Gulf Island Reports Fourth Quarter and Full Year 2023 Results
- Consolidated revenue for Q4 2023 was $44.6 million, a 17% increase from the prior year. Net income was $7.1 million with adjusted EBITDA of $6.6 million.
- Full year 2023 revenue was $151.1 million, with a net loss of $24.4 million and adjusted EBITDA of $17.0 million.
- Gulf Island resolved MPSV Litigation, resulting in a charge of $32.5 million and a promissory note agreement of $20.0 million payable to the Surety.
- Strategic initiatives focused on traditional offshore markets, new growth end markets, services business expansion, project execution, and skilled workforce expansion.
- Segment results showed revenue growth in Services and Fabrication segments, with operating income improvements and adjusted EBITDA increases.
- The Company ended 2023 with a cash balance of nearly $48 million, further strengthened by a property sale generating $8.5 million in net cash proceeds.
- Consolidated net loss for full year 2023 was $24.4 million, compared to a net loss of $3.4 million in the prior year.
- Shipyard Division recorded losses of $39.4 million for full year 2023, impacting consolidated adjusted EBITDA.
- Challenges with under-recovery of overhead costs and lower utilization of facilities affected Fabrication Division's operating results.
- Corporate Division reported an operating loss of $2.1 million for Q4 2023.
Insights
Gulf Island Fabrication, Inc.'s announcement of its fourth quarter and full year 2023 financial results indicates a significant turnaround in profitability, particularly in the fourth quarter. The company's consolidated net income of $7.1 million for Q4 2023, compared to $0.5 million in the prior year, represents a noteworthy improvement. This surge in net income can be attributed to increased revenue and the successful execution of strategic initiatives, which appear to have enhanced operational efficiency. The substantial increase in adjusted EBITDA from $2.3 million in the prior year to $6.6 million in Q4 2023 further underscores this point.
From a financial standpoint, the company's cash and short-term investments balance of $47.9 million as of December 31, 2023, provides it with a robust liquidity position. This is further bolstered by the sale of excess property in February 2024, which added approximately $8.5 million to their cash reserves. Such a strong liquidity position offers the company significant financial flexibility to pursue growth opportunities and potentially enhance shareholder value. Investors may find reassurance in the company's financial health and its ability to weather economic uncertainties or invest in strategic initiatives.
The industrial and energy sectors, where Gulf Island operates, have shown resilience and growth, which is reflected in the company's revenue increase. The 17% year-over-year growth in fourth quarter revenue indicates a robust demand for Gulf Island's services. The strategic focus on small-scale fabrication and services, including the Spark Safety services offering, seems to be paying off, with the Services Division operating income increasing by 35% for the full year 2023.
The company's strategic pivot away from its Shipyard Division, with the substantial completion of remaining ferry projects, suggests a refocusing of resources towards more profitable segments. This shift aligns with broader industry trends where companies are streamlining operations to focus on core, high-margin activities. Gulf Island's management appears to be executing a disciplined growth strategy, which is evidenced by their projected EBITDA for 2024 and their emphasis on pursuing projects with adequate risk-adjusted returns.
The resolution of the MPSV Litigation is a critical development for Gulf Island. The dismissal of the lawsuit and the subsequent agreement with the Surety not only eliminates a significant legal overhang but also provides clarity on future financial obligations. The promissory note agreement, which replaces the liability with a structured repayment plan, offers a clear pathway for the company to manage its debt obligations without undue financial strain. This resolution removes a substantial uncertainty and allows management to focus on core business activities without the distraction of ongoing litigation.
It is also important to note the impact of the $32.5 million charge recorded by the Shipyard Division due to the litigation resolution, which significantly affected the full year 2023 revenue figures. The transparent handling of this charge and its reflection in the financial statements, demonstrates the company's commitment to clear financial reporting practices. Stakeholders should appreciate the finalization of this legal matter and the company's proactive approach to addressing and communicating its impact.
THE WOODLANDS, Texas, March 07, 2024 (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 2023.
