Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 05, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | GIFI | |
Entity Registrant Name | GULF ISLAND FABRICATION INC | |
Entity Central Index Key | 1,031,623 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 14,630,952 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 39,202 | $ 34,828 |
Contracts receivable and retainage, net | 45,306 | 47,060 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 13,891 | 12,822 |
Prepaid expenses and other | 2,768 | 3,418 |
Inventory | 17,823 | 12,936 |
Assets held for sale | 0 | 4,805 |
Total current assets | 118,990 | 115,869 |
Property, plant and equipment, net | 217,403 | 200,384 |
Intangible assets, net | 2,105 | 0 |
Other assets | 670 | 670 |
Total assets | 339,168 | 316,923 |
Current liabilities: | ||
Accounts payable | 8,922 | 13,604 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 7,685 | 7,081 |
Deferred revenue, current | 20,179 | 0 |
Accrued contract losses | 5,859 | 9,495 |
Accrued employee costs | 7,618 | 6,831 |
Accrued expenses and other liabilities | 1,629 | 890 |
Total current liabilities | 51,892 | 37,901 |
Deferred revenue, noncurrent | 6,284 | 0 |
Net deferred tax liabilities | 22,369 | 21,825 |
Total liabilities | 80,545 | 59,726 |
Shareholders’ equity: | ||
Preferred stock, no par value, 5,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, no par value, 20,000,000 shares authorized, 14,630,686 issued and outstanding at March 31, 2016 and 14,580,216 at December 31, 2015, respectively | 10,411 | 10,352 |
Additional paid-in capital | 96,718 | 96,194 |
Retained earnings | 151,494 | 150,651 |
Total shareholders’ equity | 258,623 | 257,197 |
Total liabilities and shareholders’ equity | $ 339,168 | $ 316,923 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value (in dollars per share) | ||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, no par value (in dollars per share) | ||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 14,630,686 | 14,580,216 |
Common stock, shares outstanding (in shares) | 14,630,686 | 14,580,216 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 83,979 | $ 99,233 |
Cost of revenue | 78,278 | 94,785 |
Gross profit | 5,701 | 4,448 |
General and administrative expenses | 4,485 | 4,293 |
Operating income | 1,216 | 155 |
Other income (expense): | ||
Interest expense | (50) | (37) |
Interest income | 6 | 6 |
Other income (expense) | 398 | 3 |
Total other income (expense) | 354 | (28) |
Net income before income taxes | 1,570 | 127 |
Income taxes | 581 | 44 |
Net income | $ 989 | $ 83 |
Per share data: | ||
Basic and diluted earnings per share - common shareholders (usd per share) | $ 0.07 | $ 0 |
Cash dividend declared per common share (usd per share) | $ 0.01 | $ 0.10 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings |
Beginning balance, (in shares) at Dec. 31, 2015 | 14,580,216 | 14,580,216 | ||
Beginning balance at Dec. 31, 2015 | $ 257,197 | $ 10,352 | $ 96,194 | $ 150,651 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 989 | 989 | ||
Vesting of restricted stock, (in shares) | 50,470 | |||
Vesting of restricted stock | (145) | $ (14) | (131) | |
Compensation expense restricted stock | 728 | $ 73 | 655 | |
Dividends on common stock | $ (146) | (146) | ||
Ending balance, (in shares) at Mar. 31, 2016 | 14,630,686 | 14,630,686 | ||
Ending balance at Mar. 31, 2016 | $ 258,623 | $ 10,411 | $ 96,718 | $ 151,494 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 989 | $ 83 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Bad debt expense | 30 | 400 |
Depreciation | 6,567 | 6,599 |
Amortization of deferred revenue | (1,160) | 0 |
Gain on sale of asset | (360) | 0 |
Deferred income taxes | 544 | (149) |
Compensation expense - restricted stock | 728 | 435 |
Changes in operating assets and liabilities: | ||
Contracts receivable and retainage | 5,268 | 28,536 |
Costs and estimated earnings in excess of billings on uncompleted contracts | (1,069) | 795 |
Prepaid expenses and other assets | 650 | 897 |
Inventory | 51 | (5) |
Accounts payable | (10,679) | (14,469) |
Billings in excess of costs and estimated earnings on uncompleted contracts | 604 | (5,558) |
Deferred revenue | (1,623) | 0 |
Accrued employee costs | 636 | (932) |
Accrued expenses | 690 | 325 |
Accrued contract losses | (3,636) | (650) |
Current income taxes | 49 | 189 |
Net cash (used in) provided by operating activities | (1,721) | 16,496 |
Cash flows from investing activities: | ||
Capital expenditures | (724) | (1,001) |
Net cash received in acquisition | 1,588 | 0 |
Proceeds from the sale of equipment | 5,377 | 0 |
Net cash provided by (used) in investing activities | 6,241 | (1,001) |
Cash flows from financing activities: | ||
Payments of dividends on common stock | (146) | (1,465) |
Net cash used in financing activities | (146) | (1,465) |
