What changed in this filing

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Item 1. Financial Statements

2021-04-30 compared with 2020-10-30 · 195 added, 278 removed, 594 unchanged (44% of the section changed)

4 unchanged sentences

(In Thousands, Except Share and Per Share Information)

September 30,

Current assets:

Cash and cash equivalents

Restricted cash

Accounts receivable:

2 unchanged sentences

Other current

Costs and estimated earnings in excess of billings on uncompleted contracts

Contract assets

Prepaid expenses and other

13 unchanged sentences

Income taxes payable

Billings in excess of costs and estimated earnings on uncompleted contracts

Contract liabilities

Current portion of operating lease liabilities

11 unchanged sentences

Common stock -- $ 0.01 par value, 50,000,000 authorized, 31,188,886 and 31,171,804 issued;

30,415,095 and 29,592,164 outstanding at September 30, 2020 and December 31, 2019, respectively

Treasury stock, 711,231 shares, at cost, as of September 30, 2020 and December 31, 2019, respectively

30,477,655 and 30,460,573 outstanding at March 31, 2021 and December 31, 2020, respectively

Treasury stock, 711,231 shares, at cost, as of March 31, 2021 and December 31, 2020, respectively

Accumulated other comprehensive loss

8 unchanged sentences

(In Thousands, Except Share and Per Share Information)

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Contract revenues

3 unchanged sentences

Gain on disposal of assets, net

Operating income (loss)

Operating income

Other (expense) income:

2 unchanged sentences

Other expense, net

Income (loss) before income taxes

Income before income taxes

Income tax expense

Net income (loss)

Basic earnings (loss) per share

Diluted earnings (loss) per share

Shares used to compute income (loss) per share:

Basic earnings per share

Diluted earnings per share

Shares used to compute income per share:

The accompanying notes are an integral part of these condensed consolidated financial statements

1 unchanged sentence

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Income

(In Thousands)

Three months ended September 30,

Nine months ended September 30,

Net income (loss)

Change in fair value of cash flow hedge, net of tax expense of $ 44 and tax benefit of $ 173 for the three and nine months ended September 30, 2020, respectively and net of tax benefit of $ 55 and $ 280 for the three and nine months ended September 30, 2019.

Total comprehensive income (loss)

Three months ended March 31,

Change in fair value of cash flow hedge, net of tax expense of $ 53 and net of tax benefit of $ 226 for the three months ended March 31, 2021 and March 31, 2020, respectively.

Total comprehensive income

The accompanying notes are an integral part of these condensed consolidated financial statements

8 unchanged sentences

Stock-based compensation

Issuance of restricted stock

Forfeiture of restricted stock

Exercise of stock options

Payments related to tax withholding for stock-based compensation

Cash flow hedge

Balance, March 31, 2021

Stock-based compensation

Issuance of restricted stock

Forfeiture of restricted stock

Purchase of vested stock-based awards

Cash flow hedge

Balance, June 30, 2020

Stock-based compensation

Issuance of restricted stock

Purchase of vested stock-based awards

Cash flow hedge

Balance, September 30, 2020

Accumulated Other

Comprehensive

Earnings (Loss)

Balance, December 31, 2019

Stock-based compensation

Exercise of stock options

Issuance of restricted stock

2 unchanged sentences

Balance, March 31, 2020

Stock-based compensation

Issuance of restricted stock

Forfeiture of restricted stock

Cash flow hedge

Balance, June 30, 2019

Stock-based compensation

Issuance of restricted stock

Cash flow hedge

Balance, September 30, 2019

The accompanying notes are an integral part of these condensed consolidated financial statements

3 unchanged sentences

(in thousands)

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Operating activities:

2 unchanged sentences

Amortization of ROU finance leases

Unamortized debt issuance costs upon debt modification

Amortization of deferred debt issuance costs

7 unchanged sentences

Prepaid expenses and other

Costs and estimated earnings in excess of billings on uncompleted contracts

Contract assets

Accounts payable

2 unchanged sentences

Income tax payable

Billings in excess of costs and estimated earnings on uncompleted contracts

Net cash provided by (used in) operating activities

Contract liabilities

Net cash provided by operating activities

Cash flows from investing activities:

3 unchanged sentences

Insurance claim proceeds related to property and equipment

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

1 unchanged sentence

Payments made on borrowings from Credit Facility

Proceeds from sale-leaseback arrangement

Loan costs from Credit Facility

Payments of finance lease liabilities

Purchase of vested stock-based awards

Payments related to tax withholding for stock-based compensation

Exercise of stock options

Net cash (used in) provided by financing activities

Net cash used in financing activities

Net change in cash, cash equivalents and restricted cash

1 unchanged sentence

Cash, cash equivalents and restricted cash at end of period

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash shown above

Supplemental disclosures of cash flow information:

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GAAP”) have been condensed or omitted.

Readers of this report should also read the Company’s condensed consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (“2019 Form 10-K”) as well as Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations also included in its 2019 Form 10-K.

Readers of this report should also read the Company’s consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“2020 Form 10-K”) as well as Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations also included in its 2020 Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented.

Such adjustments are of a normal recurring nature.

Interim results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation in the Company’s condensed consolidated statement of operations.

As part of the Company’s Invest, Scale and Grow (“ISG”) initiative it realigned its project management personnel within the operating groups for the combined company.

As a result of the realignment, beginning in the second quarter of 2019, the Company has elected to classify certain project management costs in Cost of contract revenue in its Condensed Consolidated Statements of Operations (the “Statements of Operations”) to better represent how those costs are managed and controlled.

For periods reported prior to the second quarter of 2019, certain project management costs were included in Selling, general and administrative (“SG&A”) expenses.

The Company’s SG&A expense for 2019 included project management costs of $ 1.1 million incurred in the first quarter of 2019.

Interim results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Summary of Significant Accounting Policies

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Revenue Recognition

The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), on January 1, 2018, using the modified retrospective method.

The Company recognized the cumulative effect of initially adopting Topic 606 guidance as an adjustment to the beginning balance of retained earnings.

Contracts with customers that were not substantially complete in both the Company’s marine and concrete segments were evaluated in order to determine the impact as of the date of adoption.

The Company’s revenue is derived from contracts to provide marine construction, dredging, turnkey concrete services, and other specialty services.

The Company’s projects are typically short in duration and usually span a period of less than one year.

The Company’s projects are typically short in duration and usually span

a period of less than one year.

The Company determines the appropriate accounting treatment for each contract before work begins and generally records revenue on contracts over time.

Performance obligations are promises in a contract to transfer distinct goods or services to the customer and are the unit of account under Topic 606.

The Company’s contracts and related change orders typically represent a single performance obligation because the Company provides a significant integrated service and individual goods and services are not separately identifiable.

The Company’s contracts and related change orders typically represent a single performance obligation because the Company provides an integrated service and individual goods and services are not separately identifiable.

