Gulf Island Fabrication, Inc. ("Gulf Island" or the "Company")
(NASDAQ: GIFI) today reported a net loss of $4.7 million ($0.31 per
share) on revenue of $60.2 million for the fourth quarter 2018,
compared to a net loss of $24.3 million ($1.63 per share) on
revenue of $37.3 million for the fourth quarter 2017. For the
full year 2018, the Company reported a net loss of $20.4 million
($1.36 per share) on revenue of $221.2 million, compared to a net
loss of $44.8 million ($3.02 per share) on revenue of $171.0
million for the full year 2017. The Company's cash and short-term
investments totaled $79.2 million at December 31, 2018, compared to
$54.5 million at September 30, 2018 and $9.0 million at December
31, 2017. Backlog at December 31, 2018 totaled $356.5
million, compared to $222.6 million at December 31, 2017.
"Results for the fourth quarter 2018 reflect the
completion of the previously announced sale of our Texas North Yard
and associated equipment, the recovery of a bad debt that was
reserved during the third quarter 2018, increased backlog in our
Fabrication Division and continued improvement in the utilization
of all our facilities," said Kirk Meche, Gulf Island's President
and Chief Executive Officer. "I am pleased with our recent
successes to further strengthen our liquidity, including generating
positive operating cash flows of $6.0 million over the last six
months. Our balance sheet and liquidity provides us with a
strong foundation for future growth. Unfortunately, the
quarter was impacted by the partial under utilization of our
facilities; however, we expect continuing improvement in
utilization as our backlog ramps up in the coming quarters. In
addition, we experienced forecast cost increases on our ten harbor
tug projects of $5.8 million related to challenges encountered in
the installation and testing of the piping systems on the projects.
We delivered the first vessel in the fourth quarter 2018 and
anticipate delivery of the second vessel in the first quarter 2019.
Our forecasts for the remaining eight vessels reflect revised
estimates based on actual results experienced on the first two
vessels.”
Backlog (1)
The Company's backlog at December 31, 2018 of
$356.5 million includes deliveries through 2021 and represents a
60% increase from December 31, 2017 backlog. Backlog by operating
segment at December 31, 2018 was $281.5 million for Shipyard, $63.5
million for Fabrication, $11.0 million for Services and $0.4
million for EPC. Backlog excludes approximately $14.0 million
for a new project award within our Fabrication Segment that was
received subsequent to December 31, 2018. Backlog also
excludes customer options on contracts of approximately $534.0
million within our Shipyard Segment, which include deliveries
through 2025 should all options be exercised._____________
(1) Backlog includes future performance
obligations at December 31, 2018 of $334.6 million, as defined
by generally accepted accounting principles in the United States
("GAAP"), plus $21.9 million of backlog subject to a contract
termination dispute with a customer to build two multi-purpose
service vessels, that does not meet the criteria to be reported as
future performance obligations under GAAP. Pending resolution of
the dispute, the Company has ceased all work and the partially
completed vessels and associated equipment and materials remain at
its shipyard in Houma, Louisiana.
