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Edited Transcript of GIFI earnings conference call or presentation 7-May-19 2:00pm GMT

Q1 2019 Gulf Island Fabrication Inc Earnings Call

HOUMA May 16, 2019 (Thomson StreetEvents) -- Edited Transcript of Gulf Island Fabrication Inc earnings conference call or presentation Tuesday, May 7, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Cindi Cook

Gulf Island Fabrication, Inc. - Executive Assistant to CEO

* Kirk J. Meche

Gulf Island Fabrication, Inc. - President, CEO, COO & Director

* Westley S. Stockton

Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary

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Conference Call Participants

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* James Philip Geygan

Global Value Investment Corp - VP Advisory

* John Eric Deysher

Bertolet Capital LLC - President, Chief Compliance Officer and Portfolio Manager

* Martin Whittier Malloy

Johnson Rice & Company, L.L.C., Research Division - Director of Research

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Presentation

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Operator [1]

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Good morning and welcome, ladies and gentlemen, to the Gulf Island Fabrication, Inc. First Quarter 2019 Earnings Conference Call. (Operator Instructions) This call is being recorded.

At this time, I would like to turn the conference over to Ms. Cindi Cook for opening remarks and introductions. Cindi, please go ahead.

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Cindi Cook, Gulf Island Fabrication, Inc. - Executive Assistant to CEO [2]

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Thank you, Shelby, and good morning. I would like to welcome everyone to Gulf Island's First Quarter 2019 Teleconference. Our results were released yesterday afternoon, and a copy of the press release is available on our website at gulfisland.com. A replay of today's call will be available on our website later today.

Please keep in mind that the press release and certain comments on this call include forward-looking statements, and actual results may differ materially. We would like to refer everyone to the cautionary language included in our press release and to the risk factors described in our 2018 Form 10-K and subsequent SEC filings.

Today, we have Mr. Kirk Meche, President, CEO and Director; and Mr. Wes Stockton, Executive Vice President and Chief Financial Officer. Mr. Meche?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [3]

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Thank you, Cindi, and good morning to all of our listeners. Results for the quarter reflect revenue growth on a sequential and year-over-year basis along with solid project execution across our divisions. However, underutilization within our facilities impacted our results for the quarter. Specifically, while our Fabrication Division showed improvement as we expected, our Shipyard and Services Divisions experienced an increase in the under recovery of our overhead costs due to the timing of awarded contracts in our Service Division and a slower-than-anticipated ramp-up of construction activities for our Shipyard Division. We expect future quarters to show improvement as newly awarded contracts in our Service Division were executed and our shipyard activities for our backlog increased.

As it relates to our shipyard activities, our backlog growth has continued with the April award of a third vessel for Oregon State, along with a second and third vessel for the Navy T-ATS program. These 3 projects have posted $200 million to our quarter end backlog for our Shipyard Division and demonstrates the continued confidence our customers have with our ability to build and deliver quality vessels.

Prior to turning the call over to Wes, I would like to bring your attention -- to your attention a change to our reportable segments during the quarter. As a result of uncertainty with respect to timing for the SeaOne Project and in order to take advantage of our resources and place an increased focus on modular fabrication in the petrochemical and industrial sector, along with offshore wind opportunities, during the first quarter, we operationally combined our EPC Division with our Fabrication Division.

We believe this operational combination will better ensue what we have the right -- to make sure that we have the right bidding and project focus on our opportunities while still enabling us to pursue opportunities to provide project management services for EPC projects.

Now with that, I will turn the call over to Wes who will provide additional details of our results and segment breakdowns. Wes?

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [4]

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Thanks, Kirk, and good morning, everyone. I would now like to provide some additional details on our results for the quarter.

Consolidated revenue for the first quarter 2019 was $67.6 million with a net loss of $3 million or diluted loss per share of $0.20. This compares to revenue for the first quarter 2018 of $57.3 million and a net loss of $5.3 million or diluted loss per share of $0.35. This also compares to revenue for the fourth quarter of 2018 of $60.2 million or diluted loss per share of $0.31.

