0001564590-20-008688.txt : 20200304 0001564590-20-008688.hdr.sgml : 20200304 20200304161534 ACCESSION NUMBER: 0001564590-20-008688 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20200304 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200304 DATE AS OF CHANGE: 20200304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GULF ISLAND FABRICATION INC CENTRAL INDEX KEY: 0001031623 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED STRUCTURAL METAL PRODUCTS [3440] IRS NUMBER: 721147390 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34279 FILM NUMBER: 20687333 BUSINESS ADDRESS: STREET 1: 16225 PARK TEN PLACE, SUITE 280 CITY: HOUSTON STATE: TX ZIP: 77084 BUSINESS PHONE: 7137146100 MAIL ADDRESS: STREET 1: 16225 PARK TEN PLACE, SUITE 280 CITY: HOUSTON STATE: TX ZIP: 77084 8-K 1 gifi-8k_20200304.htm 8-K gifi-8k_20200304.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 4, 2020

Gulf Island Fabrication, Inc.

(Exact name of registrant as specified in its charter)

 

Louisiana

001-34279

72-1147390

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

16225 Park Ten Place, Suite 300

Houston, Texas 77084

(Address of principal executive offices)(Zip Code)

(713) 714-6100

(Registrant's telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value per share

GIFI

NASDAQ

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]


Item 2.02

Results of Operations and Financial Condition

On March 4, 2020, Gulf Island Fabrication, Inc. issued a press release (the “Press Release”) announcing its fourth quarter and full year results for 2019. A copy of the Press Release is attached as Exhibit 99.1.

Neither the information reported herein nor in the Press Release shall be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Securities Act or the Exchange Act.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is filed herewith:

 

 

*Filed with this Current Report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

GULF ISLAND FABRICATION, INC.

 

 

 

 

 

 

 

 

By:

/s/ Westley S. Stockton

 

 

 

 

Westley S. Stockton

 

 

 

 

Executive Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer)

Dated:

 

March 4, 2020

 

 

 

EX-99.1 2 gifi-ex991_7.htm EX-99.1 gifi-ex991_7.htm

 

Exhibit 99.1

NEWS RELEASE    

FOR IMMEDIATE RELEASE

Wednesday, March 4, 2020

 

GULF ISLAND

REPORTS FOURTH QUARTER 2019 RESULTS

 

Highlights of Business Strategy and Fourth Quarter Results

 

Strengthening resources, processes and procedures to drive project execution and profitability

 

Improving resource utilization and centralizing key resources

 

o

Combining Fabrication Division and Services Division

 

o

Closing Jennings facility within the Shipyard Division  

 

Maintaining focus on fabrication of modules and structures for onshore facilities and marine vessels for government end markets

 

Maintained approximately $100 million of total liquidity at year-end 2019; ongoing focus to monetize underutilized assets

 

Net loss of $34.3 million for the fourth quarter 2019 due to project impacts of $14.0 million and impairments and nonrecurring items of $17.3 million

 

Resolved customer change order dispute in February 2020; received $10.0 million payment

 

Houston, TX - Gulf Island Fabrication, Inc. ("Gulf Island" or the "Company") (NASDAQ: GIFI) today reported results for the fourth quarter and full year 2019. The Company also announced initiatives intended to position the Company for future profitability and growth.

 

 

Three Months Ended

 

Operating Results (in thousands, except per share data)

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

Revenue

 

$

79,445

 

 

$

75,802

 

 

$

60,231

 

Operating loss

 

 

(34,427

)

 

 

(6,928

)

 

 

(4,554

)

Impairments and (gain) loss on assets held for sale(1)

 

 

17,274

 

 

 

324

 

 

 

(1,167

)

Adjusted EBITDA(2)

 

 

(14,853

)

 

 

(4,314

)

 

 

(3,159

)

Net loss

 

 

(34,325

)

 

 

(6,779

)

 

 

(4,682

)

Basic and diluted loss per common share

 

 

(2.26

)

 

 

(0.44

)

 

 

(0.31

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity (in thousands)

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

Cash and short-term investments

 

$

69,621

 

 

$

71,368

 

 

$

79,177

 

Total available liquidity

 

 

99,387

 

 

 

100,934

 

 

 

116,260

 

_________

 

(1)

Includes non-cash asset impairments, (gains) losses on assets held for sale and certain nonrecurring items. See “Consolidated Results of Operations” and “Results of Operations by Segment” below for further discussion.

