Gulf Island Reports Third Quarter 2023 Results
- The resolution of the MPSV Litigation eliminates ongoing legal and vessel holding costs, improving the risk profile of Gulf Island.
- Services Division operating income grew almost 8% year-over-year, showing a stable and profitable baseline business.
- The resolution of the MPSV Litigation resulted in a charge of $32.5 million for the Shipyard Division, impacting the third quarter 2023 results negatively.
- The Shipyard Division recorded a negative revenue of $32.7 million due to the resolution of the MPSV Litigation, impacting the overall revenue negatively.
THE WOODLANDS, Texas, Nov. 07, 2023 (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 third quarter 2023.
THIRD QUARTER 2023 SUMMARY
- Resolves Shipyard Division’s MPSV Litigation
- Revenue of
$5.0 million ; Adjusted revenue of$37.7 million (excluding Shipyard Division negative revenue of$32.7 million ) - Consolidated net loss of
$33.2 million ; Adjusted EBITDA of$2.6 million (excluding a loss for the Shipyard Division of$35.1 million and a net gain from insurance recoveries of$0.3 million ) - Services Division operating income of
$2.6 million ; EBITDA of$3.1 million - Fabrication Division operating income of
$0.9 million ; Adjusted EBITDA of$1.4 million (excluding a net gain from insurance recoveries of$0.3 million ) - Cash and short-term investment balance of
$41.8 million at September 30, 2023
Consolidated revenue for the third quarter 2023 was
Consolidated net loss for the third quarter 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
“We made critical headway in our strategic transformation in recent months with the settlement of the MPSV litigation and progress towards the completion of the shipyard wind down,” said Richard Heo, Gulf Island’s President and Chief Executive Officer. “The resolution of the MPSV litigation is a positive outcome for all of our stakeholders as it eliminates ongoing legal and vessel holding costs, removes the risk of a potential adverse outcome and avoids a potential appeals process which could have been long and costly. We have significantly improved the risk profile of Gulf Island, which was a key initiative of the first phase of our strategic transformation, and we are excited to focus all of our efforts on pursuing profitable growth for our remaining business going forward.”
“Our third quarter results once again highlight the stable and profitable baseline business we have established through the expansion of our Services Division and growth in our small-scale fabrication business,” continued Heo. “Our Services Division continued its strong momentum, with operating income growing almost
“We generated strong operating results during the third quarter and improved our working capital position, resulting in a quarter-end cash balance of almost
“This is a pivotal time in the history of Gulf Island, and we are extremely excited by our strategic positioning and the opportunities that lie ahead for the Company,” noted Heo. “We have removed the significant overhangs and distractions from our business, our execution and operations are strong, our end markets are favorable and we are in a solid financial position. We look forward to finishing the year on a strong note and anticipate fourth quarter operating results for both Fabrication and Services to improve relative to the third quarter 2023. We are optimistic that 2024 will be an even stronger year for Gulf Island,” 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, the Company entered into an agreement (the “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 agreed to release possession of the MPSVs to the Surety. Further, the Company entered into a promissory note (“Note Agreement”) payable to the Surety in the principal amount of
STRATEGIC UPDATE
During the third quarter, 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 highlights during the third quarter 2023 are as follows:
Pursue traditional offshore markets – Bidding activity for both services and fabrication projects remains active in the Gulf of Mexico, driven by stable and relatively higher oil prices and healthy customer balance sheets.
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, and bidding activity on large fabrication project opportunities remains active, driven by strong industry fundamentals combined with limited industry capacity.
Grow and diversify services business – Gulf Island continues to expand its Services business with third quarter revenues growing compared to the prior year, driven by the contribution of Spark Safety, the Services Division’s welding enclosures business line.
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 recent margin improvement in Services and Fabrication demonstrates the Company’s strong project execution and focus on maintaining discipline in pursuing projects that provide adequate risk-adjusted returns.