Our increase in revenue for the quarter relative to the first quarter 2018 reflects an increase in activity for our Shipyard Division, offset partially by a decrease in activity for our Fabrication Division. Our increase in revenue for the quarter relative to the fourth quarter 2018 reflects an increase in activity for both our Shipyard and Fabrication Divisions.

With respect to operating results for the quarter, the loss for the 2019 period was due to the partial under recovery of our overhead costs across our divisions. The decrease in operating loss relative to the first quarter 2018 was due to higher revenue, an overall higher-margin project mix, lower general and administrative expense associated with lower incentive plan cost, and the prior period including impairment charges associated with certain assets held for sale. These improvements were offset partially by reduced recoveries of our overhead costs for our Fabrication and Services Divisions.

The decrease in operating loss relative to the fourth quarter 2018 was due to higher revenue, lower general and administrative expense associated with lower legal and professional fees, and the prior period including the impact of changes in estimates on our harbor tug projects. These improvements were partially offset by the current period experiencing reduced recoveries of our overhead costs and the prior period including the benefit of a bad debt reversal and a net gain on the sale of our Texas North Yard.

Now prior to providing additional details for the quarter by segment, I would like to note that as a result of the operational combination of our former EPC Division with our Fabrication Division during the first quarter, our current reportable segments are Shipyard, Fabrication, Services and Corporate. Further, the operating results for our EPC Division for the first and fourth quarters of 2018 have been combined with our Fabrication Division to conform to the presentation of our reportable segments for the 2019 period.

So with that understanding, let me provide some additional details of our results by segment. For our Shipyard Division, revenue was $36.6 million for the quarter versus $18.6 million for the comparable period of 2018 and $29.7 million for the fourth quarter 2018. Operating loss for the quarter was $904,000 compared to an operating loss of $2 million for the same period of 2018 and $6.6 million for the fourth quarter 2018.

The increase in revenue relative to the year ago quarter was due to increased repair and maintenance activity and progress on our harbor tug projects, ice-breaker tug, 2 regional class research vessels and our towing, salvage and rescue ship for the U.S. Navy. These increases were offset partially by the prior period including revenue for an OSV project that was completed during 2018 and revenue for our 2 MPSV contracts that were suspended during the first quarter 2018. The increase in revenue relative to the fourth quarter 2018 was due to increased repair and maintenance activity and progress on our harbor tug projects, 2 regional class research vessels and our towing, salvage and rescue ship.

With respect to operating results for the quarter, the loss for the 2019 period was due to the partial under-recovery of our overhead costs. The decrease in operating loss relative to the first quarter 2018 is primarily due to higher revenue, increased recoveries of our overhead costs and lower general and administrative expense, offset partially by a lower-margin project mix due to revenue at no gross profit for the harbor tug projects, which are in a loss position. The decrease in operating loss relative to the fourth quarter 2018 was due to higher revenue and the prior period including changes in estimates on our harbor tug projects and an impairment charge associated with assets held for sale. These improvements were offset partially by reduced recoveries of our overhead costs.

For our Fabrication Division, revenue was $12.6 million for the quarter versus $17.3 million for the comparable period of 2018 and $10.2 million for the fourth quarter 2018. Operating loss for the quarter was $1.5 million compared to an operating loss of $2.5 million for the same period of 2018 and operating income of $1.8 million for the fourth quarter 2018. The decrease in revenue relative to the year ago quarter was due to the prior period including significant activity of our module fabrication project that was completed in the second quarter 2018, offset partially by progress on our paddle wheel river project, which was not under construction in the prior period. The increase in revenue relative to the fourth quarter 2018 was also due to the progress on the paddle wheel riverboat project.

