million for the year ended December 31, 2022.
The increase was mainly attributable to higher incentive compensation and employee benefit expenses, partially offset by lower severance and office expenses. 38 Other gains and losses for the year ended December 31, 2024 was a gain of $3.0 million, as compared to a gain of $7.5 million for the year ended December 31, 2023.
We have contracted dredging backlog related to rivers & lakes of $6.8 million at December 31, 2023, which is $1.5 million higher than the backlog of $5.2 million at December 31, 2022. The increase in our backlog for 2023 relates to the exercise of options that were previously pending on existing projects as of December 31, 2022.
We have contracted dredging backlog related to rivers & lakes of $6.3 million at December 31, 2024, which is $0.5 million lower than the backlog of $6.8 million at December 31, 2023. We expect all of our rivers & lakes dredging backlog at December 31, 2024 to be performed in 2025.
The Company’s fleet, which includes 17 dredges, 13 material transportation barges, one drillboat, and numerous other support vessels, is the largest and most diverse fleet of any U.S. dredging company. Our fleet of dredging equipment can be utilized on one or many types of work and in various geographic locations.
The decrease in the federal government revenue percentage is a result of additional revenues from state and local governments and private customers during 2024. The Company’s fleet, which includes 16 dredges, 13 material transportation barges, one drillboat, and numerous other support vessels, is the largest and most diverse fleet of any U.S. dredging company.
The increase was partially offset by a $13.8 million increase in the income tax provision and a $5.9 million increase to general and administrative expenses during the current year when compared to the prior year. Adjusted EBITDA (as defined and reconciled on page 37) was $73.0 million and $17.0 million for the years ended December 31, 2023 and 2022, respectively.
Adjusted EBITDA (as defined and reconciled on page 37) was $136.0 million and $73.0 million for the years ended December 31, 2024 and 2023, respectively. The increase in Adjusted EBITDA of $63.0 million, or 86% from 2023, was driven by the increase in gross profit, excluding depreciation, partially offset by an increase in general and administrative expense.
The decrease in net interest expense was primarily due to an increase in capitalized interest related to financing the Company’s new build program, partially offset by an increase in interest due to increased borrowings under the Company’s revolving credit facility. Income tax provision in 2023 was $4.4 million, compared to an income tax benefit of $9.4 million in 2022.
The increase in net interest expense was primarily due to higher borrowings from the Second Lien Credit Agreement which was executed during the second quarter of 2024, partially offset by a decrease in interest expense from lower borrowings under the ABL Credit Agreement. Income tax provision in 2024 was $18.1 million, compared to $4.4 million in 2023.
We continue to see strong support from the current presidential administration and Congress for the dredging industry. Government funded projects coming into the pipeline include Sabine, Mobile and Houston. These deepenings continue the trend of ensuring all East Coast and Gulf of Mexico ports will be able to accommodate the deeper draft vessels currently used on several trade routes.
These deepenings continue the trend of ensuring all East Coast and Gulf of America ports will be able to accommodate the deeper draft vessels currently used on several trade routes. The nation’s governors continue to show commitment to their respective ports through engagement and funding.
The increase in coastal protection revenue for the year ended December 31, 2023 was mostly attributable to higher revenue earned on projects in New York and New Jersey, partially offset by less revenue earned on projects in North Carolina in the current year when compared to the prior year.
Coastal protection revenues were $253.4 million in 2024, an increase of $57.1 million, or 29%, from $196.3 million in 2023. The increase in coastal protection revenues for the year ended December 31, 2024 was mainly attributable to an increase in revenue earned on projects in Florida and Alabama in the current year when compared to the prior year.
The Company won 36%, or $241.8 million, of the domestic capital dredging projects awarded in 2023, excluding LNG, compared to 8%, or $63.8 million, in the prior year. Domestic capital dredging work made up $741.8 million, or 71%, of our December 31, 2023 contracted dredging backlog.
