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Gulf Island Fabrication Reports Fourth Quarter Earnings

HOUSTON--(BUSINESS WIRE)--

Gulf Island Fabrication, Inc. (GIFI) today reported a net loss of $3.6 million ($0.24 diluted loss per share) on revenue of $55.5 million for its fourth quarter ended December 31, 2016, compared to a net loss of $14.7 million ($1.01 diluted loss per share) on revenue of $55.0 million for the fourth quarter ended December 31, 2015. For the years ended December 31, 2016 and 2015, the Company reported net income of $3.5 million ($0.24 diluted earnings per share) on revenue of $286.3 million compared to a net loss of $25.4 million ($1.75 diluted loss per share) on revenue of $306.1 million, respectively.

The Company had a revenue backlog of $133.0 million and a labor backlog of approximately 1.3 million hours at December 31, 2016, including commitments received through February 22, 2017, compared to a revenue backlog of $181.2 million and a labor backlog of 1.6 million hours reported as of September 30, 2016. We expect to recognize revenue from our backlog of approximately $130.4 million and $2.6 million during the years 2017 and 2018, respectively.

         
December 31,
2016
December 31,
2015
(in thousands)
Cash and cash equivalents $ 51,167 $ 34,828
Total current assets 113,360 115,869
Property, plant and equipment, net 206,222 200,384
Total assets 322,408 316,923
Total current liabilities 35,348 37,901
Total debt
Total shareholders’ equity $ 263,032 $ 257,197
 

As of December 31, 2016, our balance sheet position remained stable with $51.2 million in cash, no debt, and working capital of $78.0 million. We will continue to monitor and maintain a conservative capital structure as we navigate through the current oil and gas downturn.

On February 23, 2017, our Board of Directors approved a recommendation of management to consolidate all of our fabrication operations in South Texas with our fabrication operations in Houma, Louisiana, and place our properties located in Aransas Pass and Ingleside, Texas, up for sale. These properties are currently underutilized and represent excess capacity within our fabrication division. We are working to wind down all fabrication activities at these locations and re-allocate remaining backlog and workforce to our Houma Fabrication Yard as necessary. We do not expect the sale of these properties to impact our ability to service our deepwater customers or operate our fabrication division.

The management of Gulf Island Fabrication, Inc. will hold a conference call on Friday, February 24, 2017, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss the Company’s financial results for the quarter and year ended December 31, 2016. The call is accessible by webcast (www.gulfisland.com) through CCBN and by dialing 1.888.264.8952. A digital rebroadcast of the call is available two hours after the call and ending March 3, 2017 by dialing 1.888.203.1112.

Gulf Island Fabrication, Inc. is a leading fabricator of complex steel structures and marine vessels used in energy extraction and production, petrochemical and industrial facilities, power generation and alternative energy projects and shipping and marine transportation operations. The Company also provides related installation, hookup, commissioning, repair and maintenance services with specialized crews and integrated project management capabilities. The Company is currently fabricating complex modules for the construction of a new petrochemical plant, completing newbuild construction of two technologically advanced offshore support and two multi-purpose service vessels and recently fabricated wind turbine pedestals for the first offshore wind power project in the United States. The Company also constructed one of the largest lift boats servicing the Gulf of Mexico ("GOM"), one of the deepest production jackets in the GOM and the first SPAR fabricated in the United States. The Company’s customers include U.S. and, to a lesser extent, international energy producers, petrochemical, industrial, power and marine operators. Our corporate headquarters is located in Houston, Texas, with fabrication facilities located in Houma, Jennings and Lake Charles, Louisiana, and Aransas Pass and Ingleside, Texas.

 
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 
      Three Months Ended     Twelve Months Ended

December 31,

   

December 31,

   

September 30,

December 31,

   

December 31,

2016

2015

2016 2016 2015
Revenue $ 55,461 $ 55,018 $ 65,384 $ 286,326 $ 306,120
Cost of revenue 55,633     72,590     60,125   261,473   321,276  
Gross (loss) profit (172 ) (17,572 ) 5,259 24,853 (15,156 )
General and administrative expenses

5,037

4,439 5,086 19,670 16,256
Asset impairment   602       7,202  
Operating (loss) income

(5,209

) (22,613 ) 173 5,183 (38,614 )
Other income (expense):
Interest expense (84 ) (39 ) (110 ) (332 ) (165 )
Interest income 4 5 12 24 26
Other income (expense) (358 )   599   681   20  
(438 ) (34 ) 501   373   (119 )
(Loss) income before income taxes