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 has successfully maintained its skilled labor headcount in Services and has proven its ability to ramp up headcount in Fabrication to support new project awards, which places the Company in a strong position to continue to grow the business. The Company continues to evaluate opportunities to expand its skilled labor headcount given the favorable demand trends, including strategic acquisitions to increase craft labor headcount.
SEGMENT RESULTS FOR THIRD QUARTER 2023
Services Segment – Revenue for the third quarter 2023 was
New project awards were
Operating income was
Fabrication Segment – Revenue for the third quarter 2023 was
New project awards were
Operating income was
Shipyard Segment – Revenue for the third quarter 2023 was negative
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 are nearing completion and charges, vessel holding costs and legal fees associated with the Company’s previous MPSV Litigation (discussed above). The Company intends to wind down its Shipyard Segment operations by the fourth quarter 2023. 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 September 30, 2023 was
THIRD QUARTER 2023 CONFERENCE CALL
Gulf Island will hold a conference call on Tuesday, November 7, 2023 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, 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. 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 the Company intends to wind down by the fourth quarter 2023. The Company believes adjusted revenue is a useful supplemental measure as it reflects the Company’s revenue adjusted to remove revenue for the Company’s Shipyard Division (including the impact of certain nonrecurring items related to the resolution of the MPSV Litigation), which the Company intends to wind down by the fourth quarter 2023. Reconciliations of EBITDA, adjusted EBITDA and adjusted revenue 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 September 30, 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; timing of delivery of vessels related to the Active Retained Shipyard Contracts and subsequent wind down of the Company’s Shipyard Division operations; impacts of the resolution of the MPSV Litigation; 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; liquidity; tax rates; and execution of strategic initiatives. 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: supply chain disruptions (including global shipping and logistics challenges), inflationary pressures, economic slowdowns and recessions, natural disasters, public health crises (such as COVID-19), labor costs and geopolitical conflicts (such as the conflict in Ukraine and the Israel-Hamas conflict), and the related volatility in oil and gas prices and other factors impacting the global economy; cyclical nature of the oil and gas industry; its ability to resolve any material legal proceedings; 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; recoveries of any insurance proceeds for previous damage at its Houma Facilities; 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 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; focus on environmental, social and governance factors by institutional investors and regulators; 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 | 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 | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| New project awards(2) | $ | 38,417 | $ | 37,274 | $ | 139,162 | $ | 113,319 | $ | 202,302 | ||||||||||