Revenue is recognized over time because control is continuously transferred to the customer.

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A determination that the collection of a claim is probable is based upon compliance with the terms of the contract and the extent to which the Company performed in accordance therewith but does not guarantee collection in full.

Contract assets and liabilities include the following:

Assets and liabilities derived from contracts with customers include the following:

● Accounts Receivable:

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Retainage - Represent amounts which have not been billed to or paid by customers due to retainage provisions in construction contracts, which amounts generally become payable upon contract completion and acceptance by the customer.

● Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts - Represent revenues recognized in excess of amounts billed, which management believes will be billed and collected within one year of the completion of the contract (i.e.

Contract Assets) and are recorded as a current asset, until such amounts are either received or written off.

● Billings in Excess of Costs and Estimated Earnings on Uncompleted Contracts - Represent billings in excess of revenues recognized (i.e.

Contract Liabilities) and are recorded as a current liability, until the underlying obligation has been performed or discharged.

Remaining performance obligations represent the transaction price of firm orders or other written contractual commitments from customers for which work has not been performed or is partially completed and excludes unexercised contract options and potential orders.

As of September 30, 2020, the aggregate amount of the remaining performance obligations was approximately $ 428.8 million.

Of this amount, the current expectation of the Company is that it will recognize $ 386.6 million, or 90 %, in the next 12 months and the remaining balance thereafter.

● Contract Assets - Represent revenues recognized in excess of amounts billed, which management believes will be billed and collected within one year of the completion of the contract and are recorded as a current asset, until such amounts are either received or written off.

● Contract Liabilities - Represent billings in excess of revenues recognized and are recorded as a current liability, until the underlying obligation has been performed or discharged.

Classification of Current Assets and Liabilities

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The Company has not historically sustained losses on its cash balances in excess of federally insured limits.

Cash equivalents at September 30, 2020 and December 31, 2019 consisted primarily of overnight bank deposits.

Restricted cash of $ 1.0 million at December 31, 2019 consisted of collateral related to a marine project that was completed during the quarter ended June 30, 2020.

The Company had no restricted cash as of September 30, 2020.

Cash equivalents at March 31, 2021 and December 31, 2020 consisted primarily of overnight bank deposits.

The Company had no restricted cash as of March 31, 2021 and December 31, 2020.

Risk Concentrations

1 unchanged sentence

The Company depends on its ability to continue to obtain federal, state and local governmental contracts, and indirectly, on the amount of funding available to these agencies for new and current governmental projects.

Therefore, a portion of the Company’s operations is dependent upon the level and timing of government

Therefore, a portion of the Company’s operations is dependent upon the level and timing of government funding.

Statutory mechanics liens provide the Company high priority in the event of lien foreclosures following financial difficulties of private owners, thus minimizing credit risk with private customers.

1 unchanged sentence

Accounts receivable are stated at the historical carrying value, net of allowances for credit losses.

The Company has significant investments in billed and unbilled receivables as of September 30, 2020 and December 31, 2019.

The Company has significant investments in billed and unbilled receivables as of March 31, 2021 and December 31, 2020.

Billed receivables represent amounts billed upon the completion of small contracts and progress billings on large contracts in accordance with contract terms and milestone achievements.

Unbilled receivables on contracts, which are included in costs in excess of billings, arise as revenues are recognized over time.

Unbilled receivables on contracts, which are included in contract assets, arise as revenues are recognized over time.

Unbilled amounts on contracts represent recoverable costs and accrued profits not yet billed.

1 unchanged sentence

Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability.

In establishing an allowance for credit losses, the Company evaluates its contract receivables and costs in excess of billings and thoroughly reviews historical collection experience, the financial condition of its customers, billing disputes and other factors.

In establishing an allowance for credit losses, the Company evaluates its contract receivables and contract assets and thoroughly reviews historical collection experience, the financial condition of its customers, billing disputes and other factors.

The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected or if a settlement is reached for an amount that is less than the carrying value.

As of September 30, 2020, and December 31, 2019, the Company has recorded an allowance for credit losses of $ 0.4 million and $ 2.6 million, respectively.

As of March 31, 2021, and December 31, 2020, the Company has recorded an allowance for credit losses of $ 0.3 million and $ 0.4 million, respectively.

Balances billed to customers but not paid pursuant to retainage provisions in construction contracts generally become payable upon contract completion and acceptance by the owner.

Retainage at September 30, 2020 totaled $ 36.2 million, of which $ 7.2 million is expected to be collected beyond September 30, 2021.

Retainage at March 31, 2021 totaled $ 38.0 million, of which $ 4.3 million is expected to be collected beyond March 31, 2022.

Retainage at December 31, 2020 totaled $ 36.5 million.

8 unchanged sentences

Costs related to environmental remediation are charged to expense.

Other environmental costs are also charged to expense except to the extent they increase the value of the property and/or provide future economic benefits, in which event the costs are capitalized.

Other environmental costs are also charged to expense unless they increase the value of the property and/or provide future economic benefits, in which event the costs are capitalized.

Environmental liabilities, if any, are recognized when the expenditure is considered probable and the amount can be reasonably estimated.

The Company did not recognize any environmental liabilities as of September 30, 2020 or December 31, 2019, other than those involved in insurance reserves.

See Note 16 for further discussion regarding matters pursuant to insurance reserves.

The Company did not recognize any environmental liabilities as of March 31, 2021 or December 31, 2020.

Fair Value Measurements

The Company evaluates and presents certain amounts included in the accompanying condensed consolidated financial statements at “fair value” in accordance with U.S.

GAAP, which requires the Company to base its

estimates on assumptions that market participants, in an orderly transaction, would use to price an asset or liability, and to establish a hierarchy that prioritizes the information used to determine fair value.

GAAP, which requires the Company to base its estimates on assumptions that market participants, in an orderly transaction, would use to price an asset or liability, and to establish a hierarchy that prioritizes the information used to determine fair value.

Refer to Note 8 for more information regarding fair value determination.

4 unchanged sentences

Where shipping and handling costs are incurred by the Company, these charges are included in inventory and charged to cost of contract revenue upon use.

Non-current inventory consists of spare parts (including engines, cutters and gears) that require special order or long-lead times for manufacture or fabrication but must be kept on hand to reduce downtime.

Refer to Note 7 for more information regarding inventory.

Non-current inventory consists of spare parts (including engines, cutters and gears) that require special order or long-lead times for manufacture or fabrication, but must be kept on hand to reduce downtime and is valued at the lower of cost (using historical average cost) or net realizable value.

Property and Equipment

2 unchanged sentences

Major renewals and betterments of equipment are capitalized and depreciated generally over three to seven years until the next scheduled maintenance.

When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in results of operations for the respective period.

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets for financial statement purposes, as follows:

12 unchanged sentences

These costs and the related amortization periods are periodically reviewed to determine if the estimates are accurate.

If warranted, a significant upgrade of equipment may result in a revision to extend the useful life of the asset, in which case the change is accounted for prospectively.

