Gulf Island Fabrication, Inc. Reports Third Quarter Earnings
HOUSTON--(BUSINESS WIRE)-- Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported net income of $541,000 ($0.04 diluted earnings per share) on revenue of $65.4 million for its third quarter ended September 30, 2016, compared to a net loss of $(12.1) million ($(0.84) diluted earnings (loss) per share) on revenue of $67.5 million for the third quarter ended September 30, 2015. For the nine months ended September 30, 2016 and 2015, the Company reported net income of $7.1 million ($0.48 diluted earnings per share) on revenue of $230.9 million compared to a net loss of $(10.7) million ($(0.74) diluted earnings (loss) per share) on revenue of $251.1 million, respectively.
The Company had revenue backlog of $181.2 million and labor backlog of approximately 1.6 million hours at September 30, 2016, including commitments received through October 27, 2016, compared to revenue backlog of $157.5 million and labor backlog of 1.3 million hours reported as of June 30, 2016. We expect to recognize revenue from our backlog of approximately $71.8 million, $87.3 million, and $22.1 million during the remainder of 2016, 2017, and 2018, respectively.
| September 30, 2016 (1) | December 31, 2015 | |||||||||||
| (in thousands) | ||||||||||||
| Cash and cash equivalents | $ | 55,642 | $ | 34,828 | ||||||||
| Total current assets | 123,255 | 115,869 | ||||||||||
| Property, plant and equipment, net | 211,215 | 200,384 | ||||||||||
| Total assets | 337,212 | 316,923 | ||||||||||
| Total current liabilities | 43,483 | 37,901 | ||||||||||
| Total shareholders’ equity | 266,115 | 257,197 | ||||||||||
________________
(1) Amounts include assets and liabilities acquired in connection with the LEEVAC transaction.
Our balance sheet position remains stable with $55.6 million in cash, no debt, and working capital of $79.8 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.
During the fourth quarter, we expect to enter into a two-year $40.0 million amended and restated credit facility with our current lenders that will continue to be secured by substantially all of our assets (other than real property). We anticipate the amended credit facility will allow us to use the full $40.0 million borrowing base for both letters of credit and general corporate purposes. Given the historically low levels of borrowings under our current facility and our cash position, we requested a reduction in the amount of available credit under our revolver from $80.0 million to $40.0 million to decrease the commitment fees payable to our lenders for the undrawn portion of the facility.
“Our subsidiary, Gulf Island LLC, received a letter of intent for the fabrication of four modules associated with a U.S. ethane cracker project. We are excited to be a part of the petrochemical plant expansion projects as we continue to explore markets outside the Oil & Gas sector. This project will bring much needed job opportunities to our Louisiana fabrication division,” stated Kirk Meche President & CEO. Revenue and man hours have been incorporated in the backlog numbers contained within.
The management of Gulf Island Fabrication, Inc. will hold a conference call on Friday, October 28, 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 September 30, 2016. The call is accessible by webcast (www.gulfisland.com) through CCBN and by dialing 1.888.806.6208. A digital rebroadcast of the call is available two hours after the call and ending November 4, 2016 by dialing 1.888.203.1112, replay passcode: 325346.
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 along with providing fabrication solutions to alternative energy providers. 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, foundations for offshore wind projects, 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, onshore and offshore scaffolding, piping insulation services, and steel warehousing and sales.
