- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number 0-22303
GULF ISLAND FABRICATION, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 72-1147390
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
583 THOMPSON ROAD,
HOUMA, LOUISIANA 70363
(Address of principal executive offices) (Zip Code)
(985) 872-2100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
The number of shares of the Registrant's common stock, no par value per
share, outstanding at November 7, 2002 was 11,744,614.
GULF ISLAND FABRICATION, INC.
INDEX
PAGE
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
at September 30, 2002 (unaudited) and December 31, 2001 3
Consolidated Statements of Income
for the Three and Nine Months Ended September 30, 2002
and 2001 (unaudited) 4
Consolidated Statement of Changes in Shareholders' Equity
for the Nine Months Ended September 30, 2002 (unaudited) 5
Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 2002
and 2001 (unaudited) 6
Notes to Consolidated Financial Statements 7-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-12
Item 4. Controls and Procedures 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
CIVIL CERTIFICATIONS 15-16
EXHIBIT INDEX E-1
-2-
GULF ISLAND FABRICATION, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2002 2001
------------- ------------
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 10,854 $ 11,274
Short-term investments 24,177 23,758
Contracts receivable, net 29,895 14,231
Contract retainage 1,859 1,736
Costs and estimated earnings in excess of billings
on uncompleted contracts 2,208 1,961
Prepaid expenses 831 1,170
Inventory 1,485 1,331
------------ ------------
Total current assets 71,309 55,461
Property, plant and equipment, net 47,108 41,666
Excess of cost over fair value of net assets acquired, net -- 4,765
Other assets 645 646
------------ ------------
Total assets $ 119,062 $ 102,538
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,627 $ 1,660
Billings in excess of costs and estimated
earnings on uncompleted contracts 10,757 2,891
Accrued employee costs 2,394 2,012
Accrued expenses 2,538 1,929
Income taxes payable 2,129 368
------------ ------------
Total current liabilities 22,445 8,860
Deferred income taxes 5,041 4,773
------------ ------------
Total liabilities 27,486 13,633
Shareholders' equity:
Preferred stock, no par value, 5,000,000 shares
authorized, no shares issued and outstanding -- --
Common stock, no par value, 20,000,000 shares
authorized, 11,744,614 and 11,706,864 shares issued and
outstanding at September 30, 2002 and December 31, 2001, respectively 4,266 4,227
Additional paid-in capital 36,551 36,101
Retained earnings 50,759 48,577
------------ ------------
Total shareholders' equity 91,576 88,905
------------ ------------
Total liabilities and shareholders' equity $ 119,062 $ 102,538
============ ============
The accompanying notes are an integral part of these statements.
-3-
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Revenue $ 40,255 $ 30,496 $ 100,554 $ 92,321
Cost of revenue 33,483 25,826 87,504 79,731
---------- ---------- ---------- ----------
Gross profit 6,772 4,670 13,050 12,590
General and administrative expenses 1,103 1,051 3,029 3,394
---------- ---------- ---------- ----------
Operating income 5,669 3,619 10,021 9,196
Other income (expense):
Interest expense (14) (9) (32) (27)
Interest income 151 295 479 874
Other 1 (628) 58 (737)
---------- ---------- ---------- ----------
138 (342) 505 110
---------- ---------- ---------- ----------
Income before income taxes 5,807 3,277 10,526 9,306
Income taxes 1,974 1,120 3,579 3,291
---------- ---------- ---------- ----------
Net income before cumulative effect of
change in accounting principle 3,833 2,157 6,947 6,015
Cumulative effect of change in accounting principle (Note 2) -- -- (4,765) --
---------- ---------- ---------- ----------
Net income $ 3,833 $ 2,157 $ 2,182 $ 6,015
========== ========== ========== ==========
Per share data: (Note 5)
Basic earnings (loss) per share:
Net income before cumulative effect of
change in accounting principle $ 0.33 $ 0.18 $ 0.59 $ 0.51
Cumulative effect of change in accounting principle -- -- (0.41) --
---------- ---------- ---------- ----------
Basic earnings per share $ 0.33 $ 0.18 $ 0.19 $ 0.51
========== ========== ========== ==========
Diluted income (loss) per share:
Net income before cumulative effect of
change in accounting principle $ 0.32 $ 0.18 $ 0.59 $ 0.51
Cumulative effect of change in accounting principle -- -- (0.40) --
---------- ---------- ---------- ----------
Diluted earnings per share $ 0.32 $ 0.18 $ 0.18 $ 0.51
========== ========== ========== ==========
Weighted-average shares 11,744 11,706 11,727 11,702
Effect of dilutive securities: employee stock options 71 52 87 100
---------- ---------- ---------- ----------
Adjusted weighted-average shares 11,815 11,758 11,814 11,802
========== ========== ========== ==========
The accompanying notes are an integral part of these statements.