 

 

(2)

Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures” below for the Company’s reconciliation and definition of Adjusted EBITDA.

 

Consolidated Overview

 

Consolidated revenue for the fourth quarter 2019 was $79.4 million, compared to $60.2 million in the fourth quarter 2018 with the increase primarily due to progress on the Company’s three research vessel projects and three towing, salvage and rescue ship projects. Consolidated net loss of $34.3 million for the fourth quarter 2019 includes project charges of $14.0 million, primarily attributable to the Company’s Fabrication Division and Shipyard Division. Fourth quarter 2019 results also include non-cash asset impairments and certain nonrecurring costs of $17.3 million. The impairments were primarily associated with assets held for sale and lease assets and fixed assets associated with the Company’s Jennings facility (which is expected to be closed in the third quarter 2020) and Lake Charles facility. Adjusted EBITDA loss of $14.9 million for the fourth quarter 2019 excludes the non-cash impairments and nonrecurring costs. In February 2020, the Company reached a $10.0 million settlement related to a customer change order dispute for a completed project. The settlement amount was received by the Company in February 2020 and is not included in operating results for the fourth quarter 2019.

1

 


 

 

"Fourth quarter results reflect the impact of project charges related to operational challenges and non-cash asset impairments as we further rationalize and monetize under-utilized assets and facilities. These results are not indicative of Gulf Island’s capabilities and I am committed to taking actions necessary to return the Company to profitability. Since joining the Company in November, I have spent significant time with our customers and employees, reviewing current projects, and identifying opportunities to enhance our people, processes and procedures. These efforts, combined with the knowledge gained from the Company’s recent challenges, have provided key insights into the initiatives necessary to improve project execution and strengthen Gulf Island’s position in our end markets,” said Richard Heo, Gulf Island’s President and Chief Executive Officer. “Underpinning our success will be a more disciplined approach to pursuing project opportunities, increased rigor around bid estimates, changes in certain management and functional leadership, strengthened processes and procedures and greater accountability for project execution.”

 

“We are also focused on improving resource utilization and centralizing key project resources. Our announced closure of the Jennings facility within our Shipyard Division will consolidate the segment’s new build marine vessel construction activities in Houma and combine management and supervision talent in a single location. In addition, in the first quarter of 2020, we combined our Fabrication Division and Services Division to form a new and fully integrated segment. The Fabrication & Services Segment will enable us to further leverage the best practices and experience of the combined new division. These facility and division consolidations will also maximize the utilization of our resources, including reducing costs, and contribute to improved project execution.”

 

“From an end market perspective, we will continue to provide fabrication and associated services to our traditional offshore market, while increasing our business development efforts and focus on the fabrication of modules, piping systems and other structures for onshore refining, petrochemical, LNG and industrial facilities. We will also maintain our focus on opportunities for newbuild marine vessels for government and other customers unrelated to the offshore oil and gas sector, as well as fabrication opportunities for offshore wind developments.”

 

“Supporting these initiatives is almost $100 million of total liquidity and ongoing efforts to monetize under-utilized assets. Going forward we are building a strong foundation that will enable us to execute our existing backlog to completion, fully leverage our workforce and strategic location in Houma and secure new project awards to drive profitable growth,” concluded Mr. Heo.

 

Segment Overview

 

Fabrication Segment – Revenue for the fourth quarter 2019 was $15.5 million, an increase of $5.3 million compared to the fourth quarter 2018, primarily due to progress on the Company’s jacket and deck project and two forty-vehicle ferry projects. Operating loss was $18.5 million for the fourth quarter 2019, compared to operating income of $1.8 million for the fourth quarter 2018.  

