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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Gulf Island Fabrication Inc | NASDAQ:GIFI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.041 | -0.57% | 7.149 | 7.12 | 7.18 | 7.28 | 7.10 | 7.23 | 12,813 | 16:51:26 |
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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GULF ISLAND FABRICATION, INC.
(Exact name of registrant as specified in its charter)
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LOUISIANA
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72-1147390
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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16225 PARK TEN PLACE, SUITE 280
HOUSTON, TEXAS
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77084
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(Address of principal executive offices)
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(Zip Code)
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(713) 714-6100
(Registrant’s telephone number, including area code)
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Large accelerated filer
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Page
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Item 3
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2017 Annual Report:
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Our annual report for the year ended December 31, 2017, on Form 10-K as filed with the SEC on March 9, 2018.
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ASC:
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FASB Accounting Standards Codification.
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ASU:
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Accounting Standards Update.
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Company:
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Gulf Island Fabrication, Inc. and its consolidated subsidiaries.
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Credit Agreement:
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The Company's $40.0 million revolving credit facility with a third party financial institution maturing June 9, 2019, as amended.
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deck:
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The component of a platform on which development drilling, production, separating, gathering, piping, compression, well support, crew quartering and other functions related to offshore oil and gas development are conducted.
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direct labor hours:
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Hours worked by employees directly involved in the production of the Company’s products. These hours do not include support personnel hours such as maintenance, warehousing and drafting.
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EPC:
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Engineering, procurement and construction phases of a complex project; EPC typically refers to a contract that requires the project management and coordination of these significant activities.
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Exchange Act:
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U.S. Securities Exchange Act of 1934, as amended.
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FASB:
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Financial Accounting Standards Board.
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FPSO:
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Floating Production Storage and Offloading vessel. A floating vessel used by the offshore oil and gas industry for the production and processing of hydrocarbons, and for the storage of oil.
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GAAP:
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Generally accepted accounting principles in the U.S.
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GOM:
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Gulf of Mexico.
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inshore:
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Inside coastlines, typically in bays, lakes and marshy areas.
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jacket:
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A component of a fixed platform consisting of a tubular steel, braced structure extending from the mudline of the seabed to a point above the water surface. The jacket is anchored with tubular steel pilings driven into the seabed. The jacket supports the deck structure located above the water.
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LIBOR:
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London Inter-bank Offered Rate.
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MinDOC:
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Minimum Deepwater Operating Concept. A floating production platform designed for stability and dynamic response to waves consisting of three vertical columns arranged in a triangular shape connected to upper and lower pontoon sections.
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modules:
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Packaged equipment usually consisting of major production, utility or compression equipment with associated piping and control systems.
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MPSV:
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Multi-Purpose Service Vessel.
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NOL(s):
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Net operating loss(es).
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offshore:
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In unprotected waters outside coastlines.
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OSV:
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Offshore Support Vessel.
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piles:
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Rigid tubular pipes that are driven into the seabed to support platforms.
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platform:
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A structure from which offshore oil and gas development drilling and production are conducted.
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pressure vessel:
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A metal container generally cylindrical or spheroid, capable of withstanding various internal pressure loads.
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SeaOne:
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SeaOne Caribbean, LLC.
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SeaOne Project:
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The engineering, procurement, construction, installation, commissioning and start-up for SeaOne's Compressed Gas Liquids Caribbean Fuels Supply Project. This project will include execution of engineering, construction and installation of modules for an export facility in Gulfport, Mississippi, and import facilities in the Caribbean and South America.
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SEC:
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U.S. Securities and Exchange Commission.
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skid unit:
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Packaged equipment usually consisting of major production, utility or compression equipment with associated piping and control system.
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South Texas Properties:
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Collectively, our Texas North Yard and Texas South Yard properties and equipment located in Aransas Pass and Ingleside, Texas, respectively. These properties, improvements and related machinery and equipment are held for sale.
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SPAR:
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Single Point Anchor Reservoir. A floating vessel with a circular cross-section that sits vertically in the water and is used for infield flow lines and associated subsea infrastructure. The SPAR connects subsea production and injection wells for oil and gas production in deepwater environments.
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subsea templates:
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Tubular frames which are placed on the seabed and anchored with piles. Usually a series of oil and gas wells are drilled through these underwater structures.