Net change in cash and cash equivalents | 4,374 | 14,030 |
Cash and cash equivalents at beginning of period | 34,828 | 36,085 |
Cash and cash equivalents at end of period | $ 39,202 | $ 50,115 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Gulf Island Fabrication, Inc., together with its subsidiaries (the “Company”, “we” or “our”), is a leading fabricator of offshore drilling and production platforms and other specialized structures. We operate and manage our business through three segments: Fabrication, Shipyards and Services. The Company’s principal corporate office is located in Houston, Texas and its fabrication facilities are located in Houma, Jennings and Lake Charles, Louisiana and San Patricio County, Texas. The Company’s principal markets are concentrated in the offshore regions and along the coast of the Gulf of Mexico. The consolidated financial statements include the accounts of Gulf Island Fabrication, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Gulf Island Fabrication, Inc. serves as a holding company and conducts all of its operations through its subsidiaries. Our Fabrication segment includes Gulf Island, L.L.C. and Gulf Marine Fabricators, L.P., both of which perform fabrication of offshore drilling and production platforms and other specialized structures used in the development and production of oil and gas reserves. Our Shipyards segment includes Gulf Island Marine Fabricators, L.L.C., and Gulf Island Shipyards, L.L.C., both of which perform marine vessel fabrication, construction, and repair services. Our Services segment includes Dolphin Services, L.L.C., which performs interconnect piping services on offshore platforms and inshore steel structures, and Dolphin Steel Sales, L.L.C., which sells steel plate and other steel products. Structures and equipment fabricated by us include: jackets and deck sections of fixed production platforms; hull, tendon, and/or deck sections of floating production platforms (such as “TLPs”, “SPARs”, “FPSOs” and “MinDOCs”); piles; wellhead protectors; subsea templates; various production, compressor and utility modules; offshore living quarters; towboats; offshore support vessels; dry docks; 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. For definitions of certain technical terms contained in this Form 10-Q, see the Glossary of Certain Technical Terms contained in our Annual Report on Form 10-K for the year ended December 31, 2015 . The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ended December 31, 2016 . The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . New Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases , which requires lessees to record most leases on their balance sheets but recognize expenses in a manner similar to current guidance. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018. The guidance is required to be applied using a modified retrospective approach. We are currently evaluating the effect that ASU 2016-02 will have on our financial position, results of operations and related disclosures. On May 28, 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in FASB Accounting Standard Codification (ASC) Topic 605, “Revenue Recognition.” ASU No. 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 requires retrospective application and will be effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is not permitted. The Company is evaluating the effect of this new standard on its financial statements. |
LEEVAC ACQUISITION
LEEVAC ACQUISITION | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
LEEVAC ACQUISITION | LEEVAC ACQUISITION On January 1, 2016, we acquired substantially all of the assets and assumed certain specified liabilities of LEEVAC Shipyards, L.L.C. and its affiliates (“LEEVAC”). The purchase price for the acquisition was $20.0 million , subject to a working capital adjustment whereby we received a dollar for dollar reduction for the assumption of certain net liabilities of LEEVAC and settlement payments from sureties on certain ongoing fabrication projects that were assigned to us in the acquisition. After taking into account these adjustments, we received approximately $1.6 million in cash at closing. The facilities acquired are operated under lease agreements as follows: • Jennings - Leased facilities from a third party for a 180 acre complex five miles east of Jennings, LA on the west bank of the Mermentau River approximately 25 miles north of the Intracoastal waterway. The Jennings Complex includes over 100,000 square feet of covered fabrication area and 3,000 feet of water frontage with two launch ways. The lease, including exercisable renewal options, extends through January 2045. • Lake Charles - Subleased facilities from a third party for a 10 acre complex 17 miles from the Gulf of Mexico on the Calcasieu River near Lake Charles, Louisiana. The Lake