Gulf Island Reports Fourth Quarter And Full-Year 2021 Results
Gulf Island Fabrication reported fourth quarter 2021 revenue of $25.8 million, a 13.4% year-over-year increase, despite a net loss of $6.2 million influenced by Hurricane Ida and acquisition costs. Full-year revenue dropped 20.6% to $93.5 million. The company completed the DSS Acquisition, enhancing its services division. The balance sheet remains strong with a cash reserve of $54.6 million and no debt. Management expresses optimism about growth in services and small-scale fabrication amidst rising energy prices, while emphasizing a disciplined approach to large project bidding.
- Fourth quarter revenue increased to $25.8 million, up 13.4% year-over-year.
- DSS Acquisition completed, enhancing services and increasing skilled labor force.
- Cash balance at December 31, 2021, stood at $54.6 million with no debt.
- New project awards in Q4 2021 reached $21.5 million, a 58.4% year-over-year increase.
- Full-year 2021 revenue decreased by 20.6% to $93.5 million.
- Net loss for the fourth quarter 2021 was $6.2 million, impacted by Hurricane Ida-related costs.
- Operating loss in the Fabrication & Services Division was $2.8 million due to under-utilization of resources.
HOUSTON, March 22, 2022 (GLOBE NEWSWIRE) -- Gulf Island Fabrication, Inc. (NASDAQ: GIFI) (“Gulf Island” or the “Company”), a leading steel fabricator and service provider to the industrial and energy sectors, today announced results for the fourth quarter and full-year 2021.
FOURTH QUARTER 2021 SUMMARY (as compared to the fourth quarter 2020)
- Revenue of
$25.8 million ,13.4% y/y - Net loss from Continuing Operations of
$6.2 million , including Hurricane Ida and acquisition costs of$3.9 million - Operating loss for Fabrication & Services Division of
$2.8 million , including Hurricane Ida and acquisition costs of$3.7 million - Non-GAAP EBITDA loss for Fabrication & Services Division of
$1.8 million , including Hurricane Ida and acquisition costs of$3.7 million - Cash balance of
$54.6 million at December 31, 2021 - Completed acquisition to expand Services business in December 2021
FULL-YEAR 2021 SUMMARY (as compared to full-year 2020)
- Revenue of
$93.5 million , (20.6% ) y/y - Net loss from Continuing Operations of
$4.8 million , including Hurricane Ida and acquisition costs of$4.3 million - Operating income for Fabrication & Services Division of
$0.3 million , including Hurricane Ida and acquisition costs of$3.7 million - Non-GAAP EBITDA for Fabrication & Services Division of
$4.3 million , including Hurricane Ida and acquisition costs of$3.7 million - Completed Shipyard Transaction in April 2021
Consolidated revenue for the fourth quarter 2021 was
On December 1, 2021, the Company acquired (“DSS Acquisition”) the services and industrial staffing businesses (“DSS” or “DSS Business”) of Dynamic Industries, Inc. The operating results of the DSS Business for the one-month period ended December 31, 2021, are included within the Fabrication & Services Division.
MANAGEMENT COMMENTARY
“We had another quarter of solid project performance by our Fabrication & Services Division, while also continuing to successfully execute on our strategic initiatives during the fourth quarter,” said Richard Heo, Gulf Island’s President and Chief Executive Officer. “Momentum in our small-scale fabrication and services businesses continues to improve and we expect the recent rise in energy prices to further bolster this trend in the near term. The strong platform we are building in our services and small-scale fabrication businesses position us well for profitable growth in these markets.”
“Activity in the large fabrication market is picking up; however, we believe there is still excess capacity in the market. We remain committed to taking a measured and disciplined approach when bidding on large projects, as we have no intention of derailing all that we have accomplished over the last two years by booking large project awards on terms that do not meet our risk parameters,” continued Heo. “These are long-term, fixed-price contracts, and we are unwilling to commit our resources to any project that does not meet our return hurdles, particularly given the current inflationary headwinds and uncertain labor environment. In the absence of large fabrication awards, we will continue to shift our focus to our growing services and small-scale fabrication businesses, and we will look to optimize our asset base for changes in our business mix over time.”