If warranted, a significant upgrade of equipment may result in a revision to the useful life of the asset, in which case the change is accounted for prospectively.

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated future cash flows,

an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or the fair value, less the costs to sell, and are no longer depreciated.

There were no assets classified as held for sale as of September 30, 2020 or December 31, 2019.

The Company adopted ASU 2016-02, Leases (Topic 842), on January 1, 2019, on a prospective basis, forgoing comparative reporting.

The Company elected to utilize the transition guidance within the new standard, which allows the Company to carryforward the historical lease classification.

The Company elected to not separate lease and non-lease components for all classes of underlying assets in which it is the lessee and made an accounting policy election to not account for leases with an initial term of 12 months or less on the balance sheet.

Adoption of the standard resulted in the recording of additional net ROU operating lease assets of approximately $ 23.3 million and lease liabilities for operating leases of approximately $ 24.0 million on the Condensed Consolidated Balance Sheets as of January 1, 2019.

The adoption of this guidance did not have an impact on net income.

There were no assets classified as held for sale as of March 31, 2021 or December 31, 2020.

Management determines if a contract is or contains a lease at inception of the contract or modification of the contract.

A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration.

Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.

Finance and operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date.

As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise such option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.

The Company’s lease arrangements have lease and non-lease components.

Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

See Note 18 for more information regarding leases.

4 unchanged sentences

Intangible assets that have infinite lives are not amortized, but are subject to impairment testing at least annually or more frequently if events or circumstances indicate that the asset may be impaired.

The Company has one infinite-lived intangible asset, a trade name, which is tested for impairment annually on October 31, or whenever events or circumstances indicate that the carrying amount of the trade name may not be recoverable.

The Company has one infinite-lived intangible asset, a trade name, which it tests for impairment annually on October 31, or whenever events or circumstances indicate that the carrying amount of the trade name may not be recoverable.

Impairment is calculated as the excess of the trade name’s carrying value over its fair value.

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The fair value of restricted stock grants is equivalent to the fair value of the stock issued on the date of grant and is measured as the closing price of the stock on the date of grant.

Compensation expense is recognized only for share-based payments expected to vest.

Compensation expense is recognized only for stock-based payments expected to vest.

The Company estimates forfeitures at the date of grant based on historical experience and future expectations.

3 unchanged sentences

GAAP, which requires the recognition of income tax expense for the amount of taxes payable or refundable for the current period and for deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns.

The Company must make significant assumptions, judgments and estimates to determine its current provision for income taxes, its deferred tax assets and liabilities, and any valuation allowance to be recorded against any deferred tax asset.

The Company must make significant assumptions, judgments and estimates to determine its current provision for income taxes, its

deferred tax assets and liabilities, and any valuation allowance to be recorded against any deferred tax asset.

The current provision for income tax is based upon the current tax laws and the Company’s interpretation of these laws, as well as the probable outcomes of any tax audits.

13 unchanged sentences

The marine segment maintains five levels of excess loss insurance coverage, totaling $ 200 million in excess of primary coverage.

The marine segment’s excess loss coverage responds to all key marine liability policies when a primary limit of $ 1 million has been exhausted;

The marine segment’s excess loss coverage responds to most of its policies when a primary limit of $ 1 million has been exhausted;

provided that the primary limit for Contingent Maritime Employer’s Liability is $ 10 million and the Watercraft Pollution Policy primary limit is $ 5 million.

4 unchanged sentences

The Company does not net insurance recoveries against the related claim liability as the amount of the claim liability is determined without consideration of the anticipated insurance recoveries from third parties.

Separately, the Company’s marine segment employee health care is not covered by primary insurance, with claims being paid out of general assets of the Company and the insurance program being currently administered by a third party.

Separately, the Company’s marine segment employee health care is paid for by general assets of the Company and currently administered by a third party.

The administrator has purchased appropriate stop-loss coverage.

Losses on these policies up to the deductible amounts are accrued based upon reported claims incurred, and an estimate of claims incurred but not reported.

The accruals are derived from known facts, historical trends and industry averages to determine the best estimate of the ultimate expected loss.

Losses on these policies up to the deductible amounts are accrued based upon known claims incurred and an estimate of claims incurred but not reported.

The accruals are derived from known facts, historical trends and

industry averages to determine the best estimate of the ultimate expected loss.

Actual claims may vary from estimates.

Any adjustments to such reserves are included in the Condensed Consolidated Statements of Operations in the period in which they become known.

Any adjustments to such reserves are included in the Condensed Consolidated Results of Operations in the period in which they become known.

The Company’s concrete segment employee health care is provided through two policies.

1 unchanged sentence

The self-funded plan is funded to the maximum exposure and, as a result, is expected to receive a partial refund after the policy expiration.

The total accrual for insurance claims liabilities was $ 24.5 million and $ 3.7 million at September 30, 2020 and December 31, 2019, respectively.

The total accrual for insurance claims receivable was $ 23.5 million and $ 1.1 million at September 30, 2020 and December 31, 2019, respectively.

The total accrual for insurance claims liabilities was $ 59.2 million and $ 60.4 million at March 31, 2021 and December 31, 2020, respectively, reflected as a component of accrued liabilities in the condensed consolidated balance sheet.

The total accrual for insurance claims receivable was $ 54.9 million and $ 57.0 million at March 31, 2021 and December 31, 2020, respectively, reflected as a component of other current accounts receivable in the condensed consolidated balance sheet.

Accounting Standards Adopted in 2021

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All ASUs are adopted by their respective due dates and in the manner prescribed by the FASB.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which changes the way in which entities estimate and present credit losses for most financial assets, including accounts receivable.

The Company adopted the new standard on January 1, 2020.

For the Company’s trade receivables, certain other receivables and certain other financial instruments, the Company is required to use a new forward-looking “expected” credit loss model based on historical loss rates that replaced the prior “incurred” credit loss model.

The adoption of the new standard generally results in earlier recognition of allowances for credit losses.

Adoption of the standard resulted in no adjustment for credit losses as the impact was immaterial;

however, subsequently primarily as a result of the COVID-19 pandemic additional bad debt expense of approximately $ 0.4 million was recorded as of September 30, 2020.

In December 2019, the FASB issued ASU 2019-12, Income Taxes:

Simplifying the Accounting for Income Taxes (Topic 740).

This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within that year.

Contract revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following table represents a disaggregation of the Company’s contract revenues by service line for the marine and concrete segments:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Marine Segment

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In making this determination, the Company considered the similar characteristics of its operations as discussed in Note 1.

Additionally, as discussed, both the marine and concrete segments have a limited number of contracts with multiple performance obligations.

The Company’s contracts often combine multiple services, such as engineering, dredging, diving and construction, into one distinct finished product that is transferred to the customer.

These contracts are often estimated and bid as one project and evaluated as to performance as one project, not by individual services performed under such contracts.