-4-
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
Additional Total
Common Stock Paid-In Retained Shareholders'
Shares Amount Capital Earnings Equity
------------ ------------ ------------ ------------ -------------
(in thousands, except share data)
Balance at January 1, 2002 11,706,864 $ 4,227 $ 36,101 $ 48,577 $ 88,905
Exercise of stock options 37,750 39 348 -- 387
Income tax benefit from
exercise of stock options -- -- 102 -- 102
Net income -- -- -- 2,182 2,182
------------ ------------ ------------ ------------ ------------
Balance at September 30, 2002 11,744,614 $ 4,266 $ 36,551 $ 50,759 $ 91,576
============ ============ ============ ============ ============
The accompanying notes are an integral part of these statements.
-5-
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended
September 30,
2002 2001
------------ ------------
(in thousands)
Cash flows from operating activities:
Net income $ 2,182 $ 6,015
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 3,439 3,302
Amortization -- 325
Cumulative effect of change in accounting principle 4,765 --
Deferred income taxes 268 96
Changes in operating assets and liabilities:
Contracts receivable (15,664) (10,326)
Contract retainage (123) (1,463)
Costs and estimated earnings in excess of billings
on uncompleted contracts (247) 1,072
Prepaid expenses, inventory and other assets 185 326
Accounts payable 2,967 33
Billings in excess of costs and estimated earnings
on uncompleted contracts 7,866 1,403
Accrued employee costs 382 610
Accrued expenses 609 (598)
Income taxes payable 1,863 2,193
------------ ------------
Net cash provided by operating activities 8,492 2,988
Cash flows from investing activities:
Capital expenditures, net (8,981) (3,222)
Proceeds on the sale of property and equipment 100 2,100
Purchase of short-term investments (419) (7,593)
Other 1 (50)
------------ ------------
Net cash used in investing activities (9,299) (8,765)
Cash flows from financing activities:
Proceeds from exercise of stock options 387 374
------------ ------------
Net cash provided by financing activities 387 374
------------ ------------
Net decrease in cash and cash equivalents (420) (5,403)
Cash and cash equivalents at beginning of period 11,274 10,079
------------ ------------
Cash and cash equivalents at end of period $ 10,854 $ 4,676
============ ============
Supplemental cash flow information:
Interest paid $ -- $ 18
============ ============
Income taxes paid $ 730 $ 940
============ ============
The accompanying notes are an integral part of these statements.
-6-
GULF ISLAND FABRICATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTH AND NINE MONTH
PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING PRINCIPLES
Gulf Island Fabrication, Inc. (the "Company"), together with its
subsidiaries, is a leading fabricator of offshore drilling and production
platforms and other specialized structures used in the development and
production of offshore oil and gas reserves. Structures and equipment fabricated
by the Company include jackets and deck sections of fixed production platforms;
hull and/or deck sections of floating production platforms (such as TLP's,
SPAR's and FPSO's); piles; wellhead protectors; subsea templates; various
production, compressor and utility modules; and offshore living quarters. The
Company, located in Houma, Louisiana, also provides services such as offshore
interconnect pipe hook-up; inshore marine construction; manufacture and repair
of pressure vessels; and steel warehousing and sales. The Company's principal
markets are concentrated in the offshore regions of the Gulf of Mexico. The
consolidated financial statements include the accounts of the Company and its
subsidiaries. All significant intercompany balances and transactions have been
eliminated in consolidation.
