Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Gulf Island Fabrication, Inc. | |
Entity Central Index Key | 0001031623 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 15,775,304 | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-34279 | |
Entity Tax Identification Number | 72-1147390 | |
Entity Address, Address Line One | 16225 Park Ten Place | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77084 | |
City Area Code | 713 | |
Local Phone Number | 714-6100 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | LA | |
Trading Symbol | Gifi | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 41,061 | $ 52,886 |
Restricted cash, current | 1,703 | 1,297 |
Contract receivables and retainage, net | 23,643 | 15,986 |
Contract assets | 2,694 | 4,759 |
Prepaid expenses and other assets | 9,120 | 6,971 |
Inventory | 1,700 | 1,779 |
Assets held for sale | 1,800 | 1,800 |
Total current assets | 81,721 | 85,478 |
Restricted cash, noncurrent | 406 | |
Property, plant and equipment, net | 32,057 | 32,866 |
Goodwill | 2,217 | 2,217 |
Other intangibles, net | 949 | 984 |
Other noncurrent assets | 13,261 | 13,322 |
Total assets | 130,205 | 135,273 |
Current liabilities: | ||
Accounts payable | 9,531 | 9,280 |
Contract liabilities | 4,198 | 6,648 |
Accrued expenses and other liabilities | 15,831 | 14,026 |
Total current liabilities | 29,560 | 29,954 |
Other noncurrent liabilities | 1,252 | 1,411 |
Total liabilities | 30,812 | 31,365 |
Shareholders’ equity: | ||
Preferred stock, no par value, 5,000 shares authorized, no shares issued and outstanding | ||
Common stock, no par value, 30,000 shares authorized, 15,775 shares issued and outstanding at March 31, 2022 and 15,622 at December 31, 2021 | 11,435 | 11,384 |
Additional paid-in capital | 105,972 | 105,511 |
Accumulated deficit | (18,014) | (12,987) |
Total shareholders’ equity | 99,393 | 103,908 |
Total liabilities and shareholders’ equity | $ 130,205 | $ 135,273 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, no par value | ||
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 | ||
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 15,775,000 | 15,622,000 |
Common stock, shares outstanding (in shares) | 15,775,000 | 15,622,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 28,686 | $ 23,785 |
Cost of revenue | 29,106 | 23,760 |
Gross profit (loss) | (420) | 25 |
General and administrative expense | 4,110 | 2,787 |
Other (income) expense, net | 452 | (529) |
Operating loss | (4,982) | (2,233) |
Interest (expense) income, net | (40) | (194) |
Loss before income taxes | (5,022) | (2,427) |
Income tax (expense) benefit | (5) | 11 |
Loss from continuing operations | (5,027) | (2,416) |
Loss from discontinued operations, net of taxes | (16,121) | |
Net loss | $ (5,027) | $ (18,537) |
Per share data: | ||
Basic and diluted loss from continuing operations | $ (0.32) | $ (0.15) |
Basic and diluted loss from discontinued operations | (1.05) | |
Basic and diluted loss per share | $ (0.32) | $ (1.20) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Beginning Balance at Dec. 31, 2020 | $ 124,476 | $ 11,223 | $ 104,072 | $ 9,181 |
Beginning Balance (in shares) at Dec. 31, 2020 | 15,359 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (18,537) | (18,537) | ||
Vesting of restricted stock | (100) | $ (9) | (91) | |
Vesting of restricted stock (in shares) | 158 | |||
Stock-based compensation expense | 313 | $ 31 | 282 | |
Ending Balance at Mar. 31, 2021 | 106,152 | $ 11,245 | 104,263 | (9,356) |
Ending Balance (in shares) at Mar. 31, 2021 | 15,517 | |||
Beginning Balance at Dec. 31, 2021 | $ 103,908 | $ 11,384 | 105,511 | (12,987) |
Beginning Balance (in shares) at Dec. 31, 2021 | 15,622 | 15,622 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | $ (5,027) | (5,027) | ||
Vesting of restricted stock | (59) | $ (6) | (53) | |
Vesting of restricted stock (in shares) | 153 | |||
Stock-based compensation expense | 571 | $ 57 | 514 | |
Ending Balance at Mar. 31, 2022 | $ 99,393 | $ 11,435 | $ 105,972 | $ (18,014) |
Ending Balance (in shares) at Mar. 31, 2022 | 15,775 | 15,775 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net loss | $ (5,027) | $ (18,537) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 1,251 | 1,940 | |
Asset impairments | 22,750 | ||
(Gain) loss on sale of fixed assets, net | (25) | 9 | |
Stock-based compensation expense | 571 | 313 | |
Changes in operating assets and liabilities: | |||
Contract receivables and retainage, net | (7,657) | (2,779) | |
Contract assets | 2,065 | (3,851) | |
Prepaid expenses, inventory and other current assets | (2,070) | 228 | |
Accounts payable | 346 | 1,756 | |
Contract liabilities | (2,450) | (3,317) | |
Accrued expenses and other current liabilities | 1,792 | 2,199 | |
Noncurrent assets and liabilities, net | (147) | (353) | |
Net cash provided by (used in) operating activities | (11,351) | 358 | |
Cash flows from investing activities: | |||
Capital expenditures | (440) | (460) | |
Proceeds from sale of property and equipment | 25 | 39 | |
Net cash used in investing activities | (415) | (421) | |
Cash flows from financing activities: | |||
Tax payments for vested stock withholdings | (59) | (100) | |
Net cash used in financing activities | (59) | (100) | |
Net decrease in cash, cash equivalents and restricted cash | (11,825) | (163) | |
Cash, cash equivalents and restricted cash, beginning of period | 54,589 | 43,159 | $ 43,159 |