Both the marine and concrete segments have a single chief operating decision maker (“CODM”) for the entire segment, not the service lines of the segments.

Resources are allocated by segment and financial and budgetary information is compiled and reviewed by segment, not by service line.

Additionally, as discussed, both the marine and concrete segments have limited contracts with multiple performance obligations.

The Company’s contracts are often estimated and bid as one project and evaluated as to performance as one project, not by individual services performed by each.

Both the marine and concrete segments have a single Executive Vice President responsible for the entire segment, not by service lines of the segments.

Resources are allocated by segment and financial and budgetary information is compiled and reviewed by segment, not service line.

Marine Segment

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Light commercial services include horizontally poured concrete for products such as sidewalks, ramps, tilt walls and trenches.

Other services comprise labor related to concrete pouring such as rebar

installation and pumping services and typically support the Company’s structural and light commercial services.

Other services comprise labor related to concrete pouring such as rebar installation and pumping services and typically support the Company’s structural and light commercial services.

Concentration of Risk and Enterprise Wide Disclosures

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Balances billed to customers but not paid pursuant to retainage provisions generally become payable upon contract completion and acceptance by the owner.

The table below presents the concentrations of accounts receivable from customers (trade and retainage) at September 30, 2020 and December 31, 2019, respectively:

September 30, 2020

The table below presents the concentrations of accounts receivable from customers (trade and retainage) at March 31, 2021 and December 31, 2020, respectively:

March 31, 2021

December 31, 2020

6 unchanged sentences

Net receivables

At September 30, 2020 no single customer accounted for more than 10.0% of total current receivables.

At March 31, 2021 one customer in the Private Companies category accounted for 10.6 % of total current receivables.

At December 31, 2020, no single customer accounted for more than 10.0% of total current receivables.

Additionally, the table below represents concentrations of contract revenue by type of customer for the three and nine months ended September 30, 2020 and 2019, respectively:

Three months ended September 30,

Nine months ended September 30,

Additionally, the table below represents concentrations of contract revenue by type of customer for the three months ended March 31, 2021 and 2020, respectively:

Three months ended March 31,

Federal Government

3 unchanged sentences

Total contract revenues

In the three months ended September 30, 2020, one customer in the Local Governments category accounted for 13.8 % of total contract revenues.

In the three months ended September 30, 2019, no single customer accounted for more than 10% of total contract revenues.

In the nine months ended September 30, 2020, one customer in the Local Governments category accounted for 11.2 % of total contract revenues.

In the nine months ended September 30, 2019, no single customer accounted for more than 10% of total contract revenues.

In the three months ended March 31, 2021 and 2020, no single customer exceeded 10.0% of total contract revenues.

The Company does not believe that the loss of any one of its customers would have a material adverse effect on the Company or its subsidiaries and affiliates since no single specific customer sustains such a large portion of receivables or contract revenue over time.

1 unchanged sentence

The loss of any one of these suppliers could adversely impact short-term operations.

Contract revenues generated outside the United States totaled 0.9 % and 2.3 % of total revenues for the three months ended September 30, 2020 and 2019, respectively, and 1.8 % and 1.5 % for the nine months ended September 30, 2020 and 2019, respectively, and were primarily located in the Caribbean Basin and Mexico.

Contract revenues generated outside the United States totaled 1.6 % and 2.4 % of total revenues for the three months ended March 31, 2021 and 2020, and were primarily located in the Caribbean Basin and Mexico.

Contracts in Progress

Contracts in progress are as follows at September 30, 2020 and December 31, 2019:

September 30,

Contracts in progress are as follows at March 31, 2021 and December 31, 2020:

Costs incurred on uncompleted contracts

4 unchanged sentences

Included in the accompanying Condensed Consolidated Balance Sheets under the following captions:

Costs and estimated earnings in excess of billings on uncompleted contracts

Billings in excess of costs and estimated earnings on uncompleted contracts

Included in cost and estimated earnings in excess of billings on uncompleted projects is approximately $ 3.2 million and $ 0.1 million at September 30, 2020 and December 31, 2019, respectively, related to claims and unapproved change orders.

See Note 2 - Summary of Significant Accounting Policies to the Company’s condensed consolidated financial statements for discussion of the accounting for these claims.

Contract costs include all direct costs, such as materials and labor, and those indirect costs incurred that are related to contract performance such as payroll taxes and insurance.

General and administrative costs are charged to expense as incurred.

Incentive fees, if available, are billed to the customer based on the terms and conditions of the contract.

Pending claims are recognized as an increase in contract revenue only when the collection is deemed probable and if the amount can be reasonably estimated for purposes of calculating total profit or loss on long-term contracts.

Changes in job performance and job conditions, including those arising from final contract settlements, may result in revisions to costs and revenues and are recognized in the period in which the revisions are determined.

Provisions for estimated losses on contracts in progress are made in the period in which such losses are determined, without regard to the percentage of completion.

Contract assets

Contract liabilities

Included in contract assets is approximately $ 3.6 million and $ 3.1 million at March 31, 2021 and December 31, 2020, respectively, related to claims and unapproved change orders.

See Note 2 - Summary of Significant

Accounting Policies to the Company’s condensed consolidated financial statements for discussion of the accounting for these claims.

As of March 31, 2021, the aggregate amount of the remaining performance obligations was approximately $ 364.8 million.

Of this amount, the current expectation of the Company is that it will recognize $ 328.6 million, or 90 %, in the next 12 months and the remaining balance thereafter.

Property and Equipment

The following is a summary of property and equipment at September 30, 2020 and December 31, 2019:

September 30,

The following is a summary of property and equipment at March 31, 2021 and December 31, 2020:

Automobiles and trucks

6 unchanged sentences

Construction in progress

For the three months ended September 30, 2020 and 2019, depreciation expense was $ 5.3 million and $ 5.8 million, respectively.

For the nine months ended September 30, 2020 and 2019, depreciation expense was $ 16.6 million and $ 17.6 million, respectively.

For the three months ended March 31, 2021 and 2020, depreciation expense was $ 5.3 million and $ 5.7 million, respectively.

Substantially all depreciation expense is included in the cost of contract revenue in the Company’s Condensed Consolidated Statements of Operations.

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See Note 2 to the Company’s condensed consolidated financial statements for further discussion of property and equipment.

Current inventory at both September 30, 2020 and December 31, 2019 of $ 1.9 million and $ 1.1 million, respectively, consisted primarily of spare parts and small equipment held for use in the ordinary course of business.

Non-current inventory at September 30, 2020 and December 31, 2019 totaled $ 6.5 million and $ 7.0 million, respectively, and consisted primarily of spare engine components or items which require longer lead times for sourcing or fabrication for certain of the Company’s assets to reduce equipment downtime.

Other Current Accounts Receivable

Other current accounts receivable at March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021

December 31, 2020

Insurance claims receivable

Accident loss receivables

Other current receivables

Total other current accounts receivable

Recurring Fair Value Measurements

7 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.