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Surety
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A financial institution that issues bonds to customers on behalf of the Company for the purpose of providing third-party financial support related to construction contracts.
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T&M:
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Work performed and billed to the customer generally at contracted time and materials rates which can include a mark-up.
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Texas North Yard:
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Our Texas North Yard represents our fabrication yard located in Aransas Pass, Texas, is located along the U.S. Intracoastal Waterway and is approximately three miles north of the Corpus Christi Ship Channel. This facility is situated on approximately 196 acres. This facility, its improvements and its related machinery and equipment are held for sale.
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Texas South Yard:
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Our Texas South Yard represents our fabrication yard located in Ingleside, Texas and located on the northwest corner of the Corpus Christi Ship Channel at the intersection of the Corpus Christi Ship Channel and the U.S. Intracoastal Waterway. It consists of approximately 212 acres. This facility, its improvements and its related machinery and equipment was sold on April 20, 2018.
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this Report
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This quarterly report filed on Form 10-Q for the quarterly period ended March 31, 2018.
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TLP:
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Tension Leg Platform. A floating hull and deck anchored by vertical tensioned cables or pipes connected to pilings driven into the seabed. A tension leg platform is typically used in water depths exceeding 1,200 feet.
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March 31,
2018 |
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December 31,
2017 |
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(Unaudited)
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(Audited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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6,492
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$
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8,983
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Contracts receivable and retainage, net
|
27,359
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28,466
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Contracts in progress
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37,509
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28,373
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Prepaid expenses and other assets
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3,311
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|
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3,833
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Inventory
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5,053
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4,933
|
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Assets held for sale
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98,386
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104,576
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Total current assets
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178,110
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179,164
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Property, plant and equipment, net
|
86,006
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88,899
|
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||
Other assets
|
5,006
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2,777
|
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Total assets
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$
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269,122
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$
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270,840
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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18,869
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$
|
18,375
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Advance billings on contracts
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4,301
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5,136
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Deferred revenue, current
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2,312
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4,676
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Accrued contract losses
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6,320
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|
7,618
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Accrued expenses and other liabilities
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9,006
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12,741
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Income tax payable
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232
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|
119
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Total current liabilities
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41,040
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48,665
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Deferred revenue, noncurrent
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1,674
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769
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Outstanding borrowings under our Credit Agreement
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10,000
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—
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Other liabilities
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2,322
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1,913
|
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Total liabilities
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55,036
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51,347
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Shareholders’ equity:
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Preferred stock, no par value, 5,000,000 shares authorized, no shares issued and outstanding
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—
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—
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Common stock, no par value, 20,000,000 shares authorized, 15,043,068 issued and outstanding at March 31, 2018, and 14,910,498 at December 31, 2017, respectively
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10,813
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10,823
|
|
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Additional paid-in capital
|
100,355
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100,456
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Retained earnings
|
102,918
|
|
|
108,214
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Total shareholders’ equity
|
214,086
|
|
|
219,493
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|
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Total liabilities and shareholders’ equity
|
$
|
269,122
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$
|
270,840
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Three Months Ended
March 31, |
||||||
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2018
|
|
2017
|
||||
Revenue
|
$
|
57,290
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$
|
37,993
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Cost of revenue
|
56,611
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|
|
42,890
|
|
||
Gross profit (loss)
|
679
|
|
|
(4,897
|
)
|
||
General and administrative expenses
|
4,709
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|
|
3,930
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|
||
Asset impairment
|
750
|
|
|
389
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|
||
Operating income (loss)
|
(4,780
|
)
|
|
(9,216
|
)
|
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Other income (expense):
|
|
|
|
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Interest expense
|
(469
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)
|
|
(59
|
)
|
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Other income (expense), net
|
12
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|
|
9
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|
||
Total other income (expense)
|
(457
|
)
|
|
(50
|
)
|
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Net loss before income taxes
|
(5,237
|
)
|
|
(9,266
|
)
|
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Income tax expense (benefit)
|
59
|
|
|
(2,812
|
)
|
||
Net loss
|
$
|
(5,296
|
)
|
|
$
|
(6,454
|
)
|
Per share data:
|
|
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|
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Basic and diluted loss per share - common shareholders
|
$
|
(0.35
|
)
|
|
$
|
(0.44
|
)
|
Cash dividend declared per common share
|
$
|
—
|
|
|
$
|
0.01
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Total
Shareholders’
Equity
|
||||||||||||
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Shares
|
|
Amount
|
|
|||||||||||||||
Balance at January 1, 2018
|
14,910,498
|
|
|
$
|
10,823
|
|
|
$
|
100,456
|
|
|
$
|
108,214
|
|
|
$
|
219,493
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,296
|
)
|
|
(5,296
|
)
|
|||||
Vesting of restricted stock
|
132,570
|
|
|
(79
|
)
|
|
(708
|
)
|
|
—
|
|
|
(787
|
)
|
|||||
Compensation expense - restricted stock
|
—
|
|
|
69
|
|
|
607
|
|
|
—
|
|
|
676
|
|
|||||
Balance at March 31, 2018
|
15,043,068
|
|
|
$
|
10,813
|
|
|
$
|
100,355
|
|
|
$
|
102,918
|
|
|
$
|
214,086
|
|
|
Three Months Ended
March 31, |
||||||
|
|||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(5,296
|
)
|
|
$
|
(6,454
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Bad debt expense
|
8
|
|
|
—
|
|
||
Depreciation and amortization
|
2,749
|
|
|
4,700
|
|
||
Amortization of deferred revenue
|
(390
|
)
|
|
(1,552
|
)
|
||
Asset impairment, net of insurance recovery
|
750
|
|
|
389
|
|
||
Gain on sale of assets
|
(12
|
)
|
|
—
|
|
||
Deferred income taxes
|
—
|
|
|
(3,035
|
)
|
||
Compensation expense - restricted stock
|
676
|
|
|
459
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Contracts receivable and retainage, net
|
(1,494
|
)
|
|
(892
|
)
|
||
Contracts in progress
|
(9,136
|
)
|
|
(3,551
|
)
|
||
Prepaid expenses, inventory, and other current assets
|
542
|
|
|
1,046
|
|
||
Accounts payable
|
494
|
|
|
(520
|
)
|
||
Advance billings on contracts
|
(835
|
)
|
|
785
|
|
||
Deferred revenue
|
(1,068
|
)
|
|
(4,162
|
)
|
||
Deferred compensation
|
409
|
|
|
196
|
|
||
Accrued expenses and other liabilities
|
(490
|
)
|
|
(2,498
|
)
|
||
Accrued contract losses
|
(1,298
|
)
|
|
(235
|
)
|
||
Current income taxes and other
|
295
|
|
|
240
|
|
||
Net cash used in operating activities
|
(14,096
|
)
|
|
(15,084
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(71
|
)
|
|
(391
|
)
|
||
Proceeds from the sale of equipment
|
309
|
|
|
—
|
|
||
Proceeds from insurance recoveries
|
2,165
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
2,403
|
|
|
(391
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Tax payments made on behalf of employees from withheld, vested shares of common stock
|
(787
|
)
|
|
(880
|
)
|
||
Payment of financing cost
|
(11
|
)
|
|
—
|
|
||
Payments of dividends on common stock
|
—
|
|
|
(149
|
)
|
||
Proceeds received from borrowings under our Credit Agreement
|
15,000
|
|
|
—
|
|
||
Repayment of borrowings under our Credit Agreement
|
(5,000
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
9,202
|
|
|
(1,029
|
)
|
||
Net change in cash and cash equivalents
|
(2,491
|
)
|
|
(16,504
|
)
|
||
Cash and cash equivalents at beginning of period
|
8,983
|
|
|
51,167
|
|
||
Cash and cash equivalents at end of period
|
$
|
6,492
|
|
|
$
|
34,663
|
|
•
|
Clean-up and repair related costs of
$1.6 million
that we have incurred since August 25, 2017, through
March 31, 2018
;
|
•
|
A building at our Texas South Yard and a building at our Texas North Yard were determined to be total losses. As a result, we impaired the remaining net book value of
$1.5 million
related to these buildings and recorded a corresponding insurance recovery offsetting the impairment during the fourth quarter of 2017; and
|
•
|
During the first quarter of 2018, we determined that we do not expect to repair the damaged buildings and equipment at the Texas North Yard. Accordingly, we impaired our Texas North Yard by
$5.1 million
, which represents our best estimate of the decline in the fair value of the property and equipment as a result of our decision to not repair the facility and recorded a corresponding insurance recovery offsetting the impairment.
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South Texas Properties
|
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||||||||||
Assets
|
Texas South Yard
(1)
|
|
Texas North Yard
|
|
Shipyard Division Assets
|
|
Consolidated
|
||||||||
Land
|
$
|
3,335
|
|
|
$
|
2,157
|
|
|
$
|
—
|
|
|
$
|
5,492
|
|
Buildings and improvements
|
90,370
|
|
|
30,692
|
|
|
—
|
|
|
121,062
|
|
||||
Machinery and equipment
|
—
|
|
|
66,305
|
|
|
2,187
|
|
|
68,492
|
|
||||
Less: accumulated depreciation
|
(43,808
|
)
|
|
(52,554
|
)
|
|
(298
|
)
|
|
(96,660
|
)
|
||||
Total assets held for sale
|
$
|
49,897
|
|
|
$
|
46,600
|
|
|
$
|
1,889
|
|
|
$
|
98,386
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
|
|
Fabrication Division
|
|
Shipyard Division
|
|
Services Division
|
|
EPC Division
|
|
Eliminations
|
|
Total
|
||||||||||||
Contract Type
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Lump sum and fixed-price construction
(1)
|
$
|
17,270
|
|
|
$
|
17,222
|
|
|
$
|
11,285
|
|
|
$
|
—
|
|
|
$
|
(488
|
)
|
|
$
|
45,289
|
|
|
Service contract revenue
(2)
|
—
|
|
|
1,343
|
|
|
10,585
|
|
|
—
|
|
|
—
|
|
|
11,928
|
|
|||||||
Other
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|||||||
Total
|
|
$
|
17,270
|
|
|
$
|
18,565
|
|
|
$
|
21,870
|
|
|
$
|
73
|
|
|
$
|
(488
|
)
|
|
$
|
57,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||||
|
|
Fabrication Division
|
|
Shipyard Division
|
|
Services Division
|
|
EPC Division
|
|
Eliminations
|
|
Total
|
||||||||||||
Contract Type
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Lump sum and fixed-price construction
(1)
|
$
|
10,209
|
|
|
$
|
16,707
|
|
|
$
|
5,721
|
|
|
$
|
—
|
|
|
$
|
(1,350
|
)
|
|
$
|
31,287
|
|
|
Service contract revenue
(2)
|
—
|
|
|
1,715
|
|
|
4,991
|
|
|
—
|
|
|
—
|
|
|
6,706
|
|
|||||||
Other
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
10,209
|
|
|
$
|
18,422
|
|
|
$
|
10,712
|
|
|
$
|
—
|
|
|
$
|
(1,350
|
)
|
|
$
|
37,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By Segment
|
Performance Obligations as of March 31, 2018
|
||
Fabrication Division
|
$
|
6,706
|
|
Shipyard Division
(1)
|
149,590
|
|
|
Services Division
|
11,858
|
|
|
EPC Division
|
—
|
|
|
Intersegment eliminations
|
(990
|
)
|
|
Total
|
$
|
167,164
|
|
|
|
Year
|
|
$'s
|
||
Remainder of 2018
|
|
$
|
88,573
|
|
2019
|
|
59,231
|
|
|
2020
|
|
19,360
|
|
|
Total
|
|
$
|
167,164
|
|
|
|
|
•
|
The fabrication of
four
modules for a customer within our Fabrication Division associated with a U.S. ethane cracker project (completed in April 2018);
|
•
|
Offshore services related to repair, installation and hook-up work for a customer within our Services Division; and
|
•
|
Inshore service repair and installation work for a customer within our Services Division.
|
•
|
Level 1 - inputs are based upon quoted prices for identical instruments traded in active markets;
|
•
|
Level 2 - inputs are based upon quoted prices for similar instruments in active markets and model-based valuation techniques for which all significant assumptions are observable in the market; and
|
•
|
Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. These include discounted cash flow models and similar valuation techniques.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Basic and diluted:
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(5,296
|
)
|
|
$
|
(6,454
|
)
|
Less: Distributed and undistributed loss (unvested restricted stock)
|
—
|
|
|
(34
|
)
|
||
Net loss attributable to common shareholders
|
$
|
(5,296
|
)
|
|
$
|
(6,420
|
)
|
Denominator:
|
|
|
|
||||
Weighted-average shares
(1)
|
14,964
|
|
|
14,758
|
|
||
Basic and diluted loss per share - common shareholders
|
$
|
(0.35
|
)
|
|
$
|
(0.44
|
)
|
i.
|
Ratio of current assets to current liabilities of not less than
1.25
:1.00;
|
ii.
|
Minimum tangible net worth requirement of at least the sum of:
|
a)
|
$185 million
, plus
|
b)
|
An amount equal to
50%
of consolidated net income for each fiscal quarter ending after June 30, 2017, including
50%
of any gain attributable to the sale of our South Texas Properties (with no deduction for a net loss in any such fiscal quarter), plus
|
c)
|
100%
of the proceeds of any issuance of any stock or other equity after deducting of any fees, commissions, expenses and other costs incurred in such offering; and
|
iii.
|
Ratio of funded debt to tangible net worth of not more than
0.50
:1.00.
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||
|
Fabrication
|
Shipyard
|
Services
|
EPC
|
Corporate
|
Eliminations
|
Consolidated
|
||||||||||||||
Revenue
|
$
|
17,270
|
|
$
|
18,565
|
|
$
|
21,870
|
|
$
|
73
|
|
$
|
—
|
|
$
|
(488
|
)
|
$
|
57,290
|
|
Gross profit (loss)
|
(219
|
)
|
(1,023
|
)
|
2,614
|
|
(308
|
)
|
(385
|
)
|
—
|
|
679
|
|
|||||||
Operating income (loss)
|
(1,593
|
)
|
(1,819
|
)
|
1,880
|
|
(725
|
)
|
(2,523
|
)
|
—
|
|
(4,780
|
)
|
|||||||
Total assets
|
184,263
|
|
76,150
|
|
105,632
|
|
12
|
|
318,137
|
|
(415,072
|
)
|
269,122
|
|
|||||||
Depreciation and amortization expense
|
1,149
|
|
1,069
|
|
393
|
|
—
|
|
138
|
|
—
|
|
2,749
|
|
|||||||
Capital expenditures
|
—
|
|
6
|
|
65
|
|
—
|
|
—
|
|
—
|
|
71
|
|
|||||||
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
|||||||||||||||||||
|
Fabrication
|
Shipyard
|
Services
|
EPC
|
Corporate
|
Eliminations
|
Consolidated
|
|||||||||||||
Revenue
|
$
|
10,209
|
|
$
|
18,422
|
|
$
|
10,712
|
|
—
|
|
$
|
—
|
|
$
|
(1,350
|
)
|
$
|
37,993
|
|
Gross profit (loss)
|
(2,966
|
)
|
(1,704
|
)
|
33
|
|
—
|
|
(260
|
)
|
—
|
|
(4,897
|
)
|
||||||
Operating income (loss)
|
(3,787
|
)
|
(3,057
|
)
|
(633
|
)
|
—
|
|
(1,739
|
)
|
—
|
|
(9,216
|
)
|
||||||
Total assets
|
197,834
|
|
88,489
|
|
95,562
|
|
—
|
|
349,917
|
|
(427,142
|
)
|
304,660
|
|
||||||
Depreciation and amortization expense
|
3,135
|
|
1,009
|
|
432
|
|
—
|
|
124
|
|
—
|
|
4,700
|
|
||||||
Capital expenditures
|
102
|
|
272
|
|
—
|
|
—
|
|
17
|
|
—
|
|
391
|
|
||||||
|
|
|
|
|
|
|
|
•
|
Clean-up and repair related costs of
$1.6 million
that we have incurred since August 25, 2017, through
March 31, 2018
;
|
•
|
A building at our Texas South Yard and a building at our Texas North Yard were determined to be total losses. As a result, we impaired the remaining net book value of
$1.5 million
related to these buildings and recorded a corresponding insurance recovery offsetting the impairment during the fourth quarter of 2017; and
|
•
|
During the first quarter of 2018, we determined that we do not expect to repair the damaged buildings and equipment at the Texas North Yard. Accordingly, we impaired our Texas North Yard by
$5.1 million
, which represents our best estimate of the decline in the fair value of the property and equipment as a result of our decision to not repair the facility and recorded a corresponding insurance recovery offsetting the impairment.
|
•
|
Our ability to execute on projects in accordance with our cost estimates and manage them to successful completion;
|
•
|
Our ability to win contracts through competitive bidding or alliance/partnering arrangements;
|
•
|
Demand for our services and the overall number of projects in the market place. As discussed above, a significant portion of our historical customer base has been impacted by the level of exploration and development activity maintained by oil and gas exploration and production companies in the GOM, and to a lesser extent, overseas locations, which is dependent upon the price of oil and gas;
|
•
|
The level of petrochemical facility construction and improvements;
|
•
|
Our successful execution of an agreement with SeaOne;
|
•
|
Our ability to resolve our disputes with our customer for the completion of the two MPSV vessels; and
|
•
|
Our ability to secure additional fabrication offshore wind projects.
|
|
March 31, 2018
|
||||||||||||||||||||||
|
Fabrication
|
|
Shipyard
|
|
Services
|
|
EPC
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Future performance obligations required under fixed-price contracts under Topic 606 of ASC
|
$
|
6,706
|
|
|
$
|
149,590
|
|
|
$
|
11,858
|
|
|
$
|
—
|
|
|
$
|
(990
|
)
|
|
$
|
167,164
|
|
Contracts signed subsequent to March, 31, 2018
|
—
|
|
|
29,874
|
|
|
—
|
|
|
1,037
|
|
|
—
|
|
|
30,911
|
|
||||||
Signed contracts under purported termination or third party protest
(1), (2)
|
—
|
|
|
94,176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94,176
|
|
||||||
Backlog
|
$
|
6,706
|
|
|
$
|
273,640
|
|
|
$
|
11,858
|
|
|
$
|
1,037
|
|
|
$
|
(990
|
)
|
|
$
|
292,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes backlog for a customer for which we have received a notice of purported termination within our Shipyard Division related to the construction of two MPSVs. We dispute the purported termination and disagree with the customer’s reasons for same.We cannot guarantee that we be able to favorably negotiate completion of the MPSVs with this customer. See Note 9 of the Notes to Consolidated Financial Statements.
|
(2)
|
Includes our signed contract with the U.S. Navy for the construction of the T-ATS Salvage vessel which is under bid protest from a competitor. Bid protests can result in an award decision being overturned, requiring a re-bid of the contract. Even when a bid protest does not result in a re-bid, resolution of the matter typically extends the time until contract performance can begin, which may reduce our earnings in the period in which the contract would otherwise be performed.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||
Division
|
$'s
|
Labor hours
|
|
$'s
|
Labor hours
|
||||
Fabrication
|
$
|
6,706
|
|
54
|
|
$
|
15,771
|
|
150
|
Shipyard
|
273,640
|
|
1,493
|
|
184,035
|
|
1,104
|
||
Services
|
11,858
|
|
130
|
|
23,181
|
|
290
|
||
EPC
|
1,037
|
|
—
|
|
—
|
|
—
|
||
Intersegment eliminations
|
(990
|
)
|
—
|
|
(370
|
)
|
—
|
||
Total backlog
|
$
|
292,251
|
|
1,677
|
|
$
|
222,617
|
|
1,544
|
|
|
|
|
|
|
||||
|
Number
|
Percentage
|
|
Number
|
Percentage
|
||||
Major customers
(1)
|
5
|
85.4%
|
|
4
|
73.0%
|
||||
|
|
|
|
|
|
||||
Backlog is expected to be recognized in revenue during:
(2)
|
$'s
|
Percentage
|
|
|
|
||||
2018
|
$
|
90,879
|
|
31.1%
|
|
|
|
||
2019
|
142,274
|
|
48.7%
|
|
|
|
|||
2020
|
59,098
|
|
20.2%
|
|
|
|
|||
Total
|
$
|
292,251
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
At
March 31, 2018
, projects for our five largest customers in terms of revenue backlog consisted of:
|
(i)
|
Two large MPSVs for one customer for which we have received a purported notice of termination as discussed above;
|
(ii)
|
Newbuild construction of five harbor tugs for one customer (to be completed in 2018 through 2020);
|
(iii)
|
Newbuild construction of five harbor tugs for one customer (separate from above) (to completed in 2018 through 2020);
|
(iv)
|
Newbuild construction of an offshore research vessel (to be completed in 2020); and
|
(v)
|
Newbuild construction of one T-ATS vessel (to be completed in 2020). This contract is currently under a bid protest.
|
(2)
|
The timing of recognition of the revenue represented in our backlog is based on management’s current estimates to complete the projects. Certain factors and circumstances could cause changes in the amounts ultimately recognized and the timing of the recognition of revenue from our backlog.
|
|
Three Months Ended March 31,
|
|
Increase or (Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
Amount
|
Percent
|
||||||
Revenue
|
$
|
57,290
|
|
|
$
|
37,993
|
|
|
$
|
19,297
|
|
50.8%
|
Cost of revenue
|
56,611
|
|
|
42,890
|
|
|
13,721
|
|
32.0%
|
|||
Gross profit (loss)
|
679
|
|
|
(4,897
|
)
|
|
5,576
|
|
113.9%
|
|||
Gross profit (loss) percentage
|
1.2
|
%
|
|
(12.9
|
)%
|
|
|
|
||||
General and administrative expenses
|
4,709
|
|
|
3,930
|
|
|
779
|
|
19.8%
|
|||
Asset impairment
|
750
|
|
|
389
|
|
|
361
|
|
92.8%
|
|||
Operating income (loss)
|
(4,780
|
)
|
|
(9,216
|
)
|
|
(4,436
|
)
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Interest expense
|
(469
|
)
|
|
(59
|
)
|
|
(410
|
)
|
(694.9)%
|
|||
Other income (expense), net
|
12
|
|
|
9
|
|
|
3
|
|
33.3%
|
|||
Total other income (expense)
|
(457
|
)
|
|
(50
|
)
|
|
(407
|
)
|
(814.0)%
|
|||
Net loss before income taxes
|
(5,237
|
)
|
|
(9,266
|
)
|
|
(4,029
|
)
|
(43.5)%
|
|||
Income tax expense (benefit)
|
59
|
|
|
(2,812
|
)
|
|
2,871
|
|
102.1%
|
|||
Net loss
|
$
|
(5,296
|
)
|
|
$
|
(6,454
|
)
|
|
$
|
6,900
|
|
|
•
|
An increase of
$11.2 million
within our Services Division from additional demand for offshore oil and gas service related projects; and
|
•
|
An increase of
$7.1 million
within our Fabrication Division primarily attributable to the construction of four modules for a petrochemical plant.
|
•
|
Build-up of additional personnel for our newly created EPC Division;
|
•
|
Increased legal and advisory fees related to customer disputes, strategic planning and diversification of our business;
|
•
|
Increased employee incentive accruals of approximately $300,000 for all divisions related to our safety incentive program and higher employee profitability incentives within our Services Division as well as the addition of personnel as we build up our EPC Division in anticipation of the SeaOne Project; and
|
•
|
Higher stock compensation expense of approximately $220,000.
|
Fabrication
|
|
Three Months Ended March 31,
|
|
Increase or (Decrease)
|
||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
|
$
|
17,270
|
|
|
$
|
10,209
|
|
|
$
|
7,061
|
|
|
69.2%
|
Gross profit (loss)
|
|
(219
|
)
|
|
(2,966
|
)
|
|
(2,747
|
)
|
|
(92.6)%
|
|||
Gross profit (loss) percentage
|
|
(1.3
|
)%
|
|
(29.1
|
)%
|
|
|
|
|
||||
General and administrative expenses
|
|
624
|
|
|
821
|
|
|
(197
|
)
|
|
(24.0)%
|
|||
Asset impairment
|
|
750
|
|
|
—
|
|
|
750
|
|
|
100.0%
|
|||
Operating income (loss)
|
|
$
|
(1,593
|
)
|
|
$
|
(3,787
|
)
|
|
$
|
(2,194
|
)
|
|
|
Shipyard
|
|
Three Months Ended March 31,
|
|
Increase or (Decrease)
|
||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||
Revenue
(1)
|
|
$
|
18,565
|
|
|
$
|
18,422
|
|
|
$
|
143
|
|
|
0.8%
|
Gross profit (loss)
(1)
|
|
(1,023
|
)
|
|
(1,704
|
)
|
|
(681
|
)
|
|
(40.0)%
|
|||
Gross profit (loss) percentage
|
|
(5.5
|
)%
|
|
(9.2
|
)%
|
|
|
|
|
||||
General and administrative expenses
|
|
796
|
|
|
964
|
|
|
(168
|
)
|
|
(17.4)%
|
|||
Asset impairment
|
|
—
|
|
|
389
|
|
|
(389
|
)
|
|
(100.0)%
|
|||
Operating income (loss)
(1)
|
|
$
|
(1,819
|
)
|
|
$
|
(3,057
|
)
|
|
$
|
(1,238
|
)
|
|
|
(1)
|
Revenue for the
three months ended March 31, 2018
, and
2017
, includes
$390,000
and
$1.6 million
of non-cash amortization of deferred revenue related to the values assigned to the contracts acquired in the LEEVAC transaction, respectively.
|
Services
|
|
Three Months Ended March 31,
|
|
Increase or (Decrease)
|
||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
|
$
|
21,870
|
|
|
$
|
10,712
|
|
|
$
|
11,158
|
|
|
104.2%
|
Gross profit (loss)
|
|
2,614
|
|
|
33
|
|
|
2,581
|
|
|
7,821.2%
|
|||
Gross profit (loss) percentage
|
|
12.0
|
%
|
|
0.3
|
%
|
|
|
|
|
||||
General and administrative expenses
|
|
734
|
|
|
666
|
|
|
68
|
|
|
10.2%
|
|||
Operating income (loss)
|
|
$
|
1,880
|
|
|
$
|
(633
|
)
|
|
$
|
2,513
|
|
|
|
Corporate
|
|
Three Months Ended March 31,
|
|
Increase or (Decrease)
|
||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—%
|
Gross profit (loss)
|
|
$
|
(385
|
)
|
|
(260
|
)
|
|
125
|
|
|
48.1%
|
||
Gross profit (loss) percentage
|
|
n/a
|
|
|
n/a
|
|
|
|
|
|
||||
General and administrative expenses
|
|
2,138
|
|
|
1,479
|
|
|
659
|
|
|
44.6%
|
|||
Operating income (loss)
|
|
$
|
(2,523
|
)
|
|
$
|
(1,739
|
)
|
|
$
|
784
|
|
|
|
i.
|
Ratio of current assets to current liabilities of not less than
1.25
:1.00;
|
ii.
|
Minimum tangible net worth requirement of at least the sum of:
|
a)
|
$185 million
, plus
|
b)
|
An amount equal to
50%
of consolidated net income for each fiscal quarter ending after June 30, 2017, including
50%
of any gain attributable to the sale of our South Texas Properties (with no deduction for a net loss in any such fiscal quarter), plus
|
c)
|
100%
of the proceeds of any issuance of any stock or other equity after deducting of any fees, commissions, expenses and other costs incurred in such offering; and
|
iii.
|
Ratio of funded debt to tangible net worth of not more than
0.50
:1.00.
|
•
|
Operating losses for the
three months ended March 31, 2018
, in excess of non-cash depreciation, amortization, impairment and stock compensation expense of approximately
$1.5 million
;
|
•
|
Build-up of costs for contracts in progress of $9.1 million;
|
•
|
Build-up of retainage on projects of $1.5 million; and
|
•
|
Payment of property taxes related to our South Texas Properties of $2 million.
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
||
3.1
|
|
||
3.2
|
|
||
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
31.1
|
|
||
31.2
|
|
||
32
|
|
||
|
|
|
|
101
|
|
Attached as Exhibit 101 to this report are the following items formatted in XBRL (Extensible Business Reporting Language):
|
|
|
|
(i)
|
Consolidated Balance Sheets,
|
|
|
(ii)
|
Consolidated Statements of Operations,
|
|
|
(iii)
|
Consolidated Statement of Changes in Shareholders’ Equity,
|
|
|
(iv)
|
Consolidated Statements of Cash Flows, and
|
|
|
(v)
|
Notes to Consolidated Financial Statements.
|
|
|
|
|
†
|
|
Management Contract or Compensatory Plan.
|
GULF ISLAND FABRICATION, INC.
|
|
|
|
BY:
|
/s/ David S. Schorlemer
|
|
David S. Schorlemer
|
|
Executive Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer)
|
1 Year Gulf Island Fabrication Chart |
1 Month Gulf Island Fabrication Chart |
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