FOURTH QUARTER 2023 SUMMARY
- Consolidated revenue of
$44.6 million - Consolidated net income of
$7.1 million ; Adjusted EBITDA of$6.6 million - Services Division operating income of
$2.7 million ; EBITDA of$3.2 million - Fabrication Division operating income of
$6.1 million ; Adjusted EBITDA of$5.4 million - Cash and short-term investments balance of
$47.9 million at December 31, 2023 - Substantially completed remaining ferry projects for the Shipyard Division
Consolidated revenue for the fourth quarter 2023 was
FULL YEAR 2023 SUMMARY
- Consolidated revenue of
$151.1 million ; Adjusted revenue of$181.5 million - Consolidated net loss of
$24.4 million ; Adjusted EBITDA of$17.0 million - Services Division operating income of
$10.9 million ; EBITDA of$12.9 million - Fabrication Division operating income of
$10.6 million ; Adjusted EBITDA of$11.8 million - Resolved MPSV Litigation
Consolidated revenue for the full year 2023 was
Consolidated net loss for the full year 2023 was
See “Non-GAAP Measures” below for the Company’s definition of adjusted revenue, EBITDA and adjusted EBITDA and reconciliations of the relevant amounts to the most comparable GAAP measures.
MANAGEMENT COMMENTARY
“Our strong fourth quarter results cap off an excellent year for Gulf Island and reflect the continued favorable end market trends in our core Gulf Coast region, combined with the benefits of the successful execution of our strategic initiatives,” said Richard Heo, Gulf Island’s President and Chief Executive Officer. “Our fourth quarter revenue increased
“I am proud of the continued execution of our strategic plan during 2023, and we enter 2024 in a strong position to continue our focus on profitable growth,” continued Heo. “While we continued to make important progress on our initiatives focused on the services and fabrication businesses, the most important achievements of 2023 center on the substantial completion of our shipyard wind down and the successful resolution of the MPSV Litigation. With these distractions behind us, we are fully focused on taking advantage of the strong growth platform we have created in our services and fabrication businesses and utilizing our solid financial position to deploy capital to further enhance shareholder value.”
“Our services and small-scale fabrication businesses form a profitable and stable base business for Gulf Island to continue to build on,” continued Heo. “During 2024, we expect favorable market conditions and continued execution of our strategic initiatives to drive continued growth in these core businesses. For 2024, we expect Services EBITDA of approximately
“Our strong operating results for the fourth quarter, together with an ongoing focus on working capital management, resulted in a year-end cash balance of nearly
“This was an exciting year for Gulf Island, one that would not have been possible without the hard work and dedication of our employees across the organization,” noted Heo. “While we remain encouraged by the large project opportunities in our fabrication business, we are excited by the momentum in our services and small-scale fabrication businesses, which combined with our ability to take advantage of our strong financial flexibility, position the company to drive value for shareholders. I am very proud of all our accomplishments during 2023, and remain confident that 2024 will build on the strong foundation we have established,” concluded Heo.
RESOLUTION OF MPSV LITIGATION
As previously disclosed, on October 4, 2023, the Company’s lawsuit relating to the construction of two multi-purpose supply vessels (“MPSV Litigation”) was dismissed in full with prejudice at the request of the parties to the litigation. In addition, on November 6, 2023, the Company entered into an agreement (the “Settlement Agreement”) with the issuer (the “Surety”) of the performance bonds for the MPSV construction contracts, pursuant to which the Surety released the Company from all of its obligations under the performance bonds and the associated general indemnity agreements related to the performance bonds, and the Company released possession of the MPSVs to the Surety during the fourth quarter 2023. Further, the Company entered into a promissory note (“Note Agreement”) payable to the Surety in the principal amount of
STRATEGIC UPDATE
During 2023, Gulf Island continued to execute on the second 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 workforce, while continuing to pursue opportunities in its traditional offshore markets. Some of the key accomplishments achieved during 2023, as well as key priorities for 2024, are as follows:
Pursue traditional offshore markets – The demand environment for traditional offshore activities in the Gulf of Mexico was robust during 2023, resulting in favorable growth trends for both services and small-scale fabrication projects. Driven by relative stability in oil prices and healthy customer balance sheets, the momentum in the Gulf of Mexico is anticipated to continue into 2024, which is expected to result in continued growth in the coming year.
Pursue new growth end markets – Gulf Island has a strong foundation to pursue new growth opportunities in its core Gulf Coast region, primarily in the LNG, petrochemical, and energy transition markets. Bidding activity on large fabrication project opportunities remains active, driven by strong industry fundamentals combined with limited industry capacity. However, project decision cycles are extending due to higher interest rates and a challenging permitting environment, which has been exacerbated for the LNG market by the recent announcement from the current administration calling for a pause on LNG export project approvals. While the Company remains confident that it is well-positioned to be awarded large project opportunities, management will remain disciplined and continue its focus on profitably growing its services and small-scale fabrication businesses.