The following table sets forth by level within the fair value hierarchy the Company’s recurring financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2020 and December 31, 2019:

Fair Value Measurements

Carrying Value

September 30, 2020

March 31, 2021

Cash surrender value of life insurance policy

4 unchanged sentences

See Note 11 for additional information on the Company’s derivative instrument.

Our concrete segment has life insurance policies with a combined face value of $ 11.1 million as of September 30, 2020.

Our concrete segment has life insurance policies with a combined face value of $ 11.1 million as of March 31, 2021.

The policies are invested in mutual funds and the fair value measurement of the cash surrender balance associated with these policies is determined using Level 2 inputs within the fair value hierarchy and will vary with investment performance.

6 unchanged sentences

Other Fair Value Measurements

The fair value of the Company’s debt at September 30, 2020 and December 31, 2019 approximated its carrying value of $ 42.1 million and $ 73.3 million, respectively, as interest is based on current market interest rates for debt with similar risk and maturity.

The fair value of the Company’s debt at March 31, 2021 and December 31, 2020 approximated its carrying value of $ 28.9 million and $ 35.1 million, respectively, as interest is based on current market interest rates for debt with similar risk and maturity.

If the Company’s debt was measured at fair value, it would have been classified as Level 2 in the fair value hierarchy.

2 unchanged sentences

The tables below present the activity and amortizations of finite-lived intangible assets:

September 30,

Finite-lived intangible assets, beginning of period

8 unchanged sentences

Customer relationships were valued at approximately $ 18.8 million and are being amortized over eight years using an accelerated method based on the pattern in which the economic benefits of the assets are consumed.

For the nine months ended September 30, 2020, $ 1.6 million of amortization expense was recognized for these assets.

For the three months ended March 31, 2021, $ 0.4 million of amortization expense was recognized for these assets.

Future expense remaining of approximately $ 2.8 million will be amortized as follows:

Additionally, the Company has one indefinite-lived intangible asset, a trade name, which is tested for impairment annually on October 31, or whenever events or circumstances indicate that the carrying amount of the trade name may not be recoverable.

Impairment is calculated as the excess of the trade name’s carrying

value over its fair value.

Impairment is calculated as the excess of the trade name’s carrying value over its fair value.

The fair value of the trade name is determined using the relief from royalty method, a variation of the income approach.

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This approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates, discount rates and other variables.

The impairment test concluded that the fair value of the trade name was in excess of the carrying value, therefore no impairment was recorded.

The most recent annual impairment test concluded that the fair value of the trade name was in excess of the carrying value, therefore no impairment was recorded.

Accrued Liabilities

Accrued liabilities at September 30, 2020 and December 31, 2019 consisted of the following:

September 30, 2020

Accrued liabilities at March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021

December 31, 2020

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The Credit Agreement, which may be amended from time to time, provides for borrowings under a revolving line of credit and a term loan (together, the “Credit Facility”).

The Credit Facility is guaranteed by the subsidiaries of the Company, secured by the assets of the Company, including stock held in its subsidiaries, and may be used to finance general corporate and working capital purposes, to finance capital expenditures, to refinance existing indebtedness, to finance permitted acquisitions and associated fees, and to pay for all related expenses to the Credit Facility.

The Credit Facility is guaranteed by the subsidiaries of the Company, secured by the assets of the Company, including stock held in its subsidiaries,

and may be used to finance general corporate and working capital purposes, to finance capital expenditures, to refinance existing indebtedness, to finance permitted acquisitions and associated fees, and to pay for all related expenses to the Credit Facility.

Interest is due and is computed based on the designation of the loan, with the option of a Base Rate Loan (the base rate plus the Applicable Margin), or an Adjusted LIBOR Rate Loan (the adjusted LIBOR rate plus the Applicable Margin).

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Total debt issuance costs for the Fourth Amendment, which included underwriter fees, legal fees and syndication fees were approximately $ 0.9 million and were capitalized as non-current deferred charges and amortized using the effective interest rate method over the duration of the loan.

Additionally, the Company executed the Fifth Amendment during March 2019, which was made effective as of December 31, 2018, and

executed the Sixth Amendment during May 2019.

Additionally, the Company executed the Fifth Amendment during March 2019, which was made effective as of December 31, 2018, and executed the Sixth Amendment during May 2019.

The Company incurred additional debt issuance costs of approximately $ 0.6 million and $ 0.9 million respectively for the Fifth and Sixth Amendments.

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Total debt issuance costs for the 364-Day Revolving Credit Facility, which included underwriter fees, legal fees and syndication fees were approximately $ 0.4 million and were capitalized as current deferred charges and will be amortized over the duration of the loan.

The quarterly weighted average interest rate for the Credit Facility as of September 30, 2020 was 2.58 %.

To date the Company has had no borrowings under the 364-Day Revolving Credit Facility.

Effective, October 9, 2020, the Company entered into an amendment (the "Eighth Amendment") to its syndicated credit agreement (the "Credit Agreement"

, with Regions Bank, as Administrative Agent and Collateral Agent and Bank of America, N.A., BOKF, NA dba Bank of Texas, Iberiabank, NBH Bank, Truist

Bank, and Trustmark National Bank, as Lenders.

The Eighth Amendment provides for administrative revisions to the Credit Agreement, including changes to repayment requirements for involuntary asset dispositions and changes to the timing of repayment for voluntary asset dispositions.

The quarterly weighted average interest rate for the Credit Facility as of March 31, 2021 was 2.48 %.

The Company’s obligations under debt arrangements consisted of the following:

September 30, 2020

March 31, 2021

December 31, 2020

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Total long-term debt

(1) Total debt issuance costs include underwriter fees, legal fees and syndication fees and fees related to the execution of the Fourth, Fifth, Sixth and Seventh Amendments to the Credit Agreement.

(1) Total debt issuance costs include underwriter fees, legal fees and syndication fees and fees related to the execution of the Fourth, Fifth, Sixth, Seventh and Eighth Amendments to the Credit Agreement.

Provisions of the revolving line of credit

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The maturity date for amounts drawn under the revolving line of credit is the earlier of the Facility termination date of July 31, 2023, or the date the outstanding balance is permanently reduced to zero.

Prior to the fourth quarter of 2018, the Company classified amounts drawn as current liabilities based on an intent and ability to repay the amounts using current assets within the next twelve months.

During the fourth quarter of 2018, the Company determined it no longer has the intent to repay amounts drawn within the next twelve months.

As of September 30, 2020, the Company determined that it still does not have the intent to repay amounts drawn within the next twelve months.

Therefore, the Company has classified the entire outstanding balance of the revolving line of credit as non-current.

As of September 30, 2020, the outstanding balance for all borrowings under the revolving line of credit was $ 10.0 million, where $ 5.0 million was designated as an Adjusted LIBOR Rate Loan at a rate of 2.44 % and $ 5.0 million was designated as a Base Rate Loan at a rate of 4.5 %.