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GULF ISLAND FABRICATION, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) |
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| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
| September 30, | September 30, | June 30, | September 30, | September 30, | |||||||||||||||||||||
| 2016 (1) | 2015 | 2016 | 2016 (1) | 2015 | |||||||||||||||||||||
| Revenue (2) | $ | 65,384 | $ | 67,531 | $ | 81,502 | $ | 230,864 | $ | 251,102 | |||||||||||||||
| Cost of revenue | 60,125 | 75,368 | 67,436 | 205,839 | 248,686 | ||||||||||||||||||||
| Gross profit | 5,259 | (7,837 | ) | 14,066 | 25,025 | 2,416 | |||||||||||||||||||
| General and administrative expenses | 5,086 | 3,798 | 5,062 | 14,633 | 11,817 | ||||||||||||||||||||
| Asset impairment |
- |
6,600 |
- |
- |
6,600 | ||||||||||||||||||||
| Operating income | 173 | (18,235 | ) | 9,004 | 10,392 | (16,001 | ) | ||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||
| Interest expense | (110 | ) | (39 | ) | (88 | ) | (248 | ) | (126 | ) | |||||||||||||||
| Interest income | 12 | 8 | 2 | 20 | 21 | ||||||||||||||||||||
| Other income, net | 599 |
- |
42 | 1,039 | 20 | ||||||||||||||||||||
| 501 | (31 | ) | (44 | ) | 811 | (85 | ) | ||||||||||||||||||
| Income before income taxes | 674 | (18,266 | ) | 8,960 | 11,203 | (16,086 | ) | ||||||||||||||||||
| Income taxes | 133 | (6,129 | ) | 3,420 | 4,134 | (5,389 | ) | ||||||||||||||||||
| Net income | $ | 541 | $ | (12,137 | ) | $ | 5,540 | $ | 7,069 | $ | (10,697 | ) | |||||||||||||
| Per share data: | |||||||||||||||||||||||||
| Basic and diluted earnings per share - common shareholders | $ | 0.04 | $ | (0.84 | ) | $ | 0.37 | $ | 0.48 | $ | (0.74 | ) | |||||||||||||
| Cash dividend declared per common share | $ | 0.01 | $ | 0.10 | $ | 0.01 | $ | 0.03 | $ | 0.30 | |||||||||||||||
________________
| (1) |
Results of operations for the three and nine months ended September 30, 2016 include the operations acquired in the LEEVAC transaction effective January 1, 2016. Revenues and net income for the three months ended September 30, 2016 attributable to LEEVAC were $16.8 million and $(471,000), respectively. Revenue and net income for the nine months ended September 30, 2016 attributable to LEEVAC were $55.9 million and $280,000 respectively. |
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| (2) |
Revenue for the three and nine months ended September 30, 2016 includes the recognition of $1.5 million and $4.1 million in non-cash amortization of deferred revenue related to the values assigned to contracts acquired in the LEEVAC transaction, respectively. |
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Operating Segments Backlog (in thousands) |
||||||||||||||||||||||
| September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||||||||||||
|
Segment |
$'s | Labor hours | $'s | Labor hours | $'s | Labor hours | ||||||||||||||||
|
Fabrication (1) |
$ |
84,940 |
841 |
$ | 41,126 | 431 | $ | 48,828 | 524 | |||||||||||||
| Shipyards | 78,886 | 582 | 93,912 | 629 | 119,984 | 843 | ||||||||||||||||
| Services | 17,386 | 163 | 22,540 | 209 | 28,316 | 308 | ||||||||||||||||
| Intersegment Eliminations |
- |
- |
(41 | ) |
- |
(60 | ) |
- |
||||||||||||||
| Total Backlog | $ |
181,212 |
1,586 |
$ | 157,537 | 1,269 | $ | 197,068 | 1,675 | |||||||||||||
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Results of Operations (in thousands, except percentages) |
||||||||||||
|
Fabrication |
Three Months Ended September 30, |
|||||||||||
| 2016 | 2015 | |||||||||||
| Revenue | $ | 22,311 | $ | 32,133 | ||||||||
| Gross profit (loss) | 532 | (14,009 | ) | |||||||||
| Gross profit percentage | 2.4 | % | (43.6 | )% | ||||||||
| General and administrative expenses | 1,481 | 2,138 | ||||||||||
