Gulf Island Fabrication, Inc. ("Gulf Island" or the
"Company") (NASDAQ: GIFI) today reported results for the
third quarter 2020.
Operating
Results |
|
Three Months Ended |
|
|
Nine Months Ended |
|
(in thousands, except per
share data) |
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
54,869 |
|
|
$ |
59,974 |
|
|
$ |
75,802 |
|
|
$ |
193,398 |
|
|
$ |
223,863 |
|
Operating loss(1) |
|
|
(12,239 |
) |
|
|
(5,426 |
) |
|
|
(6,928 |
) |
|
|
(11,729 |
) |
|
|
(15,594 |
) |
EBITDA(1)(2) |
|
|
(10,063 |
) |
|
|
(3,359 |
) |
|
|
(4,638 |
) |
|
|
(5,266 |
) |
|
|
(8,330 |
) |
Net loss(1) |
|
|
(12,337 |
) |
|
|
(5,537 |
) |
|
|
(6,779 |
) |
|
|
(11,969 |
) |
|
|
(15,069 |
) |
Basic and diluted loss per
common share(1) |
|
|
(0.81 |
) |
|
|
(0.36 |
) |
|
|
(0.44 |
) |
|
|
(0.78 |
) |
|
|
(0.99 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
September 30, |
|
|
June 30, |
|
|
December 31, |
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
Cash and short-term investments |
|
$ |
63,777 |
|
|
$ |
69,176 |
|
|
$ |
69,621 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
173,060 |
|
|
|
174,415 |
|
|
|
163,474 |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
112,448 |
|
|
|
99,345 |
|
|
|
97,844 |
|
|
|
|
|
|
|
|
|
_________________
|
(1) |
|
Operating loss, EBITDA and net loss for the three months ended
September 30, 2020, includes net project charges of $6.1 million
and charges of $1.2 million associated with the impacts of
Hurricane Laura. See “Consolidated Results of Operations” and
“Results of Operations by Segment” below for a summary of project
charges and other impacts for all periods presented. |
|
(2) |
|
EBITDA is a non-GAAP measure. See “Non-GAAP Measures” below for the
Company’s reconciliation and definition of EBITDA. |
Consolidated Overview
Consolidated revenue for the third quarter 2020
was $54.9 million, compared to $75.8 million for the third quarter
2019, with the year-over-year decrease primarily attributable to
the Company’s Fabrication & Services Division. Consolidated net
loss for the quarter was $12.3 million with an EBITDA loss of $10.1
million. Third quarter 2020 results, and in particular the Shipyard
Division, were impacted by several factors, including project
charges associated with the impact of the COVID-19 pandemic and
costs attributable to an active hurricane season in the Gulf of
Mexico. In addition, third quarter results reflected the impact of
low volume for the Fabrication & Services Division and the
overall under-utilization of the Company’s facilities and
resources.
“The third quarter was challenging given the
ongoing economic and operational impact of COVID-19, oil price
uncertainty and a record level of tropical storm and hurricane
activity along the Gulf Coast. In particular, pandemic-related
disruptions resulted in schedule extensions and forecast cost
increases on our projects for the U.S. Navy. In addition, Hurricane
Laura directly impacted our operations in Lake Charles, damaging
our facilities, drydocks and ninth harbor tug project which was
within days of being delivered. While many of our employees in Lake
Charles and Jennings suffered substantial property losses,
thankfully no one was injured. I am proud and grateful to our
employees who have continued to deliver on our project commitments
during this very difficult time,” said Richard Heo, Gulf Island’s
President and Chief Executive Officer.
“In response to these challenges, we are working
closely with the Navy and are submitting a request for equitable
adjustment to extend our schedules and recoup the cost increases
associated with the impact of COVID-19 on our projects. We also
delivered our ninth harbor tug in October and are on scheduled to
deliver the tenth vessel, as well as complete the closure of our
Jennings facility, in the fourth quarter.”