Charles complex includes 1,100 feet of bulkhead water frontage with a water depth of 40 feet located one mile from the Gulf Intracoastal Waterway and is located near multiple petrochemical plants. The sublease, including exercisable renewal options (subject to sublessor renewals), extends through July 2038. • Houma - Leased facilities from the former owner of LEEVAC Shipyards, currently the Senior Vice President of our Shipyards division, for a 35 acre complex 26 miles from the Gulf of Mexico near Houma, Louisiana. Payment terms are approximately $67,000 per month. The lease expires on the later of December 31, 2016 or 90 days following the completion of the two vessels currently under construction at the facility, but no later than August 31, 2017. Upon expiration, we have the option to extend the lease at market rates. Strategically, the acquisition expands our marine fabrication and repair and maintenance presence in the Gulf South market. At the date of acquisition, we acquired approximately $112.0 million of new build construction backlog which includes four new build construction projects to be delivered in 2016 and 2017 for two customers. Additionally, we hired 380 employees upon acquisition of the facilities representing substantially all of the former LEEVAC employees. The tables below represents the total cash received as reported on our consolidated statements of cash flows and the corresponding preliminary fair values assigned to the assets and liabilities acquired from LEEVAC. Assets: Accounts receivable $ 3,544 Inventory 4,938 Machinery and equipment 23,056 Intangible assets (leasehold interests) 2,123 Liabilities: Accounts payable and accrued expenses 6,003 Deferred revenue and below market contracts 29,246 Net cash received upon the acquisition of LEEVAC $ 1,588 Cash received upon acquisition of LEEVAC: Owner payment for prepaid contracts (1) $ 16,942 Surety payments related to assigned contracts (2) 7,125 24,067 Less: Working capital assumed 2,479 Net cash due to the Company at closing 1,588 4,067 Purchase price $ 20,000 __________ (1) Payment from sellers for milestones achieved in advance of progress on contracts assigned to the Company concurrent with the closing of the LEEVAC transaction. (2) Payments from owner's surety in connection with the release of further obligations related to contracts assigned to the Company concurrent with the closing of the LEEVAC transaction. Our determination and allocation of the values assigned to the assets and liabilities acquired from LEEVAC are preliminary. Amounts settled for working capital are subject to a working capital true up between us and LEEVAC. In addition the valuation of deferred revenue and below market contracts are based upon our best estimate; however, these estimates have not been finalized. Future changes in the above could impact future determinations of depreciation expense as well as revenue recognized from deferred revenue. Pro Forma Results of Acquisitions The results of LEEVAC are included in our consolidated statements operations for the three months ended March 31, 2016 , as the acquisition was effective January 1, 2016. Revenues and net loss included in our results of operations for the three months ended March 31, 2016 and attributable to LEEVAC were $21.8 million and $(706,000) , respectively. The table below presents our pro forma results of operations for the three months ended March 31, 2015 assuming that we acquired LEEVAC on January 1, 2015 (in thousands): Pro forma adjustments Historical results LEEVAC Adj Pro forma results Revenue $ 99,233 $ 24,718 $ — $ 123,951 Net income (loss) $ 83 $ (4,408 ) $ 963 (1 ) $ (3,362 ) ______________ (1) Adjustments to historical results are as follows: Effect of purchase price depreciation $ 200 Elimination of interest expense 763 $ 963 |
CONTRACTS RECEIVABLE AND RETAIN
CONTRACTS RECEIVABLE AND RETAINAGE | 3 Months Ended |
Mar. 31, 2016 | |
Contractors [Abstract] | |
CONTRACTS RECEIVABLE AND RETAINAGE | CONTRACTS RECEIVABLE AND RETAINAGE Our customers include major and large independent oil and gas companies, marine companies, and their contractors. Of our contracts receivable balance at March 31, 2016 , $23.8 million , or 52.4% , is with four customers. The significant projects for these four customers consist of: • offshore services projects for two oil and gas customers in our Services segment; • the fabrication of two offshore support vessels for a marine customer in our Shipyards segment; and • the fabrication and repair to a deepwater structure for one of our oil and gas customers in our Fabrication segment. At March 31, 2016 , there was allowance for bad debt of $97,000 included in the Company’s contract receivable balance. |
CONTRACT COSTS
CONTRACT COSTS | 3 Months Ended |
Mar. 31, 2016 | |
Contractors [Abstract] | |