“A critical part of our growth strategy centers on growing and diversifying our services business, so we were very excited to complete the DSS Acquisition in December,” continued Heo. “The acquisition of DSS allows us to further strengthen our current services business by adding long-standing customer relationships of DSS to our existing customer base, while also providing new services offerings and positioning us for growth and attractive revenue synergy opportunities. Perhaps even more important, the addition of DSS nearly doubled the size of our skilled craft workforce, which is significant given the labor constraints plaguing our industry. While we are still early in the integration, we are very excited about the potential of our combined services businesses especially in light of the strong Gulf of Mexico production activity.”
“We once again benefited from the strong execution of our Fabrication & Services Division, which enabled the division to deliver positive EBITDA for the quarter when excluding Hurricane Ida and acquisition costs,” stated Westley Stockton, Gulf Island’s Chief Financial Officer. “In addition, we continued to improve our risk profile and liquidity position, ending the quarter with almost
“2021 was an important year in the strategic transformation of Gulf Island, and I am extremely proud of everything we accomplished during the year, as we continued to de-risk our business through the Shipyard Transaction in April, improved our project execution, significantly expanded our services business through the DSS Acquisition, and made further progress on our targeted growth markets,” noted Heo. “While we are disappointed to not have been awarded any large-scale fabrication work, we will continue to remain disciplined, and maintain our focus on markets that meet our risk and return objectives. We have made significant progress in positioning the Company for profitable growth over the last two years, and we remain optimistic about the long-term opportunity for the Company,” concluded Heo.
STRATEGIC UPDATE
During 2020, the Company outlined a strategic plan that was focused on improving its financial strength and positioning the Company to pursue higher-margin growth opportunities. Underpinning this strategy was a focus on improving the Company’s risk profile, strengthening its liquidity position, improving resource utilization and project execution, and reducing the Company’s reliance on offshore oil and gas markets. With the significant progress achieved on these objectives, during 2021, management shifted to the next phase of its strategic transformation, which is focused on generating stable, profitable growth based on pursuing new growth end markets, growing and diversifying its services business, further strengthening project execution, and expanding its skilled labor workforce. Below is an update on the progress made on each of these initiatives during the fourth quarter:
Pursue new growth end markets – The Company has focused its near-term business development efforts on higher-growth end markets such as LNG and petrochemical, with an eye towards pursuing opportunities in the rapidly growing energy transition market over time. Bidding activity in the LNG and petrochemical markets is improving, but the Company intends to remain disciplined when bidding on large fabrication projects given the uncertain labor and supply chain environment. Until the risk/return profile for large fabrication projects improves, Gulf Island will continue to focus on growing its services platform and small-scale fabrication business, which are experiencing favorable market dynamics. In addition, given the increased inquiries and bidding activity in energy transition markets such as green hydrogen and renewables, the Company intends to more quickly shift its focus to these end markets.
Grow and diversify services business – The Company is pursuing opportunities to diversify its offshore services customer base, increase its offshore services offerings, and expand its services offerings to onshore markets. The DSS Acquisition accelerated the progress on these initiatives and positions Gulf Island to succeed in these attractive end markets. Given the Company’s significantly expanded skilled workforce following the DSS Acquisition, Gulf Island is better able to take advantage of the improving business environment, and the Company is experiencing increasing activity from existing customers and has also been successful attracting new services opportunities and skilled personnel.
Further strengthen project execution – While significant progress has been made, the Company is focused on further strengthening its personnel, processes and procedures in an effort to further improve project execution, which will drive higher margins and improve new award win rates. The positive EBITDA results for the Fabrication & Services Division during 2021, despite the meaningful under-utilization of facilities and resources, highlights the progress achieved in these efforts. Consistent project execution gives the Company confidence in its capabilities and what it takes to execute projects in this competitive environment.
Expand skilled workforce – The Company continues to focus on ways to improve retention and enhance and add to its skilled craft personnel, as a strong workforce will be a key differentiator in pursuing new project awards given the scarcity of available skilled craft labor within the industry. The Company was able to make significant progress on this initiative through the DSS Acquisition, which nearly doubled its skilled craft workforce and expanded its geographic footprint for skilled labor.