| Revenue | $ | 5,023 | $ | 39,326 | $ | 39,593 | $ | 106,517 | $ | 104,181 | ||||||||||
| Cost of revenue | 34,902 | 34,845 | 35,373 | 126,881 | 98,709 | |||||||||||||||
| Gross profit (loss)(3) | (29,879 | ) | 4,481 | 4,220 | (20,364 | ) | 5,472 | |||||||||||||
| General and administrative expense(4) | 4,080 | 3,736 | 4,510 | 12,883 | 12,965 | |||||||||||||||
| Other (income) expense, net(5) | (324 | ) | (4 | ) | (944 | ) | (689 | ) | (3,698 | ) | ||||||||||
| Operating income (loss) | (33,635 | ) | 749 | 654 | (32,558 | ) | (3,795 | ) | ||||||||||||
| Interest (expense) income, net | 397 | 340 | (46 | ) | 1,057 | (104 | ) | |||||||||||||
| Income (loss) before income taxes | (33,238 | ) | 1,089 | 608 | (31,501 | ) | (3,899 | ) | ||||||||||||
| Income tax (expense) benefit | 3 | 13 | (10 | ) | 9 | (2 | ) | |||||||||||||
| Net income (loss) | $ | (33,235 | ) | $ | 1,102 | $ | 598 | $ | (31,492 | ) | $ | (3,901 | ) | |||||||
| Per share data: | ||||||||||||||||||||
| Basic and diluted income (loss) per common share | $ | (2.04 | ) | $ | 0.07 | $ | 0.04 | $ | (1.95 | ) | $ | (0.25 | ) | |||||||
Consolidated Adjusted Revenue(2) Reconciliation (in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Revenue | $ | 5,023 | $ | 39,326 | $ | 39,593 | $ | 106,517 | $ | 104,181 | ||||||||||
| Add (less): Shipyard revenue | 32,702 | (382 | ) | (1,849 | ) | 30,973 | (7,314 | ) | ||||||||||||
| Adjusted revenue | $ | 37,725 | $ | 38,944 | $ | 37,744 | $ | 137,490 | $ | 96,867 | ||||||||||
Consolidated EBITDA and Adjusted EBITDA(2) Reconciliations (in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Net income (loss) | $ | (33,235 | ) | $ | 1,102 | $ | 598 | $ | (31,492 | ) | $ | (3,901 | ) | |||||||
| Less: Income tax (expense) benefit | 3 | 13 | (10 | ) | 9 | (2 | ) | |||||||||||||
| Less: Interest (expense) income, net | 397 | 340 | (46 | ) | 1,057 | (104 | ) | |||||||||||||
| Operating income (loss) | (33,635 | ) | 749 | 654 | (32,558 | ) | (3,795 | ) | ||||||||||||
| Add: Depreciation and amortization | 1,390 | 1,392 | 1,240 | 4,115 | 3,764 | |||||||||||||||
| EBITDA | (32,245 | ) | 2,141 | 1,894 | (28,443 | ) | (31 | ) | ||||||||||||
| Add (less): Hurricane charges (gains) | (291 | ) | 17 | (1,341 | ) | (462 | ) | (4,446 | ) | |||||||||||
| Add: Non-cash impairments | - | - | 484 | - | 484 | |||||||||||||||
| Add: Shipyard operating loss | 35,117 | 1,948 | 1,393 | 39,268 | 3,965 | |||||||||||||||
| Adjusted EBITDA | $ | 2,581 | $ | 4,106 | $ | 2,430 | $ | 10,363 | $ | (28 | ) | |||||||||
_________________
| (1) | See “Results of Operations by Segment” below for results by segment. |
| (2) | New projects awards, adjusted revenue, EBITDA and adjusted EBITDA are non-GAAP measures. See “Non-GAAP Measures” above for the Company’s definition of new project awards, adjusted revenue, EBITDA and adjusted EBITDA. |
| (3) | Gross profit for the Fabrication Division for each of the three and nine months ended September 30, 2023, includes project improvements of |
| (4) | General and administrative expense for the Shipyard Division for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, and nine months ended September 30, 2023 and 2022, includes legal and advisory fees of |
| (5) | Other (income) expense for the Fabrication Division for the three months ended September 30, 2023 and 2022, and nine months ended September 30, 2023 and 2022, includes gains of |