Cash and Liquidity
The Company's cash and short term investments at
December 31, 2018 of $79.2 million represents an increase of $70.2
million from December 31, 2017. The Company ended the year
with no debt and total working capital of $103.8 million, which
includes $18.9 million of assets that are held for sale. At
December 31, 2018, the Company's total available liquidity was as
follows (in thousands):
|
|
|
Available Liquidity |
|
Total |
Cash and cash
equivalents |
|
$ |
70,457 |
|
Short-term
investments |
|
8,720 |
|
Total cash, cash
equivalents and short-term investments |
|
79,177 |
|
Credit Agreement total
capacity |
|
40,000 |
|
Less: Outstanding
letters of credit |
|
(2,917 |
) |
Credit Agreement
available capacity |
|
37,083 |
|
Total available
liquidity |
|
$ |
116,260 |
|
|
|
|
|
|
Results of Operations (1) (in
thousands, except per share data)
|
Three Months EndedDecember
31, |
|
Three Months EndedSeptember
30, |
|
Twelve Months EndedDecember
31, |
|
2018 (2) (3) |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Revenue |
$ |
60,231 |
|
|
$ |
37,277 |
|
|
$ |
49,712 |
|
|
$ |
221,247 |
|
|
$ |
171,022 |
|
Cost of revenue |
64,195 |
|
|
63,191 |
|
|
52,924 |
|
|
228,443 |
|
|
213,947 |
|
Gross
loss |
(3,964 |
) |
|
(25,914 |
) |
|
(3,212 |
) |
|
(7,196 |
) |
|
(42,925 |
) |
General and administrative
expense |
1,543 |
|
|
4,860 |
|
|
7,672 |
|
|
19,015 |
|
|
17,800 |
|
Asset impairments and
(gain) loss on assets held for sale, net |
(1,168 |
) |
|
7,283 |
|
|
103 |
|
|
(6,850 |
) |
|
7,931 |
|
Other (income) expense,
net |
215 |
|
|
(6 |
) |
|
(243 |
) |
|
304 |
|
|
(46 |
) |
Operating
loss |
(4,554 |
) |
|
(38,051 |
) |
|
(10,744 |
) |
|
(19,665 |
) |
|
(68,610 |
) |
Interest income (expense),
net |
24 |
|
|
(99 |
) |
|
72 |
|
|
(142 |
) |
|
(349 |
) |
Loss before
income taxes |
(4,530 |
) |
|
(38,150 |
) |
|
(10,672 |
) |
|
(19,807 |
) |
|
(68,959 |
) |
Income tax (expense)
benefit |
(152 |
) |
|
13,871 |
|
|
(277 |
) |
|
(571 |
) |
|
24,193 |
|
Net
loss |
$ |
(4,682 |
) |
|
$ |
(24,279 |
) |
|
$ |
(10,949 |
) |
|
$ |
(20,378 |
) |
|
$ |
(44,766 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per share common share |
$ |
(0.31 |
) |
|
$ |
(1.63 |
) |
|
$ |
(0.73 |
) |
|
$ |
(1.36 |
) |
|
$ |
(3.02 |
) |
Cash
dividends per common share |
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.04 |
|
_____________
(1) See also "Results of Operations by Operating
Segment" below for operating results by division.(2) Fourth quarter
2018 includes charges of $5.8 million for our harbor tug
projects.(3) Fourth quarter 2018 reflects a $2.8 million benefit
from the recovery of a bad debt that was reserved in the third
quarter 2018.
Condensed Cash Flow Information
(in thousands)
|
Three Months EndedDecember
31, |
|
Three Months EndedSeptember
30, |
|
Twelve Months EndedDecember
31, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net cash (used in)
provided by operating activities |
$ |
(1,726 |
) |
|
$ |
(9,826 |
) |
|
$ |
7,761 |
|
|
$ |
(20,392 |
) |
|
$ |
(39,385 |
) |
Net cash provided by
(used in) investing activities |
$ |
27,176 |
|
|
$ |
1,260 |
|
|
$ |
5,296 |
|
|
$ |
82,718 |
|
|
$ |
(1,135 |
) |
Net cash used in
financing activities |
$ |
(13 |
) |
|
$ |
(243 |
) |
|
$ |
(41 |
) |
|
$ |
(852 |
) |
|
$ |
(1,664 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheet
Information (in thousands)
|
December 31, |
|
2018 |
|
2017 |
Cash and cash
equivalents |
$ |
70,457 |
|
|
$ |
8,983 |
|
Short-term
investments |
8,720 |
|
|
— |
|
Total current assets |
159,955 |
|
|
179,164 |
|
Property, plant and
equipment, net |
79,930 |
|
|
88,899 |
|
Total assets |
258,290 |
|
|
270,840 |
|
Total current
liabilities |
56,101 |
|
|
48,665 |
|
Total shareholders’
equity |
201,100 |
|
|
219,493 |
|
|
|
|
|
|
|
Quarterly Conference Call
Gulf Island will hold a conference call on
Friday, March 1, 2019 at 9:00 a.m. Central Time (10:00 a.m. Eastern
Time) to discuss the Company’s financial results. The call will be
available by webcast and can be accessed on Gulf Island’s website
at http://www.gulfisland.com. Participants may also join the
conference call by calling 1.888.254.3590 and requesting the “Gulf
Island” conference call. A replay of the webcast will be
available on the Company’s website for seven days after the
call.