“With respect to our Fabrication & Services
Division, we had solid project execution during the quarter with
our jacket and deck project being completed on an accelerated
schedule and realizing margin improvement relative to our previous
forecast. We continue to actively pursue new project opportunities
and remain disciplined in our bidding approach. We also winning
smaller quick turnaround projects and executing the work at
attractive margins.”
“In closing, the impact of COVID-19 and the Gulf
Coast hurricanes were disruptive to our operations in the third
quarter. However, our focus will continue to be on effectively
managing those things that are within our control and preserving
our cash by controlling our costs and monetizing under-utilized
assets where possible. We also continue to explore expanding our
end markets to reduce our reliance on the offshore oil and gas
industry. While COVID-19 and oil price uncertainty are still
weighing on customer decision-making and affecting the utilization
of our facilities and resources, I believe we have made progress
and are seeing the positive impact of our investments in processes
and people,” concluded Mr. Heo.
Segment Overview
Shipyard Segment – Revenue for
the third quarter 2020 was $37.1 million, a decrease of $6.2
million compared to the third quarter 2019, primarily due to lower
revenue for the division’s harbor tug, research vessel and
ice-breaker tug projects. The decrease was partially offset by
higher revenue for the division’s towing, salvage and rescue ship
projects and seventy-vehicle ferry project. Operating loss was $9.2
million for the third quarter 2020, compared to an operating loss
of $3.3 million for the third quarter 2019. EBITDA for the current
quarter was a loss of $8.4 million, compared to a loss of $2.4
million for the third quarter 2019.
Third quarter 2020 results reflected project
charges of $6.7 million for the division’s towing, salvage and
rescue ship projects, charges of $1.2 million associated with the
impact of Hurricane Laura, a low margin backlog, and the partial
under-recovery of overhead costs. The project charges were
primarily attributable to an increase in forecast costs related to
the impact of the COVID-19 pandemic, for which the Company is
submitting a request for equitable adjustment to its customer to
extend the project schedules and recover the forecasted cost
increases. The partial under-recovery of overhead costs was
primarily due to the under-utilization of the division’s facilities
and resources due to construction delays for its research vessel
projects, the winding down of the Jennings facility, and the
impacts of Hurricane’s Laura, Marco and Sally during the third
quarter.
Fabrication &
Services Segment – Revenue for the third
quarter 2020 was $18.2 million, a decrease of $14.4 million
compared to the third quarter 2019, primarily due to the division’s
jacket and deck, paddlewheel river boat and subsea components
projects, which were completed during or prior to the third quarter
2020, and lower offshore and onshore services activity. The
decrease was partially offset by higher revenue for the division’s
marine docking structures project and offshore module project.
Operating loss was $1.1 million for the third quarter 2020,
compared to an operating loss of $1.3 million for the third quarter
2019. EBITDA for the current quarter was $0.2 million, compared to
a loss of $0.1 million for the third quarter 2019.
Third quarter 2020 results reflected low revenue
and the partial under-recovery of overhead costs due to the
under-utilization of the division’s facilities and resources due to
low levels of backlog, and overhead costs associated with retaining
employees to perform process improvements, special projects and
facility maintenance and repairs. These impacts were partially
offset by project improvements of $0.6 million for the division’s
jacket and deck project.
Corporate Segment – Operating
loss was $1.9 million for the third quarter 2020, compared to an
operating loss of $2.3 million for the third quarter 2019, with the
decrease primarily due to lower incentive plan costs and our cost
reduction initiatives. EBITDA for the current quarter was a loss of
$1.8 million, compared to a loss of $2.2 million for the third
quarter 2019.
Cash and Liquidity
The Company's cash and short-term investments at
September 30, 2020 totaled $63.8 million and current and
long-term debt totaled $10.0 million related to proceeds received
in the second quarter 2020 in connection with the Paycheck
Protection Program (“PPP”).
On August 3, 2020, the Company amended its $40.0
million credit facility (“Credit Agreement”) to extend its maturity
date from June 9, 2021 to June 30, 2022. At September 30,
2020, the Company was in compliance with all its financial
covenants and had $10.7 million of outstanding letters of credit
and no borrowings under the Credit Agreement.