Results of Operations by Segment (including Reconciliations of EBITDA and adjusted EBITDA) (in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| Services Division | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| New project awards(1) | $ | 22,776 | $ | 24,330 | $ | 22,110 | $ | 68,578 | $ | 64,572 | ||||||||||
| Revenue | $ | 22,976 | $ | 24,470 | $ | 22,569 | $ | 69,033 | $ | 65,413 | ||||||||||
| Cost of revenue | 19,716 | 20,369 | 19,406 | 58,685 | 57,118 | |||||||||||||||
| Gross profit | 3,260 | 4,101 | 3,163 | 10,348 | 8,295 | |||||||||||||||
| General and administrative expense | 701 | 792 | 791 | 2,203 | 2,280 | |||||||||||||||
| Other (income) expense, net | (18 | ) | 40 | (18 | ) | (42 | ) | 103 | ||||||||||||
| Operating income | $ | 2,577 | $ | 3,269 | $ | 2,390 | $ | 8,187 | $ | 5,912 | ||||||||||
| EBITDA(1) | ||||||||||||||||||||
| Operating income | $ | 2,577 | $ | 3,269 | $ | 2,390 | $ | 8,187 | $ | 5,912 | ||||||||||
| Add: Depreciation and amortization | 502 | 496 | 382 | 1,440 | 1,128 | |||||||||||||||
| EBITDA | $ | 3,079 | $ | 3,765 | $ | 2,772 | $ | 9,627 | $ | 7,040 | ||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| Fabrication Division | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| New project awards(1) | $ | 16,589 | $ | 13,438 | $ | 116,926 | $ | 46,733 | $ | 136,948 | ||||||||||
| Revenue | $ | 14,979 | $ | 14,741 | $ | 15,429 | $ | 69,382 | $ | 31,885 | ||||||||||
| Cost of revenue | 13,762 | 13,177 | 14,103 | 64,139 | 33,949 | |||||||||||||||
| Gross profit (loss)(2) | 1,217 | 1,564 | 1,326 | 5,243 | (2,064 | ) | ||||||||||||||
| General and administrative expense | 448 | 470 | 507 | 1,438 | 1,699 | |||||||||||||||
| Other (income) expense, net(3) | (135 | ) | (201 | ) | (1,301 | ) | (638 | ) | (4,550 | ) | ||||||||||
| Operating income | $ | 904 | $ | 1,295 | $ | 2,120 | $ | 4,443 | $ | 787 | ||||||||||
| EBITDA and Adjusted EBITDA(1) | ||||||||||||||||||||
| Operating income | $ | 904 | $ | 1,295 | $ | 2,120 | $ | 4,443 | $ | 787 | ||||||||||
| Add: Depreciation and amortization | 813 | 825 | 807 | 2,460 | 2,436 | |||||||||||||||
| EBITDA | 1,717 | 2,120 | 2,927 | 6,903 | 3,223 | |||||||||||||||
| Add (less): Hurricane charges (gains) | (291 | ) | 17 | (1,341 | ) | (462 | ) | (4,446 | ) | |||||||||||
| Adjusted EBITDA | $ | 1,426 | $ | 2,137 | $ | 1,586 | $ | 6,441 | $ | (1,223 | ) | |||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| Shipyard Division | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| New project awards(1) | $ | (718 | ) | $ | (227 | ) | $ | 380 | $ | (1,067 | ) | $ | 1,213 | |||||||
| Revenue | $ | (32,702 | ) | $ | 382 | $ | 1,849 | $ | (30,973 | ) | $ | 7,314 | ||||||||
| Cost of revenue | 1,654 | 1,566 | 2,118 | 4,982 | 8,073 | |||||||||||||||
| Gross loss(4) | (34,356 | ) | (1,184 | ) | (269 | ) | (35,955 | ) | (759 | ) | ||||||||||
| General and administrative expense(5) | 857 | 537 | 1,193 | 3,107 | 2,939 | |||||||||||||||
| Other (income) expense, net(6) | (96 | ) | 227 | (69 | ) | 206 | 267 | |||||||||||||
| Operating loss | $ | (35,117 | ) | $ | (1,948 | ) | $ | (1,393 | ) | $ | (39,268 | ) | $ | (3,965 | ) | |||||
| EBITDA(1) | ||||||||||||||||||||
| Operating loss | $ | (35,117 | ) | $ | (1,948 | ) | $ | (1,393 | ) | $ | (39,268 | ) | $ | (3,965 | ) | |||||
| Add: Depreciation and amortization | - | - | - | - | - | |||||||||||||||
| EBITDA | $ | (35,117 | ) | $ | (1,948 | ) | $ | (1,393 | ) | $ | (39,268 | ) | $ | (3,965 | ) | |||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| Corporate Division | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| New project awards (eliminations)(1) | $ | (230 | ) | $ | (267 | ) | $ | (254 | ) | $ | (925 | ) | $ | (431 | ) | |||||
