What changed in this filing

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Item 1A. Risk Factors

2022-03-07 compared with 2021-03-02 · 29 added, 42 removed, 271 unchanged (21% of the section changed)

19 unchanged sentences

The current COVID-19 pandemic has affected and may continue to adversely affect our business and results of operations and financial condition.

In March of 2020, outbreak a pandemic, and the President of the United States declared the outbreak a national emergency.

In March of 2020, there was an outbreak of a pandemic, and the President of the United States declared the outbreak a national emergency.

In response to the COVID-19 pandemic, federal, provincial, state, county and local governments and public health organizations and authorities around the world implemented a variety of measures intended to control the spread of the virus, including quarantines, “shelter-in-place,” “stay-at-home” and similar orders, travel restrictions, school closures, business curtailments and closures, social distancing and hygiene requirements, and other measures.

1 unchanged sentence

Since March 2020, when the World Health Organization declared the COVID-19 to be a global pandemic, we have continued to provide these services to our customers, but with added focused attention on the safety and health of our employees.

However, the COVID-19 pandemic and related governmental and business responses has had and will continue to have an adverse effect on our operations.

For example, as a result of the pandemic

and various governmental orders, a significant number of our corporate employees have been working from home, and we have altered our operations to allow for appropriate social distancing and hygiene, which has led to decreased efficiency and productivity in our workforce and our operations.

However, the COVID-19 pandemic and related governmental and business responses has had and may continue to have an adverse effect on the markets we derive project opportunities from, our customers, and our operations.

Several private sector markets from which we derive project opportunities have been and

may continue to be impacted by the COVID-19 pandemic.

Customers in these impacted markets have delayed and may continue to delay both near term and future projects due to macroeconomic factors driven by the COVID-19 pandemic.

These delays have and may continue to negatively impact our ability to acquire new projects from increased competition due to fewer projects being available in the market place.

Supply chains for materials incorporated into the building of our projects and for our equipment used to complete our projects have been and may continue to be impacted.

Labor markets have been and may continue to be impacted by COVID-19 related government transfer payments and other pandemic related factors, which have and may continue to result in a lower workforce participation rate.

Additionally, as a result of the pandemic and various governmental orders, we have altered our operations to allow for appropriate social distancing and hygiene, which has led to decreased efficiency and productivity in our workforce and our operations, and a significant number of our corporate employees have been working from home.

We have had and may continue to see disruptions to our operations as variants of the COVID-19 virus cause increases in absenteeism rates among our workforce.

In addition, management is focused on mitigating the effects of the COVID-19 pandemic, which has required and will continue to require a substantial investment of time, energy, resources and focus.

2 unchanged sentences

the duration and scope of the pandemic;

the impact of the vaccines, including the speed at which they are approved and disseminated and their effectiveness against COVID-19 and its evolving strains;

the impact of the vaccines and their effectiveness against COVID-19 and its evolving variants;

governmental, business, individual and other actions taken in response to the pandemic;

25 unchanged sentences

In some cases, we may be required to bear the cost of a readily available workforce and fleet of equipment that is larger than needed at the time, resulting in unpredictability in our cash flow, expenses and profitability.

If an expected contract award or the related notice to proceed is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues.

If an expected contract award or the related notice to proceed is delayed or not received,

we could incur substantial costs without receipt of any corresponding revenues.

Delays by our customers in obtaining required approvals and permits for their infrastructure projects may delay their awarding contracts for those projects and, once awarded, the ability to commence construction under those contracts.

1 unchanged sentence

Such expenditures could reduce our cash flows and necessitate increased borrowings under our credit facility.

Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earnings if

such significant projects have not been replaced in the current period.

Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earnings if such significant projects have not been replaced in the current period.

From time to time we may publicly provide earnings or other forms of guidance, which reflect our predictions about future revenue, operating costs and capital structure, among other factors.

23 unchanged sentences

Both of these aspects of our business were developed and are maintained through our executives and key project managers.

Our inability to retain our executives and key project managers or inability to complete projects timely and successfully resulting in customer satisfaction could have a material adverse effect on our current customer relationships and reputation.

Our inability to retain our executives

and key project managers or inability to complete projects timely and successfully resulting in customer satisfaction could have a material adverse effect on our current customer relationships and reputation.

The inability to maintain relationships with our customers in general or obtain new customers based on our reputation could have a material adverse effect on our business, operating results and financial condition.

We may not be able to fully realize the revenue value reported in our backlog.

As of December 31, 2020, we had a backlog of work to be completed on contracts totaling approximately $236.9 million in our concrete segment and approximately $202.6 million in our marine segment.

As of December 31, 2021, we had a backlog of work to be completed on contracts totaling approximately $376.9 million in our marine segment and approximately $213.1 million in our concrete segment.

Backlog develops as a result of new awards, which represent the potential revenue value realizable pursuant to new project commitments received by us during a given period.

29 unchanged sentences

If we subsequently fail to complete the project as scheduled, without sufficient justification, 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 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.

19 unchanged sentences

Such arrest or seizure could preclude the vessel from working, thereby causing delays in marine segment projects.

We may be subject to unionization, work stoppages, slowdowns or increased labor costs.

Only a small percentage of our marine segment workforce, located in the Pacific Northwest and Alaska, is currently unionized.

If at any time, a majority of our employees unionized, it could limit the flexibility of the workforce and could result in demands that might increase our operating expenses and adversely affect our profitability.

Each of our different employee groups could unionize at any time and would require separate collective bargaining agreements.

