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 first quarter 2024.
FIRST QUARTER 2024 SUMMARY
- Consolidated revenue of $42.9 million
- Consolidated net income of $6.2 million; Adjusted EBITDA of
$3.7 million
- Services Division operating income of $2.9 million; EBITDA of
$3.3 million
- Fabrication Division operating income of $4.7 million; Adjusted
EBITDA of $2.5 million
- Cash and short-term investments balance of $61.3 million at
March 31, 2024
- Reiterated full-year 2024 financial guidance
Consolidated revenue for the first quarter 2024
was $42.9 million, compared to consolidated revenue of $62.2
million for the prior year period. Consolidated net income for the
first quarter 2024 was $6.2 million, compared to consolidated net
income of $0.6 million for the prior year period. Consolidated
adjusted EBITDA for the first quarter 2024 was $3.7 million,
compared to consolidated adjusted EBITDA of $3.7 million for the
prior year period. Consolidated adjusted EBITDA for the first
quarter 2024 excludes income of $0.3 million for the Shipyard
Division, and a gain of $2.9 million for the Fabrication Division
related to the sale of property that was held for sale at December
31, 2023. Consolidated adjusted EBITDA for the first quarter 2023
excludes losses of $2.2 million for the Shipyard Division, and
gains of $0.2 million for the Fabrication Division from the net
impact of insurance recoveries and costs associated with damage
previously caused by Hurricane Ida.
See “Non-GAAP Measures” below for the Company’s
definition of EBITDA and adjusted EBITDA and reconciliations of the
relevant amounts to the most comparable GAAP measures.
MANAGEMENT COMMENTARY
“Our momentum has carried into the new year, as
we posted another quarter of profitable growth in our services and
small-scale fabrication businesses with strong operational
execution to kick off 2024,” said Richard Heo, Gulf Island’s
President and Chief Executive Officer. “Our Services segment
benefited from growth in our offshore services, including Spark
Safety, with the segment delivering 22% year-over-year operating
income growth for the first quarter. Our Fabrication results
for the quarter further demonstrate the opportunity to deliver
stable performance through strong execution and a focus on the
small-scale fabrication market. We remain encouraged by the
favorable end market trends in our core Gulf Coast region, which
combined with our continued execution against our strategic
initiatives, keep us on track to achieve our full-year 2024
financial targets.”
“Our recent results reflect the continued
execution of our strategic plan, and we made further progress on
our key priorities during the first quarter,” continued Heo. “We
concluded our operational shipyard obligations during the first
quarter, with the warranty period for our ferry projects being the
final remaining items associated with the wind down of the Shipyard
business. Our Services segment continued to benefit from strong
demand in the Gulf of Mexico, which contributed to first quarter
Services operating margins expanding 40 basis points to
11.2%. In our Fabrication segment, the contribution from the
NASA project during the first quarter highlights the benefit of
pursuing new end markets in small-scale fabrication, which combined
with our continued focus on disciplined bidding and strong
execution, resulted in another quarter of consistent
results. We are confident that our skilled workforce, track
record of execution and strategic location will allow us to
continue to grow our Services and Fabrication businesses in both
existing and new growth end markets.”
“We finished the first quarter in a strong
financial position with an ending cash and investments balance of
over $61 million,” stated Westley Stockton, Gulf Island’s Chief
Financial Officer. “The increase in our cash position for the
quarter was the product of our operating results, the previously
disclosed sale of excess property, and improvements in working
capital. Our balance sheet provides us ample financial flexibility
to pursue our growth objectives, which includes investments in
organic initiatives, as well as potential strategic acquisition
opportunities.”
“We are extremely excited by our strong start to
the year and remain confident we are well-positioned to pursue our
growth objectives,” noted Heo. “While we remain committed to
investing in organic growth initiatives, we are increasingly
looking for opportunities to deploy capital for strategic
acquisitions to further grow the business. With our stable
fabrication and services platform, combined with our strong
financial position, we are ideally situated to pursue acquisition
opportunities that will enable us to grow our existing platform,
expand our current capabilities and further penetrate new growth
end markets. As we have done throughout our strategic
transformation process, we will remain disciplined in our pursuit
of both organic and strategic growth, and we look forward to
updating the investment community on our continued progress in the
coming quarters,” concluded Heo.