Backlog
The Company’s backlog at September 30, 2020
was $429.1 million, with $402.9 million attributable to the
Shipyard Division and $26.2 million attributable to the Fabrication
& Services Division. Backlog excludes customer options on
contracts of approximately $203.0 million for the Shipyard
Division. See "Non-GAAP Measures" below for the Company's
definition of Backlog.
Quarterly Conference Call
Gulf Island will hold a conference call on
Monday, November 2, 2020 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 1.800.430.8332 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, modules and marine vessels, and a provider of
project management, hookup, commissioning, repair, maintenance and
civil construction services. The Company’s customers include U.S.
and international energy producers; refining, petrochemical, LNG,
industrial, power and marine operators; EPC companies; and certain
agencies of the U.S. government. The Company operates and manages
its business through two operating divisions: Fabrication &
Services and Shipyard, with its corporate headquarters located in
Houston, Texas and operating facilities located in Houma, Jennings
and Lake Charles, Louisiana.
Non-GAAP Measures
This Release includes certain non-GAAP measures,
including earnings before interest, taxes, depreciation and
amortization ("EBITDA") 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. A reconciliation of EBITDA to the most comparable
GAAP measure is presented under "EBITDA" and "Results of Operations
by Segment" below. The Company believes Backlog is a useful
supplemental measure as it represents work that the Company is
contractually obligated to perform under its current contracts.
Backlog represents the unearned value of new project awards and may
differ from the value of remaining performance obligations for
contracts as determined under GAAP. Backlog at September 30,
2020 of $429.1 million includes the Company's performance
obligations of $407.2 million, plus $21.9 million of backlog
subject to a contract termination dispute with a customer to build
two multi-purpose service vessels that does not meet the criteria
to be reported as remaining performance obligations under GAAP.
Non-GAAP measures are not intended to be
replacements or alternatives to GAAP measures, and investors are
urged to consider these non-GAAP measures in addition to, and not
in substitution for, measures prepared in accordance with GAAP. The
Company may present or calculate non-GAAP measures differently from
other companies.
Cautionary Statements
This Release contains forward-looking statements
in which the Company discusses its potential future performance.
Forward-looking statements, within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, are all statements other than statements of historical facts,
such as projections or expectations relating to oil and gas prices,
operating cash flows, capital expenditures, liquidity and tax
rates. The words “anticipates,” “may,” “can,” “plans,” “believes,”
“estimates,” “expects,” “projects,” “targets,” “intends,” “likely,”
“will,” “should,” “to be,” “potential” and any similar expressions
are intended to identify those assertions as forward-looking
statements.
The Company cautions readers that
forward-looking statements are not guarantees of future performance
and actual results may differ materially from those anticipated,
projected or assumed in the forward-looking statements. Important
factors that can cause its actual results to differ materially from
those anticipated in the forward-looking statements include: the
duration and scope of, and uncertainties associated with, the
COVID-19 pandemic and the corresponding weakened demand for, and
volatility of prices of, oil and the impact thereof on its business
and the global economy, which are evolving and beyond its control;
the potential forgiveness of any portion of the PPP Loan; its
ability to secure new project awards, including fabrication
projects for refining, petrochemical, LNG and industrial facilities
and offshore wind developments; the Company’s ability to improve
project execution; the cyclical nature of the oil and gas industry;
competition; consolidation of its customers; timing and award of
new contracts; reliance on significant customers; financial ability
and credit worthiness of its customers; nature of its contract
terms; competitive pricing and cost overruns on its projects;
adjustments to previously reported profits or losses under the
percentage-of-completion method; weather conditions; changes in
backlog estimates; suspension or termination of projects; its
ability to raise additional capital; its ability to amend or obtain
new debt financing or credit facilities on favorable terms; its
ability to remain in compliance with the covenants contained in its
Credit Agreement; its ability to generate sufficient cash flow; its
ability to sell certain assets; any future asset impairments;
utilization of facilities or closure or consolidation of
facilities; customer or subcontractor disputes; its ability to
resolve the dispute with a customer relating to the purported
terminations of contracts to build two MPSVs; operating dangers and
limits on insurance coverage; barriers to entry into new lines of
business; its ability to employ skilled workers; loss of key
personnel; performance of subcontractors and dependence on
suppliers; changes in trade policies of the U.S. and other
countries; compliance with regulatory and environmental laws; lack
of navigability of canals and rivers; any prolonged shutdown of the
U.S. government; 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 other factors described in
Item 1A "Risk Factors" in the Company’s 2019 Annual Report as
updated in the Company’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2020 and as may be further updated by
subsequent filings with the SEC.