Cash, cash equivalents and restricted cash, end of period | $ 42,764 | $ 42,996 | $ 54,589 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Gulf Island Fabrication, Inc. (together with its subsidiaries, “Gulf Island,” “the Company,” “we,” “us” and “our”) is a leading fabricator of complex steel structures and modules and provider of specialty services, including project management, hookup, commissioning, repair, maintenance, scaffolding, coatings, civil construction and staffing services to the industrial and energy sectors. Our customers include U.S. and, to a lesser extent, international energy producers; refining, petrochemical, LNG, industrial and power operators; and EPC companies. We currently operate and manage our business through three operating divisions (“Services”, “Fabrication” and “Shipyard”) and one non-operating division (“Corporate”), which represent our reportable segments. Our corporate headquarters is located in Houston, Texas and our primary operating facilities are located in Houma, Louisiana (“Houma Facilities”). See Note 9 for discussion of our realigned reportable segments. On April 19, 2021, we sold our Shipyard Division operating assets and certain construction contracts (“Shipyard Transaction”) and intend to wind down our remaining Shipyard Division operations by the third quarter 2022. See “Basis of Presentation” On December 1, 2021, we acquired (“DSS Acquisition”) the services and industrial staffing businesses (“DSS Business”) of Dynamic Industries, Inc. (“Dynamic”). The operating results of the DSS Business are included within our Services Division. See Note 4 for further discussion of the DSS Acquisition. Basis of Presentation The accompanying unaudited Consolidated Financial Statements (“Financial Statements”) reflect all wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial statements, the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, the Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, 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, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Our Consolidated Balance Sheet (“Balance Sheet”) at December 31, 2021, has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Financial Statements and related footnotes included in our 2021 Annual Report. We determined the Shipyard Division assets, liabilities and operations associated with the Shipyard Transaction, and associated with certain previously closed Shipyard Division facilities, to be discontinued operations in the second quarter 2021. Accordingly, such operating results for the three months ended March 31, 2021 have been classified as discontinued operations on our Consolidated Statements of Operations (“Statement of Operations”). We had no material operating results of discontinued operations for the three months ended March 31, 2022, and had no material assets and liabilities of discontinued operations at March 31, 2022 or December 31, 2021. Discontinued operations are not presented separately on our Consolidated Statements of Cash Flows (“Statement of Cash Flows”) or our Consolidated Statements of Changes in Shareholders’ Equity (“Statement of Shareholders’ Equity”). Unless otherwise noted, the amounts presented throughout the notes to our Financial Statements relate to our continuing operations. See Note 3 for further discussion of the Shipyard Transaction and our discontinued operations. Revision of Previously Issued Financial Statements During the fourth quarter 2021, we determined that we had immaterial errors in our previously issued financial statements. The adjustments required to reflect the corrections attributable to our previously issued financial statements for the three months ended March 31, 2021, were summarized in the footnotes to our Financial Statements in our 2021 Annual Report. Our results for the three months ended March 31, 2021 in this Report reflect the aforementioned corrections. Operating Cycle The duration of our contracts vary, but may extend beyond twelve months from the date of contract award. Consistent with industry practice, assets and liabilities have been classified as current under the operating cycle concept whereby all contract-related items are classified as current regardless of whether cash will be received or paid within a twelve-month period. Assets and liabilities classified as current, which may not be received or paid within the next twelve months, include contract retainage, contract assets and contract liabilities. Variations from normal contract terms may result in the classification of assets and liabilities as long-term. Use of Estimates General – The preparation of our Financial Statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We believe our most significant estimates and judgments are associated with: • Revenue recognition for our contracts, including application of the percentage-of-completion method, estimating costs to complete each contract and the recognition of incentives, unapproved change orders, claims and liquidated damages; • Determination of fair value with respect to acquired tangible and intangible assets; • Fair value and recoverability assessments that must be periodically performed with respect to long-lived tangible assets, assets held for sale, goodwill and other intangible assets; • Determination of deferred income tax assets, liabilities and related valuation allowances; • Reserves for bad debts; • Liabilities related to self-insurance programs; • Costs and insurance recoveries associated with damage to our Houma Facilities