Grow and diversify services business – Gulf Island continues to expand its services business, driven by the favorable demand trends for offshore services combined with the contribution of Spark Safety, the Services Division’s welding enclosures business line. Services revenue grew by
Further strengthen project execution and maintain bidding discipline – Project execution and bidding discipline remain a key priority given inflationary pressures and challenges with the availability of skilled labor. The Company’s pursuit of consistent project execution was reflected in the strong margin performance during 2023, with Services gross margins expanding 180 basis points year-over-year, and Fabrication gross margins reaching
Expand skilled workforce – A strong skilled workforce is critical to success in the services and fabrication markets, particularly given the current competitive industry-wide labor environment. Gulf Island was able to maintain its skilled labor headcount in Services during 2023 despite the challenging labor environment. The Company remains confident in its proven ability to ramp up headcount in Fabrication to support new project awards, which places the Company in a strong position to grow its fabrication business. The Company continues to evaluate opportunities to expand its skilled labor headcount in 2024 given the favorable demand trends, including strategic acquisitions to increase craft labor headcount.
SEGMENT RESULTS FOR FOURTH QUARTER 2023
Services Segment – Revenue for the fourth quarter 2023 was
New project awards were
Operating income was
Fabrication Segment – Revenue for the fourth quarter 2023 was
New project awards were
Operating income was
Shipyard Segment – Revenue for the fourth quarter 2023 was
Operating loss was
Corporate Segment – Operating loss was
Segment Descriptions – The Company’s divisions represent its reportable segments which are “Services”, “Fabrication”, “Shipyard” and “Corporate”. The Services Segment includes offshore and onshore services work performed at customer facilities, including offshore platforms. The Fabrication Segment includes all fabrication work performed on-site at the Company’s facilities, including pull-through fabrication work for the Services Segment. The Shipyard Segment includes two ferries under construction that were substantially completed in the fourth quarter 2023, and vessel holding costs and legal fees associated with the Company’s previous MPSV Litigation (discussed above). The wind down of the Company’s Shipyard Segment operations was substantially completed in the fourth quarter 2023 with the substantial completion of the ferry projects. The Corporate Segment includes costs that are not directly related to the Company’s operating segments, including the costs of being a publicly traded company.
BALANCE SHEET AND LIQUIDITY
The Company’s cash and short-term investments balance at December 31, 2023 was
2024 FINANCIAL OUTLOOK
Gulf Island is providing indicative segment and consolidated guidance for the full year 2024. Services segment EBITDA is expected to be approximately
FOURTH QUARTER 2023 CONFERENCE CALL
Gulf Island will hold a conference call on Thursday, March, 7, 2024 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 1.877.704.4453 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, welding enclosures, 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 The Woodlands, 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”), adjusted EBITDA, adjusted revenue, adjusted gross profit, new project awards and backlog. The Company believes EBITDA is a useful supplemental measure as it reflects the Company’s operating results and expectations of future performance excluding the non-cash impacts of depreciation and amortization. The Company believes adjusted EBITDA is a useful supplemental measure as it reflects the Company’s EBITDA adjusted to remove certain nonrecurring items (including the impact of insurance recoveries and costs associated with damage previously caused by Hurricane Ida and certain non-cash impairment charges) and the operating results of the Company’s Shipyard Division (including the impact of certain nonrecurring items related to the resolution of the MPSV Litigation), which was substantially wound down in the fourth quarter 2023. The Company believes adjusted revenue and adjusted gross profit are useful supplemental measures as they reflect the Company’s revenue, and gross profit or loss, adjusted to remove revenue, and gross profit or loss, for the Company’s Shipyard Division (including the impact of certain nonrecurring items related to the resolution of the MPSV Litigation), which was substantially wound down in the fourth quarter 2023. Reconciliations of EBITDA, adjusted EBITDA, adjusted revenue and adjusted gross profit to the most comparable GAAP measures are presented under “Consolidated Results of Operations,” “Results of Operations by Segment” and “2024 Financial Outlook – Segment and Consolidated EBITDA Reconciliations” 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, 2023, 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 STATEMENT
This release contains forward-looking statements in which the Company discusses its potential future performance, operations and projects. 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 operating results; 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; cash flows and cash balance; capital expenditures; implementation of the Company’s share repurchase program; liquidity; and execution of strategic initiatives. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “to be,” “potential” and any similar expressions are intended to identify those assertions as forward-looking statements. The timing and amount of any share repurchases will be at the discretion of management and will depend on a variety of factors including, but not limited to, the Company’s operating performance, cash flow and financial position, the market price of its common stock and general economic and market conditions. The share repurchase program may be modified, increased, suspended or terminated at any time at the Board’s discretion.