There were also $ 2.1 million in outstanding letters of credit as of September 30, 2020, which reduced the maximum borrowing availability on the revolving line of credit to $ 37.9 million as of September 30, 2020.

During the nine months ended September 30, 2020,

the Company drew down $ 10.0 million for general corporate purposes and made payments of $ 36.0 million on the revolving line of credit which resulted in a net decrease of $ 26.0 million.

As of March 31, 2021 the Company had no borrowing under the revolving line of credit.

There were $ 1.7 million in outstanding letters of credit as of March 31, 2021, which reduced the maximum borrowing availability on the revolving line of credit to $ 48.3 million.

During the three months ended March 31, 2021, the

Company drew down $ 5.0 million for general corporate purposes and made payments of $ 10.0 million on the revolving line of credit which resulted in a net decrease of $ 5.0 million.

Provisions of the 364-day revolving credit facility

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The commitment fee, which is due quarterly in arrears, is equal to the Applicable Margin of the actual daily amount by which the Aggregate Revolving Commitments exceeds the Total Revolving Outstanding.

As of September 30, 2020, there were no outstanding borrowings under the 364-Day Revolving Credit Facility.

As of March 31, 2021, there were no outstanding borrowings under the 364-Day Revolving Credit Facility.

Provisions of the term loan

The original principal amount of $ 60.0 million for the term loan commitment is paid off in quarterly installment payments (as stated in the Credit Agreement).

At September 30, 2020, the outstanding term loan component of the Credit Facility totaled $ 32.1 million and was secured by specific assets of the Company.

At March 31, 2021, the outstanding term loan component of the Credit Facility totaled $ 28.9 million and was secured by specific assets of the Company.

The table below outlines the total remaining payment amounts annually for the term loan through maturity of the Credit Facility:

During the nine months ended September 30, 2020 the Company made the scheduled quarterly principal payments of $ 2.6 million, and an additional principal paydown of $ 2.6 million with proceeds from the sale of equipment which reduced the outstanding principal balance to $ 32.1 million as of September 30, 2020.

During the three months ended March 31, 2021 the Company made the scheduled quarterly principal payment of $ 1.2 million, which reduced the outstanding principal balance to $ 28.9 million as of March 31,2021.

The current portion of debt is $ 4.5 million, and the non-current portion is $ 24.4 million.

As of September 30, 2020, the term loan was designated as an Adjusted LIBOR Rate Loan with an interest rate of 2.44 %.

As of March 31, 2021, the term loan was designated as an Adjusted LIBOR Rate Loan with an interest rate of 2.38 %.

Financial covenants

9 unchanged sentences

and events constituting a change of control.

The Company expects to meet its future internal liquidity and working capital needs and maintain or replace its equipment fleet through capital expenditure purchases and major repairs, from funds generated by its operating activities for at least the next 12 months.

The Company believes that its cash position and available borrowings together with cash flow from its operations is adequate for general business requirements and to service its debt.

The Company was in compliance with all financial covenants as of September 30, 2020.

The Company was in compliance with all financial covenants as of March 31, 2021.

Derivative Financial Instruments

6 unchanged sentences

Gains and losses from hedge ineffectiveness are recognized in current earnings.

The change in fair market value of the swaps for the comparative periods ended September 30, 2020 and September 30, 2019, as reflected in accumulated other comprehensive loss in the Condensed Consolidated Statements of Stockholders’ Equity, is approximately $ 0.8 million and $ 1.2 million.

The fair market value of the swaps as of September 30, 2020 is reflected as a liability of $ 1.8 million on the Condensed Consolidated Balance Sheets.

The change in fair market value of the swaps for the comparative periods ended March 31, 2021 and March 31, 2020, as reflected in accumulated other comprehensive loss in the Condensed Consolidated Statements of Stockholders’ Equity, is approximately $( 0.2 ) million and $ 1.0 million.

The fair market value of the swaps as of March 31, 2021 is reflected as a liability of $ 1.4 million on the Condensed Consolidated Balance Sheets.

See Note 8 for more information regarding the fair value of the Company’s derivative instruments.

Other Long-Term Liabilities

Other long-term liabilities at September 30, 2020 and December 31, 2019 consisted of the following:

September 30, 2020

Other long-term liabilities at March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021

December 31, 2020

Sale-leaseback arrangement

CARES Act deferred payroll taxes

Deferred compensation

9 unchanged sentences

Concurrently with the sale, the Company paid $ 18.2 million towards the Term loan portion of the Company’s Credit Facility, consistent with terms of the Sixth Amendment.

On March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which among other things includes an optional payment deferral of the employer's portion of the Social Security taxes that were otherwise due through December 31, 2020.

The Company elected to defer payments of approximately $ 7.6 million with $ 3.8 million due December 2021 reflected in accrued liabilities included in the Company’s Condensed Consolidated Balance Sheets and the remaining $ 3.8 million due December 2022 reflected in other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets.

The Company’s effective tax rate is based on expected income, statutory rates and tax planning opportunities available to it.

For interim financial reporting, the Company estimates its annual tax rate based on projected taxable income (loss) for the full year and records a quarterly tax provision in accordance with the anticipated annual rate.

For interim financial reporting, the Company estimates its annual tax rate based on projected taxable income for the full year and records a quarterly tax provision in accordance with the anticipated annual rate.

Income tax expense included in the Company’s accompanying Condensed Consolidated Statements of Operations was as follows (in thousands, except percentages):

Three months ended

Nine months ended

September 30,

Income tax expense (benefit)

Income tax expense

Effective tax rate

The effective rate for the three and nine months ended September 30, 2020 differed from the Company’s statutory federal rate of 21 % primarily due to movement in the valuation allowance to offset foreign tax credits and net operating loss carryforwards, foreign taxes, state income taxes and the non-deductibility of certain permanent items.

The effective rate for the three months ended March 31, 2021 differed from the Company’s statutory federal rate of 21 % primarily due to the movement in the valuation allowance for current year activity, state income taxes and the non-deductibility of other permanent items.

During the year ended December 31, 2020 the Company assessed the realizability of its deferred tax assets and determined that it was more likely than not that some portion or all the deferred tax assets would not be realized and therefore recorded a valuation allowance on the net deferred tax assets.

The Company assesses the available

positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

The Company considers the scheduled reversal of deferred tax liabilities, available carryback periods, and tax-planning strategies in making this assessment.

For the period ended September 30, 2020 the Company evaluated all positive and negative evidence in determining the amount of deferred tax assets more likely than not to be realized.

Based on the review of available evidence, Management believes that a valuation allowance on the net deferred tax assets at September 30, 2020 remains appropriate.

The Company does not expect that unrecognized tax benefits as of September 30, 2020 for certain federal income tax matters will significantly change due to any settlement and/or expiration of statutes of limitations over the next 12 months.

