Gulf Island Fabrication, Inc. Reports Second Quarter Earnings

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HOUSTON--(BUSINESS WIRE)-- Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported net income of $5.5 million ($0.37 diluted earnings per share) on revenue of $81.5 million for its second quarter ended June 30, 2016, compared to net income of $1.4 million ($0.09 diluted earnings per share) on revenue of $84.3 million for the second quarter ended June 30, 2015. For the six months ended June 30, 2016 and 2015, the Company reported net income of $6.5 million ($0.44 diluted earnings per share) on revenue of $165.5 million compared to net income of $1.4 million ($0.10 diluted earnings per share) on revenue of $183.6 million, respectively.

The company had revenue backlog of $157.5 million and labor backlog of approximately 1.3 million hours at June 30, 2016, including commitments received through July 28, 2016, compared to revenue backlog of $197.1 million and labor backlog of 1.7 million hours reported as of March 31, 2016. We expect to recognize revenue from our backlog of approximately $134.4 million and $23.1 million during the remainder of 2016 and during 2017, respectively.

     
June 30, 2016 (1) December 31, 2015
(in thousands)
 
Cash and cash equivalents   $ 50,065     $ 34,828
Total current assets 125,584 115,869
Property, plant and equipment, net 213,689 200,384
Total assets 342,031 316,923
Total current liabilities 49,995 37,901
Total shareholders’ equity 264,904 257,197

________________

(1) Amounts include assets and liabilities acquired in connection with the LEEVAC transaction.

 

Our balance sheet position remains stable with $50.1 million in cash, no debt, and working capital of $75.6 million. In addition, we have $75.5 million available under our credit facility for letters of credit and $20.0 million available for general corporate uses. We will continue to monitor and maintain a conservative capital structure as we navigate through the current oil and gas downturn.

The management of Gulf Island Fabrication, Inc. will hold a conference call on Friday, July 29, 2016, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss the Company’s financial results for the quarter ended June 30, 2016. The call is accessible by webcast (www.gulfisland.com) through CCBN and by dialing 1.888.600.4863. A digital rebroadcast of the call is available two hours after the call and ending August 5, 2016 by dialing 1.888.203.1112, replay passcode: 647355.

Gulf Island Fabrication, Inc., based in Houston, Texas, with fabrication facilities located in Houma, Jennings and Lake Charles, Louisiana, and San Patricio County, Texas, is a leading fabricator of offshore drilling and production platforms, hull and/or deck sections of floating production platforms and other specialized structures used in the development and production of offshore oil and gas reserves. These structures include jackets and deck sections of fixed production platforms; hull and/or deck sections of floating production platforms (such as tension leg platforms “TLPs”, “SPARs”, “FPSOs”, and “MinDOCs”), piles, wellhead protectors, subsea templates and various production, compressor and utility modules, offshore living quarters, towboats, liftboats, tanks and barges. The Company also provides offshore interconnect pipe hook-up, inshore marine construction, manufacture and repair of pressure vessels, heavy lifts such as ship integration and TLP module integration, loading and offloading of jack-up drilling rigs, semi-submersible drilling rigs, TLPs, SPARs, or other similar cargo, onshore and offshore scaffolding, piping insulation services, and steel warehousing and sales.

         

GULF ISLAND FABRICATION, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

 
Three Months Ended   Six Months Ended
June 30, June 30, March 31, June 30, June 30,

2016 (1)

2015

2016

 

2016 (1)

  2015
Revenue (2) $ 81,502 $ 84,338 $ 83,979 $ 165,481 $ 183,571
Cost of revenue   67,436     78,533     78,278       145,714       173,318  
Gross profit 14,066 5,805 5,701 19,767 10,253
General and administrative expenses   5,062     3,726     4,485       9,547       8,019  
Operating income 9,004 2,079 1,216 10,220 2,234
Other income (expense):
Interest expense (88 ) (50 ) (50 ) (138 ) (87 )
Interest income 2 7 6 8 13
Other income, net   42     17     398       440       20  
  (44 )   (26 )   354       310       (54 )
Income before income taxes 8,960 2,053 1,570 10,530 2,180
Income taxes   3,420     696     581       4,001       740  
Net income $ 5,540   $ 1,357   $ 989     $ 6,529     $ 1,440  
Per share data:
Basic and diluted earnings per share - common shareholders $ 0.37   $ 0.09   $ 0.07     $ 0.44     $ 0.10  
Cash dividend declared per common share $ 0.01   $ 0.10   $ 0.01     $ 0.02     $ 0.20  

________________

 
(1) Results of operations for the three and six months ended June 30, 2016, include the operations acquired in the LEEVAC transaction effective January 1, 2016. Revenues and net income for the three months ended June 30, 2016, attributable to LEEVAC were $17.3 million and $1.5 million, respectively. Revenue and net income for the six months ended June 30, 2016, attributable to LEEVAC were $39.1 million and $751,000, respectively.
 