About Gulf Island
Gulf Island is a leading fabricator of complex
steel structures, modules and marine vessels used in energy
extraction and production, petrochemical and industrial facilities,
power generation, alternative energy and shipping and marine
transportation operations. The Company also provides project
management for EPC projects along with installation, hookup,
commissioning and repair and maintenance services. In addition, the
Company performs civil, drainage and other work for state and local
governments. The Company operates and manages its business through
four operating divisions: Fabrication, Shipyard, Services and EPC,
with its corporate headquarters located in Houston, Texas and
fabrication facilities located in Houma, Jennings and Lake Charles,
Louisiana.
Company
Information |
|
|
|
Kirk J. Meche |
Westley S.
Stockton |
Chief Executive
Officer |
Chief Financial
Officer |
713.714.6100 |
713.714.6100 |
CAUTIONARY STATEMENT
This Release contains forward-looking statements
in which we discuss our potential future performance.
Forward-looking statements, within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, are all statements other than statements of historical facts,
such as projections or expectations relating to oil and gas prices,
operating cash flows, capital expenditures, liquidity and tax
rates. The words “anticipates,” “may,” “can,” “plans,” “believes,”
“estimates,” “expects,” “projects,” “targets,” “intends,” “likely,”
“will,” “should,” “to be,” “potential” and any similar expressions
are intended to identify those assertions as forward-looking
statements.
We caution readers that forward-looking
statements are not guarantees of future performance and actual
results may differ materially from those anticipated, projected or
assumed in the forward-looking statements. Important factors that
can cause our actual results to differ materially from those
anticipated in the forward-looking statements include the cyclical
nature of the oil and gas industry, competition, consolidation of
our customers, timing and award of new contracts, reliance on
significant customers, financial ability and credit worthiness of
our customers, nature of our contract terms, competitive pricing
and cost overruns on our projects, adjustments to previously
reported profits or losses under the percentage-of-completion
method, weather conditions, changes in backlog estimates,
suspension or termination of projects, ability to raise additional
capital, ability to amend or obtain new debt financing or credit
facilities on favorable terms, ability to remain in compliance with
our covenants contained in our Credit Agreement, ability to
generate sufficient cash flow, ability to sell certain assets,
customer or subcontractor disputes, ability to resolve the dispute
with a customer relating to the purported termination of contracts
to build two MPSVs, operating dangers and limits on insurance
coverage, barriers to entry into new lines of business, ability to
employ skilled workers, loss of key personnel, performance of
subcontractors and dependence on suppliers, changes in trade
policies of the U.S. and other countries, compliance with
regulatory and environmental laws, lack of navigability of canals
and rivers, shutdowns of the U.S. government, systems and
information technology interruption or failure and data security
breaches, performance of partners in our joint ventures and other
strategic alliances, progress of the SeaOne Project, and other
factors described in Item 1A in our Annual Report on Form 10-K
for the Year Ended December 31, 2017, as updated by subsequent
filings with the U.S. Securities and Exchange Commission.
Investors are cautioned that many of the
assumptions upon which our forward-looking statements are based are
likely to change after the forward-looking statements are made,
which we cannot control. Further, we may make changes to our
business plans that could affect our results. We caution investors
that we do not intend to update forward-looking statements more
frequently than quarterly notwithstanding any changes in our
assumptions, changes in business plans, actual experience or other
changes, and we undertake no obligation to update any
forward-looking statements.