SEGMENT RESULTS FOR FIRST QUARTER
2024
Services Segment – Revenue for
the first quarter 2024 was $25.5 million, an increase of $3.9
million, or 18.3%, compared to the first quarter 2023. The increase
was primarily due to higher offshore services activity, including
incremental revenue associated with the division’s Spark Safety
business line.
New project awards were $25.5 million for the
first quarter 2024, an 18.6% year-over-year increase, and backlog
totaled $0.4 million at March 31, 2024. The new award growth
was driven primarily by higher offshore services work, including
the division’s Spark Safety business line. See “Non-GAAP Measures”
below for the Company’s definition of new project awards and
backlog.
Operating income was $2.9 million for the first
quarter 2024, compared to $2.3 million for the first quarter 2023.
EBITDA for the first quarter 2024 was $3.3 million (or 13.1% of
revenue), versus $2.8 million (or 12.9% of revenue) for the prior
year period, an increase of 20.3%. The improved operating results
for 2024 compared to 2023 were primarily due to year-over-year
revenue growth. See “Non-GAAP Measures” below for the Company’s
definition of EBITDA and a reconciliation of the Services
Division’s operating income to EBITDA.
Fabrication Segment – Revenue
for the first quarter 2024 was $17.1 million, a decrease of $22.5
million, or 56.8%, compared to the first quarter 2023. The decrease
was primarily due to the prior year period including the benefit of
a large fabrication project that was cancelled in July 2023, offset
partially by higher small-scale fabrication activity in the current
period.
New project awards were $18.3 million for the
first quarter 2024, a 9.4% year-over-year increase, and backlog
totaled $12.9 million at March 31, 2024. New awards for the
first quarter 2024 were primarily related to small-scale
fabrication work. See “Non-GAAP Measures” below for the Company’s
definition of new project awards and backlog.
Operating income was $4.7 million for the first
quarter 2024, compared to $2.2 million for the first quarter 2023.
Adjusted EBITDA for the first quarter 2024 was $2.5 million, versus
$2.9 million for the prior year period, a decrease of 14.0%.
Adjusted EBITDA for the first quarter 2024 excludes a gain of $2.9
million related to the sale of property that was held for sale at
December 31, 2023, while the first quarter 2023 excludes gains of
$0.2 million from the net impact of insurance recoveries and costs
associated with damage previously caused by Hurricane Ida. The
decrease in operating results for 2024 compared to 2023 was
primarily due to lower revenue and associated lower utilization of
facilities and resources resulting from the cancellation of the
division’s large fabrication project in July 2023. This impact was
partially offset by improved utilization associated with higher
small-scale fabrication activity and a more favorable project
margin mix. See “Non-GAAP Measures” below for the Company’s
definition of adjusted EBITDA and a reconciliation of the
Fabrication Division’s operating income to adjusted EBITDA.
Shipyard Segment – Revenue for
the first quarter 2024 was $0.4 million, a decrease of $0.9 million
compared to the first quarter 2023. Revenue for both quarters was
related entirely to the division’s seventy-vehicle ferry and
forty-vehicle ferry projects. Operating income was $0.3 million for
the first quarter 2024, compared to an operating loss of $2.2
million for the first quarter 2023.
Corporate Segment – Operating
loss was $2.2 million for the first quarter 2024, compared to an
operating loss of $2.1 million for the first quarter 2023. EBITDA
for the first quarter 2024 was a loss of $2.1 million, versus a
loss of $2.0 million for the prior year period. See “Non-GAAP
Measures” below for the Company’s definition of EBITDA and a
reconciliation of the Corporate Division’s operating loss to
adjusted EBITDA.
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 revenue and
gross profit and loss associated with the construction of three
ferries that were substantially complete as of March 31, 2024, and
legal fees associated with previous litigation (“MPSV Litigation”)
that was settled in the fourth quarter 2023. The wind down of the
Company’s Shipyard Segment operations was substantially complete as
of March 31, 2024. Final completion of the wind down will occur
upon completion of the warranty periods for the ferries. 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 March 31, 2024 was $61.3 million, including $1.5
million of restricted cash associated with outstanding letters of
credit. At March 31, 2024, the Company had total debt of $20.0
million. The debt bears interest at a fixed rate of 3.0% per annum,
with principal and interest payable in 15 equal annual installments
of approximately $1.7 million, beginning on December 31, 2024 and
ending on December 31, 2038. The estimated present value of the
debt is $13.0 million based on an estimated market rate of
interest. During the first quarter 2024, the Company repurchased
60,860 shares of its common stock for $0.3 million under its share
repurchase program commenced in December 2023.
