During the preparation of its year-end financial statements, Great Lakes Dredge & Dock identified instances in its demolition segment where revenue was recognized in a manner not consistent with Great Lakes’ accounting policy. Certain pending change orders where client acceptance has not been finalized were included as revenue.
Great Lakes says its 2012 second and third quarter demolition segment revenues were overstated by $3.9 million and $4.3 million, respectively.
The company also reported 2012 annual results with revenue of $687.6 million and a net loss of $2.7 million.
“I am deeply disappointed with the issues in our demolition segment, which contributed to the need to restate our second and third quarter financial results,” said Jonathan Berger, CEO. “The demolition segment is a key part of our growth strategy, and we are committed to having the right personnel and tools in place to effectively grow the segment while maintaining adequate operational and financial controls.”
The dredging segment executed 18 domestic projects in the final quarter of 2012, said CFO William Steckel. “Although our results in dredging were outstanding, we fell short of our high expectations for the fourth quarter,” he said. “This was in part because three dredging projects shifted from the fourth quarter into the first quarter of 2013 and there were cost overruns in two other projects. The dredging segment had also expected to sell an underutilized dredge prior to year end. The buyer experienced funding delays and we now expect to realize the $4.0 million gain on the sale of this dredge in 2013.”