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: supply chain disruptions, inflationary pressures, economic slowdowns and recessions, natural disasters, public health crises, labor costs and geopolitical conflicts, and the related volatility in oil and gas prices and other factors impacting the global economy; cyclical nature of the oil and gas industry; competition; reliance on significant customers; competitive pricing and cost overruns on its projects; performance of subcontractors and dependence on suppliers; timing and its ability to secure and commence execution of new project awards, including fabrication projects for refining, petrochemical, LNG, industrial and sustainable energy end markets; its ability to maintain and further improve project execution; nature of its contract terms and customer adherence to such terms; suspension or termination of projects; changes in contract estimates; customer or subcontractor disputes; operating dangers, weather events and availability and limits on insurance coverage; operability and adequacy of its major equipment; 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 resolve any material legal proceedings; its ability to execute its share repurchase program and enhance shareholder value; its ability to obtain letters of credit or surety bonds and ability to meet any indemnification obligations thereunder; consolidation of its customers; financial ability and credit worthiness of its customers; adjustments to previously reported profits or losses under the percentage-of-completion method; its ability to employ a skilled workforce; loss of key personnel; utilization of facilities or closure or consolidation of facilities; failure of its safety assurance program; barriers to entry into new lines of business; weather impacts to operations; any future asset impairments; changes in trade policies of the U.S. and other countries; 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; and other factors described under “Risk Factors” in Part I, Item 1A of the Company’s annual report on Form 10-K for the year ended December 31, 2022, as 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 Chief Executive Officer 713.714.6100 | Westley S. Stockton Chief Financial Officer 713.714.6100 | |
Consolidated Results of Operations(1) (in thousands, except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| New project awards(2) | $ | 44,400 | $ | 38,417 | $ | 37,945 | $ | 157,719 | $ | 240,247 | |||||||||
| Revenue | $ | 44,550 | $ | 5,023 | $ | 38,139 | $ | 151,067 | $ | 142,320 | |||||||||
| Cost of revenue | 36,087 | 34,902 | 35,716 | 162,968 | 134,425 | ||||||||||||||
| Gross profit (loss)(3) | 8,463 | (29,879 | ) | 2,423 | (11,901 | ) | 7,895 | ||||||||||||
| General and administrative expense(4) | 3,395 | 4,080 | 5,249 | 16,278 | 18,214 | ||||||||||||||
| Other (income) expense, net(5) | (1,607 | ) | (324 | ) | (3,206 | ) | (2,296 | ) | (6,904 | ) | |||||||||
| Operating income (loss) | 6,675 | (33,635 | ) | 380 | (25,883 | ) | (3,415 | ) | |||||||||||
| Interest (expense) income, net | 383 | 397 | 190 | 1,440 | 86 | ||||||||||||||
| Income (loss) before income taxes | 7,058 | (33,238 | ) | 570 | (24,443 | ) | (3,329 | ) | |||||||||||
| Income tax (expense) benefit | 32 | 3 | (21 | ) | 41 | (23 | ) | ||||||||||||
| Net income (loss) | $ | 7,090 | $ | (33,235 | ) | $ | 549 | $ | (24,402 | ) | $ | (3,352 | ) | ||||||
| Per share data: | |||||||||||||||||||
| Basic income (loss) per share | $ | 0.44 | $ | (2.04 | ) | $ | 0.04 | $ | (1.51 | ) | $ | (0.21 | ) | ||||||
| Diluted income (loss) per share | $ | 0.43 | $ | (2.04 | ) | $ | 0.04 | $ | (1.51 | ) | $ | (0.21 | ) | ||||||