2024 FINANCIAL OUTLOOK
Gulf Island is reiterating its full year 2024
indicative segment and consolidated guidance. Services Segment
EBITDA is expected to be approximately $14.0 million, driven
primarily by growth in the Spark Safety business
line. Fabrication Segment adjusted EBITDA is expected to be
approximately $8.0 million, which includes year-over-year growth in
the small-scale fabrication business, but excludes the potential
benefit of any large project award. The adjusted EBITDA
forecast for the Fabrication segment excludes a gain of $2.9
million in the first quarter 2024 from the sale of property that
was held for sale at December 31, 2023. Corporate Segment EBITDA is
expected to be a loss of approximately $8.0 million, which is
consistent with recent historical experience. This forward-looking
guidance reflects management’s current expectations and beliefs as
of May 7, 2024, and is subject to change. See “Cautionary
Statement” below for further discussion of the factors that may
affect the Company’s future performance, “Non-GAAP Measures” below
for the Company’s definition of EBITDA and adjusted EBITDA, and
“2024 Financial Outlook - Segment and Consolidated EBITDA and
Adjusted EBITDA Reconciliations” below for reconciliations of
segment and consolidated EBITDA and adjusted EBITDA to the most
comparable GAAP measures.
FIRST QUARTER 2024 CONFERENCE CALL
Gulf Island will hold a conference call on
Tuesday, May 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 a gain from the sale of
assets held for sale and gains from the impact of insurance
recoveries and costs associated with damage previously caused by
Hurricane Ida) and the operating results for the Company’s Shipyard
Division, 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, 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 and Adjusted 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 new 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 March 31, 2024, 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, 2023, 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 |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
New project awards(2) |
|
$ |
43,818 |
|
|
$ |
44,400 |
|
|
$ |
37,628 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
42,881 |
|
|
$ |
44,550 |
|
|
$ |
62,168 |
|
Cost of revenue |
|
|
36,757 |
|
|
|
36,087 |
|
|
|
57,134 |
|
Gross profit(3) |
|
|
6,124 |
|
|
|
8,463 |
|
|
|
5,034 |
|
General and administrative
expense(4) |
|
|
3,484 |
|
|
|
3,395 |
|
|
|
5,067 |
|
Other (income) expense,
net(5) |
|
|
(3,068 |
) |
|
|
(1,607 |
) |
|
|
(361 |
) |
Operating income |
|
|
5,708 |
|
|
|
6,675 |
|
|
|
328 |
|
Interest (expense) income,
net |
|
|
542 |
|
|
|
383 |
|
|
|
320 |
|
Income before income taxes |
|
|
6,250 |
|
|
|
7,058 |
|
|
|
648 |
|
Income tax (expense)
benefit |
|
|
(10 |
) |
|
|
32 |
|
|
|
(7 |
) |
Net income |
|
$ |
6,240 |
|
|
$ |
7,090 |
|
|
$ |
641 |
|
Per share data: |
|
|
|
|
|
|
|
|
|
Basic income per share |
|
$ |
0.38 |
|
|
$ |
0.44 |
|
|
$ |
0.04 |
|
Diluted income per share |
|
$ |
0.37 |
|
|
$ |
0.43 |
|
|
$ |
0.04 |
|
Consolidated Adjusted Revenue(2) Reconciliation
(in thousands)
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
Revenue |
|
$ |
42,881 |
|
|
$ |
44,550 |
|
|
$ |
62,168 |
|
Less: Shipyard revenue |