 

Fourth quarter 2019 results include project charges of $8.7 million, primarily attributable to the Company’s two forty-vehicle ferry projects, paddle wheel river boat project and jacket and deck project. The current quarter results also include non-cash impairments of $8.7 million, primarily attributable to assets held for sale. Adjusted EBITDA for the current quarter was a loss of $8.9 million, compared to Adjusted EBITDA of $0.6 million for the fourth quarter 2018.  

 

Shipyard Segment – Revenue for the fourth quarter 2019 was $45.6 million, an increase of $15.9 million compared to the fourth quarter 2018, primarily due to progress on the Company’s three research vessel projects and three towing, salvage and rescue ship projects, offset partially by lower revenue for the Company’s harbor tug projects. Operating loss was $13.5 million for the fourth quarter 2019, compared to $6.6 million for the fourth quarter 2018.

 

Fourth quarter 2019 results include project charges of $5.1 million, primarily attributable to the Company’s three research vessel projects, harbor tug projects, and to a lesser extent, its three towing, salvage and rescue ship projects and ice-breaker tug project.  The current quarter results also include non-cash impairments of $7.6 million, primarily attributable to lease assets and fixed assets associated with the Company’s Jennings facility (which is expected to be closed in the third quarter 2020) and Lake Charles facility. Adjusted EBITDA for the current quarter was a loss of $4.9 million, compared to an Adjusted EBITDA loss of $4.6 million for the fourth quarter 2018.

 

Services Segment – Revenue for the fourth quarter 2019 was $20.5 million, a decrease of $1.0 million compared to the fourth quarter 2018, primarily due to lower offshore services revenue, offset partially by higher onshore maintenance revenue.  Operating income was $0.7 million for the fourth quarter 2019, compared to $2.1 million for the fourth quarter 2018.  Fourth quarter 2019 results include a project charge of $0.2 million and were impacted by a lower margin mix relative to 2018. The current quarter results also include non-cash impairments of $0.3 million, primarily attributable to inventory. Adjusted EBITDA for the current quarter was $1.4 million, compared to Adjusted EBITDA of $2.6 million in the fourth quarter 2018.

 

2

 


 

Corporate Segment – Operating loss was $3.1 million for the fourth quarter 2019, compared to an operating loss of $1.9 million for the fourth quarter 2018.  Results for 2019 were impacted by higher legal and advisory fees, offset partially by lower incentive plan costs.  The current quarter results also include certain nonrecurring costs of $0.7 million and legal fees and other costs of $0.8 million associated with two customer disputes. Adjusted EBITDA for the current quarter was a loss of $2.3 million, compared to an EBITDA loss of $1.8 million for the fourth quarter 2018.

 

Cash and Liquidity

 

The Company's cash and short-term investments at December 31, 2019 was $69.6 million, representing a decrease of $1.7 million from September 30, 2019, and a decrease of $9.6 million from December 31, 2018. The Company ended the quarter with no debt and total working capital of $65.6 million, which includes $9.0 million of assets held for sale. On February 28, 2020, the Company amended its $40.0 million credit facility (“Credit Agreement”) and at December 31, 2019, was in compliance with all its financial covenants. At December 31, 2019, the Company's total available liquidity was as follows (in thousands):

 

Available Liquidity

 

Total

 

Cash and cash equivalents

 

$

49,703

 

Short-term investments (1)

 

 

19,918

 

Total cash, cash equivalents and short-term investments

 

 

69,621

 

Credit Agreement total capacity

 

 

40,000

 

Outstanding letters of credit

 

 

(10,234

)

Credit Agreement available capacity

 

 

29,766

 

Total available liquidity

 

$

99,387

 

 

Backlog

 

The Company’s backlog at December 31, 2019 was $437.3 million, representing a decrease of $24.5 million from September 30, 2019, and an increase of $80.9 million from December 31, 2018. Backlog by operating segment was $374.0 million for the Shipyard Division, $50.1 million for the Fabrication Division, and $13.2 million for the Services Division. Backlog for the Shipyard Division excludes customer options on contracts of approximately $333.0 million, which would include deliveries through 2025 if all options are exercised. See "Non-GAAP Measures" below for the Company's definition of Backlog.

