Gulf Island Fabrication, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

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

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

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

The following tables summarize revenue for each of our operating segments, disaggregated by contract type and duration, for 2022 and 2021 (in thousands):


	Year ended December 31, 2022
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	5,035	$	36,127	$	7,671	$	(7	)	$	48,826
T&M and cost-reimbursable		79,426		9,526		—		—			88,952
Other		2,561		2,646		—		(665	)		4,542
Total	$	87,022	$	48,299	$	7,671	$	(672	)	$	142,320

Long-term	$	5,035	$	43,037	$	7,671	$	—		$	55,743
Short-term		81,987		5,262		—		(672	)		86,577
Total	$	87,022	$	48,299	$	7,671	$	(672	)	$	142,320


	Year ended December 31, 2021
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	1,293	$	39,187	$	12,778	$	(8	)	$	53,250
T&M and cost-reimbursable		34,470		2,152		100		(67	)		36,655
Other		4,795		—		—		(1,248	)		3,547
Total	$	40,558	$	41,339	$	12,878	$	(1,323	)	$	93,452

Long-term	$	1,293	$	39,187	$	12,778	$	(8	)	$	53,250
Short-term		39,265		2,152		100		(1,315	)		40,202
Total	$	40,558	$	41,339	$	12,878	$	(1,323	)	$	93,452

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 December 31, 2022 (in thousands):


	December 31, 2022
	Services		Fabrication		Shipyard		Total
Fixed-price and unit-rate	$	1,322	$	11,314	$	3,272	$	15,908
T&M and cost-reimbursable (1)		—		98,973		—		98,973
Total (2)	$	1,322	$	110,287	$	3,272	$	114,881

(1)

In February 2023, we received direction from our customer to suspend all activities on our offshore jackets project for our Fabrication Division. No duration of the suspension or timing of potential recommencement of the project was provided.

(2)

We expect to recognize revenue of $49.1 million during 2023 associated with our performance obligations at December 31, 2022 based on our current estimates. Such estimates exclude potential revenue of $65.8 million associated with our performance obligations for our offshore jackets project given the uncertainty with respect to when such amounts will be recognized. Certain factors and circumstances, including the suspension, 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 December 31, 2022 and 2021, is as follows (in thousands):


	December 31,
	2022			2021
Costs incurred on uncompleted contracts	$	112,693		$	103,315
Estimated loss incurred to date		(12,610	)		(7,807	)
Sub-total		100,083			95,508
Billings to date		(103,440	)		(97,397	)
Total	$	(3,357	)	$	(1,889	)

The above amounts are included within the following captions on our Balance Sheet at December 31, 2022 and 2021 (in thousands):


	December 31,
	2022			2021
Contract assets (1), (2)	$	4,839		$	4,759
Contract liabilities (3), (4), (5)		(8,196	)		(6,648	)
Total	$	(3,357	)	$	(1,889	)

(1)

The increase in contract assets compared to December 31, 2021, was primarily due to increased unbilled positions on various projects for our Fabrication Division and our two forty-vehicle ferry projects for our Shipyard Division, offset partially by a decreased unbilled position on our seventy-vehicle ferry project for our Shipyard Division.

(2)

Contract assets at December 31, 2022 and 2021, excluded $3.6 million and $2.3 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. The increase compared to December 31, 2021, was primarily due to a customer for our Services Division.

(3)

The increase in contract liabilities compared to December 31, 2021, was primarily due to an increase in advance billings on our offshore jackets project for our Fabrication Division and seventy-vehicle ferry project for our Shipyard Division, offset partially by a decrease in accrued contract losses and the unwind of advance payments on our two forty-vehicle ferry projects for our Shipyard Division.

(4)

Revenue recognized during 2022 and 2021, related to amounts included in our contract liabilities balance at December 31, 2021 and 2020, was $2.7 million and $3.7 million, respectively.

(5)

Contract liabilities at December 31, 2022 and 2021, includes accrued contract losses of $1.6 million and $3.9 million, respectively. See “Changes in Project Estimates” below for further discussion of our accrued contract losses.

Schedules of Concentration of Risk, by Risk Factor

The following table summarizes revenue for customers that accounted for 10% or more of our consolidated revenue for 2022 and 2021 (in thousands):


	Years Ended December 31,
	2022		2021
Customer A	$	54,257	$	41,057
Customer B		14,635	*
Customer C	*			9,576

* The customer revenue was less than 10% of consolidated revenue for the year.