The information presented at September 30, 2002, and for the three
months and nine months ended September 30, 2002 and 2001, is unaudited. In the
opinion of the Company's management, the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring adjustments)
that the Company considers necessary for the fair presentation of the Company's
financial position at September 30, 2002, and the results of its operations for
the three months and nine months ended September 30, 2002 and 2001, and its cash
flows for the nine months ended September 30, 2002 and 2001. The results of
operations for the three months and nine months ended September 30, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002.
In the opinion of management, the financial statements included herein
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2001.
NOTE 2 - NEW ACCOUNTING STANDARD
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No.142 ("SFAS No. 142"), "Goodwill
and Other Intangible Assets", which established a new method of testing goodwill
for impairment using a fair-value-based approach and eliminated the amortization
of goodwill as previously required by Accounting Principles Board ("APB")
Opinion 17, "Intangibles". An impairment loss would be recorded if the recorded
goodwill exceeds its implied fair value. At December 31, 2001, the Company had
goodwill of $4.8 million (net of accumulated amortization of $1.3 million)
related to the acquisition of Southport, Inc. ("Southport"). The Company adopted
SFAS No. 142 effective January 1, 2002, and completed the required transitional
impairment test during the quarter ended March 31, 2002. As a result of the
transitional impairment test, the Company
-7-
calculated an impairment charge of $4.8 million. The impairment charge was
calculated based on fair value using an expected cash flow approach. The Company
considered in its expected cash flow projections the continued decline in the
demand for, the highly competitive nature of, and the recent bid activity
related to the fabrication of living quarters. The transitional impairment
charge is reflected as a cumulative effect of change in accounting principle as
of January 1, 2002, in the accompanying financial statements.
A reconciliation of reported net income before cumulative effect of
change in accounting principle and related earnings per share to the adjusted
net income and earnings per share to exclude the prior amortization expense of
goodwill is as follows (in thousands, except per share data):
Nine Months Ended
September 30,
2002 2001
------------ ------------
Reported net income before cumulative
effect of change in accounting principle $ 6,947 $ 6,015
Add back: Goodwill amortization -- 325
------------ ------------
Adjusted net income before cumulative
effect of change in accounting principle $ 6,947 $ 6,340
============ ============
Basic earnings-per-share
Reported net income before cumulative
effect of change in accounting principle $ 0.59 $ 0.51
Add back: Goodwill amortization -- 0.03
------------ ------------
Adjusted net income before cumulative
effect of change in accounting principle $ 0.59 $ 0.54
============ ============
Diluted earnings-per-share
Reported net income before cumulative
effect of change in accounting principle $ 0.59 $ 0.51
Add back: Goodwill amortization -- 0.03
------------ ------------
Adjusted net income before cumulative
effect of change in accounting principle $ 0.59 $ 0.54
============ ============
NOTE 3 - NOTES PAYABLE
Effective September 30, 2002, the Company's existing bank credit
facility was amended and restated in order, among other reasons, to extend the
maturity date to December 31, 2004. The Company's bank credit facility provides
for a revolving line of credit (the "Revolver") of up to $20.0 million, which
bears interest equal to, at the Company's option, the prime lending rate
established by Bank One Corporation or LIBOR plus 1.5%. The Revolver matures
December 31, 2004, and is secured by a mortgage on the Company's real estate,
machinery and equipment, and fixtures. The Company pays a fee on a quarterly
basis, of three-sixteenths of one percent per annum on the weighted-average
unused portion of the Revolver. At September 30, 2002, there were no borrowings
outstanding under the Revolver, but the Company did have letters of credit
outstanding totaling $5.0 million, which reduces the unused portion of the
Revolver. The Company is required to maintain certain covenants, including
balance sheet and cash flow ratios. At September 30, 2002, the Company was in
compliance with these covenants.