SEGMENT RESULTS
Fabrication & Services Segment – Revenue for the fourth quarter 2021 was
New project awards were
Operating loss was
Shipyard Segment – Revenue for the fourth quarter 2021 was
Operating loss was
Corporate Segment – Operating loss was
Discontinued Operations – In April 2021, the Company sold its Shipyard Division operating assets and long-term construction contracts (“Shipyard Transaction”). Discontinued operations include the results associated with the operations included in the Shipyard Transaction and associated with certain previously closed Shipyard Division facilities. Operating loss was
BALANCE SHEET AND LIQUIDITY
The Company’s cash balance at December 31, 2021 was
FOURTH QUARTER 2021 CONFERENCE CALL
Gulf Island will hold a conference call on Tuesday, March 22, 2022 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss the Company’s financial results. The call will be available by webcast and can be accessed on Gulf Island’s website at www.gulfisland.com. Participants may also join the call by dialing 1.888.220.8451 and requesting the “Gulf Island” conference call. A replay of the webcast will be available on the Company's website for seven days after the call.
ABOUT GULF ISLAND
Gulf Island is a leading fabricator of complex steel structures and modules and provider of specialty services, including project management, hookup, commissioning, repair, maintenance, scaffolding, coatings, civil construction and staffing services to the industrial and energy sectors. The Company’s customers include U.S. and, to a lesser extent, international energy producers; refining, petrochemical, LNG, industrial and power operators; and EPC companies. The Company is headquartered in Houston, Texas and its primary operating facilities are located in Houma, Louisiana.
NON-GAAP MEASURES
This Release includes certain non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), new project awards and backlog. The Company believes EBITDA is a useful supplemental measure as it reflects the Company's operating results excluding the non-cash impacts of depreciation and amortization. Reconciliations of EBITDA to the most comparable GAAP measure are presented under “Consolidated Results of Operations” and “Results of Operations by Segment” below.
The Company believes new project awards and backlog are useful supplemental measures as they represent work that the Company is obligated to perform under its current contracts. New project awards represent the expected revenue value of contract commitments received during a given period, including scope growth on existing contract commitments. Backlog represents the unrecognized revenue value of new project awards, and at December 31, 2021, was consistent with the value of remaining performance obligations for contracts as determined under GAAP.
Non-GAAP measures are not intended to be replacements or alternatives to GAAP measures, and investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. The Company may present or calculate non-GAAP measures differently from other companies.
CAUTIONARY STATEMENTS
This Release contains forward-looking statements in which the Company discusses its potential future performance. Forward-looking statements, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, are all statements other than statements of historical facts, such as projections or expectations relating to timing of wind down of our Shipyard Division operations, diversification and entry into new end markets, improvement of risk profile, industry outlook, oil and gas prices, timing of investment decisions and new project awards, operating cash flows, capital expenditures, liquidity and tax rates. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be,” “potential” and any similar expressions are intended to identify those assertions as forward-looking statements.
The Company cautions readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements. Important factors that can cause its actual results to differ materially from those anticipated in the forward-looking statements include: the final assessment of damage to its Houma facilities and infrastructure challenges in the Houma area following Hurricane Ida and the related recovery of any insurance proceeds; the duration and scope of, and uncertainties associated with, the ongoing global pandemic caused by COVID-19 (including new and emerging strains and variants) and the war in Ukraine and the corresponding volatility in oil prices and the impact thereof on its business; its ability to secure new project awards, including fabrication projects for refining, petrochemical, LNG, industrial and sustainable energy end markets; the Company’s ability to improve project execution; its inability to realize the expected financial benefits of the Shipyard Transaction; the cyclical nature of the oil and gas industry; competition; consolidation of its customers; timing and award of new contracts; reliance on significant customers; financial ability and credit worthiness of its customers; nature of its contract terms; competitive pricing and cost overruns on its projects; adjustments to previously reported profits or losses under the percentage-of-completion method; weather conditions; changes in contract estimates; suspension or termination of projects; its ability to raise additional capital; its ability to amend or obtain new debt financing or credit facilities on favorable terms; its ability to generate sufficient cash flow; its ability to sell certain assets; any future asset impairments; utilization of facilities or closure or consolidation of facilities; customer or subcontractor disputes; its ability to resolve the dispute with a customer relating to the purported terminations of contracts to build two MPSVs and the dispute with a customer related to contracts to build two forty-vehicle ferries, as well as other material legal proceedings that may arise; operating dangers and limits on insurance coverage; barriers to entry into new lines of business; its ability to employ skilled workers; loss of key personnel; performance of subcontractors and dependence on suppliers; changes in trade policies of the U.S. and other countries, including in response to Russia’s invasion of Ukraine; compliance with regulatory and environmental laws; lack of navigability of canals and rivers; systems and information technology interruption or failure and data security breaches; performance of partners in any future joint ventures and other strategic alliances; shareholder activism; focus on environmental, social and governance factors by institutional investors and regulators; and other factors described under “Risk Factors” in Part 1, Item 1A of the Company’s 2020 Annual Report as updated under “Risk Factors” in Part II, Item 1A of our quarterly report on Form 10-Q for the quarter ended March 31, 2021, and as may be further updated by subsequent filings with the SEC.