With respect to operating results for the quarter, the operating loss for the 2019 period was due to the partial under recovery of our overhead costs. The increase in operating loss relative to the first quarter 2018 was primarily due to lower revenue and reduced recoveries of our overhead costs, offset partially by higher-margin project mix, lower general and administrative expense, and the prior period including impairment charges associated with assets held for sale. The operating loss for the first quarter of 2019 versus operating income for the fourth quarter 2018 was primarily due to the prior period including the benefit of a bad debt reversal and a net gain on the sale of our Texas North Yard, offset partially by higher revenue during the current period and higher-margin project mix and improved recoveries of our overhead costs.

For our Services Division, revenue was $19.6 million for the quarter versus $21.9 million for the comparable period of 2018 and $21.5 million for the fourth quarter 2018. Operating income for the quarter was $1.3 million or 6.6% of revenue compared to operating income of $1.9 million or 8.7% of revenue for the same period of 2018 and operating income of $2.1 million or 10% of revenue for the fourth quarter 2018. The decrease in revenue relative to both the year ago quarter and the fourth quarter of 2018 was primarily due to the timing of new awards.

With respect to operating results for the quarter, operating income for 2019 was negatively impacted by the partial under recovery of our overhead costs. The decrease in operating income relative to both the first quarter and fourth quarter 2018 was primarily due to lower revenue volume and reduced recoveries of our overhead costs, offset partially by higher-margin project mix and lower general and administrative expense.

For our Corporate Division, operating loss for the quarter was $2.1 million compared to an operating loss of $2.5 million for the same period of 2018 and $1.9 million for the fourth quarter 2018. The decrease in operating loss relative to the first quarter 2018 was primarily due to lower incentive plan cost, offset partially by a higher legal and advisory fee due to changes in the classification of certain legal costs between our corporate and operating segments and increased professional fees and other costs associated with the valuation of strategic alternatives and initiatives to diversify and enhance our business. The increase in operating loss relative to the fourth quarter 2018 was primarily due to changes in the classification of certain costs between our corporate and operating segments and costs associated with the evaluation of strategic alternatives and initiatives to diversify the business.

Now let me provide a few comments regarding our income taxes and backlog and liquidity as of year-end -- or quarter end. Our tax expense for all periods reflect only state income taxes as we have not recorded any federal income tax benefit for our losses due to GAAP limitations on recognizing deferred tax assets. As a reminder, although we have not recorded a tax benefit in our results, we will receive a cash tax benefit on future taxable income.

Moving on to backlog. At March 31, 2019, our backlog totaled approximately $335 million, representing an increase of $43 million from our backlog in March 2018 and a decrease of $22 million from year-end 2018. Our quarter end backlog by operating segment was $248 million for our Shipyard Division, $71 million for our Fabrication Division and $15 million for our Services Division. Our quarter end backlog represents an increase from year-end for both our Fabrication and Shipyard Divisions and excludes almost $200 million in new project awards for our Shipyard Division that were received in April 2019.

As mentioned by Kirk, these awards represent the exercise of customer options for a regional class research vessel for OSU and 2 towing, salvage and rescue ships for the U.S. Navy. Backlog also excludes remaining customer options on contracts for the U.S. Navy, which, if exercised, would increase our backlog by an additional $330 million.

With respect to our liquidity, we ended the quarter with cash and short-term investments of $70.2 million, an increase of $64 million from March 2018 and a decrease of $9 million from year-end 2018. The decrease from year-end was due to changes in working capital during the quarter primarily due to an increase in our net contract asset position on certain projects and backlog due to the timing of billing milestones on the projects. Although we anticipate ongoing quarterly variability in our project working capital requirements, including an increase in working capital during the second quarter, the net contract asset position for these projects will ultimately result in future cash inflows as the projects progress towards completion. Excluding the impacts of working capital changes, our operating cash flow for the quarter was approximately breakeven.

With respect to our overall liquidity, on May 1, we amended our $40 million credit facility to extend its maturity to June 2021. And at quarter end, we had $2.9 million of outstanding letters of credit and no borrowings on the facility, providing $37.1 million of availability for additional letters of credit or borrowings. As a result of the aforementioned, our liquidity remains strong with total cash, investments and availability under our credit facility of approximately $107 million at March 31, 2019.