| Revenue (eliminations) | $ | (230 | ) | $ | (267 | ) | $ | (254 | ) | $ | (925 | ) | $ | (431 | ) | |||||
| Cost of revenue | (230 | ) | (267 | ) | (254 | ) | (925 | ) | (431 | ) | ||||||||||
| Gross profit | - | - | - | - | - | |||||||||||||||
| General and administrative expense | 2,074 | 1,937 | 2,019 | 6,135 | 6,047 | |||||||||||||||
| Other (income) expense, net(7) | (75 | ) | (70 | ) | 444 | (215 | ) | 482 | ||||||||||||
| Operating loss | $ | (1,999 | ) | $ | (1,867 | ) | $ | (2,463 | ) | $ | (5,920 | ) | $ | (6,529 | ) | |||||
| EBITDA and Adjusted EBITDA(1) | ||||||||||||||||||||
| Operating loss | $ | (1,999 | ) | $ | (1,867 | ) | $ | (2,463 | ) | $ | (5,920 | ) | $ | (6,529 | ) | |||||
| Add: Depreciation and amortization | 75 | 71 | 51 | 215 | 200 | |||||||||||||||
| EBITDA | (1,924 | ) | (1,796 | ) | (2,412 | ) | (5,705 | ) | (6,329 | ) | ||||||||||
| Add: Non-cash impairments | - | - | 484 | - | 484 | |||||||||||||||
| Adjusted EBITDA | $ | (1,924 | ) | $ | (1,796 | ) | $ | (1,928 | ) | $ | (5,705 | ) | $ | (5,845 | ) | |||||
_________________
| (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 each of the three and nine months ended September 30, 2023, includes project improvements of |
| (3) | Other (income) expense for the Fabrication Division for the three months ended September 30, 2023 and 2022, and nine months ended September 30, 2023 and 2022, includes gains of |
| (4) | Gross loss for the Shipyard Division for each of the three and nine months ended September 30, 2023, includes charges of |
| (5) | General and administrative expense for the Shipyard Division for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, and nine months ended September 30, 2023 and 2022, includes legal and advisory fees of |
| (6) | Other (income) expense for the Shipyard Division for the three months ended September 30, 2023 and June 30, 2023, and nine months ended September 30, 2023 and 2022, includes charges of |
| (7) | Other (income) expense for the Corporate Division for each of the three and nine months ended September 30, 2022, includes a non-cash impairment charge of |
Consolidated Balance Sheets (in thousands)
| September 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 25,125 | $ | 33,221 | ||||
| Restricted cash | 1,197 | 1,603 | ||||||
| Short-term investments | 15,437 | 9,905 | ||||||
| Contract receivables and retainage, net | 35,684 | 29,427 | ||||||
| Contract assets | 4,305 | 4,839 | ||||||
| Prepaid expenses and other assets | 3,438 | 6,475 | ||||||
| Inventory | 2,340 | 1,599 | ||||||
| Total current assets | 87,526 | 87,069 | ||||||
| Property, plant and equipment, net | 29,285 | 31,154 | ||||||
| Goodwill | 2,217 | 2,217 | ||||||
| Other intangibles, net | 735 | 842 | ||||||
| Other noncurrent assets | 839 | 13,584 | ||||||
| Total assets | $ | 120,602 | $ | 134,866 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 11,515 | $ | 8,310 | ||||
| Contract liabilities | 3,534 | 8,196 | ||||||
| Accrued expenses and other liabilities | 13,247 | 14,283 | ||||||
| Total current liabilities | 28,296 | 30,789 | ||||||
| Contract liabilities, non-current | 20,000 | — | ||||||
| Other noncurrent liabilities | 822 | 1,453 | ||||||
| Total liabilities | 49,118 | 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, 16,287 shares issued and outstanding at September 30, 2023 and 15,973 at December 31, 2022 | 11,690 | 11,591 | ||||||
