Gulf island fabrication, inc. reports second quarter earnings
Houston--(business wire)--gulf island fabrication, inc. (nasdaq: gifi) today reported a net loss of $10.9 million ($0.73 basic and diluted loss per share) on revenue of $45.9 million for the three months ended june 30, 2017, compared to net income of $5.5 million ($0.37 basic and diluted earnings per share) on revenue of $81.5 million for the three months ended june 30, 2016. for the six months ended june 30, 2017 and 2016, the company reported a net loss of $17.4 million ($1.17 basic and diluted loss per share) on revenue of $83.9 million compared to net income of $6.5 million ($0.44 basic and diluted earnings per share) on revenue of $165.5 million. kirk meche, the company's ceo and president, commented, "results for the second quarter of 2017 are reflective of contract losses of approximately $10.2 million as a result of rework performed and revised estimates to complete two vessel construction projects we assumed as part of our shipyard asset acquisition in 2016. additionally, competitive pricing pressures and the continued weakness in demand from our traditional markets in offshore oil and gas contributed to our losses. finally, we incurred holding costs of $1.2 million during the quarter related to our south texas facilities which are for sale. year-to-date holding costs in south texas were $2.5 million plus another $1.9 million in depreciation which was incurred during the first quarter." he continued, "as stated in prior earnings calls, we are focused on managing our balance sheet and rebuilding contract backlog in new markets and believe we have made progress on both initiatives. during the quarter, we successfully negotiated a new $40.0 million credit agreement with whitney bank with improved flexibility to support our business. additionally, we increased our revenue backlog to its highest level in over three years to $251.0 million, up $137.8 million from last quarter's total. finally, the increase in backlog included new project awards totaling $167.0 million in markets primarily outside of oil and gas." the company had revenue backlog of $251.0 million and labor backlog of approximately 1.7 million labor hours at june 30, 2017, compared to revenue backlog of $113.2 million and labor backlog of 1.1 million labor hours reported as of march 31, 2017. our balance sheet position at june 30, 2017, includes $22.3 million in cash, no debt, and working capital of $167.7 million which includes $107.3 million in assets held for sale, primarily related to our south texas assets. we continue to monitor and maintain a conservative capital structure as we navigate through the current oil and gas industry downturn and further expand our efforts to secure additional project awards in markets with greater demand. on june 9, 2017, we successfully negotiated a new $40.0 million credit agreement with whitney bank that matures on june 9, 2019. loan amounts may be used for issuing letters of credit and/or general corporate and working capital purposes providing the company with enhanced working capital flexibility to manage our business and respond to market opportunities. the management of gulf island fabrication, inc. will hold a conference call on friday, july 28, 2017, 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, 2017. the call is being webcast through ccbn and can be accessed at gulf island's website at http://www.gulfisland.com. participants may also join the conference call by dialing 1.888.715.1402 and requesting the “gulf island” conference call. a digital replay of the call will be available from a link on our website two hours after the call and ending august 4, 2017. gulf island fabrication, inc. is a leading fabricator of complex steel structures and marine vessels used in energy extraction and production, petrochemical and industrial facilities, power generation, alternative energy projects and shipping and marine transportation operations. the company also provides related installation, hookup, commissioning, repair and maintenance services with specialized crews and integrated project management capabilities. the company is currently fabricating complex modules for the construction of a new petrochemical plant, completing newbuild construction of a technologically advanced offshore support and two multi-purpose service vessels and recently fabricated wind turbine pedestals for the first offshore wind power project in the united states. the company also constructed one of the largest lift boats servicing the gulf of mexico ("gom"), one of the deepest production jackets in the gom and the first spar fabricated in the united states. the company’s customers include u.s. and, to a lesser extent, international energy producers, petrochemical, industrial, power and marine operators. our corporate headquarters is located in houston, texas, with fabrication facilities located in houma, jennings and lake charles, louisiana, and aransas pass and ingleside, texas. gulf island fabrication, inc. consolidated statements of operations (unaudited) (in thousands, except per share data) - - - ________________ operating segments backlog (in thousands) segments - - - ________________ results of operations (in thousands, except percentages) during the three and six months ended june 30, 2017, management reduced its allocation of corporate administrative costs and overhead expenses to its operating divisions such that a significant portion of its corporate expenses are retained in its non-operating corporate division. in addition, it has also allocated certain personnel previously included in the operating divisions to the corporate division. in doing so, management believes that it has created a fourth reportable segment with each of its three operating divisions and its corporate division each meeting the criteria of reportable segments under gaap. during the three and six months ended june 30, 2016, we allocated substantially all of our corporate administrative costs and overhead expenses to our three operating divisions. we have recast our 2016 segment data below in order to conform to the current period presentation. our results of our operations by segment for the three and six months ended june 30, 2017, and 2016, are presented below (in thousands, except for percentages). fabrication three months endedjune 30, six months endedjune 30, shipyards three months endedjune 30, six months endedjune 30, - - - services three months endedjune 30, six months endedjune 30, corporate three months endedjune 30, six months endedjune 30, - - - - ________________ gulf island fabrication, inc. consolidated statements of cash flows (unaudited) we adopted accounting standards update (asu) no. 2016-09 on january 1, 2017, which clarifies that cash paid by the company to taxing authorities on behalf of an employee from the value of withheld vested shares should be classified as a financing activity in the company’s statement of cash flows. we have reported $0.9 million within financing activities within our statement of cash flows for the six months ended june 30, 2017, as a result of adoption of this asu. we have also recast our statement of cash flows for the six months ended march 31, 2016, which resulted in the reclassification of $0.1 million from cash used in operating activities to cash used in financing activities to conform with the current period presentation. - - - -