-8-
NOTE 4 - INCOME TAX PROVISION
Income tax expense for interim periods is based on estimates of the
effective tax rates for the entire fiscal year. The effective tax rate
applicable to pre-tax earnings was 34% for the three-month and nine-month
periods ended September 30, 2002, compared to the effective rate of 34% for
three-month and 35% for the nine-month periods ended September 30, 2001,
respectively. This reduction in the effective rate was the result of anticipated
tax benefits arising from an increase in net income attributable to foreign
contracts.
NOTE 5 - EARNINGS PER SHARE
For the nine months ended September 30, 2002, the per share net income
before cumulative effect of change in accounting principle was $0.59 and the per
share cumulative effect of change in accounting principle was $0.41 and $0.40 on
a basic and diluted per share basis, respectively. The resulting basic earnings
per share and diluted earnings per share of $0.19 and $0.18, respectively,
reflect the impact of rounding on the calculation.
-9-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Goodwill Impairment-Southport Acquisition
In assessing the recoverability of the Company's excess of cost over
fair value of the net assets acquired (goodwill) from the Southport acquisition,
the Company made assumptions regarding estimated future cash flows and other
factors to determine the fair value of the respective assets. Pursuant to SFAS
No. 142 the Company adopted the new rules for accounting for goodwill effective
January 1, 2002, and completed the required transitional impairment test during
the first quarter ended March 31, 2002. As a result of the transitional
impairment test, the Company calculated an impairment charge of $4.8 million.
The impairment charge was calculated based on fair value using an expected cash
flow approach. The Company considered in its expected cash flow projections the
continued decline in the demand for, the highly competitive nature of, and the
recent bid activity related to the fabrication of living quarters. The
transitional impairment charge is reflected as a cumulative effect of change in
accounting principle as of January 1, 2002, in the accompanying financial
statements.
RESULTS OF OPERATIONS
The Company's revenue for the three-month and nine-month periods ended
September 30, 2002 was $40.3 million and $100.6 million, an increase of 32.1%
and 9.0%, respectively, compared to $30.5 million and $92.3 million in revenue
for the three-month and nine-month periods ended September 30, 2001. The volume
of direct labor hours applied to contracts in progress increased by 16.6% for
the three months and 5.2% for the nine months when comparing the three-month and
the nine-month periods ended September 30, 2002 to the same periods of 2001.
Gross profit increased $2.1 million or 44.7% and $500,000 or 4.0% when
comparing the three-month and nine-month periods ended September 30, 2002, to
the comparable periods in 2001. For the three-month and nine-month periods ended
September 30, 2002, gross profit was $6.8 million (16.9% of revenue) and $13.1
million (13.0% of revenue), compared to $4.7 million (15.4% of revenue) and
$12.6 million (13.7% of revenue) of gross profit for the three-month and
nine-month periods ended September 30, 2001. The increase in production volumes
accompanied by efficiencies in labor on several jobs in progress resulted in the
increase in gross profit margins for the three-month period ended September 30,
2002, when compared to the three-month period ended September 30, 2001. Although
production volumes increased slightly for the nine-month period ended September
30, 2002, compared to the nine-month period ended September 30, 2001, the
reduction in product prices and less favorable weather conditions in the first
two quarters of 2002 caused the gross profit margin to remain relatively flat.
The Company's general and administrative expenses were $1.1 million for
the three-month period ended September 30, 2002 and $3.0 million for the
nine-month period ended September 30, 2002. This compared to $1.1 million for
the three-month period ended
-10-
September 30, 2001, and $3.4 million for the nine-month period ended September
30, 2001. As a percentage of revenue, general and administrative expenses
decreased to 2.7% from 3.6% of revenue for the three-month periods ended
September 30, 2002 and 2001, respectively, and decreased to 3.0% from 3.7% of
revenue for the comparable nine-month periods. Effective January 1, 2002,
goodwill amortization ($108,000 per quarter) was eliminated. Offsetting the
elimination of goodwill amortization were increases to costs that vary with
sales volumes, primarily labor-related costs, when comparing the three-month
periods ended September 30, 2002 and 2001, respectively. The decrease in general
and administrative expenses for the nine months ended September 30, 2002 was
directly related to the elimination of goodwill amortization when compared to
the nine months ended September 30, 2001.
The Company had net interest income of $137,000 and $447,000 for the
three-month and nine-month periods ended September 30, 2002, respectively,
compared to $286,000 and $847,000 for the three-month and nine-month periods
ended September 30, 2001. The reduction in interest income was the result of the
decrease in income generated from investments during the three-month and
nine-month periods ended September 30, 2002, compared to the three-month and
nine-month periods ended September 30, 2001, due to the sharp decline in
interest rates (approximately 52% and 48%, respectively) on short-term
investments.
For the three-month period ended September 30, 2002, the Company had
other income of $1,000. For the nine-month period ended September 30, 2002,
other income was $58,000, of which the majority was related to the sale of
miscellaneous equipment. For the three-month and nine-month periods ended
September 30, 2001, the Company had other expense of $628,000 and $737,000,
respectively, of which $170,000 and $279,000, respectively, consisted of the
Company's share of the MinDOC, L.L.C. activities to design and market the MinDOC
floating platform concept for deepwater drilling and production. Prior to
October 1, 2001, the Company's investment in MinDOC, L.L.C. was accounted for
under the equity method of accounting for investments with its share of
operating results included in other as an expense in the statements of income.
Effective October 1, 2001, the Company's investment in MinDOC, L.L.C. and its
operating results were consolidated within the consolidated financial statements
of Gulf Island Fabrication, Inc. For the nine months ended September 30, 2001,
other expense also included $280,000 for the settlement of a lawsuit the Company
had been involved in for several years and $180,000 resulting from a loss the
Company had on the sale of a facility the Company owned in Harvey, Louisiana.
LIQUIDITY AND CAPITAL RESOURCES
Historically the Company has funded its business activities primarily
through funds generated from operations. The Company also maintains a revolving
line of credit with a commercial bank but has not drawn on it since December
1998. Net cash provided by operating activities was $8.5 million for the
nine-months ended September 30, 2002. At September 30, 2002, working capital was
$48.9 million, resulting in a current ratio of 3.2 to 1. Net cash used in
investing activities for the nine months ended September 30, 2002 was $9.3
million, which included $100,000 of proceeds on the sale of equipment, $9.0
million for capital expenditures, and $419,000 for the purchase of short-term
investments. The majority of the capital expenditures for the first nine months
of 2002 was related to the construction of a new fabrication building scheduled
to be completed in the first quarter of 2003.
-11-
The Company's bank credit facility provides for a revolving line of
credit of up to $20.0 million, which bears interest equal to, at the Company's
option, the prime lending rate established by Bank One Corporation or LIBOR plus
1.5%. The Revolver matures December 31, 2004, and is secured by a mortgage on
the Company's real estate, machinery and equipment, and fixtures. The Company
pays a fee on a quarterly basis, of three-sixteenths of one percent per annum on
the weighted-average unused portion of the Revolver. At September 30, 2002,
there were no borrowings outstanding under the Revolver, but the Company did
have letters of credit outstanding totaling $5.0 million, which reduces the
unused portion of the Revolver. The Company is required to maintain certain
covenants, including balance sheet and cash flow ratios. At September 30, 2002,
the Company was in compliance with these covenants.
Capital expenditures for the remaining three months of 2002 are
estimated to be approximately $3.7 million, including improvements to the
facilities and the purchase of various other fabrication machinery and
equipment. Management believes that its available funds, cash generated by
operating activities, and funds available under the Revolver will be sufficient
to fund these capital expenditures and its working capital needs. The Company
may, however, expand its operations through future acquisitions that may require
additional equity or debt financing.
FORWARD-LOOKING STATEMENTS
Statements under "Results of Operations" and "Liquidity and Capital
Resources" and other statements in this report and the exhibits hereto that are
not statements of historical fact are forward-looking statements. These
statements involve risks and uncertainties that include, among others, the
timing and extent of changes in the prices of crude oil and natural gas; the
timing of new projects and the Company's ability to obtain them; competitive
factors in the heavy marine fabrication industry; the Company's ability to
successfully complete the testing, production and marketing of the MinDOC and
other deep water production systems and to develop and provide financing for
them; and the Company's ability to attract and retain qualified production
employees at acceptable compensation rates. Changes in these factors could
result in changes in the Company's performance and could cause the actual
results to differ materially from those expressed in the forward-looking
statements.
ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's President and Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, the Company's President
and Chief Executive Officer along with the Company's Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
Securities and Exchange Commission filings. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.
-12-
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDING.
For a description of legal proceedings, see Item 3 of Part I of the
Company's Annual Report on Form 10-K for the year ended December 31, 2001.
ITEM 5. OTHER INFORMATION.
On October 10, 2002, the Company announced the scheduled time for the
release of its 2002 third quarter earnings and its quarterly conference call.
The press release making this announcement is attached hereto as Exhibit 99.1.
On October 23, 2002, the Company announced its 2002 third quarter
earnings and related matters. The press release making this announcement is
attached hereto as Exhibit 99.2.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
10.1 Third Amendment to Eighth Amended and Restated
Revolving Credit Agreement among the Company and Bank
One, NA and Whitney National Bank dated November 19,
2001.
10.2 Fourth Amendment to Eighth Amended and Restated
Revolving Credit Agreement among the Company and Bank
One, NA and Whitney National Bank dated September 30,
2002.
99.1 Press release issued by the Company on October 10,
2002, announcing the scheduled time for the release
of its 2002 third quarter earnings and its quarterly
conference call.
99.2 Press release issued by the Company on October 23,
2002, announcing its 2002 third quarter earnings and
related matters.
(b) On August 12, 2002, the Company filed a report on Form 8-K to
report (under items 7 and 9) the filing of the certifications
of the Chief Executive Officer and the Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
-13-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GULF ISLAND FABRICATION, INC.
By: /s/ Joseph P. Gallagher, III
----------------------------------------
Joseph P. Gallagher, III
Vice President - Finance,
Chief Financial Officer
and Treasurer
(Principal Financial Officer
and Duly Authorized Officer)
Date: November 7, 2002
-14-
CEO CIVIL CERTIFICATION
I, Kerry J. Chauvin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Gulf Island
Fabrication, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 7, 2002
By: /s/ Kerry J. Chauvin
----------------------------------------
Kerry J. Chauvin
President and Chief Executive Officer
-15-
CFO CIVIL CERTIFICATION
I, Joseph P. Gallagher, III, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Gulf Island
Fabrication, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 7, 2002
By: /s/ Joseph P. Gallagher, III
-------------------------------------
Joseph P. Gallagher, III
Chief Financial Officer
-16-
GULF ISLAND FABRICATION, INC.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
10.1 Third Amendment to Eighth Amended and Restated Revolving
Credit Agreement among the Company and Bank One, NA and
Whitney National Bank dated November 19, 2001.
10.2 Fourth Amendment to Eighth Amended and Restated Revolving
Credit Agreement among the Company and Bank One, NA and
Whitney National Bank dated September 30, 2002.
99.1 Press release issued by the Company on October 10, 2002,
announcing the scheduled time for the release of its 2002
third quarter earnings and its quarterly conference call.
99.2 Press release issued by the Company on October 23, 2002,
announcing its 2002 third quarter earnings and related
matters.
E-1