Now as a reminder, this current liquidity excludes any potential proceeds from the sale of machinery and equipment totaling $18.6 million that remains held for sale at quarter end.

I'll now turn the call over to Kirk for final comments.

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [5]

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Thanks, Wes. With the addition of the OSU and Navy T-ATS options, we have one of the largest backlogs in our company's history. Further, our backlog at quarter end and these executed options after quarter end reflect our ongoing efforts to diversify outside of our traditional reliance on the oil and gas sector. Specifically, with these executed options included, approximately 90% of our backlog is outside of the oil and gas sector.

Having said this, we are continuing to see significant opportunities for onshore fabrication in the industrial sector as well as traditional oil and gas maintenance and repair. We are also beginning to see increased engineering activity associated with the Gulf of Mexico. While this may not yield traditional structures, it may provide for a tieback which lends itself to construction opportunities, which we had been a supplier of fabricated components in the past.

With respect to the utilization of our facilities, although our utilization was lower than expected for the first quarter, we do expect to see improvement on a sequential quarter basis going forward and increase revenue as construction activities for our backlog ramp up.

In closing, our strong liquidity, current backlog and significant market opportunities and bidding activity had me convinced that our current strategic plan has us moving in the right direction. While we remain confident on our strategic plan and the growth opportunities available to the company, we want to do everything possible to maximize returns for our shareholders.

Accordingly, yesterday, we announced that our Board of Directors has established a Special Committee to initiate a process to conduct a thorough evaluation of all options reasonably available to the company to enhance shareholder value. Our Board has not set a timetable for the conclusion of the Special Committee's review of alternative strategies, and we do not intend to publicly discuss or disclose further developments of the review unless and until our Board has approved a specific course of action or we have otherwise determined that further disclosure is appropriate.

Shelby, you may now open the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We'll take our first question from Martin Malloy with Johnson Rice.

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Martin Whittier Malloy, Johnson Rice & Company, L.L.C., Research Division - Director of Research [2]

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Good to see the additional options being exercised for the vessels. Could you maybe talk about where you are in terms of engineering for the vessels and the ramp-up in terms of construction at your Houma facility, I believe, is where you're doing those?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [3]

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Yes, sure, Marty. So you're right, and we were very excited to have the options executed by not only the Navy but also OSU. The Navy -- again, we were always continuing on with engineering through the protest process. So engineering will still continue on, but we were limited in terms of ordering specific equipment and whatnot. But I will tell you that the equipment for the first vessel is ordered. We expect to start construction on the Navy on the third quarter of this year, and I'd say the follow-on 2 vessels will probably be sometime in the second or maybe third quarter of next year as we get ramped up on these projects.

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Martin Whittier Malloy, Johnson Rice & Company, L.L.C., Research Division - Director of Research [4]

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And on the Oregon State University projects?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [5]

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Yes. So Oregon State, again, it's repeat vessels 1 through 3. We were just about finished the engineering aspect from a piping standpoint on the first vessel. Construction on that one should really commence during this quarter. And I'd say that the second and third vessels -- the second vessel, I'd say third quarter 2019 would be the start time frame for that. And for the third vessel, probably somewhere surrounding end of the first quarter of 2020.

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Martin Whittier Malloy, Johnson Rice & Company, L.L.C., Research Division - Director of Research [6]

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Okay. Any new developments on the wind side to share with us in terms of some of those projects moving forward?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [7]

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Well, there is one project that did go out for bid. We did tender to it. No results have been issued at this point in time. But quite frankly, it was one of the projects we suspect that, that would have a heavy concentration of European content in it. The second project, which is what we're really chasing heavily, we're still scheduled to receive bids within the next quarter or 2. Again, we've announced our strategic alignment with a European supplier. And so I'd say that one is going fairly well. But again, we've always said the wind would be a little bit out towards the latter part of this year into the first quarter of next year, and we don't see much movement in that respect. But the good news is there's still a lot of interest in it. And again, we're having conversation with the owners in terms of constructability and whatnot. So it's still moving positive for us.