Investors are cautioned that many of the
assumptions upon which the Company’s forward-looking statements are
based are likely to change after 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 does not intend to update
forward-looking statements more frequently than quarterly
notwithstanding any changes in its assumptions, changes in business
plans, actual experience or other changes, and undertakes no
obligation to update any forward-looking statements.
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, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
54,869 |
|
|
$ |
59,974 |
|
|
$ |
75,802 |
|
|
$ |
193,398 |
|
|
$ |
223,863 |
|
Cost of revenue |
|
|
62,686 |
|
|
|
61,677 |
|
|
|
78,487 |
|
|
|
203,172 |
|
|
|
227,593 |
|
Gross loss(2) |
|
|
(7,817 |
) |
|
|
(1,703 |
) |
|
|
(2,685 |
) |
|
|
(9,774 |
) |
|
|
(3,730 |
) |
General and administrative
expense |
|
|
3,072 |
|
|
|
3,722 |
|
|
|
3,970 |
|
|
|
10,538 |
|
|
|
11,791 |
|
Impairments and (gain) loss on
assets held for sale |
|
|
72 |
|
|
|
- |
|
|
|
324 |
|
|
|
72 |
|
|
|
254 |
|
Other (income) expense,
net(3) |
|
|
1,278 |
|
|
|
1 |
|
|
|
(51 |
) |
|
|
(8,655 |
) |
|
|
(181 |
) |
Operating loss |
|
|
(12,239 |
) |
|
|
(5,426 |
) |
|
|
(6,928 |
) |
|
|
(11,729 |
) |
|
|
(15,594 |
) |
Interest (expense) income,
net |
|
|
(118 |
) |
|
|
(89 |
) |
|
|
139 |
|
|
|
(154 |
) |
|
|
527 |
|
Loss before income taxes |
|
|
(12,357 |
) |
|
|
(5,515 |
) |
|
|
(6,789 |
) |
|
|
(11,883 |
) |
|
|
(15,067 |
) |
Income tax (expense)
benefit |
|
|
20 |
|
|
|
(22 |
) |
|
|
10 |
|
|
|
(86 |
) |
|
|
(2 |
) |
Net loss |
|
$ |
(12,337 |
) |
|
$ |
(5,537 |
) |
|
$ |
(6,779 |
) |
|
$ |
(11,969 |
) |
|
$ |
(15,069 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common share |
|
$ |
(0.81 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.78 |
) |
|
$ |
(0.99 |
) |
|
Consolidated EBITDA (in
thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss |
|
$ |
(12,337 |
) |
|
$ |
(5,537 |
) |
|
$ |
(6,779 |
) |
|
$ |
(11,969 |
) |
|
$ |
(15,069 |
) |
Less: Income tax (expense)
benefit |
|
|
20 |
|
|
|
(22 |
) |
|
|
10 |
|
|
|
(86 |
) |
|
|
(2 |
) |
Less: Interest (expense)
income, net |
|
|
(118 |
) |
|
|
(89 |
) |
|
|
139 |
|
|
|
(154 |
) |
|
|
527 |
|
Operating loss |
|
|
(12,239 |
) |
|
|
(5,426 |
) |
|
|
(6,928 |
) |
|
|
(11,729 |
) |
|
|
(15,594 |
) |
Add: Depreciation and lease
asset amortization |
|
|
2,176 |
|
|
|
2,067 |
|
|
|
2,290 |
|
|
|
6,463 |
|
|
|
7,264 |
|
EBITDA(4) |
|
$ |
(10,063 |
) |
|
$ |
(3,359 |
) |
|
$ |
(4,638 |
) |
|
$ |
(5,266 |
) |
|
$ |
(8,330 |
) |
_________________
|
(1) |
|
See "Results of Operations by Segment" below for results by
segment. |
|
(2) |
|
Gross loss for the Shipyard Division includes project charges for
the three months ended September 30, 2020, June 30, 2020 and
September 30, 2019, and nine months ended September 30, 2020 and
2019, of $6.7 million, $0.6 million, $2.4 million, $8.7 million and