(2) Revenue for the three and six months ended June 30, 2016, includes the recognition of $1.5 million and $2.7 million of deferred revenue related to the values assigned to contracts acquired in the LEEVAC transaction, respectively.
 

Operating Segments

 

Backlog (in thousands)

           
June 30, 2016 March 31, 2016 December 31, 2015

Segment

$'s Labor hours $'s   Labor hours $'s Labor hours
Fabrication $ 41,126 431 $ 48,828 524 $ 62,006 724
Shipyards 93,912 629 119,984 843 131,660 886
Services 22,540 209 28,316 308 38,761 304
Intersegment Eliminations   (41 )

-

  (60 )  

-

    (16 )

-

Total Backlog $ 157,537   1,269 $ 197,068     1,675   $ 232,411   1,914
 

Results of Operations (in thousands, except percentages)

 

   

Fabrication

Three Months Ended June 30,
2016 2015
Revenue $24,296 $ 48,365
Gross profit 3,844 210
Gross profit percentage 15.8 % 0.4 %
 
General and administrative expenses 1,666 2,194
Operating income (loss) 2,178 (1,984 )
 
 

Shipyards (1)

Three Months Ended June 30,
2016 2015
Revenue (2) $ 29,373 $ 14,760
Gross profit (2) 5,390 1,644
Gross profit percentage 18.4 % 11.1 %
 
General and administrative expenses 1,996 420
Operating income (2) 3,394 1,224
 
 

Services

Three Months Ended June 30,
2016 2015
Revenue $ 28,692 $ 22,712
Gross profit 4,832 3,951
Gross profit percentage 16.8 % 17.4 %
 
General and administrative expenses 1,336 1,029
Operating income 3,496 2,922

________________

 
(1) Included in our results of operations for our Shipyards segment were revenue and net income of $17.3 million and $1.5 million attributable to the operations acquired in the LEEVAC transaction for the three months ended June 30, 2016. No amounts were included in the comparable 2015 period as the LEEVAC transaction was effective January 1, 2016.
 
(2) Revenue for the three months ended June 30, 2016 includes the recognition of $1.5 million of deferred revenue related to the values assigned to contracts acquired in the LEEVAC transaction.
     

GULF ISLAND FABRICATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 
Six Months Ended June 30,
2016 2015
(in thousands)
Cash flows from operating activities:
Net income $ 6,529 $ 1,440
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt expense 320 400
Depreciation 12,878 13,140
Amortization of deferred revenue (2,654 )

-

Gain on sale of assets (369 ) (10 )
Deferred income taxes 3,899 (715 )
Compensation expense - restricted stock 1,619 1,153
Changes in operating assets and liabilities:
Contracts receivable and retainage 9,783 41,446
Costs and estimated earnings in excess of billings on uncompleted contracts 1,550 1,631
Prepaid expenses and other assets (1,396 ) 946
Inventory (1,234 ) 245
Accounts payable (7,522 ) (24,493 )
Billings in excess of costs and estimated earnings on uncompleted contracts 247 (9,538 )
Deferred revenue (8,718 )

-

Accrued employee costs 1,144 (516 )
Accrued expenses 1,479 (2,803 )
Accrued contract losses (5,974 ) (604 )
Current income taxes   105     1,450  
Net cash provided by operating activities 11,686 23,172
Cash flows from investing activities:
Capital expenditures (3,290 ) (2,953 )
Net cash received in acquisition 1,588

-

Proceeds on the sale of equipment   5,548     10  
Net cash provided by (used in) investing activities 3,846 (2,943 )
Cash flows from financing activities:
Payments of dividends on common stock   (295 )   (2,930 )
Net cash used in financing activities (295 ) (2,930 )
Net change in cash and cash equivalents 15,237 17,299
Cash and cash equivalents at beginning of period   34,828     36,085  
Cash and cash equivalents at end of period $ 50,065   $ 53,384  

Gulf Island Fabrication, Inc.
Kirk J. Meche, 713.714.6100
Chief Executive Officer
or
Jeffrey M. Favret, 713.714.6100
Chief Financial Officer

Source: Gulf Island Fabrication, Inc.

Released July 28, 2016