Consolidated Adjusted Revenue(2) Reconciliation (in thousands)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Revenue | $ | 44,550 | $ | 5,023 | $ | 38,139 | $ | 151,067 | $ | 142,320 | |||||||||
| Add (less): Shipyard revenue | (556 | ) | 32,702 | (357 | ) | 30,417 | (7,671 | ) | |||||||||||
| Adjusted revenue | $ | 43,994 | $ | 37,725 | $ | 37,782 | $ | 181,484 | $ | 134,649 | |||||||||
Consolidated Adjusted Gross Profit(2) Reconciliation (in thousands)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Gross profit (loss) | $ | 8,463 | $ | (29,879 | ) | $ | 2,423 | $ | (11,901 | ) | $ | 7,895 | |||||||
| Add (less): Shipyard gross loss (profit) | (93 | ) | 34,356 | 2,299 | 35,862 | 3,058 | |||||||||||||
| Adjusted gross profit | $ | 8,370 | $ | 4,477 | $ | 4,722 | $ | 23,961 | $ | 10,953 | |||||||||
Consolidated EBITDA and Adjusted EBITDA(2) Reconciliations (in thousands)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Net income (loss) | $ | 7,090 | $ | (33,235 | ) | $ | 549 | $ | (24,402 | ) | $ | (3,352 | ) | ||||||
| Less: Income tax (expense) benefit | 32 | 3 | (21 | ) | 41 | (23 | ) | ||||||||||||
| Less: Interest (expense) income, net | 383 | 397 | 190 | 1,440 | 86 | ||||||||||||||
| Operating income (loss) | 6,675 | (33,635 | ) | 380 | (25,883 | ) | (3,415 | ) | |||||||||||
| Add: Depreciation and amortization | 1,351 | 1,390 | 1,334 | 5,466 | 5,098 | ||||||||||||||
| EBITDA | 8,026 | (32,245 | ) | 1,714 | (20,417 | ) | 1,683 | ||||||||||||
| Less: Hurricane insurance gains | (1,526 | ) | (291 | ) | (3,010 | ) | (1,988 | ) | (7,456 | ) | |||||||||
| Add: Non-cash impairments | - | - | - | - | 484 | ||||||||||||||
| Add: Shipyard operating loss | 106 | 35,117 | 3,589 | 39,374 | 7,554 | ||||||||||||||
| Adjusted EBITDA | $ | 6,606 | $ | 2,581 | $ | 2,293 | $ | 16,969 | $ | 2,265 | |||||||||
_________________
| (1) | See “Results of Operations by Segment” below for results by segment. |
| (2) | New projects awards, adjusted revenue, adjusted gross profit, EBITDA and adjusted EBITDA are non-GAAP measures. See “Non-GAAP Measures” above for the Company’s definition of new project awards, adjusted revenue, adjusted gross profit, EBITDA and adjusted EBITDA. |
| (3) | Gross profit for the Fabrication Division for the three months ended December 31, 2023 and September 30, 2023, includes project improvements of |
| (4) | General and administrative expense for the Shipyard Division for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, and twelve months ended December 31, 2023 and 2022, includes legal and advisory fees of |
| (5) | Other (income) expense for the Fabrication Division for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, and twelve months ended December 31, 2023 and 2022, includes gains of |
Results of Operations by Segment (including Reconciliations of EBITDA and Adjusted EBITDA) (in thousands)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| Services Division | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| New project awards(1) | $ | 24,150 | $ | 22,776 | $ | 21,274 | $ | 92,728 | $ | 85,846 | |||||||||
| Revenue | $ | 24,515 | $ | 22,976 | $ | 21,609 | $ | 93,548 | $ | 87,022 | |||||||||
| Cost of revenue | 21,080 | 19,716 | 18,677 | 79,765 | 75,795 | ||||||||||||||
| Gross profit | 3,435 | 3,260 | 2,932 | 13,783 | 11,227 | ||||||||||||||
| General and administrative expense | 699 | 701 | 717 | 2,902 | 2,997 | ||||||||||||||
| Other (income) expense, net | (6 | ) | (18 | ) | 3 | (48 | ) | 106 | |||||||||||
| Operating income | $ | 2,742 | $ | 2,577 | $ | 2,212 | $ | 10,929 | $ | 8,124 | |||||||||
| EBITDA(1) | |||||||||||||||||||