resulting from Hurricane Ida discussed further below; and • The impacts of volatile oil prices, the ongoing global coronavirus pandemic (“COVID-19”) and Russia’s invasion of Ukraine on our business, estimates and judgments as discussed further below. If the underlying estimates and assumptions upon which our Financial Statements are based change in the future, actual amounts may differ materially from those included in the Financial Statements. Volatile Oil Prices, COVID-19 and Russia’s Invasion of Ukraine – Since 2008, the price of oil has experienced significant volatility, including depressed prices over extended periods, resulting in reductions in capital spending and drilling activities from our traditional offshore oil and gas customer base. Consequently, our operating results and cash flows have been negatively impacted as we experienced reductions in revenue, lower margins due to competitive pricing and under-utilization of our operating facilities and resources. Beginning in 2020, COVID-19 added another layer of pressure and uncertainty on oil prices (with oil prices reaching a twenty-year low), which further negatively impacted our end markets during 2021 and the first quarter 2022. This volatility in oil prices has been compounded by Russia’s invasion of Ukraine in February 2022, and the U.S. and other countries actions in response (with oil prices reaching an eight-year high), which may positively impact our end markets during 2022; however, the duration and broader consequences of this conflict are difficult to predict at this time. In addition to the impacts on our end markets, our operations, as well as the operations of our customers, subcontractors and counterparties, were negatively impacted in 2020 and 2021 by physical distancing, quarantine and isolation measures and mandatory business closures that were enacted in an attempt to control the spread of COVID-19, and which could be reenacted in response to new and emerging strains and variants of COVID-19 or any future major public health crisis. The ultimate business and financial impacts of oil price volatility, COVID-19 and Russia’s invasion of Ukraine on our business and results of operations continues to be uncertain, but the impacts have included , or may include, among other things, reduced bidding activity; suspension or termination of backlog; deterioration of customer financial condition; supply chain interruptions; and unanticipated project costs due to project disruptions and schedule delays, material price increases, lower labor productivity, increased employee and contractor absenteeism and turnover, craft labor hiring challenges, lack of performance by subcontractors and suppliers, and contract disputes. We continue to monitor the impacts of oil price volatility, COVID-19 and Russia’s invasion of Ukraine on our operations, and our estimates in future periods will be revised for any events and changes in circumstances arising after the date of this Report. Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income (loss) per share reflects the assumed conversion of dilutive securities in periods in which income is reported. See Note 8 for calculations of our basic and diluted income (loss) per share. Cash Equivalents, Restricted Cash and Short-Term Investments Cash Equivalents – We consider investments with original maturities of three months or less when purchased to be cash equivalents. Restricted Cash – At both March 31, 2022 and December 31, 2021, we had $1.7 million of restricted cash as security for letters of credit issued under our letter of credit facility (“LC Facility”) with Hancock Whitney Bank (“Whitney Bank”). Our restricted cash is held in an interest-bearing money market account with Whitney Bank. The classification of the restricted cash as current and noncurrent is determined by the contractual maturity dates of the letters of credit being secured, with letters of credit having maturity dates of twelve months or less from the balance sheet date classified as current, and letters of credit having maturity dates of longer than twelve months from the balance sheet date classified as noncurrent. See Note 6 for further discussion of our cash security requirements under our LC Facility. Short-Term Investments – We consider investments with original maturities of more than three months but less than twelve months to be short-term investments. We had no short-term investments at March 31, 2022 or December 31, 2021. Inventory Inventory is recorded at the lower of cost or net realizable value determined using the first-in-first-out basis. The cost of inventory includes acquisition costs, production or conversion costs, and other costs incurred to bring the inventory to a current location and condition. Net realizable value is our estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation. An allowance for excess or inactive inventory is recorded based on an analysis that considers current inventory levels, historical usage patterns, estimates of future sales and salvage value. Allowance for Doubtful Accounts In the normal course of business, we extend credit to our customers on a short-term basis and contract receivables are generally not collateralized; however, we typically have the right to place liens on our projects in the event of nonpayment by our customers. We routinely review individual contract receivable balances for collectability and make provisions for probable uncollectible amounts as necessary. Among the