CONTRACT COSTS | CONTRACT COSTS The Company uses the percentage-of-completion accounting method for fabrication contracts. Revenue from fixed-price or unit rate contracts is recognized on the percentage-of-completion method, computed by the efforts-expended method using the percentage of labor hours incurred as compared to estimated total labor hours to complete each contract. This progress percentage is applied to our estimate of total anticipated gross profit for each contract to determine gross profit earned to date. Revenue recognized in a period for a contract is the amount of gross profit recognized for that period plus labor costs and pass-through costs incurred on the contract during the period. We define pass-through costs as material, freight, equipment rental, and sub-contractor services included in the direct costs of revenue associated with projects. Consequently, pass-through costs are included in revenue but have no impact on the gross profit realized for that particular period. Pass-through costs as a percentage of revenue were 40.0% and 44.7% for the three months ended March 31, 2016 , and 2015 , respectively. Costs and estimated earnings in excess of billings on uncompleted contracts at March 31, 2016 , include unbilled costs of $11.3 million relating to seven major customers. Billings in excess of costs and estimated earnings at March 31, 2016 , include advances of $3.3 million from two major customers. Revenues and gross profit on contracts can be significantly affected by change orders and claims that may not be resolved until the later stages of the contract or after the contract has been completed and delivery occurs. At March 31, 2016, we included $1.4 million in revenue related change orders on two projects which have been approved as to scope but not price. Total unapproved change orders included within our percent complete estimates as of March 31, 2016 were $3.2 million . We expect to resolve these change orders before the end of the second quarter of 2016. During the three months ended March 31, 2016 , we recorded revisions to revenue of $(488,000) related to disputed change orders recognized in prior periods. During the third and fourth quarter of 2015, we recorded contract losses of $24.5 million related to a decrease in the contract price due to final weight re-measurements and our inability to recover certain costs on disputed change orders related to a large deepwater project that was delivered during 2015. No amounts with respect to these disputed change orders are included on our balance sheet or in our consolidated statement of operations as of and for the three months ended March 31, 2016. We have recently initiated legal action to recover our costs from these disputed change orders; however, we can give no assurance that our actions will be successful or that we will recover any of these contract losses from our customer. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company bases its fair value determinations by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1-inputs are based upon quoted prices for identical instruments traded in active markets. • Level 2-inputs are based upon quoted prices for similar instruments in active markets and model-based valuation techniques for which all significant assumptions are observable in the market. • Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. These include discounted cash flow models and similar valuation techniques. Recurring fair value measurements and financial instruments - The carrying amounts that we have reported for financial instruments, including cash and cash equivalents, accounts receivables and accounts payables, approximate their fair values. LEEVAC acquisition - We preliminarily recorded the assets and liabilities acquired from LEEVAC at their estimated fair values. See Note 2. The preliminary values assigned for the valuation of our machinery and equipment were estimated primarily using the cost method. The cost method uses the concept of replacement and/or reproductive cost of the asset less depreciation due to physical, functional and economic factors, including obsolescence. The preliminary values assigned to the intangible assets (leasehold interest) and below market contracts were calculated using the income method by applying a discounted cash flow model to the differences between the forecasted cash flows and market rates. The significant estimates and assumptions used in calculating these estimates are generally unobservable in the marketplace and reflect management’s estimates of assumptions that market participants would use. Accordingly, we have determined that the fair values assigned to the assets and liabilities acquired in the LEEVAC acquisition fall within Level 3 of the fair value hierarchy. |
EARNINGS PER SHARE AND SHAREHOL
EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY | EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY Earnings per Share: The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended March 31, 2016 2015 Basic and diluted: Numerator: Net Income $ 989 $ 83 Less: Distributed and undistributed income (unvested restricted stock) 9 25 Net income attributable to common shareholders $ 980 $ 58 Denominator: Weighted-average shares (1) 14,601 14,540 Basic and diluted earnings per share - common shareholders $ 0.07 $ — ______________ (1) We have no dilutive securities. |
LINE OF CREDIT
LINE OF CREDIT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | LINE OF CREDIT We have a credit agreement with Whitney Bank and JPMorgan Chase Bank N.A. that provides for an $80 million revolving credit facility maturing January 2, 2017 . The credit agreement allows the Company to use up to the full amount of the available borrowing base for letters of credit and up to $20.0 million for general corporate purposes. Our obligations under the credit agreement are secured by substantially all of our assets, other than real property located in the state of Louisiana. On February 29, 2016, we entered into an amendment to our credit agreement. The amendment (i) extended the term of the Credit Facility from February 29, 2016 to January 2, 2017; (ii) increased the commitment fee on undrawn amounts from 0.25% to 0.50% per annum; (iii) increased the letter of credit fee, subject to certain limited exceptions, to 2.00% per annum on undrawn stated amounts under letters of credit issued by the lenders; and (iv) limited the maximum amount of loans outstanding at any time for general corporate purposes to $20.0 million . Under the amendment our financial covenants beginning with the quarter ending March 31, 2016 as follows: (i) minimum net worth requirement of not less than $250.0 million plus a) 50% of net income earned in each quarter beginning March 31, 2016 and b) 100% of proceeds from any issuance of common stock; (ii) debt to EBITDA ratio not greater than 3.0 to 1.0; and (iii) interest coverage ratio not less than 2.0 to 1.0. At March 31, 2016 , no amounts were outstanding under the credit facility, and we had outstanding letters of credit totaling $20.5 million , reducing the unused portion of our credit facility for additional letters of credit and general corporate purposes to $59.5 million and $20.0 million , respectively. As of March 31, 2016 , we were in compliance with all covenants. |
SEGMENT DISCLOSURES
SEGMENT DISCLOSURES | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT DISCLOSURES | SEGMENT DISCLOSURES Effective January 1, 2016, we acquired the assets and certain liabilities of LEEVAC Shipyards, LLC (See Note 2). In connection with the LEEVAC acquisition, management restructured the operation of our business units into three divisions which we believe meet the criteria of reportable segments under GAAP: Fabrication, Shipyards and Services. Fabrication - Our Fabrication division primarily fabricates structures such as offshore drilling and production platforms and other steel structures for customers in the oil and gas and marine industries including jackets and deck sections of fixed production platforms along with pressure vessels. Our Fabrication segment also fabricates structures for alternative energy customers (such as the five jackets and piles we constructed for a shallow water wind turbine project off the coast of Rhode Island during 2015) as well floating LNG platforms. We perform these activities out of our fabrication yards in Houma, Louisiana and Ingleside, Texas. Shipyards - Our Shipyards division primarily fabricates and repairs marine vessels including offshore supply vessels, anchor handling vessels, lift boats, tug boats, and towboats. The LEEVAC acquisition expands our marine fabrication capabilities to include non oil and gas marine vessels such as cruise vessels. Our Shipyards division also constructs dry docks to lift marine vessels out of the water in order to make repairs or modifications. Our marine repair activities include steel repair, blasting and painting services, electrical systems repair, machinery and piping system repairs, and propeller, shaft, and rudder reconditioning. Our Shipyards division also performs conversion projects that consist of lengthening or modifying the use of existing vessels to enhance their capacity or functionality. We perform these activities primarily out of our facilities in Houma, Jennings and Lake Charles, Louisiana. Services - Our Services division primarily provides interconnect piping services on offshore platforms and inshore steel structures. Interconnect piping services involve sending employee crews to offshore platforms in the Gulf of Mexico to perform welding and other activities required to connect production equipment, service modules and other equipment to a platform. We