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)

3 Months Ended

Mar. 31, 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 months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31, 2023
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	172	$	12,189	$	1,347	$	(8	)	$	13,700
T&M and cost-reimbursable		20,542		27,473		—		—			48,015
Other		873		—		—		(420	)		453
Total	$	21,587	$	39,662	$	1,347	$	(428	)	$	62,168

Long-term	$	172	$	38,708	$	1,347	$	(8	)	$	40,219
Short-term		21,415		954		—		(420	)		21,949
Total	$	21,587	$	39,662	$	1,347	$	(428	)	$	62,168


	Three Months Ended March 31, 2022
	Services		Fabrication		Shipyard		Eliminations			Total
Fixed-price and unit-rate	$	1,609	$	5,044	$	2,497	$	(1	)	$	9,149
T&M and cost-reimbursable		18,463		573		—		—			19,036
Other		592		—		—		(91	)		501
Total	$	20,664	$	5,617	$	2,497	$	(92	)	$	28,686

Long-term	$	1,609	$	5,044	$	2,497	$	(1	)	$	9,149
Short-term		19,055		573		—		(91	)		19,537
Total	$	20,664	$	5,617	$	2,497	$	(92	)	$	28,686

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 March 31, 2023 (in thousands):


	March 31, 2023
	Services		Fabrication		Shipyard		Total
Fixed-price and unit-rate	$	1,207	$	10,948	$	1,803	$	13,958
T&M and cost-reimbursable(1)		—		76,383		—		76,383
Total(2)	$	1,207	$	87,331	$	1,803	$	90,341

(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 has been provided. See “Other Operating and Project Matters” below for further discussion of the impacts of the suspension.

(2)

We expect to recognize revenue of $14.4 million for the remainder of 2023 associated with our performance obligations at March 31, 2023 based on our current estimates. Such estimates exclude potential revenue of $75.9 million associated with our performance obligations for our offshore jackets project given the uncertainty with respect to when such amounts will be recognized, if at all. 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 March 31, 2023 and December 31, 2022, is as follows (in thousands):


	March 31,			December 31,
	2023			2022
Contract assets(1), (2)	$	5,538		$	4,839
Contract liabilities(3), (4), (5)		(4,388	)		(8,196	)
Contracts in progress, net	$	1,150		$	(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 for our forty-vehicle ferry projects for our Shipyard Division.

(2)

Contract assets at March 31, 2023 and December 31, 2022, excluded $3.6 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 offshore jackets project for our Fabrication Division and accrued contract losses on our forty-vehicle ferry projects for our Shipyard Division.

(4)

Revenue recognized during the three months ended March 31, 2023 and 2022, related to amounts included in our contract liabilities balance at December 31, 2022 and 2021 was $6.0 million and $2.1 million, respectively.

(5)

Contract liabilities at March 31, 2023 and December 31, 2022, includes accrued contract losses of $1.0 million and $1.6 million, respectively. See “Changes in Project Estimates” below for further discussion of our accrued contract losses.