 

Quarterly Conference Call

 

Gulf Island will hold a conference call on Wednesday, March 4, 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 1.800.367.2403 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. As of December 31, 2019, the Company operated and managed its business through three operating divisions: Fabrication, Shipyard and Services, with its corporate headquarters located in Houston, Texas and operating facilities located in Houma, Jennings and Lake Charles, Louisiana. During the first quarter 2020, the Company’s Fabrication Division and Services Division were combined, resulting in two operating divisions: Fabrication & Services and Shipyard.

 

Non-GAAP Measures

 

This Release includes certain non-GAAP measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted 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. The Company believes Adjusted EBITDA is a useful supplemental measure as it reflects the Company’s EBITDA excluding non-cash impacts of impairments and other impacts which the Company believes are non-recurring. Reconciliations of EBITDA and Adjusted EBITDA to the most comparable GAAP measure are presented under "EBITDA & Adjusted EBITDA" above 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 December 31, 2019 of $437.3 million includes the Company's performance obligations of $415.4 million, plus $21.9 million

3

 


 

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 we discuss our 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.

 

We caution 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 our actual results to differ materially from those anticipated in the forward-looking statements include ability to secure new project awards, including fabrication projects for refining, petrochemical, LNG and industrial facilities and offshore wind developments, ability to improve project execution, the cyclical nature of the oil and gas industry, competition, consolidation of our customers, timing and award of new contracts, reliance on significant customers, financial ability and credit worthiness of our customers, nature of our contract terms, competitive pricing and cost overruns on our 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, ability to raise additional capital, ability to amend or obtain new debt financing or credit facilities on favorable terms, ability to remain in compliance with our covenants contained in our Credit Agreement, ability to generate sufficient cash flow, ability to sell certain assets, any future asset impairments, utilization of facilities or closure or consolidation of facilities, customer or subcontractor disputes, 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, 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, shutdowns 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 of our Annual Report on Form 10-K for the year ended December 31, 2018, as updated by subsequent filings with the U.S. Securities and Exchange Commission.

 

Investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the forward-looking statements are made, which we cannot control. Further, we may make changes to our business plans that could affect our results. We caution investors that we do not intend to update forward-looking statements more frequently than quarterly notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes, and we undertake 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

 

 

4

 


 

Consolidated Results of Operations(1) (in thousands, except per share data)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

79,445

 

 

$

75,802

 

 

$

60,231

 

 

$

303,308

 

 

$

221,247

 

Cost of revenue

 

 

92,714

 

 

 

78,487

 

 

 

64,195

 

 

 

320,307

 

 

 

228,443

 

Gross loss(2)

 

 

(13,269

)

 

 

(2,685

)

 

 

(3,964

)

 

 

(16,999

)

 

 

(7,196

)

General and administrative expense

 

 

3,837

 

 

 

3,970

 

 

 

4,312

 

 

 

15,628

 

 

 

19,015

 

Impairments and (gain) loss on assets held for sale(3)

 

 

17,274

 

 

 

324

 

 

 

(1,167

)

 

 

17,528

 

 

 

(6,850

)

Other (income) expense, net

 

 

47

 

 

 

(51

)

 

 

(2,555

)

 

 

(134

)

 

 

304

 

Operating loss(4)

 

 

(34,427

)

 

 

(6,928

)

 

 

(4,554

)

 

 

(50,021

)

 

 

(19,665

)

Interest (expense) income, net

 

 

4

 

 

 

139

 

 

 

24

 

 

 

531

 

 

 

(142

)

Net loss before income taxes

 

 

(34,423

)

 

 

(6,789

)

 

 

(4,530

)

 

 

(49,490

)

 

 

(19,807

)

Income tax (expense) benefit

 

 

98

 

 

 

10

 

 

 

(152

)

 

 

96

 

 

 

(571

)

Net loss

 

$

(34,325

)

 

$

(6,779

)

 

$

(4,682

)

 

$

(49,394

)

 

$

(20,378

)

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$

(2.26

)

 

$

(0.44

)

 

$

(0.31

)

 

$

(3.24

)

 

$

(1.36

)

 

(1)

See "Results of Operations by Segment" below for results by segment.

