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Revenue
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue

10. REVENUE

The Company’s revenue is derived from contracts for services with federal, state, local and foreign governmental entities and private customers. Revenues are generally derived from the enhancement or preservation of navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock.

Performance obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account upon which the Company’s revenue is calculated. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue as the performance obligation is satisfied. Fixed-price contracts, which comprise substantially all of the Company’s revenue, will most often represent a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

The Company’s performance obligations are satisfied over time and revenue is recognized using contract fulfillment costs incurred to date compared to total estimated costs at completion, also known as cost-to-cost, to measure progress towards completion. As the Company’s performance creates an asset that the customer controls, this method provides a faithful depiction of the transfer of an asset to the customer. Generally, the Company has an enforceable right to payment for performance completed to date.

The majority of the Company’s contracts are completed in a year or less. At December 31, 2023, the Company had $1.04 billion of remaining performance obligations, which the Company refers to as total dredging backlog. Total dredging backlog does not include $44.6 million of performance obligations related to offshore wind contracts. The Company expects to perform on its offshore wind contracts using the inclined fall-pipe vessel for subsea rock installation which is expected to be delivered and operational in the 2025. Approximately 60% of the Company’s dredging backlog will be completed in 2024.

Transaction price

The transaction price is calculated using the Company’s estimated costs to complete a project. These costs are based on the types of equipment required to perform the specified service, project site conditions, the estimated project duration, seasonality, location and complexity of a project.

The nature of the Company’s contracts gives rise to several types of variable consideration, including pay on quantity dredged for dredging projects and dredging project contract modifications. Estimated pay quantity is the amount of material the Company expects to dredge for which it will receive payment. Estimated quantity to be dredged is calculated using engineering estimates based on current survey data and the Company’s knowledge based on historical project experience.

Revenue by category

Domestically, the Company’s work generally is performed in coastal waterways and deep-water ports. The U.S. dredging market consists of four primary types of work: capital, coastal protection, maintenance and rivers & lakes. Foreign projects typically involve capital work.

The following table sets forth, by type of work, the Company’s contract revenues for the years ended December 31, 2023, 2022 and 2021:

 

Revenues

 

2023

 

 

2022

 

 

2021

 

Dredging:

 

 

 

 

 

 

 

 

 

Capital—U.S.

 

$

186,715

 

 

$

342,461

 

 

$

397,034

 

Capital—foreign

 

 

—

 

 

 

149

 

 

 

6,596

 

Coastal protection

 

 

196,343

 

 

 

192,567

 

 

 

169,678

 

Maintenance

 

 

187,586

 

 

 

98,077

 

 

 

132,551

 

Rivers & lakes

 

 

16,318

 

 

 

15,527

 

 

 

20,290

 

Total dredging revenues

 

$

586,962

 

 

$

648,781

 

 

$

726,149

 

Offshore Wind:

 

 

 

 

 

 

 

 

 

Offshore Wind

 

 

2,663

 

 

 

—

 

 

 

—

 

Total revenues

 

$

589,625

 

 

$

648,781

 

 

$

726,149

 

 

The following table sets forth, by type of customer, the Company’s contract revenues for the years ended December 31, 2023, 2022 and 2021:

 

Revenues

 

2023

 

 

2022

 

 

2021

 

Dredging:

 

 

 

 

 

 

 

 

 

Federal government

 

$

438,790

 

 

$

431,705

 

 

$

568,980

 

State and local government

 

 

129,583

 

 

 

207,033

 

 

 

118,712

 

Private

 

 

18,589

 

 

 

9,894

 

 

 

31,861

 

Foreign

 

 

—

 

 

 

149

 

 

 

6,596

 

Total dredging revenues

 

$

586,962

 

 

$

648,781

 

 

$

726,149

 

Offshore wind:

 

 

 

 

 

 

 

 

 

Offshore wind

 

 

2,663

 

 

 

—

 

 

 

—

 

Total revenues

 

$

589,625

 

 

$

648,781

 

 

$

726,149

 

 

Contract balances

 

Billings on contracts are generally submitted after verification with the customers of physical progress and are recognized as accounts receivable in the balance sheet. For billings that do not match the timing of revenue recognition, the difference between amounts billed and recognized as revenue is reflected in the balance sheet as either contract revenues in excess of billings or billings in

excess of contract revenues. Certain pre-contract and pre-construction costs are capitalized and reflected as contract assets in the balance sheet. Customer advances, deposits and commissions are reflected in the balance sheet as contract liabilities.

