1372020--3/17/2008--Great_Lakes_Dredge_&_Dock

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We depend on our ability to continue to obtain federal government dredging contracts, and are therefore greatly impacted by the amount of government funding for dredging projects. A reduction in government funding for dredging contracts can materially reduce our revenues and profits. If we are unable, in the future, to obtain bonding for our dredging contracts, our ability to obtain future dredging contracts will be limited, thereby adversely affecting our business. If we are unable, in the future, to obtain letters of credit for our foreign dredging contracts, our ability to obtain future dredging contracts will be limited, thereby adversely affecting our business. Our business is subject to significant operating risks and hazards that could result in damage or destruction to persons or property, which could result in losses or liabilities to us. We are subject to risks related to our international operations. The work currently performed internationally is primarily with one customer. The amount of our estimated backlog is subject to change and not necessarily indicative of future revenues. Our profitability is subject to inherent risks because of the fixed-price nature of most of our contracts. Our business could suffer in the event of a work stoppage by our unionized labor force. Our business would be adversely affected if we failed to comply with the Jones Act provisions on coastwise trade, or if those provisions were modified or repealed. We have a significant amount of indebtedness, which makes us more vulnerable to adverse economic and competitive conditions. Capital expenditures and other costs necessary to operate and maintain our vessels tend to increase with the age of the vessel and may also increase due to changes in governmental regulations, safety or other equipment standards. Our employees are covered by federal laws that may provide seagoing employees remedies for job-related claims in addition to those provided by state laws. Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all. Environmental regulations could force us to incur significant capital and operational costs. Our demolition business (NASDI) depends on key customer relationships and our reputation in the Boston contract market developed and maintained by our key operations manager. Loss of any of these elements would materially reduce our demolition revenues and profits. During the ordinary course of our business, we may become subject to lawsuits, which could materially and adversely affect our business, operating results and financial condition. If we fail to comply with government contracting regulations, our revenue could suffer. Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded revenue and profit. Our common stock is subject to restrictions on foreign ownership. Our controls and procedures may not prevent or detect all errors or acts of fraud. Failure to maintain an effective system of internal control over financial reporting may have an adverse effect on our stock price. The market price of our common stock may fluctuate significantly, and this may make it difficult for holders to resell our common stock when they want or at prices that they find attractive. Future issuances of our common stock will dilute the ownership interests of stockholders and may adversely affect the trading price of our common stock.

Full 10-K form ▸

1372020--3/17/2008--Great_Lakes_Dredge_&_Dock_CORP