(5,647

) (22,647 ) 674 5,556 (38,733 )
Income taxes (2,092 ) (7,980 ) 133   2,041   (13,369 )
Net (loss) income $

(3,555

) $ (14,667 ) $ 541   $ 3,515   $ (25,364 )
Per share data:
Basic and diluted (loss) earnings per share - common shareholders $ (0.24 ) $ (1.01 ) $ 0.04   $ 0.24   $ (1.75 )
Cash dividend declared per common share $ 0.01   $ 0.10   $ 0.01   $ 0.04   $ 0.40  
 
             

Backlog (in thousands)

December 31, 2016 September 30, 2016 June 30, 2016

Segment

$'s     Labor hours $'s     Labor hours $'s     Labor hours
Fabrication $ 65,444 707 $ 84,940 841 $ 41,126 431
Shipyards 59,771 457 78,886 582 93,912 629
Services 7,757 101 17,386 163 22,540 209
Intersegment Eliminations       (41 )
Total Backlog $ 132,972 1,265 $ 181,212 1,586 $ 157,537   1,269
 
 

Results of Operations by Operating Segments (in thousands, except percentages)

 

Fabrication Division

     

Three Months Ended
December 31,

   

Twelve Months Ended
December 31,

2016     2015 2016     2015
Revenue $ 18,247 $ 14,145 $ 88,683 $ 151,576
Gross profit (loss) 643 (23,486 ) 5,061 (37,541 )
Gross profit percentage 3.5 % (166.0 )% 5.7 % (24.8 )%
General and administrative expenses 1,621 2,267 6,100 9,293
Asset impairment 602 7,202
Operating loss (978 ) (26,355 ) (1,039 ) (54,036 )
 

Shipyards Division

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2016 2015 2016 2015
Revenue $ 22,949 $ 12,424 $ 109,502 $ 59,601
Gross (loss) profit (2,008 ) 2,643 7,587 8,665
Gross profit percentage (8.7 )% 21.3 % 6.9 % 14.5 %

General and administrative expenses

1,875 449 7,750 1,692
Operating (loss) income (3,883 ) 2,194 (163 ) 6,973
 

Services Division

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2016 2015 2016 2015
Revenue $ 15,235 $ 29,444 $ 91,414 $ 100,431
Gross profit 1,193 3,277 12,205 13,726
Gross profit percentage 7.8 % 11.1 % 13.4 % 13.7 %
General and administrative expenses 1,518 1,170 5,637 4,178
Operating (loss) income (325 ) 2,107 6,568 9,548
 
 
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
      Twelve Months Ended December 31,
2016     2015
(in thousands)
Cash flows from operating activities:
Net income (loss) $ 3,515 $ (25,364 )
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation 25,448 26,204
Amortization of deferred revenue (5,223 )
Asset impairment 7,202
Allowance for doubtful accounts 493 448
(Gain) loss on sale of asset (757 ) (10 )
Deferred income taxes 1,409 (14,061 )
Stock-based compensation expense 3,125 2,707
Changes in operating assets and liabilities:
Contracts receivable, net 28,067 31,740
Contracts in progress (13,984 ) 14,167
Advance billings on contracts (3,197 ) (11,685 )
Accounts payable (12,757 ) (26,668 )
Prepaid expenses and other assets 230 1,092
Inventory 6,501 931
Accrued contract losses (9,108 ) 8,678
Deferred revenue (11,656 )
Deferred compensation 305
Accrued expenses 2,003 (5,381 )
Current income taxes (63 ) 615  
Net cash provided by operating activities $ 14,351 $ 10,615
Cash flows from investing activities:
Cash received in acquisition 3,035
Capital expenditures, net (6,795 ) (6,018 )
Proceeds from the sale of equipment 6,458   11  
Net cash provided by (used in) investing activities 2,698 (6,007 )
Cash flows from financing activities:
Payment of financing costs (122 )
Payments of dividends on common stock (588 ) (5,865 )
Net cash used in financing activities (710 ) (5,865 )
Net increase (decrease) in cash and cash equivalents 16,339 (1,257 )
Cash and cash equivalents at beginning of period 34,828   36,085  
Cash and cash equivalents at end of period $ 51,167   $ 34,828  
Supplemental cash flow information:
Interest paid $ 332   $ 165  
Income taxes paid (refunds received), net $ 377   $ (152 )
Schedule of noncash financing activities
Reclassification of property, plant and equipment to assets held for sale $   $ 4,805  
Reclassification of assets to held for sale to inventory $   $ 3,727  

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