(2)

Gross loss and operating loss includes charges on certain projects in the Shipyard Division for the three months ended December 31, 2019 and September 30, 2019, and for the twelve months ended December 31, 2019, of $5.1 million, $2.4 million and $7.2 million, respectively; charges on certain projects in the Fabrication Division for the three and twelve months ended December 31, 2019, of $8.7 million and $8.4 million, respectively; and charges on a project in the Services Division for the three and twelve months ended December 31, 2019, of $0.2 million and $1.6 million, respectively.

(3)

Impairments and (gain) loss on assets held for sale for the three and twelve months ended December 31, 2019 includes impairments of assets held for sale and fixed assets, net gains on the sale of assets held for sale and certain nonrecurring costs.

(4)

Operating loss for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, and twelve months ended December 31, 2019 and 2018, includes legal fees and other costs of $0.8 million, $0.5 million, $0.5 million, $2.5 million, and $2.5 million, respectively, associated with two customer disputes.  

 

EBITDA & Adjusted EBITDA(1) (in thousands)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net loss

 

$

(34,325

)

 

$

(6,779

)

 

$

(4,682

)

 

$

(49,394

)

 

$

(20,378

)

Less: Income tax (expense) benefit

 

 

98

 

 

 

10

 

 

 

(152

)

 

 

96

 

 

 

(571

)

Less: Interest (expense) income, net

 

 

4

 

 

 

139

 

 

 

24

 

 

 

531

 

 

 

(142

)

Operating loss

 

 

(34,427

)

 

 

(6,928

)

 

 

(4,554

)

 

 

(50,021

)

 

 

(19,665

)

Add: Depreciation and lease asset amortization

 

 

2,300

 

 

 

2,290

 

 

 

2,562

 

 

 

9,564

 

 

 

10,350

 

EBITDA

 

 

(32,127

)

 

 

(4,638

)

 

 

(1,992

)

 

 

(40,457

)

 

 

(9,315

)

Add: Impairments and (gain) loss on assets held for sale

 

 

17,274

 

 

 

324

 

 

 

(1,167

)

 

 

17,528

 

 

 

(6,850

)

Adjusted EBITDA

 

$

(14,853

)

 

$

(4,314

)

 

$

(3,159

)

 

$

(22,929

)

 

$

(16,165

)

 

(1)

EBITDA and Adjusted EBITDA are non-GAAP measures. See "Non-GAAP Measures" below for the Company's definition of EBITDA and Adjusted EBITDA.

 

5

 


 

Condensed Cash Flow Information (in thousands)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net cash provided by (used in) operating activities

 

$

(434

)

 

$

(3,822

)

 

$

(1,726

)

 

$

(7,140

)

 

$

(20,392

)

Net cash provided by (used in) investing activities

 

 

4,226

 

 

 

19,630

 

 

 

27,176

 

 

 

(12,771

)

 

 

82,718

 

Net cash used in financing activities

 

 

-

 

 

 

(89

)

 

 

(13

)

 

 

(843

)

 

 

(852

)

 

Condensed Balance Sheet Information (in thousands)

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

Cash and cash equivalents

 

$

49,703

 

 

$

45,911

 

 

$

70,457

 

Short-term investments

 

 

19,918

 

 

 

25,457

 

 

 

8,720

 

Total current assets

 

 

163,474

 

 

 

178,804

 

 

 

159,955

 

Property, plant and equipment, net

 

 

70,484

 

 

 

74,770

 

 

 

79,930

 

Total assets

 

 

252,777

 

 

 

277,165

 

 

 

258,290

 

Total current liabilities

 

 

97,844

 

 

 

84,822

 

 

 

56,101

 

Total shareholders equity

 