$4.4 million, respectively. Gross loss for the Fabrication &
Services Division includes project improvements for the three
months ended September 30, 2020 and June 30, 2020, and nine months
ended September 30, 2020, of $0.6 million, $1.0 million and $2.6
million, respectively, and project charges for the three and nine
months ended September 30, 2019, of $1.5 million and $1.4 million,
respectively. |
|
(3) |
|
Other (income) expense for the Shipyard Division for both the three
and nine months ended September 30, 2020, includes charges of $1.2
million associated with insurance coverage deductibles and other
costs related to the impacts of Hurricane Laura. Other (income)
expense for the Fabrication & Services Division for the nine
months ended September 30, 2020, includes a gain of $10.0 million
associated with the settlement of a contract dispute for a
previously completed project. |
|
(4) |
|
EBITDA is a non-GAAP measure. See "Non-GAAP Measures" above for the
Company's definition of EBITDA. |
|
|
|
|
Results of Operations
by Segment (in thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
Shipyard
Division(1) |
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
37,078 |
|
|
$ |
33,888 |
|
|
$ |
43,323 |
|
|
$ |
116,525 |
|
|
$ |
120,787 |
|
Cost of revenue |
|
|
44,582 |
|
|
|
35,119 |
|
|
|
45,725 |
|
|
|
126,484 |
|
|
|
126,381 |
|
Gross loss(2) |
|
|
(7,504 |
) |
|
|
(1,231 |
) |
|
|
(2,402 |
) |
|
|
(9,959 |
) |
|
|
(5,594 |
) |
General and administrative
expense |
|
|
461 |
|
|
|
493 |
|
|
|
657 |
|
|
|
1,529 |
|
|
|
1,871 |
|
Impairments and (gain) loss on
assets held for sale |
|
|
- |
|
|
|
- |
|
|
|
324 |
|
|
|
- |
|
|
|
324 |
|
Other (income) expense,
net(3) |
|
|
1,279 |
|
|
|
- |
|
|
|
(34 |
) |
|
|
1,379 |
|
|
|
28 |
|
Operating loss |
|
$ |
(9,244 |
) |
|
$ |
(1,724 |
) |
|
$ |
(3,349 |
) |
|
$ |
(12,867 |
) |
|
$ |
(7,817 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
$ |
(9,244 |
) |
|
$ |
(1,724 |
) |
|
$ |
(3,349 |
) |
|
$ |
(12,867 |
) |
|
$ |
(7,817 |
) |
Add: Depreciation and lease
asset amortization |
|
|
819 |
|
|
|
802 |
|
|
|
992 |
|
|
|
2,408 |
|
|
|
3,148 |
|
EBITDA(4) |
|
$ |
(8,425 |
) |
|
$ |
(922 |
) |
|
$ |
(2,357 |
) |
|
$ |
(10,459 |
) |
|
$ |
(4,669 |
) |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
Fabrication &
Services Division(1) |
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
18,237 |
|
|
$ |
26,606 |
|
|
$ |
32,681 |
|
|
$ |
78,286 |
|
|
$ |
103,926 |
|
Cost of revenue |
|
|
18,550 |
|
|
|
27,078 |
|
|
|
32,899 |
|
|
|
78,101 |
|
|
|
101,715 |
|
Gross profit (loss)(5) |
|
|
(313 |
) |
|
|
(472 |
) |
|
|
(218 |
) |
|
|
185 |
|
|
|
2,211 |
|
General and administrative
expense |
|
|
743 |
|
|
|
921 |
|
|
|
1,054 |
|
|
|
2,503 |
|
|
|
3,479 |
|
Impairments and (gain) loss on
assets held for sale |
|
|
72 |
|
|
|
- |
|
|
|
- |
|
|
|
72 |
|
|
|
(70 |
) |
Other (income) expense,
net(6) |
|
|
(1 |
) |
|
|
1 |
|
|
|
(17 |
) |
|