| Operating income | $ | 2,742 | $ | 2,577 | $ | 2,212 | $ | 10,929 | $ | 8,124 | |||||||||
| Add: Depreciation and amortization | 486 | 502 | 368 | 1,926 | 1,496 | ||||||||||||||
| EBITDA | $ | 3,228 | $ | 3,079 | $ | 2,580 | $ | 12,855 | $ | 9,620 | |||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| Fabrication Division | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| New project awards(1) | $ | 19,896 | $ | 16,589 | $ | 17,291 | $ | 66,629 | $ | 154,239 | |||||||||
| Revenue | $ | 19,664 | $ | 14,979 | $ | 16,414 | $ | 89,046 | $ | 48,299 | |||||||||
| Cost of revenue | 14,729 | 13,762 | 14,624 | 78,868 | 48,573 | ||||||||||||||
| Gross profit (loss)(2) | 4,935 | 1,217 | 1,790 | 10,178 | (274 | ) | |||||||||||||
| General and administrative expense | 447 | 448 | 607 | 1,885 | 2,306 | ||||||||||||||
| Other (income) expense, net(3) | (1,627 | ) | (135 | ) | (2,904 | ) | (2,265 | ) | (7,454 | ) | |||||||||
| Operating income | $ | 6,115 | $ | 904 | $ | 4,087 | $ | 10,558 | $ | 4,874 | |||||||||
| EBITDA and Adjusted EBITDA(1) | |||||||||||||||||||
| Operating income | $ | 6,115 | $ | 904 | $ | 4,087 | $ | 10,558 | $ | 4,874 | |||||||||
| Add: Depreciation and amortization | 789 | 813 | 907 | 3,249 | 3,343 | ||||||||||||||
| EBITDA | 6,904 | 1,717 | 4,994 | 13,807 | 8,217 | ||||||||||||||
| Less: Hurricane insurance gains | (1,526 | ) | (291 | ) | (3,010 | ) | (1,988 | ) | (7,456 | ) | |||||||||
| Adjusted EBITDA | $ | 5,378 | $ | 1,426 | $ | 1,984 | $ | 11,819 | $ | 761 | |||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| Shipyard Division | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| New project awards(1) | $ | 539 | $ | (718 | ) | $ | (379 | ) | $ | (528 | ) | $ | 834 | ||||||
| Revenue | $ | 556 | $ | (32,702 | ) | $ | 357 | $ | (30,417 | ) | $ | 7,671 | |||||||
| Cost of revenue | 463 | 1,654 | 2,656 | 5,445 | 10,729 | ||||||||||||||
| Gross profit (loss)(4) | 93 | (34,356 | ) | (2,299 | ) | (35,862 | ) | (3,058 | ) | ||||||||||
| General and administrative expense(5) | 98 | 857 | 1,530 | 3,205 | 4,469 | ||||||||||||||
| Other (income) expense, net(6) | 101 | (96 | ) | (240 | ) | 307 | 27 | ||||||||||||
| Operating loss | $ | (106 | ) | $ | (35,117 | ) | $ | (3,589 | ) | $ | (39,374 | ) | $ | (7,554 | ) | ||||
| EBITDA(1) | |||||||||||||||||||
| Operating loss | $ | (106 | ) | $ | (35,117 | ) | $ | (3,589 | ) | $ | (39,374 | ) | $ | (7,554 | ) | ||||
| Add: Depreciation and amortization | - | - | - | - | - | ||||||||||||||
| EBITDA | $ | (106 | ) | $ | (35,117 | ) | $ | (3,589 | ) | $ | (39,374 | ) | $ | (7,554 | ) | ||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| Corporate Division | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| New project awards (eliminations)(1) | $ | (185 | ) | $ | (230 | ) | $ | (241 | ) | $ | (1,110 | ) | $ | (672 | ) | ||||
| Revenue (eliminations) | $ | (185 | ) | $ | (230 | ) | $ | (241 | ) | $ | (1,110 | ) | $ | (672 | ) | ||||
| Cost of revenue (eliminations) | (185 | ) | (230 | ) | (241 | ) | (1,110 | ) | (672 | ) | |||||||||
| Gross profit | - | - | - | - | - | ||||||||||||||
| General and administrative expense | 2,151 | 2,074 | 2,395 | 8,286 | 8,442 | ||||||||||||||
| Other (income) expense, net(7) | (75 | ) | (75 | ) | (65 | ) | (290 | ) | 417 | ||||||||||
| Operating loss | $ | (2,076 | ) | $ | (1,999 | ) | $ | (2,330 | ) | $ | (7,996 | ) | $ | (8,859 | ) | ||||
| EBITDA and Adjusted EBITDA(1) | |||||||||||||||||||
| Operating loss | $ | (2,076 | ) | $ | (1,999 | ) | $ | (2,330 | ) | $ | (7,996 | ) | $ | (8,859 | ) | ||||
| Add: Depreciation and amortization | 76 | 75 | 59 | 291 | 259 | ||||||||||||||