| Additional paid-in capital | 108,257 | 107,372 | ||||||
| Accumulated deficit | (48,463 | ) | (16,339 | ) | ||||
| Total shareholders’ equity | 71,484 | 102,624 | ||||||
| Total liabilities and shareholders’ equity | $ | 120,602 | $ | 134,866 | ||||
Consolidated Cash Flows (in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net income (loss) | $ | (33,235 | ) | $ | 1,102 | $ | 598 | $ | (31,492 | ) | $ | (3,901 | ) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 1,390 | 1,392 | 1,240 | 4,115 | 3,764 | |||||||||||||||
| Asset impairments | — | — | 484 | — | 484 | |||||||||||||||
| Change in allowance for doubtful accounts and credit losses | (210 | ) | (200 | ) | — | (410 | ) | — | ||||||||||||
| (Gain) loss on sale or disposal of fixed assets, net | (216 | ) | 31 | (37 | ) | (249 | ) | (79 | ) | |||||||||||
| Gain on insurance recoveries | — | — | (1,200 | ) | (245 | ) | (1,200 | ) | ||||||||||||
| Stock-based compensation expense | 513 | 444 | 404 | 1,466 | 1,464 | |||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Contract receivables and retainage, net | 631 | 7,430 | (6,196 | ) | (6,479 | ) | (17,026 | ) | ||||||||||||
| Contract assets | 2,357 | (1,124 | ) | (2,622 | ) | 534 | (3,048 | ) | ||||||||||||
| Prepaid expenses, inventory and other current assets | 1,874 | 808 | 1,633 | 2,829 | 1,203 | |||||||||||||||
| Accounts payable | (5,828 | ) | (9,393 | ) | 286 | 2,914 | 2,811 | |||||||||||||
| Contract liabilities | 469 | (1,323 | ) | 984 | (4,662 | ) | (2,355 | ) | ||||||||||||
| Accrued expenses and other current liabilities | 2,020 | (2,455 | ) | (216 | ) | (373 | ) | (288 | ) | |||||||||||
| Noncurrent assets and liabilities, net | 32,256 | (201 | ) | (308 | ) | 31,880 | (654 | ) | ||||||||||||
| Net cash provided by (used in) operating activities | 2,021 | (3,489 | ) | (4,950 | ) | (172 | ) | (18,825 | ) | |||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Capital expenditures | (645 | ) | (569 | ) | (558 | ) | (1,701 | ) | (1,032 | ) | ||||||||||
| Proceeds from Shipyard Transaction | — | — | — | — | 886 | |||||||||||||||
| Proceeds from sale of property and equipment | 290 | — | 1,972 | 396 | 2,035 | |||||||||||||||
| Recoveries from insurance claims | — | — | 1,200 | 245 | 1,200 | |||||||||||||||
| Purchases of short-term investments | (15,471 | ) | (177 | ) | (9,809 | ) | (30,731 | ) | (9,809 | ) | ||||||||||
| Maturities of short-term investments | 15,200 | — | — | 25,200 | — | |||||||||||||||
| Net cash used in investing activities | (626 | ) | (746 | ) | (7,195 | ) | (6,591 | ) | (6,720 | ) | ||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Payments on Insurance Finance Arrangements | (128 | ) | (126 | ) | (715 | ) | (1,257 | ) | (963 | ) | ||||||||||
| Tax payments for vested stock withholdings | — | (301 | ) | — | (482 | ) | (121 | ) | ||||||||||||
| Net cash used in financing activities | (128 | ) | (427 | ) | (715 | ) | (1,739 | ) | (1,084 | ) | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 1,267 | (4,662 | ) | (12,860 | ) | (8,502 | ) | (26,629 | ) | |||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 25,055 | 29,717 | 40,820 | 34,824 | 54,589 | |||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 26,322 | $ | 25,055 | $ | 27,960 | $ | 26,322 | $ | 27,960 | ||||||||||
FAQ
What were Gulf Island's revenue and net loss for Q3 2023?
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What are the key highlights of Gulf Island's strategic update?
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