 

152,685

 

 

 

187,044

 

 

 

201,100

 

 

 

 

Results of Operations by Segment (in thousands, except for percentages)

 

 

Three Months Ended

 

 

Twelve Months Ended

 

Fabrication Division(1)

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

15,532

 

 

$

19,474

 

 

$

10,223

 

 

$

70,052

 

 

$

40,420

 

Cost of revenue

 

 

24,904

 

 

 

19,902

 

 

 

12,175

 

 

 

81,301

 

 

 

48,260

 

Gross profit (loss)

 

 

(9,372

)

 

 

(428

)

 

 

(1,952

)

 

 

(11,249

)

 

 

(7,840

)

General and administrative expenses

 

 

404

 

 

 

440

 

 

 

1,065

 

 

 

2,353

 

 

 

4,951

 

Impairments and (gain) loss on assets held for sale

 

 

8,721

 

 

 

-

 

 

 

(2,213

)

 

 

8,651

 

 

 

(7,896

)

Other (income) expense, net

 

 

5

 

 

 

(20

)

 

 

(2,563

)

 

 

(152

)

 

 

(82

)

Operating income (loss)

 

$

(18,502

)

 

$

(848

)

 

$

1,759

 

 

$

(22,101

)

 

$

(4,813

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA & Adjusted EBITDA(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(18,502

)

 

$

(848

)

 

$

1,759

 

 

$

(22,101

)

 

$

(4,813

)

Add: Depreciation and lease asset amortization

 

 

836

 

 

 

840

 

 

 

1,096

 

 

 

3,534

 

 

 

4,315

 

EBITDA

 

 

(17,666

)

 

 

(8

)

 

 

2,855

 

 

 

(18,567

)

 

 

(498

)

Add: Impairments and (gain) loss on assets held for sale

 

 

8,721

 

 

 

-

 

 

 

(2,213

)

 

 

8,651

 

 

 

(7,896

)

Adjusted EBITDA

 

$

(8,945

)

 

$

(8

)

 

$

642

 

 

$

(9,916

)

 

$

(8,394

)

6

 


 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

Shipyard Division

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

45,627

 

 

$

39,436

 

 

$

29,747

 

 

$

159,217

 

 

$

96,424

 

Cost of revenue

 

 

50,982

 

 

 

41,838

 

 

 

34,656

 

 

 

170,166

 

 

 

106,896

 

Gross profit (loss)

 

 

(5,355

)

 

 

(2,402

)

 

 

(4,909

)

 

 

(10,949

)

 

 

(10,472

)

General and administrative expenses

 

 

574

 

 

 

657

 

 

 

712

 

 

 

2,445

 

 

 

2,801

 

Impairments and (gain) loss on assets held for sale

 

 

7,596

 

 

 

324

 

 

 

964

 

 

 

7,920

 

 

 

964

 

Other (income) expense, net

 

 

10

 

 

 

(34

)

 

 

1

 

 

 

38

 

 

 

159

 

Operating income (loss)

 

$

(13,535

)

 

$

(3,349

)

 

$

(6,586

)

 

$

(21,352

)

 

$

(14,396

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA & Adjusted EBITDA(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(13,535

)

 

$

(3,349

)

 

$

(6,586

)

 

$

(21,352

)

 

$

(14,396

)

Add: Depreciation and lease asset amortization

 

 

1,019

 

 

 

992

 

 

 

1,059

 

 

 

4,167

 

 

 

4,229

 

EBITDA

 

 

(12,516

)

 

 

(2,357

)

 

 

(5,527

)

 

 

(17,185

)

 

 

(10,167

)

Add: Impairments and (gain) loss on assets held for sale

 

 

7,596

 

 

 

324

 

 

 

964

 

 

 

7,920

 

 

 

964

 

Adjusted EBITDA

 

$

(4,920

)

 

$

(2,033

)

 

$

(4,563

)

 

$

(9,265

)

 

$

(9,203

)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

Services Division

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

20,532

 

 

$

17,507

 

 

$

21,538

 

 