factors considered in our review are the financial condition of our customer and its access to financing, underlying disputes with the customer, the age and value of the receivable balance, and economic conditions in general. See Note 2 for further discussion of our allowance for doubtful accounts. Stock-Based Compensation Awards under our stock-based compensation plans are calculated using a fair value-based measurement method. We use the straight-line and graded vesting methods to recognize share-based compensation expense over the requisite service period of the award. We recognize the excess tax benefit or tax deficiency resulting from the difference between the deduction we receive for tax purposes and the stock-based compensation expense we recognize for financial reporting purposes created when common stock vests, as an income tax benefit or expense on our Statement of Operations. Tax payments made on behalf of employees to taxing authorities in order to satisfy employee income tax withholding obligations from the vesting of shares under our stock-based compensation plans are classified as a financing activity on our Statement of Cash Flows. Assets Held for Sale Assets held for sale are measured at the lower of their carrying amount or fair value less cost to sell. See Note 5 for further discussion of our assets held for sale. Depreciation and Amortization Expense Property, plant and equipment are depreciated on a straight-line basis over estimated useful lives ranging from three to 25 years. Ordinary maintenance and repairs, which do not extend the physical or economic lives of the plant or equipment, are charged to expense as incurred. Intangible assets are amortized on a straight-line basis over 7 years and amortization expense is reflected within general and administrative expense on our Statement of Operations. Long-Lived Assets Goodwill – Our goodwill is associated with the DSS Acquisition. Goodwill is not amortized, but instead is reviewed for impairment at least annually at a reporting unit level, absent any indicators of impairment or when other actions require an impairment assessment (such as a change in reporting units). Our Services Division includes one reporting unit associated with our DSS Acquisition. We perform our annual impairment assessment during the fourth quarter of each year based upon balances as of October 1. In evaluating goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is greater than its carrying value. If we determine that it is more likely than not that the carrying value of the reporting unit is greater than its fair value, we perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing it to the carrying value of the reporting unit, and we recognize an impairment charge to the extent its carrying value exceeds its fair value. We had no indicators of impairment during the three months ended March 31, 2022. If, based on future assessments, our goodwill is deemed to be impaired, the impairment would result in a charge to our operating results in the year of impairment. See Note 4 for discussion of the DSS Acquisition and related goodwill. Other Long-Lived Assets – Our property, plant and equipment, lease assets (included within other noncurrent assets), and finite-lived intangible assets (associated with the DSS Acquisition) are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If a recoverability assessment is required, we compare the estimated future undiscounted cash flow associated with the asset or asset group to its carrying amount to determine if an impairment exists. An asset group constitutes the minimum level for which identifiable cash flows are principally independent of the cash flows of other assets or asset groups. An impairment loss is measured by comparing the fair value of the asset or asset group to its carrying amount and the excess of the carrying amount of the asset or asset group over its fair value is recorded as an impairment charge. Fair value is determined based on discounted cash flows, appraised values or third-party indications of value, as appropriate. We had no indicators of impairment during the three months ended March 31, 2022. See Note 2 for discussion of our long-lived asset impairments associated with Hurricane Ida, Note 3 for discussion of our long-lived asset impairments within discontinued operations, and Note 4 for discussion of the DSS Acquisition and related long-lived assets. Leases We record a right-of-use asset and an offsetting lease liability on our Balance Sheet equal to the present value of our lease payments for leases with an original term of longer than twelve months. We do not record an asset or liability for leases with an original term of twelve months or less and we do not separate lease and non-lease components for our leases. Our lease assets are reflected within other noncurrent assets, and the current and noncurrent portions of our lease liabilities are reflected within accrued expenses and other liabilities, and other noncurrent liabilities, respectively, on our Balance Sheet. For leases with escalations over the life of the lease, we recognize expense on a straight-line basis. Fair Value Measurements Fair value determinations for financial assets and liabilities are based on the particular facts and circumstances. Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: • 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 based upon model-based valuation techniques for which significant assumptions are generally not observable in the market and typically reflect estimates and assumptions that we believe market participants would use in pricing the asset or liability. These include discounted cash flow models and similar valuation techniques. The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximate their fair values. Our fair value assessments for determining the impairments of goodwill, inventory, long-lived assets and assets held for sale, are non-recurring fair value measurements that fall within Level 3 of the fair value hierarchy. See Note 4 for discussion of the fair value measurements associated with the DSS Acquisition and Note 5 for further discussion of our assets held for sale. Revenue Recognition General – Our revenue is derived from customer contracts and agreements that are awarded on a competitively bid and negotiated basis using a range of contracting options, including fixed-price, unit-rate and T&M. Our contracts primarily relate to the fabrication and construction of steel structures, modules and marine vessels, and project management services and other service arrangements. We recognize revenue from our contracts in accordance with Accounting Standards Update (“ASU”) 2014-09, Topic 606 (“Topic 606”). Topic 606 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. Additionally, provisions of Topic 606 specify which goods and services are distinct and represent separate performance obligations (representing the unit of account in Topic 606) within a contract and which goods and services (which could include multiple contracts or agreements) should be aggregated. In general, a performance obligation is a contractual obligation to construct and/or transfer a distinct good or service to a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenue for performance obligations satisfied over time are recognized as the work progresses. Revenue for performance obligations that do not meet the criteria for over time recognition are recognized at a point-in-time when a performance obligation is complete and a customer has obtained control of a promised asset. Fixed-Price and Unit-Rate Contracts – Revenue for our fixed-price and unit-rate contracts is recognized using the percentage-of-completion method based on contract costs incurred to date compared to total estimated contract costs (an input method). Contract costs include direct costs, such as materials and labor, and indirect costs attributable to contract activity. Material costs that are significant to a contract and do not reflect an accurate measure of project completion are excluded from the determination of our contract progress. Revenue for such materials is only recognized to the extent of costs incurred. Revenue and gross profit for contracts accounted for using the percentage-of-completion method can be significantly affected by changes in estimated cost to complete such contracts. Significant estimates impacting the cost to complete a contract include: forecast costs of engineering, materials, equipment and subcontracts; forecast costs of labor and labor productivity; schedule durations, including subcontractor and supplier progress; contract disputes, including claims; achievement of contractual performance requirements; and contingency, among others. Although our customers retain the right and ability to change, modify or discontinue further work at any stage of a contract, in the event our customers discontinue work, they are required to compensate us for the work performed to date. The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on contracts. Due to the various estimates inherent in our contract accounting, actual results could differ from those estimates, which could result in material changes to our Financial Statements and related disclosures. See Note 2 for further discussion of projects with significant changes in estimated margins during the three months ended March 31, 2022 and 2021. T&M Contracts – Revenue for our T&M contracts is recognized at contracted rates when the work is performed, the costs are incurred and collection is reasonably assured. Our T&M contracts provide for labor and materials to be billed at rates specified within the contract. The consideration from the customer directly corresponds to the value of our performance completed at the time of invoicing. Variable Consideration Revenue and gross profit for contracts can be significantly affected by variable consideration, which can be in the form of unapproved change orders, claims, incentives and liquidated damages that may not be resolved until the later stages of the contract or after the contract has been completed. We estimate variable consideration based on the amount we expect to be entitled and include estimated amounts in transaction price to the extent it is probable that a significant future reversal of cumulative revenue recognized will not occur or when we conclude that any significant uncertainty associated with the variable consideration is resolved. See Note 2 for further discussion of unapproved change orders, claims, incentives and liquidated damages for our projects. Additional Disclosures Topic 606 also requires disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. See Note 2 for required disclosures under Topic 606. Pre-Contract Costs Pre-contract costs are generally charged to cost of revenue as incurred, but in certain cases their recognition may be deferred if specific probability criteria are met. At March 31, 2022 and