also contract with oil and gas companies that have platforms and other structures located in the inland lakes and bays throughout the southeast for various on-site construction and maintenance activities. In addition, our Services division can fabricate large and small packaged skid units and provide various municipal and drainage projects, such as pump stations, levee reinforcement, bulkheads and other levee and drainage projects, to state and local governments. We generally evaluate the performance of and allocate resources to our segments based upon gross profit (loss) and operating income (loss). Segment assets are comprised of all assets attributable to each segment. Corporate administrative costs and overhead are generally allocated to our segments except for costs that are not directly identifiable with our divisions. Intersegment revenues are priced at the estimated fair value as negotiated between the operating divisions. Summarized financial information concerning our segments as of and for the three months ended March 31, 2016 and 2015 is as follows (in thousands): Three Months Ended March 31, 2016 Fabrication Shipyards Services Corp. & Eliminations Consolidated Revenue $ 23,829 $ 34,120 $ 26,559 $ (529 ) $ 83,979 Gross profit 41 2,329 3,331 — 5,701 Operating income (loss) (1,282 ) 523 2,095 (120 ) 1,216 Total assets 293,049 85,638 93,283 (132,802 ) 339,168 Depreciation expense 4,855 1,166 442 104 6,567 CAPEX (109 ) (35 ) (543 ) (37 ) (724 ) Three Months Ended March 31, 2015 Fabrication Shipyards Services Corp. & Eliminations Consolidated Revenue $ 56,933 $ 19,481 $ 24,788 $ (1,969 ) $ 99,233 Gross profit (loss) (256 ) 2,441 2,263 — 4,448 Operating income (loss) (2,950 ) 2,010 1,278 (183 ) 155 Total assets 377,579 61,411 87,305 (153,378 ) 372,917 Depreciation expense 5,560 479 430 130 6,599 CAPEX (480 ) (92 ) (429 ) — (1,001 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 28, 2016 , our Board of Directors declared a dividend of $ 0.01 per share on our shares of common stock outstanding, payable May 26, 2016 to shareholders of record on May 12, 2016 . |
ORGANIZATION AND SUMMARY OF S16
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Standards | New Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases , which requires lessees to record most leases on their balance sheets but recognize expenses in a manner similar to current guidance. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018. The guidance is required to be applied using a modified retrospective approach. We are currently evaluating the effect that ASU 2016-02 will have on our financial position, results of operations and related disclosures. On May 28, 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in FASB Accounting Standard Codification (ASC) Topic 605, “Revenue Recognition.” ASU No. 2014-09 requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 requires retrospective application and will be effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is not permitted. The Company is evaluating the effect of this new standard on its financial statements. |
LEEVAC ACQUISITION (Tables)
LEEVAC ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Schedules of Net Cash Received Upon Acquisition | Cash received upon acquisition of LEEVAC: Owner payment for prepaid contracts (1) $ 16,942 Surety payments related to assigned contracts (2) 7,125 24,067 Less: Working capital assumed 2,479 Net cash due to the Company at closing 1,588 4,067 Purchase price $ 20,000 The tables below represents the total cash received as reported on our consolidated statements of cash flows and the corresponding preliminary fair values assigned to the assets and liabilities acquired from LEEVAC. Assets: Accounts receivable $ 3,544 Inventory 4,938 Machinery and equipment 23,056 Intangible assets (leasehold interests) 2,123 Liabilities: Accounts payable and accrued expenses 6,003 Deferred revenue and below market contracts 29,246 Net cash received upon the acquisition of LEEVAC $ 1,588 |
Pro Forma Results of Operations Assuming LEEVAC Acquisition | The table below presents our pro forma results of operations for the three months ended March 31, 2015 assuming that we acquired LEEVAC on January 1, 2015 (in thousands): Pro forma adjustments Historical results LEEVAC Adj Pro forma results Revenue $ 99,233 $ 24,718 $ — $ 123,951 Net income (loss) $ 83 $ (4,408 ) $ 963 (1 ) $ (3,362 ) ______________ (1) Adjustments to historical results are as follows: Effect of purchase price depreciation $ 200 Elimination of interest expense 763 $ 963 |
EARNINGS PER SHARE AND SHAREH18
EARNINGS PER SHARE AND SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended March 31, 2016 2015 Basic and diluted: Numerator: Net Income $ 989 $ 83 Less: Distributed and undistributed income (unvested restricted stock) 9 25 Net income attributable to common shareholders $ 980 $ 58 Denominator: Weighted-average shares (1) 14,601 14,540 Basic and diluted earnings per share - common shareholders $ 0.07 $ — ______________ (1) We have no dilutive securities. |