|
|
(409 |
) |
|
|
(556 |
) |
|
|
(1,347 |
) |
Adjusted revenue |
|
$ |
42,472 |
|
|
$ |
43,994 |
|
|
$ |
60,821 |
|
Consolidated Adjusted Gross Profit(2)
Reconciliation (in thousands)
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
Gross
profit |
|
$ |
6,124 |
|
|
$ |
8,463 |
|
|
$ |
5,034 |
|
Add (less): Shipyard gross loss (profit) |
|
|
(319 |
) |
|
|
(93 |
) |
|
|
415 |
|
Adjusted gross profit |
|
$ |
5,805 |
|
|
$ |
8,370 |
|
|
$ |
5,449 |
|
Consolidated EBITDA and Adjusted EBITDA(2)
Reconciliations (in thousands)
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
Net income |
|
$ |
6,240 |
|
|
$ |
7,090 |
|
|
$ |
641 |
|
Less: Income tax (expense) benefit |
|
|
(10 |
) |
|
|
32 |
|
|
|
(7 |
) |
Less: Interest (expense) income, net |
|
|
542 |
|
|
|
383 |
|
|
|
320 |
|
Operating income |
|
|
5,708 |
|
|
|
6,675 |
|
|
|
328 |
|
Add: Depreciation and amortization |
|
|
1,193 |
|
|
|
1,351 |
|
|
|
1,333 |
|
EBITDA |
|
|
6,901 |
|
|
|
8,026 |
|
|
|
1,661 |
|
Less: Gain on property sale(5) |
|
|
(2,880 |
) |
|
|
- |
|
|
|
- |
|
Less: Hurricane insurance gains(5) |
|
|
- |
|
|
|
(1,526 |
) |
|
|
(188 |
) |
Add (less): Shipyard operating loss (income) |
|
|
(342 |
) |
|
|
106 |
|
|
|
2,203 |
|
Adjusted EBITDA |
|
$ |
3,679 |
|
|
$ |
6,606 |
|
|
$ |
3,676 |
|
_________________
(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, includes project improvements of $3.8
million. Gross profit (loss) for the Shipyard Division for the
three months ended December 31, 2023, includes project charges of
$0.2 million, and for each of the three months ended December 31,
2023 and March 31, 2023, includes vessel holding costs of $0.2
million associated with the Company’s previous MPSV
Litigation. |
(4) |
General and administrative expense for the Shipyard Division for
the three months ended December 31, 2023 and March 31, 2023,
includes legal and advisory fees of $0.1 million and $1.7 million,
respectively, associated with the Company’s previous MPSV
Litigation. |
(5) |
Other (income) expense for the Fabrication Division for the three
months ended March 31, 2024, includes a gain of $2.9 million from
the sale of assets held for sale, and for the three months ended
December 31, 2023 and March 31, 2023, includes gains of $1.5
million and $0.2 million, respectively, from the net impact of
insurance recoveries and costs associated with damage previously
caused by Hurricane Ida. Such amounts have been removed from EBITDA
to derive adjusted EBITDA. |
Results of Operations by Segment (including
Reconciliations of EBITDA and Adjusted EBITDA) (in
thousands)
|
|
Three Months Ended |
Services
Division |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
New project awards(1) |
|
$ |
25,468 |
|
|
$ |
24,150 |
|
|
$ |
21,472 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
25,534 |
|
|
$ |
24,515 |
|
|
$ |
21,587 |
|
Cost of revenue |
|
|
21,921 |
|
|
|
21,080 |
|
|
|
18,600 |
|
Gross profit |
|
|
3,613 |
|
|
|
3,435 |
|
|
|
2,987 |
|
General and administrative
expense |
|
|
743 |
|
|
|
699 |
|
|
|
710 |
|
Other (income) expense,
net |
|
|
3 |
|
|
|
(6 |
) |
|
|
(64 |
) |
Operating income |
|
$ |
2,867 |
|
|
$ |
2,742 |
|
|
$ |
2,341 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA(1) |
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