December 31, 2021, we had no deferred pre-contract costs. Other (Income) Expense, Net Other (income) expense, net, generally represents recoveries or provisions for bad debts, gains or losses associated with the sale or disposition of property and equipment other than assets held for sale, and income or expense associated with certain nonrecurring items. Income Taxes Income taxes have been provided for using the liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted rates expected to be in effect during the year in which the differences are expected to reverse. Due to state income tax laws related to the apportionment of revenue for our projects, judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. A valuation allowance is provided to reserve for deferred tax assets (“DTA(s)”) if, based upon the available evidence, it is more likely than not that some or all of the DTAs will not be realized. The realization of our DTAs depends on our ability to generate sufficient taxable income of the appropriate character and in the appropriate jurisdictions. Our effective tax rate differs from our statutory rate for the three months ended March 31, 2022 and 2021, as no federal benefit was recorded for our losses as a full valuation allowance was recorded against our federal deferred tax assets generated during the respective periods. Income taxes recorded for the three months ended March 31, 2022 and 2021 represent state income taxes. Reserves for uncertain tax positions are recognized when we consider it more likely than not that additional tax will be due in excess of amounts reflected in our income tax returns, irrespective of whether or not we have received tax assessments. Interest and penalties on uncertain tax positions are recorded within income tax expense. New Accounting Standards Financial Instruments – In June 2016, the FASB issued ASU 2016-13, which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, short-term investments, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. ASU 2016-13 will be effective for us in the first quarter 2023. Early adoption of the new standard is permitted; however, we have not elected to early adopt the standard. The new standard is required to be applied using a cumulative-effect transition method. We are evaluating the effect that the new standard will have on our financial position, results of operations and related disclosures. |
REVENUE, CONTRACT ASSETS AND LI
REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS | 3 Months Ended |
Mar. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS | 2. REVENUE, CONTRACT ASSETS AND LIABILITIES AND OTHER CONTRACT MATTERS As discussed in Note 1, we recognize revenue from our contracts in accordance with Topic 606. Summarized below are required disclosures under Topic 606 and other relevant guidance. Disaggregation of Revenue The following tables summarize revenue for each of our operating segments, disaggregated by contract type, for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 Services Fabrication Shipyard Eliminations Total Fixed-price and unit-rate ( 1) $ 1,609 $ 5,044 $ 2,497 $ (1 ) $ 9,149 T&M ( 2) 18,463 573 — — 19,036 Other 592 — — (91 ) 501 Total $ 20,664 $ 5,617 $ 2,497 $ (92 ) $ 28,686 Three Months Ended March 31, 2021 Services Fabrication Shipyard Eliminations Total Fixed-price and unit-rate ( 1) $ 321 $ 11,018 $ 5,130 $ (190 ) $ 16,279 T&M ( 2) 5,551 718 — — 6,269 Other 1,634 — — (397 ) 1,237 Total $ 7,506 $ 11,736 $ 5,130 $ (587 ) $ 23,785 (1) Revenue is recognized as the contract is progressed over time. (2) Revenue is recognized at contracted rates when the work is performed and costs are incurred. Future Performance Obligations The following table summarizes our remaining performance obligations by operating segment at March 31, 2022 (in thousands): Performance Obligations Services $ 1,237 Fabrication 7,027 Shipyard 7,611 Total $ 15,875 Contracts Assets and Liabilities Revenue recognition and customer invoicing for our fixed-price and unit-rate contracts may occur at different times. Revenue recognition is based upon our estimated percentage-of-completion as discussed in Note 1; however, customer invoicing is generally dependent upon contractual billing terms, which could provide for customer payments in advance of performing the work, milestone billings based on the completion of certain phases of the work, or billings when services are provided. Revenue recognized in excess of amounts billed is reflected as contract assets on our Balance Sheet, or to the extent we have an unconditional right to the consideration, is reflected as contract receivables on our Balance Sheet. Amounts billed in excess of revenue recognized, and accrued contract losses, are reflected as contract liabilities on our Balance Sheet. Information with respect to contracts that were incomplete at March 31, 2022 and December 31, 2021, is as follows (in thousands): March 31, December 31, 2022 2021 Contract assets ( 1) (2) $ 2,694 $ 4,759 Contract liabilities ( 3), (4), (5) (4,198 ) (6,648 ) Contracts in progress, net $ (1,504 ) $ (1,889 ) (1) The decrease in contract assets compared to December 31, 2021, was primarily due to decreased unbilled positions on various projects within our Fabrication Division. (2) Contract assets at March 31, 2022 and December 31, 2021, excludes $4.3 million and $2.3 million, respectively, associated with revenue recognized in excess of amounts billed for which we have an unconditional right to the