We expect approximately 44% of our domestic capital dredging backlog at December 31, 2024 to be performed in 2025, with the remainder performed in 2026. The Company won 63%, or $557.8 million, of the coastal protection projects awarded in 2024, compared to 52%, or $213.8 million, in the prior year.
WRDA 2022 featured among many other things authorization for New York and New Jersey shipping channels to be deepened to 55 feet, projects which are estimated to be approximately $6 billion, as well as the Coastal Texas Program, estimated at $34.4 billion, which includes dune and marsh restoration to safeguard the Texas Gulf Coast from hurricane surges.
WRDA 2022 included funding for deepening the New York and New Jersey shipping channels to 55 feet, as well as the Coastal Texas Protection and Restoration Program, which aims to protect the Texas Gulf Coast from hurricanes.
This amount was offset by gains on disposals of assets during 2022 of $0.4 million. Operating income was $28.2 million and operating loss was $27.7 million for the years ended December 31, 2023 and 2022, respectively.
The gain in 2024 was mainly attributable to gains on disposals of assets. The gain in 2023 was primarily the result of a $7.4 million gain recognized that was associated with the termination of an offshore energy contract. Operating income was $92.8 million and $28.2 million for the years ended December 31, 2024 and 2023, respectively.
For these reasons, we use operating income to measure our operating performance and use Adjusted EBITDA only as a supplement.
For these reasons, we use net income (loss) to measure our operating performance and use Adjusted EBITDA only as a supplement. For the years ended December 31, 2024, 2023 and 2022, the Company did not have any adjustments to EBITDA as defined herein. As such, the amounts presented as Adjusted EBITDA herein also represent EBITDA for the periods presented.
The decrease in domestic capital dredging revenue from the prior year was primarily driven by lower revenue earned on projects in Massachusetts, Florida, South Carolina, Texas, New Hampshire, Alabama, New York and New Jersey. This decrease was partially offset by an increase in revenue earned in Virginia.
The increase in domestic capital dredging revenues was mostly due to a higher amount of revenue earned on projects in Texas in the current year when compared to prior year. These increases were partially offset by lower revenue earned on projects in Virginia and Florida in the current year.
Cash provided by operating activities for the year ended December 31, 2022 was down compared to 2021 due to lower net income and higher working capital during 2021. The Company’s net cash flows used in investing activities for the years ended December 31, 2023, 2022 and 2021 totaled $120.1 million, $140.9 million and $112.2 million, respectively.
The Company’s net cash flows used in investing activities for the years ended December 31, 2024, 2023 and 2022 totaled $115.7 million, $120.1 million and $140.9 million, respectively. Investing activities in all periods primarily relate to investments in our new build program, normal course upgrades and capital maintenance of our dredging fleet.
The decrease in revenues from the prior year was largely attributable to a decrease in domestic capital project revenues. This decrease was partially offset by an increase in domestic maintenance and coastal protection project revenues during the current year as compared to the prior year.
The increase in revenues from the prior year was largely attributable to a significant increase in domestic capital and coastal protection revenues, due to a significant increase in capital and coastal protection project awards and the delivery of the Galveston Island , the Company’s newest hopper dredge which began operations in February 2024.
Consolidated gross profit for the year ended December 31, 2023 increased by $46.5 million, or 149.2%, to $77.7 million from $31.2 million for the year ended December 31, 2022. Gross profit margin (gross profit divided by revenue) for the full year 2023 increased to 13.2%, compared to the prior year's gross profit margin of 4.8%.
In 2023, the Company recognized revenues of $2.7 million related to the termination of an offshore energy contract. Consolidated gross profit for the year ended December 31, 2024 increased by $82.9 million, or 107%, to $160.6 million from $77.7 million for the year ended December 31, 2023.
We expect substantially all of our coastal protection dredging backlog at December 31, 2023 to be performed in 2024. Coastal protection and storm impacts continue to provide the major impetus for coastal project investment at federal and state levels.
