EX-9.1 2 pressrelease4q2015.htm EXHIBIT 9.1 Exhibit


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, February 25, 2016
 
GULF ISLAND FABRICATION, INC.
REPORTS FOURTH QUARTER EARNINGS
 
Houston, TX - Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported a net loss of $14.7 million ($(1.01) diluted loss per share) on revenue of $55.0 million for its fourth quarter ended December 31, 2015, compared to net loss of $(0.1) million ($(0.01) diluted loss per share) on revenue of $124.8 million for the fourth quarter ended December 31, 2014.
 
The company had a revenue backlog of $232.4 million and a labor backlog of approximately 1.9 million hours at December 31, 2015, including commitments received through February 19, 2016, compared to a revenue backlog of $135.1 million and a labor backlog of 1.3 million hours reported as of September 30, 2015. Our backlog at December 31, 2015 includes approximately $112.0 million of new build construction acquired in the LEEVAC acquisition on January 1, 2016. We expect to recognize revenue from our backlog of approximately $207.9 million and $24.5 million during the years 2016 and 2017, respectively.
 
 
December 31,
2015
 
December 31,
2014
 
(in thousands)
 
 
 
 
Cash and cash equivalents
$
34,828

 
$
36,085

Total current assets
115,869

 
169,849

Property, plant and equipment, net
200,384

 
224,777

Total assets
316,923

 
395,297

Total current liabilities
37,901

 
72,765

Total debt
—

 
—

Total shareholders’ equity
$
257,197

 
$
285,798


•
Included in the net loss for the quarter ended December 31, 2015 were the following:

-
$10.3 million ($6.7 million after-tax, or $0.46 per share) related to a decrease in the contract price due to final weight re-measurements and our inability to date to recover certain costs on disputed change orders related to a large deepwater project which was recently delivered.

-
$7.6 million ($5.0 million after-tax, or $0.34 per share) increased contract losses resulting from increases in our projected unit labor rates for one of our fabrication facilities. Our increases in unit labor rates were driven by our expected inability to absorb fixed costs due to decreases in expected oil and gas fabrication activity.

-
$0.6 million ($0.4 million after-tax, or $0.03 per share) for a non-cash asset impairment charge related to equipment that was held for sale at December 31, 2015 and sold during the first quarter of 2016.

•
Due to the severity of the industry downturn, management has recommended and our board of directors has approved a reduction of our quarterly dividend from $0.10 per share to $0.01 per share and a temporary suspension of our stock repurchase program in an effort to conserve cash.





•
Our balance sheet position remains stable with $34.8 million in cash, no debt, and working capital of $78.0 million. 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, February 26, 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 December 31, 2015. The call is accessible by webcast (www.gulfisland.com) through CCBN and by dialing 1.888.599.4883. A digital rebroadcast of the call is available two hours after the call and ending March 4, 2016 by dialing 1.888.203.1112, replay passcode: 6604496.

Gulf Island Fabrication, Inc., based in Houston, Texas, with fabrication facilities located in Houma, 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
 
Twelve Months Ended
 
December 31,
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2015
 
2014
Revenue
$
55,018

 
$
124,760

 
$
67,531

 
$
306,120

 
$
506,639

Cost of revenue
72,590

 
113,952

 
75,368

 
321,276

 
462,083

Gross (loss) profit
(17,572
)
 
10,808

 
(7,837
)
 
(15,156
)
 
44,556

General and administrative expenses
4,439

 
6,856

 
3,798

 
16,256

 
17,409

Asset impairment
602

 
3,200

 
6,600

 
7,202

 
3,200

Operating (loss) income
(22,613
)
 
752

 
(18,235
)
 
(38,614
)
 
23,947

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense
(39
)
 
35

 
(39
)
 
(165
)
 
(37
)
Interest income
5

 
7

 
8

 
26

 
13

Other income (expense)
—

 
(1
)
 
—

 
20

 
(99
)
 
(34
)
 
41

 
(31
)
 
(119
)
 
(123
)
(Loss) income before income taxes
(22,647
)
 
793

 
(18,266
)
 
(38,733
)
 
23,824

Income taxes
(7,980
)
 
904

 
(6,129
)
 
(13,369
)
 
8,504

Net (loss) income
$
(14,667
)
 
$
(111
)
 
$
(12,137
)
 
$
(25,364
)
 
$
15,320

Per share data:
 
 
 
 

 
 
 
 
Basic and diluted (loss) earnings per share - common shareholders
$
(1.01
)
 
$
(0.01
)
 
$
(0.84
)
 
$
(1.75
)
 
$
1.05

Cash dividend declared per common share
$
0.10

 
$
0.10

 
$
0.10

 
$
0.40

 
$
0.40





GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Twelve Months Ended December 31,
 
2015
 
2014
 
(in thousands)
Cash flows from operating activities:
 
 
 
Net (loss) income
$
(25,364
)
 
$
15,320

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
Bad debt expense (recovery)
448

 
—

Depreciation
26,204

 
26,436

Asset impairment
7,202

 
3,200

Allowance for doubtful accounts
—

 
3,168

(Gain) loss on sale of asset
(10
)
 
86

Deferred income taxes
(14,061
)
 
8,264

Compensation expense - restricted stock
2,707

 
1,139

Changes in operating assets and liabilities:
 
 
 
Contracts receivable, net
31,792

 
14,963

Contract retainage
(52
)
 
111

Costs and estimated earnings in excess of billings on uncompleted contracts
14,167

 
(2,262
)
Billings in excess of costs and estimated earnings on uncompleted contracts
(11,685
)
 
(16,240
)
Accounts payable
(26,668
)
 
(25,782
)
Prepaid expenses and other assets
1,092

 
352

Inventory
931

 
1,189

Accrued contract losses
8,678

 
817

Accrued employee costs
(971
)
 
(154
)
Accrued expenses
(4,410
)
 
1,488

Current income taxes
615

 
15

Net cash provided by operating activities
$
10,615

 
$
32,110

Cash flows from investing activities:
 
 
 
Capital expenditures, net
(6,018
)
 
(27,658
)
Proceeds on the sale of equipment
11

 
929

Net cash used in investing activities
(6,007
)
 
(26,729
)
Cash flows from financing activities:
 
 
 
Borrowings against notes payable
—

 
22,000

Payments on notes payable
—

 
(22,000
)
Payments of dividends on common stock
(5,865
)
 
(5,865
)
Net cash used in financing activities
(5,865
)
 
(5,865
)
Net (decrease) increase in cash and cash equivalents
(1,257
)
 
(484
)
Cash and cash equivalents at beginning of period
36,085

 
36,569

Cash and cash equivalents at end of period
$
34,828

 
$
36,085

Supplemental cash flow information:
 
 
 
Interest paid
$
165

 
$
169

Income taxes (received) paid, net
$
(152
)
 
$
225

Schedule of noncash financing activities
Reclassification of property, plant and equipment to assets held for sale
$
4,805

 
$
—

Reclassification of assets to held for sale to inventory
$
3,727

 
$
—