|
(10,034 |
) |
|
|
(209 |
) |
Operating income (loss) |
|
$ |
(1,127 |
) |
|
$ |
(1,394 |
) |
|
$ |
(1,255 |
) |
|
$ |
7,644 |
|
|
$ |
(989 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
(1,127 |
) |
|
$ |
(1,394 |
) |
|
$ |
(1,255 |
) |
|
$ |
7,644 |
|
|
$ |
(989 |
) |
Add: Depreciation and lease
asset amortization |
|
|
1,280 |
|
|
|
1,188 |
|
|
|
1,202 |
|
|
|
3,826 |
|
|
|
3,797 |
|
EBITDA(4) |
|
$ |
153 |
|
|
$ |
(206 |
) |
|
$ |
(53 |
) |
|
$ |
11,470 |
|
|
$ |
2,808 |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
Corporate
Division |
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue (eliminations) |
|
$ |
(446 |
) |
|
$ |
(520 |
) |
|
$ |
(202 |
) |
|
$ |
(1,413 |
) |
|
$ |
(850 |
) |
Cost of revenue |
|
|
(446 |
) |
|
|
(520 |
) |
|
|
(137 |
) |
|
|
(1,413 |
) |
|
|
(503 |
) |
Gross loss |
|
|
- |
|
|
|
- |
|
|
|
(65 |
) |
|
|
- |
|
|
|
(347 |
) |
General and administrative
expense |
|
|
1,868 |
|
|
|
2,308 |
|
|
|
2,259 |
|
|
|
6,506 |
|
|
|
6,441 |
|
Operating loss |
|
$ |
(1,868 |
) |
|
$ |
(2,308 |
) |
|
$ |
(2,324 |
) |
|
$ |
(6,506 |
) |
|
$ |
(6,788 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
$ |
(1,868 |
) |
|
$ |
(2,308 |
) |
|
$ |
(2,324 |
) |
|
$ |
(6,506 |
) |
|
$ |
(6,788 |
) |
Add: Depreciation and lease
asset amortization |
|
|
77 |
|
|
|
77 |
|
|
|
96 |
|
|
|
229 |
|
|
|
319 |
|
EBITDA(4) |
|
$ |
(1,791 |
) |
|
$ |
(2,231 |
) |
|
$ |
(2,228 |
) |
|
$ |
(6,277 |
) |
|
$ |
(6,469 |
) |
_________________
|
(1) |
|
In the first quarter 2020, our former Fabrication and Services
Divisions were operationally combined to form a new division called
Fabrication & Services. Accordingly, segment results (including
the effects of eliminations) for our former Fabrication and
Services Divisions for 2019 have been combined to conform to the
presentation of our reportable segments for 2020. In addition, in
the first quarter 2020, management and project execution
responsibility for our two, forty-vehicle ferry projects was
transferred from our former Fabrication Division to our Shipyard
Division. Accordingly, revenue of $3.9 million and $7.2 million for
the three and nine months ended September 30, 2019, respectively,
associated with these projects was reclassified from our former
Fabrication Division to our Shipyard Division to conform to the
presentation of these projects for 2020 (the projects had no
significant gross profit for the three and nine months ended
September 30, 2019). |
|
(2) |
|
Gross loss for the Shipyard Division includes project charges for
the three months ended September 30, 2020, June 30, 2020 and
September 30, 2019, and nine months ended September 30, 2020 and
2019, of $6.7 million, $0.6 million, $2.4 million, $8.7 million and
$4.4 million, respectively. |
|
(3) |
|
Other (income) expense for the Shipyard Division for both the three
and nine months ended September 30, 2020, includes charges of $1.2