Additional factors or risks that the Company currently deems immaterial, that are not presently known to the Company or that arise in the future could also cause the Company’s actual results to differ materially from its expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which the Company’s forward-looking statements are based are likely to change after the date the forward-looking statements are made, which it cannot control. Further, the Company may make changes to its business plans that could affect its results. The Company cautions investors that it undertakes no obligation to publicly update or revise any forward-looking statements, which speak only as of the date made, for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, and notwithstanding any changes in its assumptions, changes in business plans, actual experience or other changes.
COMPANY INFORMATION
| Richard W. Heo | Westley S. Stockton |
| Chief Executive Officer | Chief Financial Officer |
| 713.714.6100 | 713.714.6100 |
Consolidated Results of Operations(1) (in thousands, except per share data)
| Three Months Ended | Years Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2021 | 2021(2) | 2020(2) | 2021 | 2020(2) | ||||||||||||||||
| New Project Awards(3) | $ | 21,549 | $ | 15,200 | $ | 13,975 | $ | 66,488 | $ | 67,327 | ||||||||||
| Revenue | $ | 25,812 | $ | 19,587 | $ | 22,756 | $ | 93,452 | $ | 117,729 | ||||||||||
| Cost of revenue | 25,259 | 19,722 | 28,857 | 91,788 | 125,596 | |||||||||||||||
| Gross profit (loss)(4) | 553 | (135 | ) | (6,101 | ) | 1,664 | (7,867 | ) | ||||||||||||
| General and administrative expense | 2,762 | 3,211 | 2,998 | 11,848 | 12,725 | |||||||||||||||
| Impairments and (gain) loss on assets held for sale | - | - | 2,419 | - | 2,491 | |||||||||||||||
| Other (income) expense, net(5) | 3,949 | 260 | 104 | 3,300 | (9,180 | ) | ||||||||||||||
| Operating loss | (6,158 | ) | (3,606 | ) | (11,622 | ) | (13,484 | ) | (13,903 | ) | ||||||||||
| Gain on extinguishment of debt(6) | - | 9,061 | - | 9,061 | - | |||||||||||||||
| Interest (expense) income, net | (50 | ) | (58 | ) | (114 | ) | (397 | ) | (268 | ) | ||||||||||
| Income (loss) before income taxes | (6,208 | ) | 5,397 | (11,736 | ) | (4,820 | ) | (14,171 | ) | |||||||||||
| Income tax (expense) benefit | 18 | (9 | ) | 138 | 24 | 52 | ||||||||||||||
| Income (loss) from continuing operations | (6,190 | ) | 5,388 | (11,598 | ) | (4,796 | ) | (14,119 | ) | |||||||||||
| Loss from discontinued operations, net of taxes(7) | - | - | (3,808 | ) | (17,372 | ) | (13,307 | ) | ||||||||||||
| Net income (loss) | $ | (6,190 | ) | $ | 5,388 | $ | (15,406 | ) | $ | (22,168 | ) | $ | (27,426 | ) | ||||||
| Per share data: | ||||||||||||||||||||
| Basic and diluted income (loss) from continuing operations | $ | (0.40 | ) | $ | 0.35 | $ | (0.76 | ) | $ | (0.31 | ) | $ | (0.92 | ) | ||||||
| Basic and diluted loss from discontinued operations | - | - | (0.25 | ) | (1.12 | ) | (0.87 | ) | ||||||||||||
| Basic and diluted income (loss) per common share | $ | (0.40 | ) | $ | 0.35 | $ | (1.01 | ) | $ | (1.43 | ) | $ | (1.79 | ) | ||||||
Consolidated EBITDA(3) (in thousands)
| Three Months Ended | Years Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2021 | 2021(2) | 2020(2) | 2021 | 2020(2) | ||||||||||||||||
| Income (loss) from continuing operations | $ | (6,190 | ) | $ | 5,388 | $ | (11,598 | ) | $ | (4,796 | ) | $ | (14,119 | ) | ||||||