For the period ended March 31, 2021 the Company evaluated all positive and negative evidence in determining the amount of deferred tax assets more likely than not to be realized.

Based on the review of available evidence, Management believes that a valuation allowance on the net deferred tax assets at March 31, 2021 remains appropriate.

The Company does not expect that unrecognized tax benefits as of March 31, 2021 for certain federal income tax matters will significantly change due to any settlement and/or expiration of statutes of limitations over the next 12 months.

The final outcome of these tax positions is not yet determinable.

The Company’s uncertain tax benefits, if recognized, would affect the Company’s effective tax rate.

Earnings (Loss) Per Share

Basic earnings (loss) per share is based on the weighted average number of common shares outstanding during each period.

Diluted earnings (loss) per share is based on the weighted average number of common shares outstanding as well as the effect of all dilutive common stock equivalents during each period net income is generated.

For the three months ended September 30, 2020 and 2019, the Company had 1,086,882 and 1,614,192 securities, respectively, that were potentially dilutive in earnings per share calculations.

For the nine months ended September 30, 2020 and 2019, the Company had 1,220,314 and 1,671,040 securities, respectively, that were potentially dilutive in earnings per share calculations.

Earnings Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding during each period.

Diluted earnings per share is based on the weighted average number of common shares outstanding as well as the effect of all dilutive common stock equivalents during each period net income is generated.

For the three months ended March 31, 2021 and 2020, the Company had 915,489 and 1,458,225 securities, respectively, that were potentially dilutive in earnings per share calculations.

Such dilution is dependent on the excess of the market price of our stock over the exercise price and other components of the treasury stock method.

The exercise price for certain stock options awarded by the Company exceeded the average market price of the Company’s common stock for the three and nine months ended September 30, 2020 and 2019.

Such stock options are antidilutive and are not included in the computation of earnings (loss) per share for those periods.

The following table reconciles the denominators used in the computations of both basic and diluted earnings (loss) per share:

Three months ended September 30,

Nine months ended September 30,

The exercise price for certain stock options awarded by the Company exceeded the average market price of the Company’s common stock for the three months ended March 31, 2021 and 2020.

Such stock options are antidilutive and are not included in the computation of earnings per share for those periods.

The following table reconciles the denominators used in the computations of both basic and diluted earnings per share:

Three months ended March 31,

Weighted average shares outstanding

9 unchanged sentences

The Company applies a 3.2 % and a 5.5 % forfeiture rate, which is compounded over the vesting terms of the individual award, to its restricted stock and option grants, respectively, based on historical analysis.

In the three months ended September 30, 2020 and 2019, compensation expense related to stock-based awards outstanding was $ 0.3 million and $ 0.6 million, respectively.

In the nine months ended September 30, 2020 and 2019, compensation related to stock-based awards outstanding was $ 1.9 million and $ 2.3 million, respectively.

In the three and nine months ended September 30, 2020, expense related to the purchase of vested stock-based awards for certain officers and directors of the Company was approximately $ 0.2 million.

In February 2020, the Company granted an executive of the Company 15,121 shares of restricted common stock, which vested immediately on the date of grant.

The fair value of all shares awarded on the date of grant was $ 4.96 per share.

In March 2020, certain officers and executives of the Company were awarded 170,235 shares of restricted common stock with a vesting period of three years and a fair value of $ 3.73 per share.

In May 2020, independent directors as well as certain officers and executives of the Company were awarded 638,938 shares of restricted common stock.

The total number included 238,938 shares, which were awarded to the independent directors and vested immediately on the date of the grant, as well as 300,000 shares of performance-based stock awarded to certain executives.

The performance-based stock will potentially vest 50 % if the target is met, with 25 % each vesting on the second and third anniversary of the determination that the target was met, with 100 % of the shares to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period.

The Company evaluates the probability of achieving this each reporting period.

The fair value of all shares awarded on the date of the grant was $ 2.26 per share.

In August 2020, the Company determined the performance-based stock awarded on May 24, 2019 vested at the outperformance level established above the target set based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30, 2020.

As a result, the executives earned an additional 93,750 shares of performance-based stock awards with a fair value of $ 1.96 , of which 50 % vested immediately on the date of determination and 25 % each will vest on the first and second anniversary of the date of determination.

In September 2020, the Company granted an executive of the Company 25,000 shares of restricted common stock with a vesting period of three years and a fair value of $ 2.58 per share.

In the three and nine months ended September 30, 2020, there were no options exercised.

In the three months ended September 30, 2019, there were no options exercised.

In the nine months ended September 30, 2019, 7,021 options were exercised, generating proceeds to the Company of less than $ 0.1 million.

At September 30, 2020, total unrecognized compensation expense related to unvested stock and options was approximately $ 2.4 million, which is expected to be recognized over a period of approximately two years .

In the three months ended March 31, 2021 and 2020, compensation expense related to stock-based awards outstanding was $ 0.4 million and $ 0.5 million, respectively.

In the three months ended March 31, 2021 and 2020, payments related to tax withholding for stock-based compensation for certain officers and directors of the Company was less than $ 0.1 million and none , respectively.

In the three months ended March 31, 2021, there were 23,755 options exercised generating proceeds to the Company of approximately $ 0.1 million.

In the three months ended March 31, 2020, there were no options exercised.

At March 31, 2021, total unrecognized compensation expense related to unvested stock and options was approximately $ 2.0 million, which is expected to be recognized over a period of approximately two years .

Commitments and Contingencies

The Company and one former and two current officers were named defendants in a class action lawsuit filed on April 11, 2019 in the United States District Court for the Southern District of Texas, Houston Division, seeking unstated compensatory damages under the federal securities laws allegedly arising from materially false and misleading statements during the period of March 13, 2018 to March 18, 2019.

The complaint asserted, among other things, that the current and former officers caused the Company to overstate goodwill in certain periods;

overstate accounts receivable;

that the company lacked effective internal controls over financial reporting related to goodwill impairment testing and accounts receivable;

and that as a result certain adjustments to goodwill and accounts receivable materially impacted the company’s financial statements, which in turn caused the company’s stock price to be artificially inflated during the class period.

The District Court granted the Company’s Motion to Dismiss the Complaint on June 29, 2020 and the ruling became final on July 20, 2020 after no appeal was filed.

On August 21, 2020, a Company dredge, the Waymon L.

Boyd, was consumed by a fire while working on a project in the Port of Corpus Christi.

Four crewmembers were killed, several more were injured, some seriously, and the vessel was declared a total loss.

Five crewmembers were killed, several more were injured, some seriously, and the vessel was declared a total loss.

This incident also resulted in the discharge of approximately 18,000 gallons of oil, diesel fuel and contaminated water into the Corpus Christi Ship Channel, all of which was promptly cleaned up.

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Coast Guard, the Port of Corpus Christi Authority, and the National Transportation Safety Board, among others, while they investigate the cause of this incident.

The National Transportation Safety Board has named the Company as a party of interest in their investigation.

