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

Quarterly report pursuant to Section 13 or 15(d)

Revenue, Contract Assets and Liabilities and Other Contract Matters (Tables)

Revenue, Contract Assets and Liabilities and Other Contract Matters (Tables)

6 Months Ended

Jun. 30, 2023

Revenue From Contract With Customer [Abstract]

The following tables summarize revenue for each of our operating segments, disaggregated by contract type and duration, for the three and six months ended June 30, 2023 and 2022 (in thousands):


	Three Months Ended June 30, 2023
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	627	$	13,399	$	382	$	(2	)	$	14,406
T&M and cost-reimbursable		22,828		1,342		—		—			24,170
Other		1,015		—		—		(265	)		750
Total	$	24,470	$	14,741	$	382	$	(267	)	$	39,326

Long-term	$	627	$	13,508	$	382	$	(2	)	$	14,515
Short-term		23,843		1,233		—		(265	)		24,811
Total	$	24,470	$	14,741	$	382	$	(267	)	$	39,326


	Three Months Ended June 30, 2022
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	962	$	9,197	$	2,968	$	(5	)	$	13,122
T&M and cost-reimbursable		20,503		642		—		—			21,145
Other		715		1,000		—		(80	)		1,635
Total	$	22,180	$	10,839	$	2,968	$	(85	)	$	35,902

Long-term	$	962	$	10,197	$	2,968	$	(5	)	$	14,122
Short-term		21,218		642		—		(80	)		21,780
Total	$	22,180	$	10,839	$	2,968	$	(85	)	$	35,902


	Six Months Ended June 30, 2023
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	799	$	25,588	$	1,729	$	(10	)	$	28,106
T&M and cost-reimbursable		43,370		28,815		—		—			72,185
Other		1,888		—		—		(685	)		1,203
Total	$	46,057	$	54,403	$	1,729	$	(695	)	$	101,494

Long-term	$	799	$	52,216	$	1,729	$	(10	)	$	54,734
Short-term		45,258		2,187		—		(685	)		46,760
Total	$	46,057	$	54,403	$	1,729	$	(695	)	$	101,494


	Six Months Ended June 30, 2022
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	2,571	$	14,241	$	5,465	$	(6	)	$	22,271
T&M and cost-reimbursable		38,966		1,215		—		—			40,181
Other		1,307		1,000		—		(171	)		2,136
Total	$	42,844	$	16,456	$	5,465	$	(177	)	$	64,588

Long-term	$	2,571	$	15,241	$	5,465	$	(6	)	$	23,271
Short-term		40,273		1,215		—		(171	)		41,317
Total	$	42,844	$	16,456	$	5,465	$	(177	)	$	64,588

Summary of Remaining Performance Obligations, Disaggregated by Operating Segment and Contract Type

The following table summarizes our remaining performance obligations, disaggregated by operating segment and contract type, at June 30, 2023 (in thousands):


	June 30, 2023
	Services		Fabrication		Shipyard		Total
Fixed-price and unit-rate	$	1,067	$	7,167	$	1,194	$	9,428
T&M and cost-reimbursable(1)		—		2,730		—		2,730
Total(2)	$	1,067	$	9,897	$	1,194	$	12,158

(1)

In February 2023, we received direction from our customer to suspend all activities on our offshore jackets project for our Fabrication Division, and in July 2023, the customer cancelled the contract. Accordingly, our performance obligations were reduced by $76.1 million to reflect the estimated revenue amount that will not be recognized due to the cancellation. See “Other Operating and Project Matters” below for further discussion of the project cancellation.

(2)

Based on our current estimates we expect to recognize revenue of approximately $11.8 million and $0.4 million for the remainder of 2023 and 2024, respectively, associated with our performance obligations at June 30, 2023. Certain factors and circumstances could result in changes in the timing of recognition of our performance obligations as revenue and the amounts ultimately recognized.

Summary of Contract with Customer, Asset and Liability

Information with respect to contracts that were incomplete at June 30, 2023 and December 31, 2022, is as follows (in thousands):


	June 30,			December 31,
	2023			2022
Contract assets(1), (2)	$	6,662		$	4,839
Contract liabilities(3), (4), (5)		(3,065	)		(8,196	)
Contracts in progress, net	$	3,597		$	(3,357	)

(1)

The increase in contract assets compared to December 31, 2022, was primarily due to increased unbilled positions on various projects for our Fabrication Division, offset partially by decreased unbilled positions on our forty-vehicle ferry projects for our Shipyard Division.

(2)

Contract assets at June 30, 2023 and December 31, 2022, excluded $3.0 million and $3.6 million, respectively, associated with revenue recognized in excess of amounts billed for which we have an unconditional right to the consideration. Such amounts are reflected within contract receivables.

(3)

The decrease in contract liabilities compared to December 31, 2022, was primarily due to a decrease in advance billings on our cancelled offshore jackets project for our Fabrication Division and accrued contract losses on our forty-vehicle ferry projects for our Shipyard Division. See “Future Performance Obligations” above for further discussion of the project cancellation.

(4)

Revenue recognized during the three months ended June 30, 2023 and 2022, related to amounts included in our contract liabilities balance at March 31, 2023 and 2022 was $2.3 million and $0.7 million, respectively. Revenue recognized during the six months ended June 30, 2023 and 2022, related to amounts included in our contract liabilities balance at December 31, 2022 and 2021, was $6.1 million and $2.5 million, respectively.

(5)

Contract liabilities at June 30, 2023 and December 31, 2022, includes accrued contract losses of $0.6 million and $1.6 million, respectively. See “Changes in Project Estimates” below for further discussion of our accrued contract losses.