| Less: Income tax (expense) benefit | 18 | (9 | ) | 138 | 24 | 52 | ||||||||||||||
| Less: Interest (expense) income, net | (50 | ) | (58 | ) | (114 | ) | (397 | ) | (268 | ) | ||||||||||
| Less: Gain on extinguishment of debt | - | 9,061 | - | 9,061 | - | |||||||||||||||
| Operating loss | (6,158 | ) | (3,606 | ) | (11,622 | ) | (13,484 | ) | (13,903 | ) | ||||||||||
| Add: Depreciation and amortization | 1,104 | 1,067 | 1,275 | 4,320 | 5,230 | |||||||||||||||
| EBITDA | $ | (5,054 | ) | $ | (2,539 | ) | $ | (10,347 | ) | $ | (9,164 | ) | $ | (8,673 | ) | |||||
_________________
(1) See “Results of Operations by Segment” below for results by segment.
(2) Results for the three months ended September 30, 2021 are different from previously reported amounts as they have been adjusted to reflect a decrease to consolidated net loss of
(3) New projects awards and EBITDA are non-GAAP measures. See “Non-GAAP Measures” above for the Company’s definition of new project awards and EBITDA.
(4) Gross profit for the Fabrication & Services Division for the three months ended December 31, 2021 and September 30, 2021, and twelve months ended December 31, 2021 and 2020, includes project improvements of
(5) Other (income) expense for the Fabrication & Services Division for both the three and twelve months ended December 31, 2021, includes charges of
(6) Gain on extinguishment of debt relates to the Small Business Administration’s forgiveness of
(7) Discontinued operations include results associated with the operations included in the Shipyard Transaction in April 2021 and associated with certain previously closed Shipyard Division facilities.
Results of Operations by Segment (in thousands)
| Three Months Ended | Years Ended | |||||||||||||||||||
| Fabrication & Services Division | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2021 | 2021(1) | 2020(1) | 2021 | 2020(1) | ||||||||||||||||
| New Project Awards(2) | $ | 21,549 | $ | 15,200 | $ | 13,608 | $ | 66,488 | $ | 66,654 | ||||||||||
| Revenue | $ | 23,511 | $ | 17,285 | $ | 21,199 | $ | 81,083 | $ | 99,485 | ||||||||||
| Cost of revenue | 21,831 | 16,125 | 19,857 | 74,894 | 97,931 | |||||||||||||||
| Gross profit(3) | 1,680 | 1,160 | 1,342 | 6,189 | 1,554 | |||||||||||||||
| General and administrative expense | 844 | 885 | 732 | 3,222 | 3,442 | |||||||||||||||
| Impairments and (gain) loss on assets held for sale, net | - | - | 2,419 | - | 2,491 | |||||||||||||||
| Other (income) expense, net(4) | 3,640 | (152 | ) | 1 | 2,706 | (10,033 | ) | |||||||||||||
| Operating income (loss) | $ | (2,804 | ) | $ | 427 | $ | (1,810 | ) | $ | 261 | $ | 5,654 | ||||||||
| EBITDA(2) | ||||||||||||||||||||
| Operating income (loss) | $ | (2,804 | ) | $ | 427 | $ | (1,810 | ) | $ | 261 | $ | 5,654 | ||||||||
| Add: Depreciation and amortization | 1,027 | 985 | 1,202 | 4,001 | 4,928 | |||||||||||||||
| EBITDA | $ | (1,777 | ) | $ | 1,412 | $ | (608 | ) | $ | 4,262 | $ | 10,582 | ||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||
| Shipyard Division | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2021 | 2021(1) | 2020(1) | 2021 | 2020(1) | ||||||||||||||||
| New Project Awards(2) | $ | - | $ | - | $ | 367 | $ | - | $ | 673 | ||||||||||
| Revenue | $ | 2,317 | $ | 2,302 | $ | 2,368 | $ | 12,878 | $ | 20,468 | ||||||||||
| Cost of revenue | 3,385 | 3,539 | 9,782 | 17,120 | 29,681 | |||||||||||||||