| EBITDA | (2,000 | ) | (1,924 | ) | (2,271 | ) | (7,705 | ) | (8,600 | ) | |||||||||
| Add: Non-cash impairments | - | - | - | - | 484 | ||||||||||||||
| Adjusted EBITDA | $ | (2,000 | ) | $ | (1,924 | ) | $ | (2,271 | ) | $ | (7,705 | ) | $ | (8,116 | ) | ||||
_________________
| (1) | New projects awards, EBITDA and adjusted EBITDA are non-GAAP measures. See “Non-GAAP Measures” above for the Company’s definition of new project awards, EBITDA and adjusted EBITDA. |
| (2) | Gross profit for the Fabrication Division for the three months ended December 31, 2023 and September 30, 2023, includes project improvements of |
| (3) | Other (income) expense for the Fabrication Division for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, and twelve months ended December 31, 2023 and 2022, includes gains of |
| (4) | Gross loss for the Shipyard Division for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, and twelve months ended December 31, 2023 and 2022, includes project charges of |
| (5) | General and administrative expense for the Shipyard Division for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, and twelve months ended December 31, 2023 and 2022, includes legal and advisory fees of |
| (6) | Other (income) expense for the Shipyard Division for the three months ended December 31, 2023 and September 30, 2023, and twelve months ended December 31, 2023 and 2022, includes charges of |
| (7) | Other (income) expense for the Corporate Division for the twelve months ended December 31, 2022, includes a non-cash impairment charge of |
Consolidated Balance Sheets (in thousands)
| December 31, | |||||||
| 2023 | 2022 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 38,176 | $ | 33,221 | |||
| Restricted cash | 1,475 | 1,603 | |||||
| Short-term investments | 8,233 | 9,905 | |||||
| Contract receivables and retainage, net | 36,298 | 29,427 | |||||
| Contract assets | 2,739 | 4,839 | |||||
| Prepaid expenses and other assets | 6,994 | 6,475 | |||||
| Inventory | 2,072 | 1,599 | |||||
| Assets held for sale | 5,640 | — | |||||
| Total current assets | 101,627 | 87,069 | |||||
| Property, plant and equipment, net | 23,145 | 31,154 | |||||
| Goodwill | 2,217 | 2,217 | |||||
| Other intangibles, net | 700 | 842 | |||||
| Other noncurrent assets | 739 | 13,584 | |||||
| Total assets | $ | 128,428 | $ | 134,866 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 8,466 | $ | 8,310 | |||
| Contract liabilities | 5,470 | 8,196 | |||||
| Accrued expenses and other liabilities | 14,836 | 14,283 | |||||
| Long-term debt, current | 1,075 | — | |||||
| Total current liabilities | 29,847 | 30,789 | |||||
| Long-term debt, noncurrent | 18,925 | — | |||||
| Other noncurrent liabilities | 685 | 1,453 | |||||
| Total liabilities | 49,457 | 32,242 | |||||
| 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, 16,258 issued and outstanding at December 31, 2023 and 15,973 at December 31, 2022 | 11,729 | 11,591 | |||||
| Additional paid-in capital | 108,615 | 107,372 | |||||
| Accumulated deficit | (41,373 | ) | (16,339 | ) | |||
| Total shareholders’ equity | 78,971 | 102,624 | |||||
| Total liabilities and shareholders’ equity | $ | 128,428 | $ | 134,866 | |||
Consolidated Cash Flows (in thousands)
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||
| Net income (loss) | $ | 7,090 | $ | (33,235 | ) | $ | 549 | $ | (24,402 | ) | $ | (3,352 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||
| Depreciation and amortization | 1,351 | 1,390 | 1,334 | 5,466 | 5,098 | ||||||||||||||
| Asset impairments | — | — | — | — | 484 | ||||||||||||||