| Asset impairment |
- |
6,600 | ||||||||||
| Operating income (loss) | (949 | ) | (22,747 | ) | ||||||||
|
Shipyards (2) |
Three Months Ended September 30, |
|||||||||||
| 2016 | 2015 | |||||||||||
|
Revenue (3) |
$ | 23,060 | $ | 12,936 | ||||||||
|
Gross profit (3) |
1,877 | 1,937 | ||||||||||
| Gross profit percentage | 8.1 | % | 15.0 | % | ||||||||
| General and administrative expenses | 2,065 | 392 | ||||||||||
| Operating income (loss)(2) | (188 | ) | 1,545 | |||||||||
|
Services |
Three Months Ended September 30, |
|||||||||||
| 2016 | 2015 | |||||||||||
| Revenue | $ | 20,928 | $ | 23,487 | ||||||||
| Gross profit | 2,850 | 4,235 | ||||||||||
| Gross profit percentage | 13.6 | % | 18.0 | % | ||||||||
| General and administrative expenses | 1,540 | 994 | ||||||||||
| Operating income | 1,310 | 3,241 | ||||||||||
____________
|
(1) |
Includes commitments received through October 27, 2016. |
|
|
(2) |
Included in our results of operations for our Shipyards segment were revenue and net income (loss) of $16.8 million and $(471,000) attributable to the operations acquired in the LEEVAC transaction for the three months ended September 30, 2016. |
|
|
(3) |
Revenue for the three months ended September 30, 2016 includes the recognition of $1.5 million in non-cash amortization of deferred revenue related to the values assigned to contracts acquired in the LEEVAC transaction. |
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GULF ISLAND FABRICATION, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2016 | 2015 | ||||||||||
| (in thousands) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 7,069 | $ | (10,697 | ) | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Bad debt expense | 422 | 400 | |||||||||
| Depreciation | 19,262 | 19,674 | |||||||||
| Amortization of deferred revenue | (4,114 | ) |
- |
||||||||
| Asset impairment |
- |
6,600 | |||||||||
| Gain on sale of assets | (924 | ) | (10 | ) | |||||||
| Deferred income taxes | 3,651 | (5,464 | ) | ||||||||
| Compensation expense - restricted stock | 2,452 | 1,863 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Contracts receivable and retainage | 22,287 | 43,501 | |||||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | (5,834 | ) | (237 | ) | |||||||
| Prepaid expenses and other assets | 915 | 2,072 | |||||||||
| Inventory | 135 | 508 | |||||||||
| Accounts payable | (13,654 | ) | (25,402 | ) | |||||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | (20 | ) | (13,494 | ) | |||||||
| Deferred revenue | (8,928 | ) |
- |
||||||||
| Accrued employee costs | 1,404 | 343 | |||||||||
| Accrued expenses | 2,733 | (2,369 | ) | ||||||||
| Accrued contract losses | (8,001 | ) | 1,367 | ||||||||
| Current income taxes | 413 |
- |
|||||||||
| Net cash provided by operating activities | 19,268 | 18,655 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (5,415 | ) | (5,052 | ) | |||||||
| Net cash received in acquisition | 1,588 |
- |
|||||||||
| Proceeds on the sale of equipment | 5,813 | 10 | |||||||||
| Net cash provided by (used in) investing activities | 1,986 | (5,042 | ) | ||||||||
| Cash flows from financing activities: | |||||||||||
| Payments of dividends on common stock | (440 | ) | (4,397 | ) | |||||||
| Net cash used in financing activities | (440 | ) | (4,397 | ) | |||||||
| Net change in cash and cash equivalents | 20,814 | 9,216 | |||||||||
| Cash and cash equivalents at beginning of period | 34,828 | 36,085 | |||||||||
| Cash and cash equivalents at end of period | $ | 55,642 | $ | 45,301 | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161027006970/en/
Gulf Island Fabrication, Inc.
Kirk J. Meche, 713.714.6100
Chief
Executive Officer & Interim Chief Financial Officer
Source: Gulf Island Fabrication, Inc.
Released October 27, 2016