2,867 |
|
|
$ |
2,742 |
|
|
$ |
2,341 |
|
Add: Depreciation and
amortization |
|
|
480 |
|
|
|
486 |
|
|
|
442 |
|
EBITDA |
|
$ |
3,347 |
|
|
$ |
3,228 |
|
|
$ |
2,783 |
|
|
|
Three Months Ended |
Fabrication
Division |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
New project awards(1) |
|
$ |
18,272 |
|
|
$ |
19,896 |
|
|
$ |
16,706 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
17,138 |
|
|
$ |
19,664 |
|
|
$ |
39,662 |
|
Cost of revenue |
|
|
14,946 |
|
|
|
14,729 |
|
|
|
37,200 |
|
Gross profit(2) |
|
|
2,192 |
|
|
|
4,935 |
|
|
|
2,462 |
|
General and administrative
expense |
|
|
441 |
|
|
|
447 |
|
|
|
520 |
|
Other (income) expense,
net(3) |
|
|
(2,970 |
) |
|
|
(1,627 |
) |
|
|
(302 |
) |
Operating income |
|
$ |
4,721 |
|
|
$ |
6,115 |
|
|
$ |
2,244 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA(1) |
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
4,721 |
|
|
$ |
6,115 |
|
|
$ |
2,244 |
|
Add: Depreciation and
amortization |
|
|
635 |
|
|
|
789 |
|
|
|
822 |
|
EBITDA |
|
|
5,356 |
|
|
|
6,904 |
|
|
|
3,066 |
|
Less: Gain on property
sale(3) |
|
|
(2,880 |
) |
|
|
- |
|
|
|
- |
|
Less: Hurricane insurance
gains(3) |
|
|
- |
|
|
|
(1,526 |
) |
|
|
(188 |
) |
Adjusted EBITDA |
|
$ |
2,476 |
|
|
$ |
5,378 |
|
|
$ |
2,878 |
|
|
|
Three Months Ended |
Shipyard
Division |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
New project awards(1) |
|
$ |
278 |
|
|
$ |
539 |
|
|
$ |
(122 |
) |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
409 |
|
|
$ |
556 |
|
|
$ |
1,347 |
|
Cost of revenue |
|
|
90 |
|
|
|
463 |
|
|
|
1,762 |
|
Gross profit (loss)(4) |
|
|
319 |
|
|
|
93 |
|
|
|
(415 |
) |
General and administrative
expense(5) |
|
|
- |
|
|
|
98 |
|
|
|
1,713 |
|
Other (income) expense,
net |
|
|
(23 |
) |
|
|
101 |
|
|
|
75 |
|
Operating income (loss) |
|
$ |
342 |
|
|
$ |
(106 |
) |
|
$ |
(2,203 |
) |
|
|
|
|
|
|
|
|
|
|
EBITDA(1) |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
342 |
|
|
$ |
(106 |
) |
|
$ |
(2,203 |
) |
Add: Depreciation and
amortization |
|
|
- |
|
|
|
- |
|
|
|
- |
|
EBITDA |
|
$ |
342 |
|
|
$ |
(106 |
) |
|
$ |
(2,203 |
) |
|
|
Three Months Ended |
Corporate Division |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
New project awards (eliminations)(1) |
|
$ |
(200 |
) |
|
$ |
(185 |
) |
|
$ |
(428 |
) |
|
|
|
|
|
|
|
|
|
|
Revenue (eliminations) |
|
$ |
(200 |
) |
|
$ |
(185 |
) |
|
$ |
(428 |
) |
Cost of revenue |
|
|
(200 |
) |
|
|
(185 |
) |
|
|
(428 |
) |
Gross profit |
|
|
- |
|
|
|
- |
|
|
|
- |
|
General and administrative expense |
|
|
2,300 |
|
|
|
2,151 |
|
|
|
2,124 |
|
Other (income) expense, net |
|
|
(78 |
) |
|
|
(75 |
) |
|
|
(70 |
) |
Operating loss |
|
$ |
(2,222 |
) |
|
$ |
(2,076 |
) |
|
$ |
(2,054 |
) |
|
|
|
|
|
|
|
|
|
|
EBITDA(1) |
|
|
|
|
|
|
|
|
|
Operating loss |
|
$ |
(2,222 |
) |
|
$ |
(2,076 |
) |
|
$ |
(2,054 |
) |
Add: Depreciation and amortization |
|
|
78 |
|
|
|
76 |
|
|
|
69 |
|
EBITDA |
|
$ |
(2,144 |
) |
|
$ |
(2,000 |
) |
|
$ |
(1,985 |
) |
_________________
(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, includes project improvements of $3.8
million. |
(3) |
Other (income) expense for the Fabrication Division for the three
months ended March 31, 2024, includes a gain of $2.9 million from
the sale of assets held for sale, and for the three months ended