| Change in allowance for doubtful accounts and credit losses | — | (210 | ) | — | (410 | ) | — | ||||||||||||
| (Gain) loss on sale or disposal of fixed assets, net | 276 | (216 | ) | 98 | 27 | 19 | |||||||||||||
| Gain on insurance recoveries | (326 | ) | — | — | (571 | ) | (1,200 | ) | |||||||||||
| Stock-based compensation expense | 525 | 513 | 838 | 1,991 | 2,302 | ||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||
| Contract receivables and retainage, net | (614 | ) | 631 | 3,585 | (7,093 | ) | (13,441 | ) | |||||||||||
| Contract assets | 1,566 | 2,357 | 2,968 | 2,100 | (80 | ) | |||||||||||||
| Prepaid expenses, inventory and other current assets | (2,962 | ) | 1,874 | 1,021 | (133 | ) | 2,224 | ||||||||||||
| Accounts payable | (2,923 | ) | (5,828 | ) | (3,899 | ) | (9 | ) | (1,088 | ) | |||||||||
| Contract liabilities | 1,936 | 469 | 3,903 | (2,726 | ) | 1,548 | |||||||||||||
| Accrued expenses and other current liabilities | 1,579 | 2,020 | (273 | ) | 1,206 | (561 | ) | ||||||||||||
| Noncurrent assets and liabilities, net | (129 | ) | 32,256 | (222 | ) | 31,751 | (876 | ) | |||||||||||
| Net cash provided by (used in) operating activities | 7,369 | 2,021 | 9,902 | 7,197 | (8,923 | ) | |||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||
| Capital expenditures | (1,175 | ) | (645 | ) | (2,054 | ) | (2,876 | ) | (3,086 | ) | |||||||||
| Proceeds from Shipyard Transaction | — | — | — | — | 886 | ||||||||||||||
| Proceeds from sale of property and equipment | 60 | 290 | — | 456 | 2,035 | ||||||||||||||
| Recoveries from insurance claims | — | — | — | 245 | 1,200 | ||||||||||||||
| Purchases of short-term investments | (8,297 | ) | (15,471 | ) | (96 | ) | (39,028 | ) | (9,905 | ) | |||||||||
| Maturities of short-term investments | 15,500 | 15,200 | — | 40,700 | — | ||||||||||||||
| Net cash provided by (used in) investing activities | 6,088 | (626 | ) | (2,150 | ) | (503 | ) | (8,870 | ) | ||||||||||
| Cash flows from financing activities: | |||||||||||||||||||
| Payments on Insurance Finance Arrangements | — | (128 | ) | (775 | ) | (1,257 | ) | (1,738 | ) | ||||||||||
| Repurchases of common stock | (128 | ) | — | — | (128 | ) | — | ||||||||||||
| Tax payments for vested stock withholdings | — | — | (113 | ) | (482 | ) | (234 | ) | |||||||||||
| Net cash used in financing activities | (128 | ) | (128 | ) | (888 | ) | (1,867 | ) | (1,972 | ) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 13,329 | 1,267 | 6,864 | 4,827 | (19,765 | ) | |||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 26,322 | 25,055 | 27,960 | 34,824 | 54,589 | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 39,651 | $ | 26,322 | $ | 34,824 | $ | 39,651 | $ | 34,824 | |||||||||
2024 Financial Outlook - Segment and Consolidated EBITDA(1) Reconciliations (in thousands)
| Twelve Months Ending December 31, 2024 | |||||||||||||||||||
| Services | Fabrication | Shipyard | Corporate | Consolidated | |||||||||||||||
| Net income (loss) | $ | 12,000 | $ | 5,200 | $ | - | $ | (6,400 | ) | $ | 10,800 | ||||||||
| Less: Income tax (expense) benefit | - | - | - | - | - | ||||||||||||||
| Less: Interest (expense) income, net | - | - | - | 1,900 | 1,900 | ||||||||||||||
| Operating income (loss) | 12,000 | 5,200 | - | (8,300 | ) | 8,900 | |||||||||||||
| Add: Depreciation and amortization | 2,000 | 2,800 | - | 300 | 5,100 | ||||||||||||||
| EBITDA (2) | $ | 14,000 | $ | 8,000 | $ | - | $ | (8,000 | ) | $ | 14,000 | ||||||||
_________________
| (1) | EBITDA is a non-GAAP measure. See “Non-GAAP Measures” above for the Company’s definition of EBITDA. |
| (2) | Excludes a gain of approximately |
FAQ
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