Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS

v3.20.2
OPERATING SEGMENTS
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
OPERATING SEGMENTS

7. OPERATING SEGMENTS

During 2019, we operated and managed our business through three operating divisions ("Fabrication," "Shipyard" and "Services") and one non-operating division ("Corporate"), which represented our reportable segments. In the first quarter 2020, our Fabrication and Services Divisions were operationally combined to form an integrated new division called Fabrication & Services.  The operational combination will enable us to capitalize on the best practices and execution experience of the former divisions and maximize the utilization of our resources. As a result, we currently operate and manage our business through two operating divisions ("Shipyard" and "Fabrication & Services") and one non-operating division ("Corporate"), which represent our reportable segments. Accordingly, the segment results (including the effects of eliminations) for our Fabrication and Services Divisions for 2019 were combined to conform to the presentation of our reportable segments for 2020. In addition to the division combination, in the first quarter 2020, management and project execution responsibility for our two, forty-vehicle ferry projects was transferred from our former Fabrication Division to our Shipyard Division to better align the supervision and construction of these vessels with the capabilities and expertise of our Shipyard Division. Accordingly, results for these projects for 2019 were reclassified from our former

Fabrication Division to our Shipyard Division to conform to the presentation of these projects for 2020.  Our two operating divisions and Corporate Division are discussed below:  

Shipyard Division Our Shipyard Division fabricates newbuild marine vessels, including OSVs, MPSVs, research vessels, tugboats, salvage vessels, towboats, barges, drydocks, anchor handling vessels, and lift boats; provides marine repair and maintenance services, including steel repair, blasting and painting services, electrical systems repair, machinery and piping system repairs, and propeller, shaft, and rudder reconditioning; and performs conversion projects to lengthen vessels and modify vessels to permit their use for a different type of activity or enhance their capacity or functionality. These activities are performed at our facilities in Houma, Jennings and Lake Charles, Louisiana. In the first quarter 2020, we announced our intent to close the Jennings Yard upon completion of our harbor tug projects, which is forecast to occur in the fourth quarter 2020.     

 

Fabrication & Services Division Our Fabrication & Services (“F&S”) Division fabricates modules, skids and piping systems for onshore refining, petrochemical, LNG and industrial facilities and offshore facilities; fabricates foundations, secondary steel components and support structures for alternative energy developments and coastal mooring facilities; fabricates offshore production platforms and associated structures, including jacket foundations, piles and topsides for fixed production and utility platforms, as well as hulls and topsides for floating production and utility platforms; fabricates other complex steel structures and components; provides services on offshore platforms, including welding, interconnect piping and other services required to connect production equipment and service modules and equipment; provides on-site construction and maintenance services on inland platforms and structures and industrial facilities; and performs municipal and drainage projects, including pump stations, levee reinforcement, bulkheads and other public works. These activities are performed at our facility in Houma, Louisiana.

Corporate Division Our Corporate Division includes costs that do not directly relate to our two operating divisions. Such costs include, but are not limited to, costs of maintaining our corporate office, executive management salaries and incentives, board of directors' fees, litigation related costs, and costs associated with overall corporate governance and being a publicly traded company. Costs incurred by our Corporate Division on behalf of our operating divisions are allocated to the operating divisions. Such costs include, but are not limited to, human resources, insurance, sales and marketing, information technology and accounting.

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. Intersegment revenues are priced at the estimated fair value of work performed. Summarized financial information for our segments as of and for the three and nine months ended September 30, 2020 and 2019, are as follows (in thousands):

 

 

 

Three Months Ended September 30, 2020

 

 

 

Shipyard

 

 

F&S

 

 

Corporate

 

 

Consolidated

 

Revenue

 

$

37,078

 

 

$

18,237

 

 

$

(446

)

 

$

54,869

 

Gross loss

 

 

(7,504

)

 

 

(313

)

 

 

 

 

 

(7,817

)

Operating loss

 

 

(9,244

)

 

 

(1,127

)

 

 

(1,868

)

 

 

(12,239

)

Depreciation and amortization expense

 

 

819

 

 

 

1,280

 

 

 

77

 

 

 

2,176

 

Capital expenditures

 

 

402

 

 

 

2,033

 

 

 

11

 

 

 

2,446

 

Total assets

 

 

125,995

 

 

 

69,084

 

 

 

67,297

 

 

 

262,376

 

 

 

 

Nine Months Ended September 30, 2020

 

 

 

Shipyard

 

 

F&S

 

 

Corporate

 

 

Consolidated

 

Revenue

 

$

116,525

 

 

$

78,286

 

 

$

(1,413

)

 

$

193,398

 

Gross profit (loss)

 

 

(9,959

)

 

 

185

 

 

 

 

 

 

(9,774

)

Operating income (loss)

 

 

(12,867

)

 

 

7,644

 

 

 

(6,506

)

 

 

(11,729

)

Depreciation and amortization expense

 

 

2,408

 

 

 

3,826

 

 

 

229

 

 

 

6,463

 

Capital expenditures

 

 

6,144

 

 

 

3,857

 

 

 

190

 

 

 

10,191

 

Total assets

 

 

125,995

 

 

 

69,084

 

 

 

67,297

 

 

 

262,376

 

 

 

 

Three Months Ended September 30, 2019

 

 

 

Shipyard(1)

 

 

F&S(1)

 

 

Corporate

 

 

Consolidated

 

Revenue

 

$

43,323

 

 

$

32,681

 

 

$

(202

)

 

$

75,802

 

Gross loss

 

 

(2,402

)

 

 

(218

)

 

 

(65

)

 

 

(2,685

)

Operating loss

 

 

(3,349

)

 

 

(1,255

)

 

 

(2,324

)

 

 

(6,928

)

Depreciation and amortization expense

 

 

992

 

 

 

1,202

 

 

 

96

 

 

 

2,290

 

Capital expenditures

 

 

326

 

 

 

305

 

 

 

 

 

 

631

 

Total assets

 

 

111,015

 

 

 

89,816

 

 

 

76,334

 

 

 

277,165

 

 

 

 

Nine Months Ended September 30, 2019

 

 

 

Shipyard(1)

 

 

F&S(1)

 

 

Corporate

 

 

Consolidated

 

Revenue

 

$

120,787

 

 

$

103,926

 

 

$

(850

)

 

$

223,863

 

Gross profit (loss)

 

 

(5,594

)

 

 

2,211

 

 

 

(347

)

 

 

(3,730

)

Operating loss

 

 

(7,817

)

 

 

(989

)

 

 

(6,788

)

 

 

(15,594

)

Depreciation and amortization expense

 

 

3,148

 

 

 

3,797

 

 

 

319

 

 

 

7,264

 

Capital expenditures

 

 

1,060

 

 

 

930

 

 

 

 

 

 

1,990

 

Total assets

 

 

111,015

 

 

 

89,816

 

 

 

76,334

 

 

 

277,165

 

__________________

 

(1)

Revenue of $3.9 million and $7.2 million for the three and nine months ended September 30, 2019 associated with our two, forty-vehicle ferry projects was reclassified from our former Fabrication Division to our Shipyard Division to conform to the presentation of these projects for 2020. The projects had no significant gross profit for 2019.