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Operator [8]

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We'll take our next question from John Deysher with Pinnacle.

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John Eric Deysher, Bertolet Capital LLC - President, Chief Compliance Officer and Portfolio Manager [9]

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I was just curious if there's been any movement on the SeaOne funding. I know EPC Division is kind of geared towards that, and I was curious of where we are with the SeaOne Project.

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [10]

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Sure, John. That's a good question. This is Kirk. So where we are with that is you're right, we don't see much movement in terms of them obtaining the financing needed for the project moving forward, as they had indicated to us. We were hoping to have some type of indication at the end of the first quarter. We've had several meetings with their executives, and they're still not in the position as of yet to secure that financing. And so as we mentioned on the call, I want to make sure that we had our interest and our best talent on opportunities that we thought were going to happen the quickest.

And again, so SeaOne's still out there. We're still supporting them in some respect. But I will tell you, our efforts right now are being concentrated in the petrochemical side of the business as we have a tremendous amount of bids that we have received over the last couple of quarters and continue to receive. And hopefully that we will be shortlisted on some of these projects and move these projects forward. So as kind of an update on the SeaOne, again, we're still involved with it but maybe not quite to the level that we've had in the past. Again, we're still kind of waiting for those guys to see if they can obtain their financing. And they had some design changes they had to go through as well. So we're kind of in a holding pattern with those guys.

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John Eric Deysher, Bertolet Capital LLC - President, Chief Compliance Officer and Portfolio Manager [11]

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Understood. And just for clarification. The EPC Division is combined with the Fabrication Division going forward in 2019, and you'll adjust the prior period results to reflect that as well so it's apples to apples?

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [12]

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That's right. They actually have been adjusted. So you'll see that in our press release and in our 10-Q. Those, for lack of a better term, those amounts had been pro forma to reflect the combination of both fab and EPC.

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John Eric Deysher, Bertolet Capital LLC - President, Chief Compliance Officer and Portfolio Manager [13]

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Okay. Good. And where are we with the 2 disputed vessels? Is there any movement there? I think there's been mention that 2 vessels are going to be delivered in Q2, Q3 of 2020. What's the status of those right now? And are they still in your yard under your supervision?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [14]

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Yes. John, they're still in our facilities under our care and custody. And no, there hasn't been no movement in that respect.

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John Eric Deysher, Bertolet Capital LLC - President, Chief Compliance Officer and Portfolio Manager [15]

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Okay. Is there any amounts related to those vessels embedded in the accounts receivable or the backlog at this point? And if so, how much?

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [16]

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We have, in our long-term assets, other assets, $12.5 million related to those projects, and that's consistent with what we had at year-end and it hasn't moved for some time.

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John Eric Deysher, Bertolet Capital LLC - President, Chief Compliance Officer and Portfolio Manager [17]

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And what about the backlog?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [18]

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And as it relates...

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [19]

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And as it relates to backlog, 22 -- $21 million backlog as well.

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Operator [20]

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(Operator Instructions) We'll take our next question from JP Geygan with Global Value Investment Corp.

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James Philip Geygan, Global Value Investment Corp - VP Advisory [21]

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Your backlog has really grown nicely, but you cited underutilization of your facilities for several quarters. At what level of activity will facility utilization be high enough to achieve consistent profitability? And is that level currently represented in your backlog? Or is there a need to further rationalize your footprint or expense structure?

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [22]

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Yes. This is Wes. I'll comment to that. We don't get there -- we don't get the full utilization based on our backlog solely currently. Now we will continue to see improvement. And by the end of the year, we get very close to a full utilization. But it is dependent, to some degree, on the success we have with respect to some of the fab work we're chasing and specifically some of the smaller, quicker book-and-burn projects that we're chasing. I hate to get too specific on exact amounts, but it does improve. And as we move into 2020, then that's when we feel like we'd be at full utilization of our facilities.

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James Philip Geygan, Global Value Investment Corp - VP Advisory [23]

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Is there enough gross margin built in to your projects to really take up overhead and leave enough to cover SG&A? Or should we expect a net level for profitability to not be achieved until late 2019 or early 2020?

