Quarterly report pursuant to Section 13 or 15(d)

SEGMENT DISCLOSURES

v3.5.0.2
SEGMENT DISCLOSURES
 6 Months Ended
Jun. 30, 2016
Segment Reporting [Abstract]  
SEGMENT DISCLOSURES
SEGMENT DISCLOSURES

Effective January 1, 2016, we acquired the assets and certain specified liabilities of LEEVAC (See Note 2). In connection with the LEEVAC transaction, management restructured the operation of our business units into three divisions which we believe meet the criteria of reportable segments under GAAP. These segments consist of Fabrication, Shipyards and Services.

Fabrication - Our Fabrication division primarily fabricates structures such as offshore drilling and production platforms and other steel structures for customers in the oil and gas and marine industries including jackets and deck sections of fixed production platforms along with pressure vessels. Our Fabrication segment also fabricates structures for alternative energy customers (such as the five jackets and piles we constructed for a shallow water wind turbine project off the coast of Rhode Island during 2015) as well as LNG facilities. We perform these activities out of our fabrication yards in Houma, Louisiana and Ingleside, Texas.

Shipyards - Our Shipyards division primarily fabricates and repairs marine vessels including offshore supply vessels, anchor handling vessels, lift boats, tugboats, and towboats. Our Shipyards division also constructs and owns dry docks to lift marine vessels out of the water in order to make repairs or modifications. Our marine repair activities include steel repair, blasting and painting services, electrical systems repair, machinery and piping system repairs, and propeller, shaft, and rudder reconditioning. Our Shipyards division also performs conversion projects that consist of lengthening or modifying the use of existing vessels to enhance their capacity or functionality. We perform these activities out of our facilities in Houma, Jennings and Lake Charles, Louisiana.

Services - Our Services division primarily provides interconnect piping services on offshore platforms and inshore structures. Interconnect piping services involve sending employee crews to offshore platforms in the Gulf of Mexico to perform welding and other activities required to connect production equipment, service modules and other equipment on a platform. We also contract with oil and gas companies that have platforms and other structures located in the inland lakes and bays throughout the Southeast for various on-site construction and maintenance activities. In addition, our Services division can fabricate packaged skid units and provide various municipal and drainage projects, such as pump stations, levee reinforcement, bulkheads and other projects for state and local governments.

We generally evaluate the performance of, and allocate resources to, our segments based upon gross profit (loss) and operating income (loss). Segment assets are comprised of all assets attributable to each segment. Corporate administrative costs and overhead are generally allocated to our segments except for those costs that are not directly related to the operations of our divisions. Intersegment revenues are priced at the estimated fair value of work performed. Summarized financial information concerning our segments as of and for the three and six months ended June 30, 2016 and 2015 is as follows (in thousands):
 
Three Months Ended June 30, 2016
 
Fabrication
Shipyards (1), (2)
Services
Corp. & Eliminations
Consolidated
Revenue
$
24,296

$
29,373

$
28,692

$
(859
)
$
81,502

Gross profit
3,844

5,390

4,832

—

14,066

Operating income (loss)
2,178

3,394

3,496

(64
)
9,004

 
 
 
 
 
 
Total assets
290,910

81,874

100,197

(130,950
)
342,031

Depreciation expense
4,589

1,161

456

105

6,311

CAPEX
1,201

181

505

679

2,566

 
 
 
 
 
 
 
Three Months Ended June 30, 2015
 
Fabrication
Shipyards (1)
Services
Corp. & Eliminations
Consolidated
Revenue
$
48,365

$
14,760

$
22,712

$
(1,499
)
$
84,338

Gross profit
210

1,644

3,951

—

5,805

Operating income (loss)
(1,984
)
1,224

2,922

(83
)
2,079

 
 
 
 
 
 
Total assets
353,911

62,576

103,756

(163,852
)
356,391

Depreciation expense
5,499

479

435

130

6,543

CAPEX
1,203

242

432

75

1,952

 
 
 
 
 
 

 
Six Months Ended June 30, 2016
 
Fabrication
Shipyards (1), (2)
Services
Corp. & Eliminations
Consolidated
Revenue
$
48,125

$
63,493

$
55,251

$
(1,388
)
$
165,481

Gross profit
3,886

7,720

8,161

—

19,767

Operating income (loss)
897

3,918

5,590

(185
)
10,220

 
 
 
 
 
 
Total assets
290,910

81,874

100,197

(130,950
)
342,031

Depreciation expense
9,444

2,327

898

209

12,878

CAPEX
1,311

216

1,047

716

3,290

 
 
 
 
 
 
 
Six Months Ended June 30, 2015
 
Fabrication
Shipyards (1)
Services
Corp. & Eliminations
Consolidated
Revenue
$
105,298

$
34,241

$
47,500

$
(3,468
)
$
183,571

Gross profit (loss)
(46
)
4,085

6,214

—

10,253

Operating income (loss)
(4,934
)
3,234

4,200

(266
)
2,234

 
 
 
 
 
 
Total assets
353,911

62,576

103,756

(163,852
)
356,391

Depreciation expense
11,059

958

865

258

13,140

CAPEX
1,683

334

861

75

2,953

 
 
 
 
 
 
____________
(1)
Included in our results of operations for our Shipyards segment were revenue and net income of $17.3 million and $1.5 million, for the three months ended June 30, 2016 and $39.1 million and $751,000 for the six months ended June 30, 2016, respectively, attributable to the assets and operations acquired in the LEEVAC transaction. No amounts were included in the comparable 2015 periods as the LEEVAC transaction was effective January 1, 2016. See also Note 2.
(2)
Included in revenue and results of operations was recognition of $1.5 million and $2.7 million of deferred revenue for the three and six months ended June 30, 2016, respectively related to the values assigned to contracts acquired in the LEEVAC transaction.