SEGMENT DISCLOSURES (Tables)
SEGMENT DISCLOSURES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Summarized Segment Financial Information | Summarized financial information concerning our segments as of and for the three months ended March 31, 2016 and 2015 is as follows (in thousands): Three Months Ended March 31, 2016 Fabrication Shipyards Services Corp. & Eliminations Consolidated Revenue $ 23,829 $ 34,120 $ 26,559 $ (529 ) $ 83,979 Gross profit 41 2,329 3,331 — 5,701 Operating income (loss) (1,282 ) 523 2,095 (120 ) 1,216 Total assets 293,049 85,638 93,283 (132,802 ) 339,168 Depreciation expense 4,855 1,166 442 104 6,567 CAPEX (109 ) (35 ) (543 ) (37 ) (724 ) Three Months Ended March 31, 2015 Fabrication Shipyards Services Corp. & Eliminations Consolidated Revenue $ 56,933 $ 19,481 $ 24,788 $ (1,969 ) $ 99,233 Gross profit (loss) (256 ) 2,441 2,263 — 4,448 Operating income (loss) (2,950 ) 2,010 1,278 (183 ) 155 Total assets 377,579 61,411 87,305 (153,378 ) 372,917 Depreciation expense 5,560 479 430 130 6,599 CAPEX (480 ) (92 ) (429 ) — (1,001 ) |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2016segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 3 |
LEEVAC Acquisition - Narrative
LEEVAC Acquisition - Narrative (Details) ft² in Thousands, $ in Thousands | Jan. 01, 2016USD ($)ft²aemployeeCustomervesselProjectft | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||
Revenues | $ 83,979 | $ 99,233 | |
Net income (loss) | 989 | $ 83 | |
LEEVAC | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 20,000 | ||
Net cash due to the Company at closing | 1,588 | ||
Build construction backlog acquired | $ 112,000 | ||
Number of build construction projects in backlog acquired | Project | 4 | ||
Third party customers with backlog acquired | Customer | 2 | ||
Employees hired upon acquisition | employee | 380 | ||
Revenues | 21,800 | ||
Net income (loss) | $ (706) | ||
Jennings | LEEVAC | |||
Business Acquisition [Line Items] | |||
Area of leased facility | a | 180 | ||
Covered fabrication area acquired | ft² | 100 | ||
Water frontage acquired | ft | 3,000 | ||
Lake Charles | LEEVAC | |||
Business Acquisition [Line Items] | |||
Area of leased facility | a | 10 | ||
Water frontage acquired | ft | 1,100 | ||
Houma | LEEVAC | |||
Business Acquisition [Line Items] | |||
Area of leased facility | a | 40 | ||
Monthly rental payment | $ 67 | ||
Lease expiration period after completion of vessels | 90 days | ||
Number of vessels under construction at the leased facility | vessel | 2 |
LEEVAC Acquisition - Assets and
LEEVAC Acquisition - Assets and Liabilities Acquired (Details) - LEEVAC $ in Thousands | Jan. 01, 2016USD ($) |
Fair Values Assigned From Acquisition: | |
Accounts receivable | $ 3,544 |
Inventory | 4,938 |
Machinery and equipment | 23,056 |
Intangible assets (leasehold interests) | 2,123 |
Accounts payable and accrued expenses | 6,003 |
Deferred revenue and below market contracts | 29,246 |
Net cash received upon the acquisition of LEEVAC | $ (1,588) |
LEEVAC Acquisition - Considerat
LEEVAC Acquisition - Consideration Sources (Details) - LEEVAC $ in Thousands | Jan. 01, 2016USD ($) |
Business Acquisition [Line Items] | |
Owner payment for prepaid contracts | $ 16,942 |
Surety payments related to assigned contracts | 7,125 |
Cash received | 24,067 |
Working capital assumed | 2,479 |
Net cash due to the Company at closing | 1,588 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Working Capital and Cash | 4,067 |
Purchase price | $ 20,000 |
LEEVAC Acquisition - Pro Forma
LEEVAC Acquisition - Pro Forma Results (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenue | $ 83,979 | $ 99,233 |
Net income (loss) | 989 | 83 |
Depreciation | (6,567) | (6,599) |
Interest expense | (50) | (37) |
LEEVAC | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenue | 21,800 | |
Net income (loss) | $ (706) | |
Pro Forma | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenue | 99,233 | |
Net income (loss) | 83 | |
Pro forma revenue | 123,951 | |
Pro forma net income (loss) | (3,362) | |
Pro Forma | Pro Forma Adjustment to Historical Results | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenue | 0 | |
Net income (loss) | 963 | |
Depreciation | 200 | |
Interest expense | 763 | |
Pro Forma | LEEVAC | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenue | 24,718 | |
Net income (loss) | $ (4,408) |
Contracts Receivable and Reta25
Contracts Receivable and Retainage - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)Customer | Dec. 31, 2015USD ($) | |
Long-term Contracts or Programs Disclosure [Line Items] | ||
Contract receivable | $ 45,306 | $ 47,060 |
Allowance for bad debt | 97 | |