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [24]

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Late '19 -- at this point, we're targeting a breakeven-type EBIT by the end of the year. We said that on the last call. We still think that's achievable. Again, that won't come entirely from our backlog. Some of that specifically -- our shipyard backlog is kind of where it needs to be. But on the fab side, it will be dependent, to some degree, on the timing of awards on the fab side in order to get to that level. As you saw for the quarter, from an EBITDA perspective, we're not quite at breakeven either, slightly less than $1 million, I think $800,000 to be more specific. But we do expect in the next several quarters that we'll get to EBITDA positive. And then again, as we get to the end of the year, we'll get to EBIT breakeven.

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James Philip Geygan, Global Value Investment Corp - VP Advisory [25]

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Okay. Your business has definitively shifted away from fabricating offshore structures towards much more of a shipyard business. What challenges and opportunities does this present, especially as you contemplate strategic alternatives?

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [26]

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Well, JP, I think when you think about this, you're right. Shipyard -- traditional margin on shipyard-type work are lower than what we have been experiencing in the fabrication sector in previous years. Our service group continues to perform very well for us with higher margins. Again, as Wes said, there is quite a few projects that we have bid on. The timing of those awards within our Fabrication Division certainly will impact the margins that we see within the projects. Pending no new awards in that respect, we will put some of the shipyard work into the Fabrication Division. But as I said in my call, we are starting to see a little bit of increased activity with the engineering sectors around here. Especially here in Houston, we've seen the ramp-up of these engineering companies, and that usually signals good news for us. We typically are about 6 to 12 months behind the ramp-up of these engineering companies in terms of fabrication opportunities.

Again, I don't want to get too optimistic about that, but the good news is they are hiring a lot of engineers around here. Again, some may be associated with tiebacks and whatnot. And there may be some other opportunities for us as we -- as that market continues to build. But the good news is there is some pretty strong indications in terms of increased activity not only with petrochemical, which would yield a little bit higher margins than traditional shipyard work, but especially we talk about oil and gas-type opportunities, especially with our Services Division.

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James Philip Geygan, Global Value Investment Corp - VP Advisory [27]

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Okay. And finally, I realize that you won't discuss the results of your strategic review or how that's progressing, but I'm hoping you can provide some color on the set of circumstances that led the Board to consider forming a Special Committee for -- to review strategic alternatives.

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [28]

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No, I don't think there's anything that we would point to in terms of events that led to that decision. We will always have a goal to ensure that we're doing everything we can to maximize or enhance shareholder return. I think this is part of the natural course of where we are today, and it makes sense to make sure we're doing everything we can to maximize and enhance your return.

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [29]

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Yes. And we want the biggest footprint we can get, obviously, JP. Hiring the firm to assist us in terms of seeing what's in the marketplace, I think, for the shareholders and as well as management is good for us. Again, we're going to reach out to certain markets that we may or may not have reached out in the past. So again, I'm looking forward to see what this will yield for all of us.

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James Philip Geygan, Global Value Investment Corp - VP Advisory [30]

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And then maybe I can follow that up with a question that might be somewhat presumptive. But from where you sit, have you seen any change in M&A activity, either as an acquirer or interest in Gulf Island to be acquired by other parties?

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Westley S. Stockton, Gulf Island Fabrication, Inc. - Executive VP, CFO, Treasurer & Secretary [31]

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I don't know if that's something we can comment on.

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [32]

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Yes. I don't know that we can quite comment on that.

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Operator [33]

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This concludes today's questions-and-answers session. At this time, I would like to turn the conference back over to management for any additional comments.

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Kirk J. Meche, Gulf Island Fabrication, Inc. - President, CEO, COO & Director [34]

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We thank everyone for joining us this morning and your interest in Gulf Island. And we'll speak to everyone at the end of our second quarter 2019. Thank you.

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Operator [35]

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This concludes today's Gulf Island Fabrication, Inc. conference call. You may now disconnect.