EX-99.1 2 q22016pressrelease.htm EXHIBIT 99.1 Exhibit



Exhibit 99.1
NEWS RELEASE                                             
                                                 
For further information contact:
Kirk J. Meche                                    Jeffrey M. Favret
Chief Executive Officer                          Chief Financial Officer
713.714.6100                                    713.714.6100

FOR IMMEDIATE RELEASE
Thursday, July 28, 2016

GULF ISLAND FABRICATION, INC.
REPORTS SECOND QUARTER EARNINGS

Houston, TX - Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported net income of $5.5 million ($0.37 diluted earnings per share) on revenue of $81.5 million for its second quarter ended June 30, 2016, compared to net income of $1.4 million ($0.09 diluted earnings per share) on revenue of $84.3 million for the second quarter ended June 30, 2015. For the six months ended June 30, 2016 and 2015, the Company reported net income of $6.5 million ($0.44 diluted earnings per share) on revenue of $165.5 million compared to net income of $1.4 million ($0.10 diluted earnings per share) on revenue of $183.6 million, respectively.

The company had revenue backlog of $157.5 million and labor backlog of approximately 1.3 million hours at June 30, 2016, including commitments received through July 28, 2016, compared to revenue backlog of $197.1 million and labor backlog of 1.7 million hours reported as of March 31, 2016. We expect to recognize revenue from our backlog of approximately $134.4 million and $23.1 million during the remainder of 2016 and during 2017, respectively.

 
June 30, 2016 (1)
 
December 31, 2015
 
(in thousands)
 
 
 
 
Cash and cash equivalents
 
$
50,065

 
 
 
$
34,828

 
Total current assets
 
125,584

 
 
 
115,869

 
Property, plant and equipment, net
 
213,689

 
 
 
200,384

 
Total assets
 
342,031

 
 
 
316,923

 
Total current liabilities
 
49,995

 
 
 
37,901

 
Total shareholders’ equity
 
264,904

 
 
 
257,197

 
________________
(1) Amounts include assets and liabilities acquired in connection with the LEEVAC transaction.

Our balance sheet position remains stable with $50.1 million in cash, no debt, and working capital of $75.6 million. In addition, we have $75.5 million available under our credit facility for letters of credit and $20.0 million available for general corporate uses. We will continue to monitor and maintain a conservative capital structure as we navigate through the current oil and gas downturn.

The management of Gulf Island Fabrication, Inc. will hold a conference call on Friday, July 29, 2016, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss the Company’s financial results for the quarter ended June 30, 2016. The call is accessible by webcast (www.gulfisland.com) through CCBN and by dialing 1.888.600.4863. A digital rebroadcast of the call is available two hours after the call and ending August 5, 2016 by dialing 1.888.203.1112, replay passcode: 647355.

Gulf Island Fabrication, Inc., based in Houston, Texas, with fabrication facilities located in Houma, Jennings and Lake Charles, Louisiana, and San Patricio County, Texas, is a leading fabricator of offshore drilling and production platforms, hull and/or deck sections of floating production platforms and other specialized structures used in the development and production of offshore oil and gas reserves. These structures include jackets and deck sections of fixed production platforms; hull and/or deck sections of floating production platforms (such as tension leg platforms “TLPs”, “SPARs”, “FPSOs”, and “MinDOCs”), piles, wellhead protectors, subsea templates and various production, compressor and utility modules, offshore living quarters, towboats, liftboats, tanks and barges. The Company also provides offshore interconnect pipe hook-up, inshore marine construction, manufacture and




repair of pressure vessels, heavy lifts such as ship integration and TLP module integration, loading and offloading of jack-up drilling rigs, semi-submersible drilling rigs, TLPs, SPARs, or other similar cargo, onshore and offshore scaffolding, piping insulation services, and steel warehousing and sales.


GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)

 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
 
2016 (1)
 
2015
 
2016
 
2016 (1)
 
2015
 
Revenue (2)
$
81,502

 
$
84,338

 
$
83,979

 
$
165,481

 
$
183,571

 
Cost of revenue
67,436

 
78,533

 
78,278

 
145,714

 
173,318

 
Gross profit
14,066

 
5,805

 
5,701

 
19,767

 
10,253

 
General and administrative expenses
5,062

 
3,726

 
4,485

 
9,547

 
8,019

 
Operating income
9,004

 
2,079

 
1,216

 
10,220

 
2,234

 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Interest expense
(88
)
 
(50
)
 
(50
)
 
(138
)
 
(87
)
 
Interest income
2

 
7

 
6

 
8

 
13

 
Other income, net
42

 
17

 
398

 
440

 
20

 
 
(44
)
 
(26
)
 
354

 
310

 
(54
)
 
Income before income taxes
8,960

 
2,053

 
1,570

 
10,530

 
2,180

 
Income taxes
3,420

 
696

 
581

 
4,001

 
740

 
Net income
$
5,540

 
$
1,357

 
$
989

 
$
6,529

 
$
1,440

 
Per share data:
 
 
 
 
 
 
 
 
 
 
Basic and diluted earnings per share - common shareholders
$
0.37

 
$
0.09

 
$
0.07

 
$
0.44

 
$
0.10

 
Cash dividend declared per common share
$
0.01

 
$
0.10

 
$
0.01

 
$
0.02

 
$
0.20

 
________________
(1)
Results of operations for the three and six months ended June 30, 2016, include the operations acquired in the LEEVAC transaction effective January 1, 2016. Revenues and net income for the three months ended June 30, 2016, attributable to LEEVAC were $17.3 million and $1.5 million, respectively. Revenue and net income for the six months ended June 30, 2016, attributable to LEEVAC were $39.1 million and $751,000, respectively.
(2)
Revenue for the three and six months ended June 30, 2016, includes the recognition of $1.5 million and $2.7 million of deferred revenue related to the values assigned to contracts acquired in the LEEVAC transaction, respectively.