Our contracted maintenance dredging backlog at December 31, 2024 of $60.2 million is $91.9 million lower than the backlog of $152.1 million at December 31, 2023 . We expect substantially all of our maintenance dredging backlog at December 31, 2024 to be performed in 2025.
The increase in rivers & lakes revenue during the current year was mostly attributable to higher revenue earned on projects in Arkansas, partially offset by decreased revenue earned on projects in Mississippi in the current year compared to the prior year. For the year ended December 31, 2023, we earned 100% of our December 31 2022 rivers & lakes backlog.
Rivers & lakes revenues were $2.4 million for 2024, a decrease of $13.9 million, or 86%, from $16.3 million in 2023. The decrease in rivers & lakes revenue during the current year was mostly attributable to a decrease in revenue earned on projects in Tennessee and Arkansas as compared to 2023.
Most of this work is anticipated to be coastal protection related, but some funding may be provided for channel maintenance. This increased budget and additional funding support our expectation for a stronger market in 2024. The Company won 30%, or $292.8 million, of the maintenance dredging projects awarded in 2023 compared to 26%, or $191.4 million, in 2022.
The Company won 2%, or $18.1 million, of the maintenance dredging projects awarded in 2024 compared to 30%, or $292.8 million, in 2023. The decrease in the Company’s maintenance project awards in 2024 is primarily the result of the increase in capital and coastal protection projects awarded to the Company during the same period.
Removed
The Company plans to participate in the offshore wind market, and in November 2021, the Company entered into a $197 million contract with Philly Shipyard to build the first U.S. flagged Jones Act compliant, inclined fall-pipe vessel for subsea rock installation for wind turbine foundations, the Acadia , which is expected to be delivered and operational in 2025.
Added
The Company did not commence any regulatory dry dock inspections during the fourth quarter of 2024, but did return to work the vessel that was dry docked for regulatory inspections as of September 30, 2024.
Removed
This vessel represents a significant critical advancement in building the U.S. logistics infrastructure to support the future of the new U.S. offshore wind industry. Additionally, in July 2023, the Company announced the signing of the first ever subcontract for procurement of rock with Carver Sand & Gravel LLC, a U.S. quarry in the state of New York.
Added
We expect this cold stacked equipment can be easily reactivated when market conditions are favorable for the Company.
Removed
Both milestones solidify our entry into the offshore wind market and will support Great Lakes' awarded rock installation contract for Empire Wind I with an estimated installation window in 2025.
Added
During 2024, the Company began the reactivation of one of the previously cold stacked vessels in anticipation of commencing a contract in 2025. 33 While the Company continues to reinvest in our core dredging business and renew our dredging fleet, we remain steadfast in our commitment to executing a long-term strategy that maximizes growth opportunities for the Company.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−0 removed0 unchanged
Biggest changeWe are exposed to market risks related to fluctuations in interest rates on our outstanding variable rate indebtedness. As of December 31, 2023 we had $90.0 million of variable rate indebtedness. All of the outstanding borrowings under the revolving credit facility are at variable rates based on the Secured Overnight Financing Rate (“SOFR”).
Biggest changeAll of the outstanding borrowings under the revolving credit facility are at variable rates based on the Secured Overnight Financing Rate (“SOFR”). At December 31, 2024 our weighted average interest rate on our variable rate indebtedness, after adjusting for the effects of interest rate swaps, was 10.4%.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk. In May 2021, the Company sold $325 million of unsecured 5.25% Senior Notes due June 1, 2029 pursuant to a private offering. The Company used the net proceeds from the offering, together with cash on hand, to redeem all $325.0 million aggregate principal amount of its prior outstanding 8% Notes.
Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk. In May 2021, the Company sold $325.0 million of unsecured 5.25% Senior Notes due June 1, 2029 pursuant to a private offering. The Company used the net proceeds from the offering, together with cash on hand, to redeem all $325.0 million aggregate principal amount of its prior outstanding 8% Notes.