million associated with insurance coverage deductibles and other
costs related to the impacts of Hurricane Laura. |
|
(4) |
|
EBITDA is a non-GAAP measure. See "Non-GAAP Measures" above for the
Company's definition of EBITDA. |
|
(5) |
|
Gross profit (loss) for the Fabrication & Services Division
includes project improvements for the three months ended September
30, 2020 and June 30, 2020, and nine months ended September 30,
2020, of $0.6 million, $1.0 million and $2.6 million, respectively,
and project charges for the three and nine months ended September
30, 2019, of $1.5 million and $1.4 million, respectively. |
|
(6) |
|
Other (income) expense for the Fabrication & Services Division
for the nine months ended September 30, 2020 includes a gain of
$10.0 million associated with the settlement of a contract dispute
for a previously completed project. |
|
|
|
|
Consolidated Balance
Sheets (in thousands)
|
|
September 30,2020 |
|
|
December 31,2019 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
43,778 |
|
|
$ |
49,703 |
|
Short-term investments |
|
|
19,999 |
|
|
|
19,918 |
|
Contracts receivable and retainage, net |
|
|
24,436 |
|
|
|
26,095 |
|
Contract assets |
|
|
72,359 |
|
|
|
52,128 |
|
Prepaid expenses and other assets |
|
|
2,312 |
|
|
|
3,948 |
|
Inventory |
|
|
2,517 |
|
|
|
2,676 |
|
Assets held for sale |
|
|
7,659 |
|
|
|
9,006 |
|
Total current assets |
|
|
173,060 |
|
|
|
163,474 |
|
Property, plant and equipment,
net |
|
|
72,641 |
|
|
|
70,484 |
|
Other noncurrent assets |
|
|
16,675 |
|
|
|
18,819 |
|
Total assets |
|
$ |
262,376 |
|
|
$ |
252,777 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
79,006 |
|
|
$ |
61,542 |
|
Contract liabilities |
|
|
20,177 |
|
|
|
26,271 |
|
Accrued expenses and other liabilities |
|
|
9,446 |
|
|
|
10,031 |
|
Long-term debt, current |
|
|
3,819 |
|
|
|
— |
|
Total current liabilities |
|
|
112,448 |
|
|
|
97,844 |
|
Long-term debt,
noncurrent |
|
|
6,181 |
|
|
|
— |
|
Other noncurrent
liabilities |
|
|
2,324 |
|
|
|
2,248 |
|
Total liabilities |
|
|
120,953 |
|
|
|
100,092 |
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, no par value, 5,000 shares authorized, no shares
issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock, no par value, 30,000 shares authorized, 15,325 shares
issued and outstanding at September 30, 2020 and 15,263 at December
31, 2019 |
|
|
11,189 |
|
|
|
11,119 |
|
Additional paid-in capital |
|
|
103,761 |
|
|
|
103,124 |
|
Retained earnings |
|
|
26,473 |
|
|
|
38,442 |
|
Total shareholders’ equity |
|
|
141,423 |
|
|
|
152,685 |
|
Total liabilities and shareholders’ equity |
|
$ |
262,376 |
|
|
$ |
252,777 |
|
|
Consolidated Cash Flows (in
thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(12,337 |
) |
|
$ |
(5,537 |
) |
|
$ |
(6,779 |
) |
|
$ |
(11,969 |
) |
|
$ |
(15,069 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and lease asset amortization |
|
|
2,176 |
|
|
|
2,067 |
|
|
|
2,290 |
|
|
|
6,463 |
|
|
|