Operating Segments
Backlog (in thousands)
 
 
June 30, 2016
 
March 31, 2016
 
December 31, 2015
Segment
 
$'s
 
Labor hours
 
$'s
Labor hours
 
$'s
 
Labor hours
Fabrication
 
$
41,126

 
431

 
$
48,828

524

 
$
62,006

 
724

Shipyards
 
93,912

 
629

 
119,984

843

 
131,660

 
886

Services
 
22,540

 
209

 
28,316

308

 
38,761

 
304

Intersegment Eliminations
 
(41
)
 
—

 
(60
)
—

 
(16
)
 
—

Total Backlog
 
$
157,537

 
1,269

 
$
197,068

1,675

 
$
232,411

 
1,914

 
 
 
 
 
 
 
 
 
 
 
 
Results of Operations (in thousands, except percentages)
Fabrication
 
Three Months Ended June 30,
 
 
2016
 
2015
Revenue
 
$
24,296

 
$
48,365

Gross profit
 
3,844

 
210

Gross profit percentage
 
15.8
%
 
0.4
%
 
 
 
 
 
General and administrative expenses
 
1,666

 
2,194

Operating income (loss)
 
2,178

 
(1,984
)
 
 
 
 
 
Shipyards (1)
 
Three Months Ended June 30,
 
 
2016
 
2015
Revenue (2)
 
$
29,373

 
$
14,760

Gross profit (2)
 
5,390

 
1,644

Gross profit percentage
 
18.4
%
 
11.1
%
 
 
 
 
 
General and administrative expenses
 
1,996

 
420

Operating income (2)
 
3,394

 
1,224

 
 
 
 
 
Services
 
Three Months Ended June 30,
 
 
2016
 
2015
Revenue
 
$
28,692

 
$
22,712

Gross profit
 
4,832

 
3,951

Gross profit percentage
 
16.8
%
 
17.4
%
 
 
 
 
 
General and administrative expenses
 
1,336

 
1,029

Operating income
 
3,496

 
2,922

 
 
 
 
 
____________
(1)
Included in our results of operations for our Shipyards segment were revenue and net income of $17.3 million and $1.5 million attributable to the operations acquired in the LEEVAC transaction for the three months ended June 30, 2016. No amounts were included in the comparable 2015 period as the LEEVAC transaction was effective January 1, 2016.
(2)
Revenue for the three months ended June 30, 2016 includes the recognition of $1.5 million of deferred revenue related to the values assigned to contracts acquired in the LEEVAC transaction.
 





GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 
Six Months Ended June 30,
 
2016
 
2015
 
(in thousands)
Cash flows from operating activities:
 
 
 
Net income
$
6,529

 
$
1,440

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Bad debt expense
320

 
400

Depreciation
12,878

 
13,140

Amortization of deferred revenue
(2,654
)
 
—

Gain on sale of assets
(369
)
 
(10
)
Deferred income taxes
3,899

 
(715
)
Compensation expense - restricted stock
1,619

 
1,153

Changes in operating assets and liabilities:
 
 
 
Contracts receivable and retainage
9,783

 
41,446

Costs and estimated earnings in excess of billings on uncompleted contracts
1,550

 
1,631

Prepaid expenses and other assets
(1,396
)
 
946

Inventory
(1,234
)
 
245

Accounts payable
(7,522
)
 
(24,493
)
Billings in excess of costs and estimated earnings on uncompleted contracts
247

 
(9,538
)
Deferred revenue
(8,718
)
 
—

Accrued employee costs
1,144

 
(516
)
Accrued expenses
1,479

 
(2,803
)
Accrued contract losses
(5,974
)
 
(604
)
Current income taxes
105

 
1,450

Net cash provided by operating activities
11,686

 
23,172

Cash flows from investing activities:
 
 
 
Capital expenditures
(3,290
)
 
(2,953
)
Net cash received in acquisition
1,588

 
—

Proceeds on the sale of equipment
5,548

 
10

Net cash provided by (used in) investing activities
3,846

 
(2,943
)
Cash flows from financing activities:
 
 
 
Payments of dividends on common stock
(295
)
 
(2,930
)
Net cash used in financing activities
(295
)
 
(2,930
)
Net change in cash and cash equivalents
15,237

 
17,299

Cash and cash equivalents at beginning of period
34,828

 
36,085

Cash and cash equivalents at end of period
$
50,065

 
$
53,384