Accounts receivable at December 31, 2023 and December 31, 2022 are as follows:

 

 

 

2023

 

 

2022

 

Completed contracts

 

$

2,920

 

 

$

4,682

 

Contracts in progress

 

 

40,743

 

 

 

32,546

 

Retainage

 

 

11,511

 

 

 

8,226

 

 

 

 

55,174

 

 

 

45,454

 

Allowance for doubtful accounts

 

 

(364

)

 

 

(564

)

Total accounts receivable—net

 

$

54,810

 

 

$

44,890

 

 

The components of contracts in progress at December 31, 2023 and December 31, 2022 are as follows:

 

 

 

2023

 

 

2022

 

Costs and earnings in excess of billings:

 

 

 

 

 

 

Costs and earnings for contracts in progress

 

$

206,330

 

 

$

262,125

 

Amounts billed

 

 

(196,520

)

 

 

(210,068

)

Costs and earnings in excess of billings for contracts in progress

 

 

9,810

 

 

 

52,057

 

Costs and earnings in excess of billings for completed contracts

 

 

58,925

 

 

 

14,972

 

Total contract revenues in excess of billings

 

$

68,735

 

 

$

67,029

 

 

 

 

 

 

 

 

Current portion of contract revenues in excess of billings

 

$

68,735

 

 

$

65,922

 

Long-term contract revenues in excess of billings

 

 

—

 

 

 

1,107

 

Total contract revenues in excess of billings

 

$

68,735

 

 

$

67,029

 

 

 

 

 

 

 

 

Billings in excess of costs and earnings:

 

 

 

 

 

 

Amounts billed

 

$

(258,948

)

 

$

(95,013

)

Costs and earnings for contracts in progress

 

 

229,388

 

 

 

85,099

 

Total billings in excess of contract revenues

 

$

(29,560

)

 

$

(9,914

)

In the year ending December 31, 2022, a revision to the estimated gross profit percentage of a project was recognized due to a positive settlement of a claim from the recently completed project resulting in a cumulative net impact on the project margin, which increased gross profit by $22,276.

At December 31, 2023 and 2022, costs to fulfill contracts with customers recognized as other current assets were $18,138 and $4,472, respectively. At December 31, 2023, costs to fulfill contracts with customers recognized as other noncurrent assets were $4,028. At December 31, 2022, there were no costs to fulfill contracts with customers recognized as other noncurrent assets. These costs relate to pre-contract and pre-construction activities. During the years ended December 31, 2023 and 2022 the company amortized pre-contract and pre-construction costs of $11,474 and $11,148, respectively.

The Company’s largest domestic customer is the U.S. Army Corps of Engineers (the “Corps”), which has responsibility for federally funded projects related to navigation and flood control of U.S. waterways. In 2023, 2022 and 2021, 75%, 67% and 78%, respectively, of contract revenues were earned from contracts with federal government agencies, including the Corps, as well as other federal entities such as the U.S. Coast Guard and U.S. Navy. During the year ended December 31, 2021 the Company recognized $716 of revenue related to the use of equipment by a customer working on a federal government contract. At December 31, 2023 and 2022, approximately 36% and 46% respectively, of accounts receivable, including contract revenues in excess of billings and retainage, were due on contracts with federal government agencies. The Company depends on its ability to continue to obtain federal government contracts, and indirectly, on the amount of federal funding for new and current government dredging projects. Therefore, the Company’s operations can be influenced by the level and timing of federal funding.

The Company derived revenues and gross loss from foreign project operations for the years ended December 31, 2023, 2022, and 2021, as follows:

 

 

2023

 

 

2022

 

 

2021

 

Contract revenues

 

$

—

 

 

$

149

 

 

$

6,596

 

Costs of contract revenues

 

 

(1,142

)

 

 

(341

)

 

 

(9,281

)

Gross loss

 

$

(1,142

)

 

$

(192

)

 

$

(2,685

)

 

In 2022 and 2021, foreign revenues were primarily from work done in the Middle East. The majority of the Company’s long-lived assets are marine vessels and related equipment. At any point in time, the Company may employ certain assets outside of the U.S., as needed, to perform work on the Company’s foreign projects. As of December 31, 2023 and 2022, long-lived assets located outside of the U.S had no net book value. Currently our assets outside of the U.S. do not include dredges. Revenue from foreign projects has been concentrated in the Middle East which comprised less than 1% in 2023, 2022 and 2021. At December 31, 2023, there were no accounts receivable due on contracts in the Middle East. At December 31, 2022, approximately 9%, of total accounts receivable, including retainage and contract revenues in excess of billings, were due on contracts in the Middle East.