7,264 |
|
Other amortization, net |
|
|
17 |
|
|
|
18 |
|
|
|
11 |
|
|
|
48 |
|
|
|
37 |
|
Bad debt expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59 |
|
Asset impairments |
|
|
— |
|
|
|
— |
|
|
|
323 |
|
|
|
— |
|
|
|
622 |
|
(Gain) loss on sale of assets held for sale, net |
|
|
72 |
|
|
|
— |
|
|
|
— |
|
|
|
72 |
|
|
|
(369 |
) |
(Gain) loss on sale of fixed assets and other assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
(565 |
) |
Stock-based compensation expense |
|
|
341 |
|
|
|
345 |
|
|
|
462 |
|
|
|
781 |
|
|
|
1,808 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts receivable and retainage, net |
|
|
(11,045 |
) |
|
|
2,787 |
|
|
|
(6,926 |
) |
|
|
1,659 |
|
|
|
(7,822 |
) |
Contract assets |
|
|
5,500 |
|
|
|
(12,955 |
) |
|
|
479 |
|
|
|
(20,232 |
) |
|
|
(20,873 |
) |
Prepaid expenses, inventory and other current assets |
|
|
1,045 |
|
|
|
(1,161 |
) |
|
|
1,290 |
|
|
|
1,713 |
|
|
|
1,502 |
|
Accounts payable |
|
|
16,819 |
|
|
|
(7,582 |
) |
|
|
2,975 |
|
|
|
18,900 |
|
|
|
29,244 |
|
Contract liabilities |
|
|
(6,796 |
) |
|
|
15,402 |
|
|
|
1,859 |
|
|
|
(6,094 |
) |
|
|
(1,164 |
) |
Accrued expenses and other current liabilities |
|
|
1,184 |
|
|
|
78 |
|
|
|
638 |
|
|
|
(656 |
) |
|
|
(470 |
) |
Noncurrent assets and liabilities, net (including long-term
retainage) |
|
|
(495 |
) |
|
|
2,773 |
|
|
|
(444 |
) |
|
|
2,043 |
|
|
|
(910 |
) |
Net cash used in operating activities |
|
|
(3,519 |
) |
|
|
(3,765 |
) |
|
|
(3,822 |
) |
|
|
(7,277 |
) |
|
|
(6,706 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(2,446 |
) |
|
|
(5,621 |
) |
|
|
(631 |
) |
|
|
(10,191 |
) |
|
|
(1,990 |
) |
Proceeds from sale of property, plant and equipment |
|
|
599 |
|
|
|
— |
|
|
|
— |
|
|
|
1,679 |
|
|
|
1,598 |
|
Purchases of short-term investments |
|
|
(1 |
) |
|
|
(19,991 |
) |
|
|
— |
|
|
|
(19,992 |
) |
|
|
(45,366 |
) |
Maturities of short-term investments |
|
|
— |
|
|
|
20,000 |
|
|
|
20,261 |
|
|
|
20,000 |
|
|
|
28,761 |
|
Net cash provided by (used in) investing activities |
|
|
(1,848 |
) |
|
|
(5,612 |
) |
|
|
19,630 |
|
|
|
(8,504 |
) |
|
|
(16,997 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
Payment of financing cost |
|
|
(39 |
) |
|
|
(1 |
) |
|
|
(8 |
) |
|
|
(70 |
) |
|
|
(48 |
) |
Tax payments for vested stock withholdings |
|
|
— |
|
|
|
— |
|
|
|
(81 |
) |
|
|
(74 |
) |
|
|
(795 |
) |
Net cash provided by (used in) financing activities |
|
|
(39 |
) |
|
|
9,999 |
|
|
|
(89 |
) |
|
|
9,856 |
|
|
|
(843 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
|
(5,406 |
) |
|
|
622 |
|
|
|
15,719 |
|
|
|
(5,925 |
) |
|
|
(24,546 |
) |
Cash and cash equivalents,
beginning of period |
|
|
49,184 |
|
|
|
48,562 |
|
|
|
49,898 |
|
|
|
49,703 |
|
|
|
70,457 |
|
Cash and cash equivalents, end
of period |
|
$ |
43,778 |
|
|
$ |
49,184 |
|
|
$ |
65,617 |
|
|
$ |
43,778 |
|
|
$ |
45,911 |
|
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