$

81,706

 

 

$

88,230

 

Cost of revenue

 

 

19,104

 

 

 

17,297

 

 

 

18,481

 

 

 

76,190

 

 

 

75,783

 

Gross profit (loss)

 

 

1,428

 

 

 

210

 

 

 

3,057

 

 

 

5,516

 

 

 

12,447

 

General and administrative expenses

 

 

425

 

 

 

614

 

 

 

821

 

 

 

1,955

 

 

 

3,022

 

Impairments and (gain) loss on assets held for sale

 

 

282

 

 

 

-

 

 

 

82

 

 

 

282

 

 

 

82

 

Other (income) expense, net

 

 

2

 

 

 

3

 

 

 

6

 

 

 

(50

)

 

 

(28

)

Operating income (loss)

 

$

719

 

 

$

(407

)

 

$

2,148

 

 

$

3,329

 

 

$

9,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA & Adjusted EBITDA(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

719

 

 

$

(407

)

 

$

2,148

 

 

$

3,329

 

 

$

9,371

 

Add: Depreciation and lease asset amortization

 

 

351

 

 

 

362

 

 

 

370

 

 

 

1,450

 

 

 

1,511

 

EBITDA

 

 

1,070

 

 

 

(45

)

 

 

2,518

 

 

 

4,779

 

 

 

10,882

 

Add: Impairments and (gain) loss on assets held for sale

 

 

282

 

 

 

-

 

 

 

82

 

 

 

282

 

 

 

82

 

Adjusted EBITDA

 

$

1,352

 

 

$

(45

)

 

$

2,600

 

 

$

5,061

 

 

$

10,964

 

7

 


 

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

Corporate Division

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

(2,246

)

 

$

(615

)

 

$

(1,277

)

 

$

(7,667

)

 

$

(3,827

)

Cost of revenue

 

 

(2,276

)

 

 

(550

)

 

 

(1,117

)

 

 

(7,350

)

 

 

(2,496

)

Gross profit (loss)

 

 

30

 

 

 

(65

)

 

 

(160

)

 

 

(317

)

 

 

(1,331

)

General and administrative expenses

 

 

2,434

 

 

 

2,259

 

 

 

1,714

 

 

 

8,875

 

 

 

8,241

 

Impairments and (gain) loss on assets held for sale

 

 

675

 

 

 

-

 

 

 

-

 

 

 

675

 

 

 

-

 

Other (income) expense, net

 

 

30

 

 

 

-

 

 

 

1

 

 

 

30

 

 

 

255

 

Operating income (loss)

 

$

(3,109

)

 

$

(2,324

)

 

$

(1,875

)

 

$

(9,897

)

 

$

(9,827

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA & Adjusted EBITDA(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(3,109

)

 

$

(2,324

)

 

$

(1,875

)

 

$

(9,897

)

 

$

(9,827

)

Add: Depreciation and lease asset amortization

 

 

94

 

 

 

96

 

 

 

37

 

 

 

413

 

 

 

295

 

EBITDA

 

 

(3,015

)

 

 

(2,228

)

 

 

(1,838

)

 

 

(9,484

)

 

 

(9,532

)

Add: Impairments and (gain) loss on assets held for sale

 

 

675

 

 

 

-

 

 

 

-

 

 

 

675

 

 

 

-

 

Adjusted EBITDA

 

$

(2,340

)

 

$

(2,228

)

 

$

(1,838

)

 

$

(8,809

)

 

$

(9,532

)

 

(1)

During the first quarter 2019, the Company's former EPC Division was operationally combined with its Fabrication Division, and accordingly, the Company's current reportable segments are "Fabrication", "Shipyard", "Services", and "Corporate." The segment results for the EPC Division for the three and twelve months ended December 31, 2018 were combined with the Fabrication Division to conform to the presentation of the Company's reportable segments for the 2019 period.

(2)

EBITDA and Adjusted EBITDA are non-GAAP measures. See "Non-GAAP Measures" above for the Company's definition of EBITDA and Adjusted EBITDA.

 

8