| Gross loss(5) | (1,068 | ) | (1,237 | ) | (7,414 | ) | (4,242 | ) | (9,213 | ) | ||||||||||
| General and administrative expense | 243 | 232 | 313 | 934 | 1,038 | |||||||||||||||
| Impairments and (gain) loss on assets held for sale, net | - | - | - | - | - | |||||||||||||||
| Other (income) expense, net(6) | 308 | 412 | 100 | 593 | 850 | |||||||||||||||
| Operating loss | $ | (1,619 | ) | $ | (1,881 | ) | $ | (7,827 | ) | $ | (5,769 | ) | $ | (11,101 | ) | |||||
| EBITDA(2) | ||||||||||||||||||||
| Operating loss | $ | (1,619 | ) | $ | (1,881 | ) | $ | (7,827 | ) | $ | (5,769 | ) | $ | (11,101 | ) | |||||
| Add: Depreciation and amortization | - | - | - | - | - | |||||||||||||||
| EBITDA | $ | (1,619 | ) | $ | (1,881 | ) | $ | (7,827 | ) | $ | (5,769 | ) | $ | (11,101 | ) | |||||
| Three Months Ended | Years Ended | |||||||||||||||||||
| Corporate Division | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2021 | 2021(1) | 2020(1) | 2021 | 2020(1) | ||||||||||||||||
| Revenue (eliminations) | $ | (16 | ) | $ | - | $ | (811 | ) | $ | (509 | ) | $ | (2,224 | ) | ||||||
| Cost of revenue | 43 | 58 | (782 | ) | (226 | ) | (2,016 | ) | ||||||||||||
| Gross loss | (59 | ) | (58 | ) | (29 | ) | (283 | ) | (208 | ) | ||||||||||
| General and administrative expense | 1,675 | 2,094 | 1,953 | 7,692 | 8,245 | |||||||||||||||
| Impairments and (gain) loss on assets held for sale, net | - | - | - | - | - | |||||||||||||||
| Other (income) expense, net | 1 | - | 3 | 1 | 3 | |||||||||||||||
| Operating loss | $ | (1,735 | ) | $ | (2,152 | ) | $ | (1,985 | ) | $ | (7,976 | ) | $ | (8,456 | ) | |||||
| EBITDA(2) | ||||||||||||||||||||
| Operating loss | $ | (1,735 | ) | $ | (2,152 | ) | $ | (1,985 | ) | $ | (7,976 | ) | $ | (8,456 | ) | |||||
| Add: Depreciation and amortization | 77 | 82 | 73 | 319 | 302 | |||||||||||||||
| EBITDA | $ | (1,658 | ) | $ | (2,070 | ) | $ | (1,912 | ) | $ | (7,657 | ) | $ | (8,154 | ) | |||||
| Three Months Ended | Years Ended | |||||||||||||||||||
| Discontinued Operations(7) | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2021 | 2021(1) | 2020(1) | 2021 | 2020(1) | ||||||||||||||||
| Revenue | $ | - | $ | - | $ | 34,805 | $ | 41,637 | $ | 133,230 | ||||||||||
| Cost of revenue | - | - | 36,681 | 33,912 | 142,872 | |||||||||||||||
| Gross profit (loss)(8) | - | - | (1,876 | ) | 7,725 | (9,642 | ) | |||||||||||||
| General and administrative expense | - | - | 322 | 413 | 1,426 | |||||||||||||||
| Impairments and (gain) loss on assets held for sale(9) | - | - | 1,639 | 25,331 | 1,639 | |||||||||||||||
| Other (income) expense, net | - | - | (29 | ) | (647 | ) | 600 | |||||||||||||
| Operating loss | $ | - | $ | - | $ | (3,808 | ) | $ | (17,372 | ) | $ | (13,307 | ) | |||||||
| EBITDA(2) | ||||||||||||||||||||
| Operating loss | $ | - | $ | - | $ | (3,808 | ) | $ | (17,372 | ) | $ | (13,307 | ) | |||||||
| Add: Depreciation and amortization | - | - | 879 | 1,066 | 3,387 | |||||||||||||||
| EBITDA | $ | - | $ | - | $ | (2,929 | ) | $ | (16,306 | ) | $ | (9,920 | ) | |||||||
_________________
(1) Results for the three months ended September 30, 2021 are different from previously reported amounts as they have been adjusted to reflect a decrease to consolidated net loss of
(2) New projects awards and EBITDA are non-GAAP measures. See “Non-GAAP Measures” above for the Company’s definition of new project awards and EBITDA.