December 31, 2023 and March 31, 2023, includes gains of $1.5
million and $0.2 million, respectively, from the net impact of
insurance recoveries and costs associated with damage previously
caused by Hurricane Ida. Such amounts have been removed from EBITDA
to derive adjusted EBITDA. |
(4) |
Gross profit (loss) for the Shipyard Division for the three months
ended December 31, 2023, includes project charges of $0.2 million,
and for each of the three months ended December 31, 2023 and March
31, 2023, includes vessel holding costs of $0.2 million associated
with the Company’s previous MPSV Litigation. |
(5) |
General and administrative expense for the Shipyard Division for
the three months ended December 31, 2023 and March 31, 2023,
includes legal and advisory fees of $0.1 million and $1.7 million,
respectively, associated with the Company’s previous MPSV
Litigation. |
Consolidated Balance Sheets (in thousands)
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
32,469 |
|
|
$ |
38,176 |
|
Restricted cash |
|
|
1,475 |
|
|
|
1,475 |
|
Short-term investments |
|
|
27,352 |
|
|
|
8,233 |
|
Contract receivables and retainage, net |
|
|
26,892 |
|
|
|
36,298 |
|
Contract assets |
|
|
4,905 |
|
|
|
2,739 |
|
Prepaid expenses and other assets |
|
|
4,634 |
|
|
|
6,994 |
|
Inventory |
|
|
2,004 |
|
|
|
2,072 |
|
Assets held for sale |
|
|
— |
|
|
|
5,640 |
|
Total current assets |
|
|
99,731 |
|
|
|
101,627 |
|
Property, plant and equipment,
net |
|
|
24,501 |
|
|
|
23,145 |
|
Goodwill |
|
|
2,217 |
|
|
|
2,217 |
|
Other intangibles, net |
|
|
664 |
|
|
|
700 |
|
Other noncurrent assets |
|
|
645 |
|
|
|
739 |
|
Total assets |
|
$ |
127,758 |
|
|
$ |
128,428 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
6,625 |
|
|
$ |
8,466 |
|
Contract liabilities |
|
|
1,740 |
|
|
|
5,470 |
|
Accrued expenses and other liabilities |
|
|
13,390 |
|
|
|
14,836 |
|
Long-term debt, current |
|
|
1,075 |
|
|
|
1,075 |
|
Total current liabilities |
|
|
22,830 |
|
|
|
29,847 |
|
Long-term debt,
noncurrent |
|
|
18,925 |
|
|
|
18,925 |
|
Other noncurrent
liabilities |
|
|
559 |
|
|
|
685 |
|
Total liabilities |
|
|
42,314 |
|
|
|
49,457 |
|
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, 16,197 shares
issued and outstanding at March 31, 2024 and
16,258 at December 31, 2023 |
|
|
11,752 |
|
|
|
11,729 |
|
Additional paid-in capital |
|
|
108,825 |
|
|
|
108,615 |
|
Accumulated deficit |
|
|
(35,133 |
) |
|
|
(41,373 |
) |
Total shareholders’ equity |
|
|
85,444 |
|
|
|
78,971 |
|
Total liabilities and shareholders’ equity |
|
$ |
127,758 |
|
|
$ |
128,428 |
|
Consolidated Cash Flows (in thousands)
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2024 |
|
2023 |
|
2023 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
6,240 |
|
|
$ |
7,090 |
|
|
$ |
641 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,193 |
|
|
|
1,351 |
|
|
|
1,333 |
|
Change in allowance for doubtful accounts and credit losses |
|
|
(28 |
) |
|
|
— |
|
|
|
— |
|
Gain on sale or disposal of assets held for sale and fixed assets,
net |
|
|
(3,241 |
) |
|
|
276 |
|
|
|
(64 |
) |
Gain on insurance recoveries |
|
|
— |
|
|
|
(326 |
) |
|
|
(245 |
) |
Stock-based compensation expense |
|
|
506 |
|
|
|
525 |
|
|
|