A significant operating cost for the Company is diesel fuel, which represents approximately 12% of our costs of contract revenues. We use fuel commodity forward contracts, typically with durations of less than one year, to reduce the impacts of changing fuel prices on operations. We do not purchase fuel hedges for trading purposes.
A significant operating cost for the Company is diesel fuel, which represents approximately 10% of our costs of contract revenues. We use fuel commodity forward contracts, typically with durations of less than one year, to reduce the impacts of changing fuel prices on operations. We do not purchase fuel hedges for trading purposes.
The 2029 Notes were priced to investors at par and will mature on June 1, 2029. At December 31, 2023, the Company had long-term senior notes outstanding with a recorded face value of $325.0 million.
The 2029 Notes were priced to investors at par and will mature on June 1, 2029. At December 31, 2024, the Company had long-term senior notes outstanding with a recorded face value of $325.0 million.
Based on our 2024 projected domestic fuel consumption, an approximate 10% increase in the average price per gallon of fuel would have a $0.5 million effect on fuel expense, after the effect of fuel commodity contracts in place at December 31, 2023.
Based on our 2025 projected domestic fuel consumption, an approximate 10% increase in the average price per gallon of fuel would have a $0.8 million effect on fuel expense, after the effect of fuel commodity contracts in place at December 31, 2024.
Under these agreements, we will pay fixed prices ranging from $2.35 to $2.90 per gallon. At December 31, 2023, the fair value liabilities on these contracts was $2.9 million, based on quoted market prices and is recorded in accrued liabilities.
Under these agreements, we will pay fixed prices ranging from $2.18 to $2.90 per gallon. At December 31, 2024, the fair value liabilities on these contracts was $1.1 million, based on quoted market prices and is recorded in accrued liabilities.
A 10% change in forward fuel prices would result in a $3.4 million change in the fair value of fuel hedges outstanding at December 31, 2023.
A 10% change in forward fuel prices would result in a $4.2 million change in the fair value of fuel hedges outstanding at December 31, 2024.
The fair value of these existing notes, which bear interest at a fixed rate of 5.25%, was $276.3 million at December 31, 2023 based on market prices. Assuming a 10% decrease in interest rates from the rates at December 31, 2023 the fair value of this fixed rate debt would have increased to $287.1 million.
The fair value of these existing notes, which bear interest at a fixed rate of 5.25%, was $301.5 million at December 31, 2024 based on market prices. Assuming a 10% decrease in interest rates from the rates at December 31, 2024 the fair value of this fixed rate debt would have increased to $309.8 million.
At December 31, 2023 we had outstanding arrangements to hedge the price of a portion of our fuel purchases related to domestic dredging work in backlog, representing approximately 87% of its anticipated domestic fuel requirements through December 2023. As of December 31, 2023, there were 13.0 million gallons remaining on these contracts.
At December 31, 2024 we had outstanding arrangements to hedge the price of a portion of our fuel purchases related to domestic dredging work in backlog, representing approximately 80% of its anticipated domestic fuel requirements through May 2026. As of December 31, 2024, there were 17.8 million gallons remaining on these contracts.
At December 31, 2023 our weighted average interest rate was 6.71%. A hypothetical 10% increase in the weighted average interest rate on our variable rate indebtedness as of December 31, 2023 would increase our annual interest cost by approximately $0.6 million.
A hypothetical 10% increase in the weighted average interest rate on our variable rate indebtedness as of December 31, 2024 would increase our annual interest cost by approximately $0.5 million. A 10% increase in interest rate would result in $0.5 million change in the fair value of the Interest Rate Swaps outstanding at December 31, 2024.
Added
We are exposed to market risks related to fluctuations in interest rates on our outstanding variable rate indebtedness. As of December 31, 2024 we had $135.0 million of variable rate indebtedness, $75 million of which is hedged by interest rate swaps to convert a portion of our variable rate debt into fixed-rate debt.

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