Gulf Island Fabrication, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LINE OF CREDIT

LINE OF CREDIT

6 Months Ended

Jun. 30, 2016

We have a credit agreement with Whitney Bank and JPMorgan Chase Bank N.A. that provides for an $80.0 million revolving credit facility maturing January 2, 2017. The credit agreement allows the Company to use up to the full amount of the available borrowing base for letters of credit and up to $20.0 million for general corporate purposes. Our obligations under the credit agreement are secured by substantially all of our assets, other than real property located in the state of Louisiana. On February 29, 2016, we entered into an amendment to our credit agreement.

The amendment (i) extends the term of the credit agreement from February 29, 2016 to January 2, 2017; (ii) increases the commitment fee on undrawn amounts from 0.25% to 0.50% per annum; (iii) increases the letter of credit fee, subject to certain limited exceptions, to 2.00% per annum on undrawn stated amounts under letters of credit issued by the lenders; and (iv) limits the maximum amount of loans outstanding at any time for general corporate purposes to $20.0 million. Under the amendment, our financial covenants beginning with the quarter ending March 31, 2016 are as follows:


(i)	minimum net worth requirement of not less than $250.0 million plus:


a)	50% of net income earned in each quarter beginning March 31, 2016, and


b)	100% of proceeds from any issuance of common stock;


(ii)	debt to EBITDA ratio not greater than 3.0 to 1.0; and


(iii)	interest coverage ratio not less than 2.0 to 1.0.

At June 30, 2016, no amounts were outstanding under the credit facility, and we had outstanding letters of credit totaling $4.5 million, reducing the unused portion of our credit facility for additional letters of credit to $75.5 million. As of June 30, 2016, we were in compliance with all covenants.