(3) Gross profit for the Fabrication & Services Division for the three months ended December 31, 2021 and September 30, 2021, and twelve months ended December 31, 2021 and 2020, includes project improvements of
(4) Other (income) expense for the Fabrication & Services Division for both the three and twelve months ended December 31, 2021, includes charges of
(5) Gross loss for the Shipyard Division for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, and twelve months ended December 31, 2021 and 2020, includes project charges of
(6) Other (income) expense for the Shipyard Division for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, and twelve months ended December 31, 2021 and 2020, includes charges of
(7) Discontinued operations include results associated with the operations included in the Shipyard Transaction in April 2021 and associated with certain previously closed Shipyard Division facilities.
(8) Gross profit (loss) from discontinued operations for the three and twelve months ended December 30, 2020, includes project charges of
(9) Impairments and (gain) loss on assets held for sale from discontinued operations for the twelve months ended December 31, 2021, includes impairment charges and transaction and other costs related to the Shipyard Transaction in April 2021.
Consolidated Balance Sheets(1) (in thousands)
| December 31, | ||||||||
| 2021 | 2020(2) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 52,886 | $ | 43,159 | ||||
| Restricted cash, current | 1,297 | — | ||||||
| Short-term investments | — | 7,998 | ||||||
| Contract receivables and retainage, net | 15,986 | 14,089 | ||||||
| Contract assets | 4,759 | 5,098 | ||||||
| Prepaid expenses and other assets | 6,971 | 7,940 | ||||||
| Inventory | 1,779 | 2,157 | ||||||
| Assets held for sale | 1,800 | 6,200 | ||||||
| Current assets of discontinued operations(2) | — | 66,116 | ||||||
| Total current assets | 85,478 | 152,757 | ||||||
| Restricted cash, noncurrent | 406 | — | ||||||
| Property, plant and equipment, net | 32,866 | 31,178 | ||||||
| Goodwill | 2,217 | — | ||||||
| Other intangibles, net | 984 | — | ||||||
| Noncurrent assets of discontinued operations(2) | — | 39,169 | ||||||
| Other noncurrent assets | 13,322 | 13,634 | ||||||
| Total assets | $ | 135,273 | $ | 236,738 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 9,280 | $ | 12,362 | ||||
| Contract liabilities | 6,648 | 10,262 | ||||||
| Accrued expenses and other liabilities | 14,026 | 13,763 | ||||||
| Long-term debt, current | — | 5,499 | ||||||
| Current liabilities of discontinued operations(2) | — | 63,807 | ||||||
| Total current liabilities | 29,954 | 105,693 | ||||||
| Long-term debt, noncurrent | — | 4,501 | ||||||
| Other noncurrent liabilities | 1,411 | 2,068 | ||||||
| Total liabilities | 31,365 | 112,262 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, no par value, 5,000 shares authorized, no shares issued and outstanding | — | — | ||||||
| Common stock, no par value, 30,000 shares authorized, 15,622 issued and outstanding at December 31, 2021 and 15,359 at December 31, 2020 | 11,384 | 11,223 | ||||||
| Additional paid-in capital | 105,511 | 104,072 | ||||||
| Retained earnings | (12,987 | ) | 9,181 | |||||
| Total shareholders’ equity | 103,908 | 124,476 | ||||||
| Total liabilities and shareholders’ equity | $ | 135,273 | $ | 236,738 | ||||
_________________
(1) The Consolidated Balance Sheet amounts at December 31, 2020, are different from previously reported amounts as they have been recast to reflect the classification of certain operations as discontinued operations as described in Note 2 below, and adjusted i) to reflect an increase to accrued expenses and other liabilities and a corresponding decrease to retained earnings and shareholders’ equity, of
(2) Assets and liabilities of discontinued operations include Balance Sheet amounts associated with operations included in the Shipyard Transaction in April 2021 and associated with certain previously closed Shipyard Division facilities.
