Annual report pursuant to Section 13 and 15(d)

OPERATING SEGMENTS

v3.6.0.2
OPERATING SEGMENTS
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
OPERATING SEGMENTS
OPERATING SEGMENTS

In connection with the LEEVAC Transaction (See Note 2), management restructured the operation of our business units into three divisions which we believe meet the criteria of reportable segments under GAAP. These divisions consist of Fabrication, Shipyards and Services.

Fabrication Division - Our Fabrication division primarily fabricates structures such as offshore drilling and production platforms and other steel structures for customers in the oil and gas industries including jackets and deck sections of fixed production platforms, hull, tendon, and/or deck sections of floating production platforms (such as TLPs, SPARs, FPSOs and MinDOCs), piles, wellhead protectors, subsea templates, and various production, compressor, and utility modules along with pressure vessels. Our Fabrication division also fabricates structures for alternative energy customers (such as the five jackets and piles we constructed for the first offshore wind power project in the United States during 2015) as well as modules for petrochemical facilities. We perform these activities out of our fabrication yards in Houma, Louisiana, and Aransas Pass and Ingleside, Texas.

Shipyards Division - Our Shipyards division primarily manufactures newbuild and repairs various steel marine vessels in the United States including offshore supply vessels, anchor handling vessels and liftboats to support the construction and ongoing operation of offshore oil and gas production platforms, tug boats, towboats, barges and other marine vessels. We also construct dry docks to lift marine vessels out of the water. 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. In addition, we perform conversion projects that consist of lengthening vessels, modifying vessels to permit their use for a different type of activity, and other modifications to enhance the capacity or functionality of a vessel. Our Houma dry dock has a current lift capacity of 9,000 tons and is used to maintain and repair third party marine vessels, as well as to launch vessels fabricated at our facilities. We are in process of enhancing our Houma dry dock to increase this capacity to 15,000 tons. We perform these activities out of our shipyards in Houma, Jennings and Lake Charles, Louisiana.

Services Division - 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 southeastern United States for various on-site construction and maintenance activities. In addition, our Services division fabricates packaged skid units and perform various municipal and drainage projects, such as pump stations, levee reinforcement, bulkheads and other public works projects for state and local governments. We perform these services at our customer's facilities or out of our Houma Service Yard.

We generally evaluate the performance of, and allocate resources to, our divisions based upon gross profit (loss) and operating income (loss). Segment assets are comprised of all assets attributable to each division. 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-year period ended December 31, 2016 is as follows (in thousands):
 
December 31, 2016
 
Fabrication
Shipyards (1), (2)
Services
Corp. & Eliminations
Consolidated
Revenue
$
88,683

$
109,502

$
91,414

$
(3,273
)
$
286,326

Gross profit
5,061

7,587

12,205

—

24,853

Operating income (loss)
(1,039
)
(163
)
6,568

(183
)
5,183

 
 
 
 
 
 
Depreciation expense
18,566

4,686

1,775

421

25,448

Capital expenditures
2,633

1,861

1,495

806

6,795

Total Assets
$
272,292

$
81,928

$
96,404

$
(128,216
)
$
322,408

 
 
 
 
 
 
 
December 31, 2015
 
Fabrication
Shipyards
Services
Corp. & Eliminations
Consolidated
Revenue
$
151,576

$
59,601

$
100,431

$
(5,488
)
$
306,120

Gross profit (loss)
(37,541
)
8,665

13,726

(6
)
(15,156
)
Operating income (loss)
(54,036
)
6,973

9,548

(1,099
)
(38,614
)
 
 
 
 
 
 
Depreciation expense
22,045

1,921

1,733

505

26,204

Capital expenditures
3,360

1,206

1,379

73

6,018

Total Assets
$
310,790

$
54,543

$
94,618

$
(143,028
)
$
316,923

 
 
 
 
 
 
 
December 31, 2014
 
Fabrication
Shipyards
Services
Corp. & Eliminations
Consolidated
Revenue
$
303,880

$
79,197

$
132,107

$
(8,545
)
$
506,639

Gross profit (loss)
19,418

4,922

20,258

(42
)
44,556

Operating income (loss)
4,079

3,262

17,502

(896
)
23,947

 
 
 
 
 
 
Depreciation expense
22,524

1,805

1,612

495

26,436

Capital expenditures
23,245

2,135

2,083

195

27,658

Total Assets
$
396,806

$
63,090

$
95,385

$
(157,338
)
$
397,943

 
 
 
 
 
 
____________
(1)
Included in our results of operations for our Shipyards division was revenue and net (loss) income of $75.6 million and ($1.8 million), for the year ended December 31, 2016, respectively, attributable to the assets and operations acquired in the LEEVAC transaction. No amounts were included in the comparable 2015 or 2014 periods as the LEEVAC transaction was effective January 1, 2016. See also Note 2.
(2)
Revenue for the year ended December 31, 2016 includes $5.2 million of non-cash amortization of deferred revenue, related to the values assigned to contracts acquired in the LEEVAC transaction.