Thus far, seven individual lawsuits have been filed against the Company by certain crewmembers or their heirs under the general maritime law and the Jones Act.

The National Transportation Safety Board has named the Company as a party of interest in their

investigation.

Thus far, eight separate lawsuits have been filed against the Company by certain crewmembers or their heirs under the general maritime law and the Jones Act.

In response thereto, the Company has filed an action in the U.S.

District Court for the Southern District of Texas seeking consolidation of these suits for procedural purposes since they all arise out of the same occurrence and seeking exoneration from or limitation of liability relating to the foregoing incident as provided for in the federal rules of procedure for maritime claims.

Other actions are anticipated that will likely claim property damages and business interruption, loss of profit, loss of use of natural resources and other economic damages for unspecified economic and compensatory damages.

In any case, the Company believes it has adequate insurance coverage for all pollution, marine, economic and other potential liabilities arising from the incident and does not expect the incident to have a material adverse effect on its business or financial condition.

District Court for the Southern District of Texas seeking consolidation of the lawsuits for procedural purposes since they all arise out of the same occurrence and seeking exoneration from or limitation of liability relating to the foregoing incident as provided for in the federal rules of procedure for maritime claims.

The Limitation Court set a deadline of February 17, 2021 by which all claims must be filed and as of the Court’s deadline, thirteen persons, estates and/or entities filed claims in the Limitation for personal injuries, death, property damages and business interruption, loss of profit, loss of use of natural resources and other economic damages for unspecified economic and compensatory damages.

Some of these claimants may not have standing to bring their claims and will be challenged.

Further, the Company filed a Default Motion with the Court which was granted on April 8, 2021 and as such bars the filing of any further claims.

Applicable accounting guidance under ASC 450 would require the Company to recognize a loss if the loss is determined to be probable and reasonably estimable.

As at March 31, 2021, the Company has recognized $ 72.2 million in total obligations to date, which includes approximately $ 18.0 million paid to date to claimants (including nine of 18 crewmembers) and accruals totaling approximately $ 54.2 million.

However, this is a multi-party, complex tort proceeding, and it is too early in the proceedings for the Company to establish loss accruals in regard to the balance of the claims.

In any event, insurance coverage is available and the carriers of such insurance have taken over the costs of the defense of the claims and have reimbursed the Company $ 17.1 million to date.

In addition, the Company continues to believe that it has adequate insurance coverage for all pollution, marine, economic and other potential liabilities arising from the incident.

The Company is also confident that it otherwise has adequate vessels, equipment and personnel to fulfill all ongoing, booked and reasonably foreseeable work.

3 unchanged sentences

Settlement amounts were recorded in Other gain from continuing operations in the Condensed Consolidated Statement of Operations, Prepaid expenses and other (current portion of the notes receivable) and Other non-current assets (non-current portion of the notes receivable) in the Condensed Consolidated Balance Sheets.

As of September 30, 2020, the current portion of the notes receivable was $ 0.8 million and the non-current portion was $ 2.0 million, net of $ 0.2 million of unamortized discount.

As of March 31, 2021, the current portion of the notes receivable was $ 0.8 million and the non-current portion was $ 1.6 million, net of $ 0.2 million of unamortized discount.

Legal fees related to this matter were expensed as incurred during the respective reporting period.

During the quarter ended September 30, 2020, the Company settled a long-standing dispute with a customer that resulted in recovery of $ 0.9 million of previously reserved accounts receivable.

Segment Information

1 unchanged sentence

marine and concrete.

The Company’s financial reporting systems present various data for management to run the business, including profit and loss statements prepared according to the segments presented.

The Company’s financial reporting systems present various data for management to run the business, including profit and loss statements

prepared according to the segments presented.

Management uses operating income to evaluate performance between the two segments.

1 unchanged sentence

Three Months Ended

Nine months ended

September 30,

Contract revenues

Operating income (loss)

Operating income

Depreciation and amortization expense

Property, plant and equipment, net

Property and equipment, net

Contract revenues

Operating (loss) income

Operating income

Depreciation and amortization expense

Property, plant and equipment, net

There were less than $ 0.1 million and $ 2.7 million in intersegment revenues between the Company’s two reportable segments for the three and nine months ended September 30, 2020, respectively.

There were $ 0.3 million and $ 0.5 million in intersegment revenues between the Company’s two reportable segments for the three and nine months ended September 30, 2019, respectively.

The marine segment had foreign revenues of $ 1.8 million and $ 4.6 million for the three months ended September 30, 2020 and 2019, respectively, and $ 9.7 million and $ 7.5 million for the nine months ended September 30, 2020 and 2019, respectively.

Property and equipment, net

There were less than $ 0.1 million and $ 2.3 million in intersegment revenues between the Company’s two reportable segments for the three months ended March 31, 2021 and 2020, respectively.

The marine segment had foreign revenues of $ 2.4 million and $ 4.0 million for the three months ended March 31, 2021 and 2020, respectively.

These revenues are derived from projects in the Caribbean Basin and Mexico and are paid primarily in U.S.

1 unchanged sentence

The Company has operating and finance leases for office space, equipment and vehicles.

Management determines if a contract is or contains a lease at inception of the contract or modification of the contract.

A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration.

Finance and operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date.

As the implicit rate is not

determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise such option.

Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.

The Company’s lease arrangements have lease and non-lease components.

Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Leases recorded on the balance sheet consists of the following:

September 30,

Operating lease right-of-use assets, net (1)

3 unchanged sentences

Total liabilities

(1) Operating lease right-of-use assets are recorded net of accumulated amortization of $ 8.7 million as of September 30, 2020.

(2) Financing lease right-of-use assets are recorded net of accumulated amortization of $ 7.1 million as of September 30, 2020.

(1) Operating lease right-of-use assets are recorded net of accumulated amortization of $ 10.0 million and $ 9.0 million as of March 31, 2021 and December 31, 2020, respectively.

(2) Financing lease right-of-use assets are recorded net of accumulated amortization of $ 5.1 million and $ 6.4 million as of March 31, 2021 and December 31, 2020, respectively.

Other information related to lease term and discount rate is as follows:

September 30,

Weighted Average Remaining Lease Term (in years)

6 unchanged sentences

The components of lease expense are as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating lease costs:

7 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

9 unchanged sentences

Year ending December 31,

2020 (excluding the nine months ended September 30, 2020)

2021 (excluding the three months ended March 31, 2021)

Total future minimum lease payments

3 unchanged sentences

Long-term lease obligations

Subsequent Event

Effective, October 9, 2020, the Company entered into an amendment (the "Eighth Amendment") to its syndicated credit agreement (the "Credit Agreement"

, with Regions Bank, as Administrative Agent and Collateral Agent and Bank of America, N.A., BOKF, NA dba Bank of Texas, Iberiabank, NBH Bank, Truist Bank, and Trustmark National Bank, as Lenders.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements