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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.12 | -1.69% | 6.98 | 4.94 | 7.49 | 7.35 | 6.88 | 7.12 | 93,503 | 21:30:00 |
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FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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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 300
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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¨
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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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x
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Emerging Growth Company
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¨
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock
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GIFI
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NASDAQ
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Page
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Item 3
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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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modules
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Fabricated structures that include structural steel, piping, valves, fittings, storage vessels and other equipment that are incorporated into a petrochemical or industrial system. These modules are pre-fabricated at our facilities and then transported to the customer's location for final integration.
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MPSV
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Multi-Purpose Service Vessel.
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offshore
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In unprotected waters outside coastlines.
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onshore
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Inside the coastline on land.
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OSV
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Offshore Support Vessel.
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Performance Obligation
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A contractual obligation to construct and transfer a distinct good or service to a customer. It is the unit of account in Topic 606. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
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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 work for SeaOne's Compressed Gas Liquids Caribbean Fuels Supply Project. This project is expected to consist of 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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Shipyard AHFS
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Drydock for our Shipyard Division that is held for sale.
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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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Our former Texas North Yard and Texas South Yard. The Texas South Yard property was sold on April 20, 2018 and the Texas North Yard was sold on November 15, 2018.
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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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Statements of Cash Flows
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Our Consolidated Statements of Cash Flows, as filed in this Report.
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Statements of Operations
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Our Consolidated Statements of Operation, as filed in this Report.
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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
|
A financial institution that issues bonds to customers on behalf of the Company for the purpose of providing third-party financial assurance related to the performance of our contracts.
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T&M
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Work performed and billed to the customer generally at contracted time and material rates, cost plus or other variable fee arrangements which can include a mark-up.
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Texas North Yard
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Our former fabrication yard, and certain related machinery and equipment, located in Aransas Pass, Texas, which was sold on November 15, 2018.
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Texas South Yard
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Our former fabrication yard, and certain related machinery and equipment, located in Ingleside, Texas, which was sold on April 20, 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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Topic 606
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The revenue recognition criteria prescribed under ASU 2014-09,
Revenue from Contracts with Customers.
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U.S.
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The United States of America.
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March 31,
2019 |
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December 31,
2018 |
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(Unaudited)
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|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
49,898
|
|
|
$
|
70,457
|
|
Short-term investments
|
20,341
|
|
|
8,720
|
|
||
Contracts receivable and retainage, net
|
21,658
|
|
|
22,505
|
|
||
Contract assets
|
38,707
|
|
|
29,982
|
|
||
Prepaid expenses and other assets
|
2,558
|
|
|
3,268
|
|
||
Inventory
|
5,568
|
|
|
6,088
|
|
||
Assets held for sale
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18,636
|
|
|
18,935
|
|
||
Total current assets
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157,366
|
|
|
159,955
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Property, plant and equipment, net
|
77,660
|
|
|
79,930
|
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||
Other noncurrent assets
|
23,689
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|
|
18,405
|
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Total assets
|
$
|
258,715
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|
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$
|
258,290
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||
Current liabilities:
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Accounts payable
|
$
|
36,511
|
|
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$
|
28,969
|
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Contract liabilities
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9,234
|
|
|
16,845
|
|
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Accrued expenses and other liabilities
|
9,605
|
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|
10,287
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Total current liabilities
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55,350
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56,101
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Other noncurrent liabilities
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5,461
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|
1,089
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Total liabilities
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60,811
|
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|
57,190
|
|
||
Shareholders’ equity:
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|
|
|
||||
Preferred stock, no par value, 5,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, no par value, 20,000 shares authorized, 15,236 shares issued and outstanding at March 31, 2019 and 15,090 at December 31, 2018
|
11,006
|
|
|
11,021
|
|
||
Additional paid-in capital
|
102,104
|
|
|
102,243
|
|
||
Retained earnings
|
84,794
|
|
|
87,836
|
|
||
Total shareholders’ equity
|
197,904
|
|
|
201,100
|
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Total liabilities and shareholders’ equity
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$
|
258,715
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$
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258,290
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Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Revenue
|
$
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67,605
|
|
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$
|
57,290
|
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Cost of revenue
|
67,052
|
|
|
56,611
|
|
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Gross profit
|
553
|
|
|
679
|
|
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General and administrative expense
|
3,834
|
|
|
4,709
|
|
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Asset impairments and (gain) loss on assets held for sale, net
|
(70
|
)
|
|
750
|
|
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Other (income) expense, net
|
71
|
|
|
310
|
|
||
Operating loss
|
(3,282
|
)
|
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(5,090
|
)
|
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Interest income (expense), net
|
262
|
|
|
(147
|
)
|
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Net loss before income taxes
|
(3,020
|
)
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(5,237
|
)
|
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Income tax (expense) benefit
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(22
|
)
|
|
(59
|
)
|
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Net loss
|
$
|
(3,042
|
)
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|
$
|
(5,296
|
)
|
Per share data:
|
|
|
|
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Basic and diluted loss per common share
|
$
|
(0.20
|
)
|
|
$
|
(0.35
|
)
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Total
Shareholders’
Equity
|
||||||||||||
|
Shares
|
|
Amount
|
|
|||||||||||||||
Balance at December 31, 2017
|
14,910
|
|
|
$
|
10,823
|
|
|
$
|
100,456
|
|
|
$
|
108,214
|
|
|
$
|
219,493
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,296
|
)
|
|
(5,296
|
)
|
|||||
Vesting of restricted stock
|
133
|
|
|
(79
|
)
|
|
(708
|
)
|
|
—
|
|
|
(787
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
69
|
|
|
607
|
|
|
—
|
|
|
676
|
|
|||||
Balance at March 31, 2018
|
15,043
|
|
|
$
|
10,813
|
|
|
$
|
100,355
|
|
|
$
|
102,918
|
|
|
$
|
214,086
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Total
Shareholders’
Equity
|
||||||||||||
|
Shares
|
|
Amount
|
|
|||||||||||||||
Balance at December 31, 2018
|
15,090
|
|
|
$
|
11,021
|
|
|
$
|
102,243
|
|
|
$
|
87,836
|
|
|
$
|
201,100
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,042
|
)
|
|
(3,042
|
)
|
|||||
Vesting of restricted stock
|
146
|
|
|
(71
|
)
|
|
(643
|
)
|
|
—
|
|
|
(714
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
56
|
|
|
504
|
|
|
—
|
|
|
560
|
|
|||||
Balance at March 31, 2019
|
15,236
|
|
|
$
|
11,006
|
|
|
$
|
102,104
|
|
|
$
|
84,794
|
|
|
$
|
197,904
|
|
|
Three Months Ended
March 31, |
||||||
|
|||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(3,042
|
)
|
|
$
|
(5,296
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and lease asset amortization
|
2,552
|
|
|
2,715
|
|
||
Other amortization, net
|
12
|
|
|
(357
|
)
|
||
Bad debt expense
|
53
|
|
|
8
|
|
||
Asset impairments
|
299
|
|
|
750
|
|
||
(Gain) loss on sale of assets held for sale, net
|
(369
|
)
|
|
—
|
|
||
(Gain) loss on sale of fixed assets and other assets, net
|
101
|
|
|
(12
|
)
|
||
Stock-based compensation expense
|
560
|
|
|
676
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Contracts receivable and retainage, net
|
796
|
|
|
(1,494
|
)
|
||
Contract assets
|
(8,725
|
)
|
|
(9,136
|
)
|
||
Prepaid expenses, inventory and other current assets
|
1,095
|
|
|
221
|
|
||
Accounts payable
|
7,542
|
|
|
494
|
|
||
Contract liabilities
|
(7,611
|
)
|
|
(3,201
|
)
|
||
Accrued expenses and other liabilities
|
(1,558
|
)
|
|
(164
|
)
|
||
Noncurrent assets and liabilities, net (including long-term retainage)
|
(182
|
)
|
|
700
|
|
||
Net cash used in operating activities
|
(8,477
|
)
|
|
(14,096
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(250
|
)
|
|
(71
|
)
|
||
Purchase of short-term investments
|
(20,041
|
)
|
|
—
|
|
||
Maturities of short-term investments
|
8,500
|
|
|
—
|
|
||
Proceeds from sale of property, plant and equipment
|
424
|
|
|
309
|
|
||
Recoveries from insurance claims
|
—
|
|
|
2,165
|
|
||
Net cash provided by (used in) investing activities
|
(11,367
|
)
|
|
2,403
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from borrowings under Credit Agreement
|
—
|
|
|
15,000
|
|
||
Repayment of borrowings under Credit Agreement
|
—
|
|
|
(5,000
|
)
|
||
Payment of financing cost
|
—
|
|
|
(11
|
)
|
||
Tax payments made on behalf of employees from vested stock withholdings
|
(715
|
)
|
|
(787
|
)
|
||
Net cash provided by (used in) financing activities
|
(715
|
)
|
|
9,202
|
|
||
Net decrease in cash and cash equivalents
|
(20,559
|
)
|
|
(2,491
|
)
|
||
Cash and cash equivalents, beginning of period
|
70,457
|
|
|
8,983
|
|
||
Cash and cash equivalents, end of period
|
$
|
49,898
|
|
|
$
|
6,492
|
|
•
|
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.
|
•
|
Level 3 - inputs are based upon model-based valuation techniques for which significant assumptions are generally not observable in the market and typically reflect estimates and assumptions that we believe 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, 2019
|
||||||||||||||||||
|
|
Fabrication
|
|
Shipyard
|
|
Services
|
|
Eliminations
|
|
Total
|
||||||||||
Contract Type
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed-price and unit-rate
(1)
|
$
|
12,631
|
|
|
$
|
33,626
|
|
|
$
|
6,231
|
|
|
$
|
(614
|
)
|
|
$
|
51,874
|
|
|
T&M
(2)
|
—
|
|
|
2,961
|
|
|
10,622
|
|
|
—
|
|
|
13,583
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
2,749
|
|
|
(601
|
)
|
|
2,148
|
|
||||||
|
Total
|
$
|
12,631
|
|
|
$
|
36,587
|
|
|
$
|
19,602
|
|
|
$
|
(1,215
|
)
|
|
$
|
67,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
|
Fabrication
|
|
Shipyard
|
|
Services
|
|
Eliminations
|
|
Total
|
||||||||||
Contract Type
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed-price and unit-rate
(1)
|
$
|
17,343
|
|
|
$
|
17,222
|
|
|
$
|
10,290
|
|
|
$
|
(453
|
)
|
|
$
|
44,402
|
|
|
T&M
(2)
|
—
|
|
|
1,343
|
|
|
10,585
|
|
|
—
|
|
|
11,928
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
995
|
|
|
(35
|
)
|
|
960
|
|
||||||
|
Total
|
$
|
17,343
|
|
|
$
|
18,565
|
|
|
$
|
21,870
|
|
|
$
|
(488
|
)
|
|
$
|
57,290
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Performance Obligations at March 31, 2019
|
||
Fabrication
|
|
$
|
71,144
|
|
Shipyard
(1) (2)
|
|
226,250
|
|
|
Services
|
|
15,397
|
|
|
Total
|
|
$
|
312,791
|
|
|
|
|
(1)
|
Amount excludes approximately
$21.9 million
of remaining performance obligations related to contracts for the construction of
two
MPSVs that are subject to dispute pursuant to a termination notice from our customer. See Note 5 for further discussion of these contracts.
|
(2)
|
Amount excludes remaining performance obligations related to contract awards in April 2019 for the construction of a regional class marine research vessel (approximately
$70.0 million
) and
two
towing, salvage and rescue ships (approximately
$129.0 million
).
|
Year
|
|
Total
|
||
Remainder of 2019
|
|
$
|
180,172
|
|
2020
|
|
101,924
|
|
|
2021
|
|
29,825
|
|
|
Thereafter
|
|
$
|
870
|
|
Total
|
|
$
|
312,791
|
|
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Contract assets
|
$
|
38,707
|
|
|
$
|
29,982
|
|
Contract liabilities
(1), (2), (3)
|
(9,234
|
)
|
|
(16,845
|
)
|
||
Contracts in progress, net
|
$
|
29,473
|
|
|
$
|
13,137
|
|
(1)
|
The decrease in contract liabilities compared to December 31, 2018, was primarily due to the unwind of advance payments on
two
separate projects in our Fabrication and Shipyard Divisions.
|
(2)
|
Revenue recognized during the three months ended March 31, 2019 and 2018 related to amounts included in our contract liabilities balance at December 31, 2018 and 2017, was
$13.5 million
and
$4.3 million
, respectively.
|
(3)
|
Contract liabilities at March 31, 2019 and December 31, 2018, includes accrued contract losses of
$1.5 million
and
$2.4 million
, respectively. See
"Project Changes in Estimates"
below for further discussion of our accrued contract losses.
|
|
|
|
|
|
|
|
||||||
Assets
|
|
Fabrication Division
|
|
Shipyard Division
|
|
Consolidated
|
||||||
Machinery and equipment
|
|
$
|
25,583
|
|
|
$
|
1,222
|
|
|
$
|
26,805
|
|
Accumulated depreciation
|
|
(7,871
|
)
|
|
(298
|
)
|
|
(8,169
|
)
|
|||
Total
|
|
$
|
17,712
|
|
|
$
|
924
|
|
|
$
|
18,636
|
|
•
|
Ratio of current assets to current liabilities at March 31, 2019 of not less than
1.25
:1.00 (
2.0
:1.00 subsequent to the amendment);
|
•
|
Minimum tangible net worth at March 31, 2019 of at least the sum of
$180.0 million
(
$170.0 million
subsequent to the amendment), plus
100%
of the net proceeds from any issuance of stock or other equity after deducting any fees, commissions, expenses and other costs incurred in such offering; and
|
•
|
Ratio of funded debt to tangible net worth at March 31, 2019 of not more than
0.50
:1.00 (no change subsequent to the amendment).
|
Period
|
|
Payments
|
||
Remainder of 2019
|
|
$
|
489
|
|
2020
|
|
659
|
|
|
2021
|
|
668
|
|
|
2022
|
|
677
|
|
|
2023
|
|
676
|
|
|
Thereafter
|
|
6,173
|
|
|
Total lease payments
|
|
9,342
|
|
|
Less interest
|
|
(4,181
|
)
|
|
Present value of lease liabilities
|
|
$
|
5,161
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net loss attributable to common shareholders
|
$
|
(3,042
|
)
|
|
$
|
(5,296
|
)
|
Weighted-average shares
(1)
|
15,151
|
|
|
14,964
|
|
||
Basic and diluted loss per common share
|
$
|
(0.20
|
)
|
|
$
|
(0.35
|
)
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
|
Fabrication
|
|
Shipyard
|
|
Services
|
|
Corporate
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
12,631
|
|
|
$
|
36,587
|
|
|
$
|
19,602
|
|
|
$
|
(1,215
|
)
|
|
$
|
67,605
|
|
Gross profit (loss)
|
(772
|
)
|
|
(280
|
)
|
|
1,741
|
|
|
(136
|
)
|
|
553
|
|
|||||
Operating income (loss)
|
(1,540
|
)
|
|
(904
|
)
|
|
1,289
|
|
|
(2,127
|
)
|
|
(3,282
|
)
|
|||||
Depreciation expense
|
967
|
|
|
1,109
|
|
|
374
|
|
|
102
|
|
|
2,552
|
|
|||||
Capital expenditures
|
14
|
|
|
22
|
|
|
214
|
|
|
—
|
|
|
250
|
|
|||||
Total assets
|
63,761
|
|
|
103,703
|
|
|
34,306
|
|
|
56,945
|
|
|
258,715
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Fabrication
|
|
Shipyard
|
|
Services
|
|
Corporate
|
|
Consolidated
|
||||||||||
Revenue
|
$
|
17,343
|
|
|
$
|
18,565
|
|
|
$
|
21,870
|
|
|
$
|
(488
|
)
|
|
$
|
57,290
|
|
Gross profit (loss)
|
(527
|
)
|
|
(1,023
|
)
|
|
2,614
|
|
|
(385
|
)
|
|
679
|
|
|||||
Operating income (loss)
|
(2,506
|
)
|
|
(1,979
|
)
|
|
1,906
|
|
|
(2,511
|
)
|
|
(5,090
|
)
|
|||||
Depreciation expense
|
1,149
|
|
|
1,069
|
|
|
393
|
|
|
104
|
|
|
2,715
|
|
|||||
Capital expenditures
|
—
|
|
|
6
|
|
|
65
|
|
|
—
|
|
|
71
|
|
|||||
Total assets
|
149,116
|
|
|
76,150
|
|
|
35,529
|
|
|
8,327
|
|
|
269,122
|
|
•
|
Shipyard Division
- Within our Shipyard Division we have increased our backlog with customers outside of the oil and gas sector. At March 31, 2019, projects in our backlog include:
|
–
|
The construction of one towing, salvage and rescue ship for the U.S. Navy (project value of approximately $64.0 million). Our customer exercised its option for the construction of two additional vessels in April 2019 (total project value of approximately $129.0 million), which are not included in backlog at March 31, 2019. The customer continues to have options for the construction of five additional vessels;
|
–
|
The construction of two regional class research vessels (individual project values of approximately $77.0 million and $69.0 million). Our customer exercised its option for the construction of a third vessel in April 2019 (project value of approximately $70.0 million), which is not included in backlog at March 31,
2019
; and
|
–
|
The construction of eight harbor tug vessels.
|
•
|
Fabrication Division -
Within our Fabrication Division we successfully increased our backlog with traditional and non-traditional fabrication work as we continue to pursue petrochemical and industrial fabrication opportunities for modules and structures. At March 31, 2019, projects in our backlog include:
|
–
|
The fabrication of a jacket and deck (destined for Trinidad);
|
–
|
The expansion and delivery of a 245-guest paddle wheel riverboat. The riverboat will be reconfigured using the existing hull of a former gaming vessel built in 1995; and
|
–
|
The construction of two, forty vehicle ferries.
|
•
|
Services Division
- Within our Services Division demand for services associated with offshore tie-backs, upgrades and maintenance remains strong, and we anticipate it will continue for the remainder of 2019. We will continue to pursue opportunities for offshore and onshore plant expansion and maintenance and have targeted service opportunities within the shale basins in West Texas.
|
•
|
The level of construction and fabrication projects in the new markets we are pursuing for our Fabrication Division, including petrochemical and industrial facilities and offshore wind developments, and our ability to secure new project awards;
|
•
|
Continued growth within our Shipyard and Services Divisions;
|
•
|
Our ability to secure new project awards through competitive bidding and/or alliance and partnering arrangements;
|
•
|
Our ability to execute projects within our cost estimates and successfully manage them through completion; and
|
•
|
Our ability to resolve our dispute with our customer related to the construction of two MPSVs.
|
|
March 31, 2019
|
||||||||||||||
|
Fabrication
|
|
Shipyard
|
|
Services
|
|
Consolidated
|
||||||||
Remaining performance obligations under Topic 606
|
$
|
71,144
|
|
|
$
|
226,250
|
|
|
$
|
15,397
|
|
|
$
|
312,791
|
|
Contracts under purported termination
(1)
|
—
|
|
|
21,888
|
|
|
—
|
|
|
21,888
|
|
||||
Total Backlog
(2)
|
$
|
71,144
|
|
|
$
|
248,137
|
|
|
$
|
15,397
|
|
|
$
|
334,679
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
Division
|
Amount
|
|
Labor hours
|
|
Amount
|
|
Labor hours
|
||||||
Fabrication
|
$
|
71,144
|
|
|
402
|
|
|
$
|
63,883
|
|
|
369
|
|
Shipyard
|
248,138
|
|
|
1,523
|
|
|
281,531
|
|
|
1,684
|
|
||
Services
|
15,397
|
|
|
194
|
|
|
11,046
|
|
|
171
|
|
||
Total Backlog
(2)
|
$
|
334,679
|
|
|
2,119
|
|
|
$
|
356,460
|
|
|
2,224
|
|
Year
(3)
|
|
Total
|
|
Percentage
|
||
Remainder of 2019
|
|
$
|
180,172
|
|
|
53.8%
|
2020
|
|
101,924
|
|
|
30.5%
|
|
2021
|
|
29,825
|
|
|
8.9%
|
|
Thereafter
|
|
870
|
|
|
0.3%
|
|
Future performance obligations under Topic 606
|
|
312,791
|
|
|
93.5%
|
|
Contracts under purported termination
(1)
|
|
21,888
|
|
|
6.5%
|
|
Total Backlog
|
|
$
|
334,679
|
|
|
100.0%
|
(1)
|
Includes backlog within our Shipyard Division related to contracts for the construction of two MPSVs that are subject to a purported notice of termination by our customer. We dispute the purported termination and disagree with the customer’s reasons for the same. We can provide no assurances that we will reach a favorable resolution with the customer for completion of the two MPSVs. See Note 5 of our Financial Statements for further discussion of the dispute.
|
(2)
|
At
March 31, 2019
,
seven
customers represented approximately
86%
of our backlog, and at December 31, 2018, seven customers represented approximately 90% of our backlog. At
March 31, 2019
, backlog from the
seven
customers consisted of:
|
(i)
|
Construction of four harbor tugs within our Shipyard Division. The first of five vessels was completed and delivered in the fourth quarter 2018. We estimate completion of the remaining vessels in 2019 and 2020;
|
(ii)
|
Construction of four harbor tugs within our Shipyard Division (separate from above). The first of five vessels was completed and delivered in the first quarter 2019. We estimate completion of the remaining vessels in 2019 and 2020;
|
(iii)
|
Construction of two regional class research vessels within our Shipyard Division. We estimate completion of the vessels in 2021. Our customer exercised its option for the construction of a third vessel in April 2019, which is not included in backlog at March 31, 2019;
|
(iv)
|
Construction of one towing, salvage and rescue ship within our Shipyard Division. We estimate completion of the vessel in 2021. Our customer exercised its option for the construction of two additional vessels in April 2019, which are not included in backlog at March 31, 2019. Our customer continues to have options for the construction of five additional vessels;
|
(v)
|
Expansion of a 245-guest paddle wheel riverboat within our Fabrication Division. We estimate completion of the project in 2020;
|
(3)
|
The timing of recognition of the revenue represented in our backlog is based on our current estimates to complete the projects. Certain factors and circumstances could cause changes in the amounts ultimately recognized and the timing of recognition of revenue from our backlog.
|
|
Three Months Ended
March 31, |
|
Favorable (Unfavorable) Change
|
||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
$
|
67,605
|
|
|
$
|
57,290
|
|
|
$
|
10,315
|
|
|
18.0%
|
Cost of revenue
|
67,052
|
|
|
56,611
|
|
|
(10,441
|
)
|
|
(18.4)%
|
|||
Gross profit
|
553
|
|
|
679
|
|
|
(126
|
)
|
|
(18.6)%
|
|||
Gross profit percentage
|
0.8
|
%
|
|
1.2
|
%
|
|
|
|
|
||||
General and administrative expense
|
3,834
|
|
|
4,709
|
|
|
875
|
|
|
18.6%
|
|||
Asset impairments and (gain) loss on assets held for sale, net
|
(70
|
)
|
|
750
|
|
|
820
|
|
|
109.3%
|
|||
Other (income) expense, net
|
71
|
|
|
310
|
|
|
239
|
|
|
77.1%
|
|||
Operating loss
|
(3,282
|
)
|
|
(5,090
|
)
|
|
1,808
|
|
|
35.5%
|
|||
Interest income (expense), net
|
262
|
|
|
(147
|
)
|
|
409
|
|
|
278.2%
|
|||
Net loss before income taxes
|
(3,020
|
)
|
|
(5,237
|
)
|
|
2,217
|
|
|
42.3%
|
|||
Income tax (expense) benefit
|
(22
|
)
|
|
(59
|
)
|
|
37
|
|
|
62.7%
|
|||
Net loss
|
$
|
(3,042
|
)
|
|
$
|
(5,296
|
)
|
|
$
|
2,254
|
|
|
42.6%
|
•
|
Increased revenue of
$18.0 million
for our Shipyard Division, primarily due to progress on our two regional class research vessels, one towing, salvage and rescue ship, an ice-breaker tug and our harbor tug projects, offset partially by the prior period including revenue on an OSV project that was completed during 2018 and revenue on our two MPSV contracts that were suspended during the first quarter 2018; offset partially by,
|
•
|
Decreased revenue for our Fabrication Division of
$4.7 million
, primarily due to the completion of modules for a petrochemical facility during the second quarter 2018, offset partially by revenue for our paddle wheel riverboat project which was not under construction in the prior period; and
|
•
|
Decreased revenue for our Services Division of
$2.3 million
, primarily due to the timing of new project awards.
|
|
Three Months Ended
March 31, |
|
Favorable (Unfavorable) Change
|
||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
$
|
12,631
|
|
|
$
|
17,343
|
|
|
$
|
(4,712
|
)
|
|
(27.2)%
|
Gross loss
|
(772
|
)
|
|
(527
|
)
|
|
(245
|
)
|
|
(46.5)%
|
|||
Gross loss percentage
|
(6.1
|
)%
|
|
(3.0
|
)%
|
|
|
|
|
||||
General and administrative expense
|
767
|
|
|
1,041
|
|
|
274
|
|
|
26.3%
|
|||
Asset impairments and (gain) loss on assets held for sale, net
|
(70
|
)
|
|
750
|
|
|
820
|
|
|
109.3%
|
|||
Other (income) expense, net
|
71
|
|
|
188
|
|
|
117
|
|
|
62.2%
|
|||
Operating loss
|
(1,540
|
)
|
|
(2,506
|
)
|
|
966
|
|
|
38.5%
|
(1)
|
During the first quarter 2019, our former EPC Division was operationally combined with our Fabrication Division. Accordingly, results for our former EPC Division for the 2018 period have been combined with the Fabrication Division to conform to the presentation of our reportable segments for the 2019 period. See Note 7 of our Financial Statements for further discussion of our realigned operating divisions and related financial information.
|
|
Three Months Ended
March 31, |
|
Favorable (Unfavorable) Change
|
||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
$
|
36,587
|
|
|
$
|
18,565
|
|
|
$
|
18,022
|
|
|
97.1%
|
Gross loss
|
(280
|
)
|
|
(1,023
|
)
|
|
743
|
|
|
72.6%
|
|||
Gross loss percentage
|
(0.8
|
)%
|
|
(5.5
|
)%
|
|
|
|
|
||||
General and administrative expense
|
624
|
|
|
796
|
|
|
172
|
|
|
21.6%
|
|||
Other (income) expense, net
|
—
|
|
|
160
|
|
|
160
|
|
|
100.0%
|
|||
Operating loss
|
(904
|
)
|
|
(1,979
|
)
|
|
1,075
|
|
|
54.3%
|
|
Three Months Ended
March 31, |
|
Favorable (Unfavorable) Change
|
||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
||||||
Revenue
|
$
|
19,602
|
|
|
$
|
21,870
|
|
|
$
|
(2,268
|
)
|
|
(10.4)%
|
Gross profit
|
1,741
|
|
|
2,614
|
|
|
(873
|
)
|
|
(33.4)%
|
|||
Gross profit percentage
|
8.9
|
%
|
|
12.0
|
%
|
|
|
|
|
||||
General and administrative expense
|
452
|
|
|
734
|
|
|
282
|
|
|
38.4%
|
|||
Other (income) expense, net
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
|
(100.0)%
|
|||
Operating income
|
1,289
|
|
|
1,906
|
|
|
(617
|
)
|
|
(32.4)%
|
|
Three Months Ended
March 31, |
|
Favorable (Unfavorable) Change
|
||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
Percent
|
||||||
Revenue (eliminations)
|
$
|
(1,215
|
)
|
|
$
|
(488
|
)
|
|
$
|
(727
|
)
|
|
nm
|
Gross loss
|
(136
|
)
|
|
(385
|
)
|
|
249
|
|
|
64.7%
|
|||
Gross loss percentage
|
n/a
|
|
|
n/a
|
|
|
|
|
|
||||
General and administrative expense
|
1,991
|
|
|
2,138
|
|
|
147
|
|
|
6.9%
|
|||
Other (income) expense, net
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
(100.0)%
|
|||
Operating loss
|
(2,127
|
)
|
|
(2,511
|
)
|
|
384
|
|
|
15.3%
|
Available Liquidity
|
|
Total
|
||
Cash and cash equivalents
(1)
|
|
$
|
49,898
|
|
Short-term investments
(2)
|
|
20,341
|
|
|
Total cash, cash equivalents and short-term investments
|
|
70,239
|
|
|
Credit Agreement total capacity
|
|
40,000
|
|
|
Outstanding letters of credit
|
|
(2,917
|
)
|
|
Credit Agreement available capacity
|
|
37,083
|
|
|
Total available liquidity
|
|
$
|
107,322
|
|
|
|
March 31,
|
|
December 31,
|
|
|
||||||
|
|
2019
|
|
2018
|
|
Change
(3)
|
||||||
Contract assets
|
|
$
|
38,707
|
|
|
$
|
29,982
|
|
|
$
|
(8,725
|
)
|
Contract liabilities
(1)
|
|
(9,234
|
)
|
|
(16,845
|
)
|
|
(7,611
|
)
|
|||
Contracts in progress, net
(2)
|
|
29,473
|
|
|
13,137
|
|
|
(16,336
|
)
|
|||
Contracts receivable and retainage, net
|
|
21,658
|
|
|
22,505
|
|
|
847
|
|
|||
Inventory, prepaid expenses and other assets
|
|
8,126
|
|
|
9,356
|
|
|
1,230
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
|
(46,116
|
)
|
|
(39,256
|
)
|
|
6,860
|
|
|||
Total
|
|
$
|
13,141
|
|
|
$
|
5,742
|
|
|
$
|
(7,399
|
)
|
(1)
|
Contract liabilities at
March 31, 2019
and
December 31, 2018
, include accrued contract losses of $1.5 million and $2.4 million, respectively.
|
(2)
|
Represents our cash position relative to revenue recognized on projects, with contract assets representing unbilled amounts that reflect future cash inflows on projects, and contract liabilities representing (i) advance payments that reflect future cash expenditures and non-cash earnings on projects and (ii) accrued contract losses that represent future cash expenditures on projects.
|
•
|
Net gains from asset sales of
$0.3 million
, bad debt expense of
$53,000
, depreciation and amortization of
$2.6 million
, asset impairments of
$0.3 million
, and stock compensation expense
$0.6 million
;
|
•
|
Increase in contract assets of
$8.7 million
, primarily due to an increase in unbilled positions on two projects in our Shipyard Division;
|
•
|
Decrease in contract liabilities of
$7.6 million
, primarily due to the partial unwind of advance payments on two separate projects in our Shipyard and Fabrication Divisions;
|
•
|
Decrease in contracts receivable and retainage of
$0.8 million
, primarily due to the timing of billings and collections on our projects;
|
•
|
Decrease in prepaid expenses, inventory and other assets of
$1.1 million
, primarily due to inventory and prepaid expenses;
|
•
|
Increase in accounts payable, accrued expenses and other current liabilities of
$6.0 million
, primarily due to increased project activity and the timing of payments for projects in our Shipyard Division; and
|
•
|
Change in noncurrent assets and liabilities, net of
$0.2 million
.
|
•
|
Ratio of current assets to current liabilities at March 31, 2019 of not less than
1.25
:1.00 (2.00:1.00 subsequent to the amendment);
|
•
|
Minimum tangible net worth at March 31, 2019 of at least the sum of
$180.0 million
($170.0 million subsequent to the amendment), plus 100% of the net proceeds from any issuance of stock or other equity after deducting any fees, commissions, expenses and other costs incurred in such offering; and
|
•
|
Ratio of funded debt to tangible net worth at March 31, 2019 of not more than
0.50
:1.00 (no change subsequent to the amendment).
|
•
|
The underutilization of our facilities within our Fabrication Division, and to a lesser extent within our Shipyard Division, until we secure and/or begin to execute sufficient backlog to fully recover our overhead costs;
|
•
|
Capital expenditures (including potential enhancements to our Shipyard Division facilities);
|
•
|
Accrued contract losses recorded at
March 31, 2019
;
|
•
|
Working capital requirements for our projects (including the potential additional projects for the U.S. Navy if the aforementioned options are exercised); and
|
•
|
Corporate administrative expenses and strategic initiatives.
|
GULF ISLAND FABRICATION, INC.
|
|
|
|
BY:
|
/s/ Westley S. Stockton
|
|
Westley S. Stockton
|
|
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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