Results of Operations by Operating Segment (in
thousands, except percentages)
Fabrication
Division |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
$ |
9,772 |
|
|
$ |
15,363 |
|
|
$ |
37,943 |
|
|
$ |
57,880 |
|
Gross loss |
(1,876 |
) |
|
(2,157 |
) |
|
(7,794 |
) |
|
(1,941 |
) |
Gross
loss percentage |
(19.2 |
)% |
|
(14.0 |
)% |
|
(20.5 |
)% |
|
(3.4 |
)% |
General and
administrative expense (income) |
(2,117 |
) |
|
984 |
|
|
3,134 |
|
|
3,416 |
|
Asset impairments and
(gain) loss on assets held for sale, net |
(2,214 |
) |
|
6,683 |
|
|
(7,896 |
) |
|
6,683 |
|
Other (income) expense
net |
207 |
|
|
(8 |
) |
|
(82 |
) |
|
(30 |
) |
Operating (loss)
income |
2,248 |
|
|
(9,816 |
) |
|
(2,950 |
) |
|
(12,010 |
) |
Shipyard
Division |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
$ |
29,748 |
|
|
$ |
900 |
|
|
$ |
96,424 |
|
|
$ |
52,699 |
|
Gross loss |
(4,909 |
) |
|
(25,809 |
) |
|
(10,472 |
) |
|
(44,870 |
) |
Gross
loss percentage |
(16.5 |
)% |
|
(2,867.7 |
)% |
|
(10.9 |
)% |
|
(85.1 |
)% |
General and
administrative expense |
712 |
|
|
1,091 |
|
|
2,801 |
|
|
3,926 |
|
Asset impairments and
(gain) loss on assets held for sale, net |
964 |
|
|
600 |
|
|
964 |
|
|
1,248 |
|
Other (income) expense
net |
— |
|
|
— |
|
|
159 |
|
|
— |
|
Operating loss |
(6,585 |
) |
|
(27,500 |
) |
|
(14,396 |
) |
|
(50,044 |
) |
Services
Division |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
$ |
21,538 |
|
|
$ |
21,687 |
|
|
$ |
88,230 |
|
|
$ |
65,445 |
|
Gross profit |
3,056 |
|
|
2,240 |
|
|
12,447 |
|
|
4,575 |
|
Gross
profit percentage |
14.2 |
% |
|
10.3 |
% |
|
14.1 |
% |
|
7.0 |
% |
General and
administrative expense |
821 |
|
|
693 |
|
|
3,022 |
|
|
2,701 |
|
Asset impairments and
(gain) loss on assets held for sale, net |
82 |
|
|
— |
|
|
82 |
|
|
— |
|
Other (income) expense
net |
8 |
|
|
— |
|
|
(28 |
) |
|
— |
|
Operating income |
2,145 |
|
|
1,547 |
|
|
9,371 |
|
|
1,874 |
|
EPC
Division |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
$ |
451 |
|
|
$ |
198 |
|
|
$ |
2,477 |
|
|
$ |
198 |
|
Gross profit |
(76 |
) |
|
41 |
|
|
(46 |
) |
|
41 |
|
Gross
profit percentage |
(16.9 |
)% |
|
n/a |
|
|
(1.9 |
)% |
|
20.7 |
% |
General and
administrative expense |
412 |
|
|
— |
|
|
1,817 |
|
|
— |
|
Operating income
(loss) |
(488 |
) |
|
41 |
|
|
(1,863 |
) |
|
41 |
|
Corporate |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue
(eliminations) |
$ |
(1,278 |
) |
|
$ |
(871 |
) |
|
$ |
(3,827 |
) |
|
$ |
(5,200 |
) |
Gross loss |
(159 |
) |
|
(229 |
) |
|
(1,331 |
) |
|
(730 |
) |
Gross
loss percentage |
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
General and
administrative expense |
1,715 |
|
|
2,092 |
|
|
8,241 |
|
|
7,757 |
|
Other (income) expense
net |
— |
|
|
2 |
|
|
255 |
|
|
(16 |
) |
Operating loss |
(1,874 |
) |
|
(2,323 |
) |
|
(9,827 |
) |
|
(8,471 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gulf Island Fabrication (NASDAQ:GIFI)
Historical Stock Chart
From Aug 2024 to Sep 2024
Gulf Island Fabrication (NASDAQ:GIFI)
Historical Stock Chart
From Sep 2023 to Sep 2024