509 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Contract receivables and retainage, net |
|
|
9,434 |
|
|
|
(614 |
) |
|
|
(14,540 |
) |
Contract assets |
|
|
(2,166 |
) |
|
|
1,566 |
|
|
|
(699 |
) |
Prepaid expenses, inventory and other current assets |
|
|
2,102 |
|
|
|
(2,962 |
) |
|
|
147 |
|
Accounts payable |
|
|
(1,712 |
) |
|
|
(2,923 |
) |
|
|
18,135 |
|
Contract liabilities |
|
|
(3,730 |
) |
|
|
1,936 |
|
|
|
(3,808 |
) |
Accrued expenses and other current liabilities |
|
|
(1,422 |
) |
|
|
1,579 |
|
|
|
62 |
|
Noncurrent assets and liabilities, net |
|
|
(157 |
) |
|
|
(129 |
) |
|
|
(175 |
) |
Net cash provided by operating activities |
|
|
7,019 |
|
|
|
7,369 |
|
|
|
1,296 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(2,553 |
) |
|
|
(1,175 |
) |
|
|
(487 |
) |
Proceeds from sale of property and equipment |
|
|
8,894 |
|
|
|
60 |
|
|
|
106 |
|
Recoveries from insurance claims |
|
|
326 |
|
|
|
— |
|
|
|
245 |
|
Purchases of short-term investments |
|
|
(22,170 |
) |
|
|
(8,297 |
) |
|
|
(15,083 |
) |
Maturities of short-term investments |
|
|
3,050 |
|
|
|
15,500 |
|
|
|
10,000 |
|
Net cash provided by (used in) investing activities |
|
|
(12,453 |
) |
|
|
6,088 |
|
|
|
(5,219 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
Payments on Insurance Finance Arrangements |
|
|
— |
|
|
|
— |
|
|
|
(1,003 |
) |
Tax payments for vested stock withholdings |
|
|
— |
|
|
|
— |
|
|
|
(181 |
) |
Repurchases of common stock |
|
|
(273 |
) |
|
|
(128 |
) |
|
|
— |
|
Net cash used in financing activities |
|
|
(273 |
) |
|
|
(128 |
) |
|
|
(1,184 |
) |
Net increase (decrease) in cash,
cash equivalents and restricted cash |
|
|
(5,707 |
) |
|
|
13,329 |
|
|
|
(5,107 |
) |
Cash, cash equivalents and
restricted cash, beginning of period |
|
|
39,651 |
|
|
|
26,322 |
|
|
|
34,824 |
|
Cash, cash equivalents and
restricted cash, end of period |
|
$ |
33,944 |
|
|
$ |
39,651 |
|
|
$ |
29,717 |
|
2024 Financial Outlook - Segment and Consolidated EBITDA
and Adjusted EBITDA(1) Reconciliations (in thousands)
|
|
Twelve Months Ending December 31, 2024 |
|
|
Services |
|
Fabrication |
|
Shipyard |
|
Corporate |
|
Consolidated |
Net income (loss) |
|
$ |
12,000 |
|
|
$ |
8,080 |
|
|
$ |
342 |
|
|
$ |
(6,400 |
) |
|
$ |
14,022 |
|
Less: Income tax (expense)
benefit |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Less: Interest (expense)
income, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,900 |
|
|
|
1,900 |
|
Operating income (loss) |
|
|
12,000 |
|
|
|
8,080 |
|
|
|
342 |
|
|
|
(8,300 |
) |
|
|
12,122 |
|
Add: Depreciation and
amortization |
|
|
2,000 |
|
|
|
2,800 |
|
|
|
- |
|
|
|
300 |
|
|
|
5,100 |
|
EBITDA |
|
|
14,000 |
|
|
|
10,880 |
|
|
|
342 |
|
|
|
(8,000 |
) |
|
|
17,222 |
|
Less: Gain on property
sale(2) |
|
|
- |
|
|
|
(2,880 |
) |
|
|
- |
|
|
|
- |
|
|
|
(2,880 |
) |
Less: Shipyard operating
income |
|
|
- |
|
|
|
- |
|
|
|
(342 |
) |
|
|
- |
|
|
|
(342 |
) |
Adjusted EBITDA |
|
$ |
14,000 |
|
|
$ |
8,000 |
|
|
$ |
- |
|
|
$ |
(8,000 |
) |
|
$ |
14,000 |
|
_________________
(1) |
EBITDA and Adjusted EBITDA are non-GAAP measure. See “Non-GAAP
Measures” above for the Company’s definition of EBITDA. |
(2) |
Reflects a gain on the sale of property that was held for sale at
December 31, 2023. |
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