Gulf Island Completes Sale of Texas South Yard for $55 Million Cash
April 23 2018 - 8:36AM
Gulf Island Fabrication, Inc. (“Gulf Island” or the “Company”)
(NASDAQ:GIFI) announced today that on April 20, 2018, the
Company completed the sale of its South Yard in Ingleside,
Texas, to a subsidiary of Buckeye Partners for $55 million. The
Company continues to actively market its North Yard in Aransas
Pass, Texas, which is also held for sale along with related cranes
and other equipment.
Kirk J. Meche, President and C.E.O. of Gulf
Island, commented, “In early 2017, we announced our plan to
rationalize underutilized assets including the two fabrication
yards and related equipment in our South Texas facilities.
Completing the sale of the South Yard is an important milestone in
that process and will facilitate the Company’s continued strategic
repositioning from the offshore oil and gas market to more
diversified markets and customers. We look forward to following
Buckeye’s plans to repurpose the property in their midstream
business and hope to participate in any fabrication or
commissioning projects once they proceed with their new
construction plans.”
The Company will retain net cash proceeds of
$52.7 million from the sale after transaction costs. Although the
Company will recognize a gain from the sale, it does not anticipate
any material tax liability given recent net operating losses. The
Company plans to utilize the proceeds to rebuild its liquidity to
support pending projects, continue investing in its newly launched
EPC Division, and for other general corporate
purposes. Following the transaction, the Company expects to
have total liquidity of $84 million including cash and amounts
available on its revolving credit line.
About Gulf Island:Gulf Island
Fabrication, Inc., based in Houston, Texas, with fabrication
facilities located in Louisiana and Texas, is a leading fabricator
of complex steel structures and marine vessels used for oil and gas
production and transportation, petrochemical and industrial
facilities, power generation and alternative energy projects. Gulf
Island also provides related installation, hookup, commissioning,
repair and maintenance services with specialized crews and
integrated project management capabilities. For more information,
please visit our website at www.gulfisland.com.
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Company
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Investor
Relations: |
Kirk J. Meche |
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David S.
Schorlemer |
Chief Executive
Officer |
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Chief Financial
Officer |
713-714-6100 |
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713-714-6106 |
Cautionary Statement:
This press release contains forward-looking
statements. Forward-looking statements are all statements other
than statements of historical facts, such as projections or
expectations relating to such topics as 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, changes in backlog estimates,
suspension or termination of projects, timing and award of new
contracts, financial ability of our customers and consolidation of
our customers, competitive pricing and cost overruns, entry into
new lines of business, ability to raise additional capital, ability
to sell certain assets and monetize other non-recurring
contingencies, advancement of the SeaOne Project, ability to reach
an agreement with our customer relating to certain contracts to
build and complete two multi-purpose service vessels, operating and
financial restrictions contained in our credit agreement, credit
worthiness of our customers, ability to employ skilled workers,
operating dangers and limits on insurance coverage, weather
conditions, competition, customer disputes, adjustment to
previously reported profits under percentage-of-completion method,
loss of key personnel, compliance with regulatory and environmental
laws, ability to utilize navigation canals, performance of
subcontractors, systems and information technology interruption or
failure and data security breaches and other factors described in
more detail in “Risk Factors” in Item 1A of our annual report on
Form 10-K for the year ended December 31, 2017, as updated by our
subsequent filing 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.
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