Top 4 Customer | ||
Long-term Contracts or Programs Disclosure [Line Items] | ||
Contract receivable | $ 23,800 | |
Percentage of contract receivable | 52.40% | |
Number of major customers, contracts receivables | Customer | 4 |
Contract Costs (Details)
Contract Costs (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016USD ($)CustomerProject | Mar. 31, 2015 | Dec. 31, 2015USD ($) | |
Long-term Contracts or Programs Disclosure [Line Items] | |||
Pass-through costs as a percentage of revenue | 40.00% | 44.70% | |
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 13,891 | $ 12,822 | |
Customer advances | $ 3,300 | ||
Number of major customers, advances | Customer | 2 | ||
Revisions to revenue | $ (488) | ||
Unbilled Contract Costs | |||
Long-term Contracts or Programs Disclosure [Line Items] | |||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 11,300 | ||
Number of major customers | Customer | 7 | ||
Project, Approved Scope, Unapproved Price | |||
Long-term Contracts or Programs Disclosure [Line Items] | |||
Revenue | $ 1,400 | ||
Change orders | $ 3,200 | ||
Number of projects | Project | 2 | ||
Large Deepwater Project, Recently Delivered | |||
Long-term Contracts or Programs Disclosure [Line Items] | |||
Contract losses | $ 24,500 |
Earnings Per Share and Shareh27
Earnings Per Share and Shareholders' Equity - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Basic and diluted: | ||
Net income | $ 989 | $ 83 |
Less: Distributed and undistributed income (unvested restricted stock) | 9 | 25 |
Net income attributable to common shareholders | $ 980 | $ 58 |
Weighted-average shares (in shares) | 14,601 | 14,540 |
Basic and diluted earnings per share - common shareholders (usd per share) | $ 0.07 | $ 0 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2016USD ($) | Feb. 28, 2016 | Mar. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | |||
Revolving credit facility | $ 80,000,000 | $ 80,000,000 | |
Revolving credit facility, maturity date | Jan. 2, 2017 | ||
Available borrowings for general corporate purposes | 20,000,000 | $ 20,000,000 | |
Financial covenants, minimum net worth | $ 250,000,000 | $ 250,000,000 | |
Financial covenants, percent of net income added to net worth requirement | 50.00% | 50.00% | |
Financial covenants, percent of proceeds from stock issuance added to net worth requirement | 100.00% | 100.00% | |
Financial covenants, maximum EBITDA ratio | 3 | 3 | |
Financial covenants, minimum interest coverage ratio | 2 | 2 | |
Revolving credit facility, borrowings outstanding | $ 0 | $ 0 | |
Total outstanding letters of credit | $ 20,500,000 | 20,500,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility, unused annual commitment fee | 0.50% | 0.25% | |
Credit facility, unused portion | $ 20,000,000 | 20,000,000 | |
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility, unused annual commitment fee | 2.00% | ||
Credit facility, unused portion | $ 59,500,000 | $ 59,500,000 |
Segment Disclosures (Details)
Segment Disclosures (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 3 | ||
Revenue | $ 83,979 | $ 99,233 | |
Gross profit | 5,701 | 4,448 | |
Operating income (loss) | 1,216 | 155 | |
Total assets | 339,168 | 372,917 | $ 316,923 |
Depreciation expense | 6,567 | 6,599 | |
CAPEX | (724) | (1,001) | |
Operating Segments | Fabrication | |||
Segment Reporting Information [Line Items] | |||
Revenue | 23,829 | 56,933 | |
Gross profit | 41 | (256) | |
Operating income (loss) | (1,282) | (2,950) | |
Total assets | 293,049 | 377,579 | |
Depreciation expense | 4,855 | 5,560 | |
CAPEX | (109) | (480) | |
Operating Segments | Shipyards | |||
Segment Reporting Information [Line Items] | |||
Revenue | 34,120 | 19,481 | |
Gross profit | 2,329 | 2,441 | |
Operating income (loss) | 523 | 2,010 | |
Total assets | 85,638 | 61,411 | |
Depreciation expense | 1,166 | 479 | |
CAPEX | (35) | (92) | |
Operating Segments | Services | |||
Segment Reporting Information [Line Items] | |||
Revenue | 26,559 | 24,788 | |
Gross profit | 3,331 | 2,263 | |
Operating income (loss) | 2,095 | 1,278 | |
Total assets | 93,283 | 87,305 | |
Depreciation expense | 442 | 430 | |
CAPEX | (543) | (429) | |
Corp. & Eliminations | |||
Segment Reporting Information [Line Items] | |||
Revenue | (529) | (1,969) | |
Gross profit | 0 | 0 | |
Operating income (loss) | (120) | (183) | |
Total assets | (132,802) | (153,378) | |
Depreciation expense | 104 | 130 | |
CAPEX | $ (37) | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | Apr. 28, 2016 | Mar. 31, 2016 | Mar. 31, 2015 |
Subsequent Event [Line Items] | |||
Dividends declared per share | $ 0.01 | $ 0.10 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared, date | Apr. 28, 2016 | ||
Dividends declared per share | $ 0.01 | ||
Dividends declared, payable date | May 26, 2016 | ||
Dividends declared, record date | May 12, 2016 |