Consolidated Cash Flows(1) (in thousands)
| Three Months Ended | Years Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2021 | 2021(1) | 2020 | 2021 | 2020(1) | ||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income (loss) | $ | (6,190 | ) | $ | 5,388 | $ | (15,406 | ) | $ | (22,168 | ) | $ | (27,426 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 1,104 | 1,067 | 2,154 | 5,386 | 8,617 | |||||||||||||||
| Asset impairments | — | — | 3,310 | 22,750 | 3,310 | |||||||||||||||
| Loss on Shipyard Transaction | — | — | — | 2,581 | — | |||||||||||||||
| (Gain) loss on sale of fixed assets and assets held for sale, net | (27 | ) | — | 174 | 33 | 289 | ||||||||||||||
| Gain on extinguishment of debt | — | (9,061 | ) | — | (9,061 | ) | — | |||||||||||||
| Stock-based compensation expense | 528 | 503 | 345 | 1,708 | 1,126 | |||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Contract receivables and retainage, net | (7,757 | ) | 5,510 | 9,043 | (593 | ) | 10,702 | |||||||||||||
| Contract assets | (2,513 | ) | 125 | 4,839 | (6,949 | ) | (15,393 | ) | ||||||||||||
| Prepaid expenses, inventory and other current assets | 2,366 | 205 | (69 | ) | 1,895 | 1,644 | ||||||||||||||
| Accounts payable | 1,770 | (2,241 | ) | (8,858 | ) | (11,491 | ) | 10,042 | ||||||||||||
| Contract liabilities | (540 | ) | (1,018 | ) | (5,048 | ) | (6,882 | ) | (11,142 | ) | ||||||||||
| Accrued expenses and other current liabilities | (2,161 | ) | (200 | ) | (1,771 | ) | (1,257 | ) | (2,376 | ) | ||||||||||
| Noncurrent assets and liabilities, net | (166 | ) | (137 | ) | (444 | ) | (766 | ) | 1,599 | |||||||||||
| Net cash provided by (used in) operating activities | (13,586 | ) | 141 | (11,731 | ) | (24,814 | ) | (19,008 | ) | |||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Capital expenditures | (403 | ) | (159 | ) | (1,021 | ) | (1,483 | ) | (11,212 | ) | ||||||||||
| Proceeds from Shipyard Transaction, net of transaction costs | 1,315 | — | — | 32,992 | — | |||||||||||||||
| DSS Acquisition | (7,573 | ) | — | — | (7,573 | ) | — | |||||||||||||
| Proceeds from sale of property and equipment | 27 | — | 341 | 4,466 | 2,020 | |||||||||||||||
| Recoveries from insurance claims | 1,000 | — | — | 1,000 | — | |||||||||||||||
| Purchases of short-term investments | — | — | (38,759 | ) | — | (58,751 | ) | |||||||||||||
| Maturities of short-term investments | — | — | 50,552 | 8,000 | 70,552 | |||||||||||||||
| Net cash provided by (used in) investing activities | (5,634 | ) | (159 | ) | 11,113 | 37,402 | 2,609 | |||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Proceeds from borrowings | — | — | — | — | 10,000 | |||||||||||||||
| Repayment of borrowings | — | (1,050 | ) | — | (1,050 | ) | — | |||||||||||||
| Payment of financing cost | — | — | (1 | ) | — | (71 | ) | |||||||||||||
| Tax payments for vested stock withholdings | — | — | — | (108 | ) | (74 | ) | |||||||||||||
| Net cash provided by (used in) financing activities | — | (1,050 | ) | (1 | ) | (1,158 | ) | 9,855 | ||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (19,220 | ) | (1,068 | ) | (619 | ) | 11,430 | (6,544 | ) | |||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 73,809 | 74,877 | 43,778 | 43,159 | 49,703 | |||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 54,589 | $ | 73,809 | $ | 43,159 | $ | 54,589 | $ | 43,159 | ||||||||||
_________________
(1) Cash flow activity for discontinued operations is not presented separately for any period in the Consolidated Statement of Cash Flows, and for the three months ended September 30, 2021 and year ended December 31, 2020, is different from previously reported amounts as they have been adjusted for corrections as described in the Notes above.
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