If any group of our employees were to unionize and we were unable to agree on the terms of their collective bargaining agreement or we were to experience widespread employee dissatisfaction, we could be subject to work slowdowns or stoppages.

In addition, we may be subject to disruptions by organized labor groups protesting our non-union status.

Any of these events would be

disruptive to our operations and could have a material adverse effect on the business, operating results and financial condition.

Our business is subject to significant operating risks and hazards that could result in damage or destruction to property, injuries or loss of life, which could result in losses or liabilities to us.

2 unchanged sentences

Our safety record is an important consideration for us and for our customers.

If serious accidents or fatalities occur or our safety record was to deteriorate, we may be excluded from bidding for on certain work, expose ourselves to possible lawsuits, and existing service arrangements could be terminated, thus having a material adverse impact on our financial position, results of operations, cash flows and liquidity.

If serious accidents or fatalities occur or our safety record was to deteriorate, we may be excluded from bidding on certain work, expose ourselves to possible lawsuits, and existing service arrangements could be terminated, thus having a material adverse impact on our financial position, results of operations, cash flows and liquidity.

Further, regulatory changes implemented by OSHA or the U.S.

20 unchanged sentences

To the extent that we experience a material increase in the frequency or severity of accidents or workers’ compensation and health claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected.

Our employees in the marine segment are covered by federal laws that provide seagoing employees remedies for job-related claims in addition to those provided by state laws.

Many of our marine segment employees are covered by federal maritime law, including provisions of the Jones Act, the Longshore and Harbor Workers Act, (“USL&H”) and the Seaman’s Wage Act.

Jones Act laws typically operate to make liability limits established by USL&H and state workers’ compensation laws inapplicable to these employees and to permit these employees and their representatives to pursue litigation against employers for job-related injuries.

Because in some cases we are not protected by the limits imposed by state workers’ compensation statutes, we have greater exposure for claims made by these employees as compared to employers whose employees are not covered by these provisions.

For example, in the normal course of business, we are a defendant in various personal injury lawsuits.

We maintain insurance to cover claims that arise from injuries to our workforce subject to a deductible.

During 2020, we recorded approximately $0.9 million of expense for our self-insured portion of these liabilities.

We believe our recorded self-insurance reserves represent our best estimate of the outcomes of these claims.

Should negative trends persist;

we could continue to be negatively impacted in the future.

Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities.

Our marine infrastructure construction, salvage, demolition, dredging and dredge material disposal activities are subject to stringent and complex federal, state and local environmental laws and regulations, including those concerning air emissions, water quality, solid waste management, and protection of certain marine and bird species, their habitats, and wetlands.

emissions, water quality, solid waste management, and protection of certain marine and bird species, their habitats, and wetlands.

We may incur substantial costs in order to conduct our operations in compliance with these laws and regulations.

15 unchanged sentences

We are subject to determinations by these authorities as to the adequacy of water or sewage facilities.

New building developments may also be subject to various assessments for

schools and other public improvements.

New building developments may also be subject to various assessments for schools and other public improvements.

In addition, in many markets government authorities have implemented no growth or growth control initiatives.

30 unchanged sentences

We maintain insurance to cover claims that arise from injuries to our workforce subject to a deductible.

During 2020, we recorded approximately $0.9 million of expense for our self-insured portion of these liabilities.

During 2021, we recorded less than $0.1 million of expense for our self-insured portion of these liabilities.

We believe our recorded self-insurance reserves represent our best estimate of the outcomes of these claims.

35 unchanged sentences

At December 31, 2021, our total indebtedness under the Credit Agreement was approximately $39.0 million.

Per the Credit Agreement, the Term Loan Facility requires quarterly installment payments which increase throughout the life of the loan and have a date of maturity of July 31, 2023.

We must also comply with various affirmative and negative covenants contained in our Credit Agreement, some of which may restrict the way in which we would like to conduct our business.

We must comply with various affirmative and negative covenants contained in our Credit Agreement, some of which may restrict

the way in which we would like to conduct our business.

Among other things, our requirements under out debt instruments could potentially limit our ability to:

15 unchanged sentences

At December 31, 2021, available capacity to borrow on the revolving lines of credit was $9.3 million.

Failure to comply with the terms and conditions of any existing or future indebtedness would constitute an event of default.

Failure to comply with the terms and conditions of any existing or future indebtedness, including current or prospective covenants, would constitute an event of default.

If an event of default occurs, the lenders will have the right to accelerate the maturity of such indebtedness and foreclose upon the collateral, if any, securing that indebtedness.

Our current Credit Agreement expires on July 31, 2023.

Failure to secure a new credit facility could restrict our access to capital, which may prevent us from funding our operations or from engaging in certain transactions which might otherwise be considered beneficial to us.

Additionally, rising interest rates may increase our cost of capital and, therefore, reduce the amount of capital available to fund our operations.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

1 unchanged sentence

If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, and our net income and operating cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

We have entered into a series of receive-variable, pay-fixed interest rate swaps.

We use interest rate swap agreements to hedge market risks relating to possible adverse changes in interest rates with the intent of reducing volatility in our cash flows due to fluctuations in interest rates.

However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk, may prove disadvantageous, or may create additional risks, including risks discussed in "Risks Related to Our Business"

In addition, our hedging activities are subject to the risks that a counterparty may not perform its obligations under the applicable derivative instrument.

UNRESOLVED STAFF COMMENTS

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-K

Item 1A. Risk Factors