consideration. Such amounts are reflected within contract receivables. (3) The decrease in contract liabilities compared to December 31, 2021, was primarily due to a decrease in accrued contract losses and the unwind of advance payments on our forty-vehicle ferry projects within our Shipyard Division. (4) Revenue recognized during the three months ended March 31, 2022 and 2021, related to amounts included in our contract liabilities balance at December 31, 2021 and 2020, was $2.1 million and $1.8 million, respectively. (5) Contract liabilities at March 31, 2022 and December 31, 2021, includes accrued contract losses of $2.9 million and $3.9 million, respectively. See “ Changes in Project Estimates” below for further discussion of our accrued contract losses. Allowance for Doubtful Accounts Our provision for bad debts is included in other (income) expense, net on our Statement of Operations. Our provision for bad debts for the three months ended March 31, 2022 and 2021, and our allowance for doubtful accounts at March 31, 2022 and December 31, 2021, were not significant. Variable Consideration For the three months ended March 31, 2022 and 2021, we had no material amounts in revenue related to unapproved change orders, claims or incentives. However, at March 31, 2022 and December 31, 2021, certain projects reflected a reduction to our estimated contract price for liquidated damages of $1.3 million and $1.2 million, respectively. Changes in Project Estimates We determine the impact of changes in estimated margins on projects for a given period by calculating the amount of revenue recognized in the period that would have been recognized in a prior period had such estimated margins been forecasted in the prior period. The total impact of changes in estimated margins for a project as disclosed on a quarterly basis may be different from the applicable year-to-date impact due to the application of the percentage-of-completion method and the changing progress of the project at each period end. Such impacts may also be different when a project is commenced and completed within the applicable year-to-date period but spans multiple quarters. Changes in Estimates for 2022 – For the three months ended March 31, 2022, individual projects with significant changes in estimated margins did not have a material net impact on our operating results. Shipyard Division • Forty-Vehicle Ferry Projects – During sea trials in January 2022 for our second forty-vehicle ferry project, one of the propulsion systems unexpectedly shutdown, causing the vessel to veer off course and run aground, resulting in damage to the hull. During the three months ended March 31, 2022, we recorded a charge of $0.1 million associated with our deductible for our insurance coverage for such an incident. Our current estimate of the cost to repair the damage is $0.4 million; however, we believe any amounts incurred in excess of our deductible are covered by our insurance coverage. Further, we are working with the customer to determine the corrective actions required associated with the propulsion system. While such actions and associated costs are currently unknown, we believe the propulsion system shutdown was due to design deficiencies and are the responsibility of the customer as discussed further below As discussed in our 2021 Annual Report, during 2020 we experienced rework and construction challenges on our two forty-vehicle ferry projects, resulting in increases in forecast costs and liquidated damages and the need to fabricate a new hull for the first vessel. We believe these impacts are the result of deficiencies in design of the vessels. Further, we believe the impacts of the design deficiencies are the responsibility of the customer, and accordingly, during 2021 we submitted claims to our customer, and subsequently filed a lawsuit, to extend our project schedules and recover the previous forecast cost increases associated with the impacts of the design deficiencies. However, we can provide no assurance that we will be successful recovering these costs. Our forecasts at March 31, 2022 do not reflect potential future benefits, if any, from the favorable resolution of the lawsuit. At March 31, 2022, the second vessel was approximately 96% complete and is forecast to be completed in the second quarter 2022 and the first vessel was approximately 77% complete and is forecast to be completed in the third quarter 2022. The projects were in a loss position at March 31, 2022 and our reserve for estimated losses was $2.2 million. Our forecast costs and schedule completion dates for the vessels are based on the current vessel design and reflect our best estimates; however, such estimates may be impacted by future challenges with, and resolution of, the vessel design deficiencies. While we continue to believe such impacts are the responsibility of the customer, we can provide no assurances that we will be successful recovering any future costs incurred associated with the design deficiencies. If future craft labor productivity and subcontractor costs differ from our current estimates, we are unable to achieve our progress estimates, our schedules are further extended or we incur additional schedule liquidated damages, we incur additional costs on the second vessel related to the damage caused during sea trials, we experience further challenges during sea trials or commissioning of either vessel or other challenges associated with the design deficiencies and are unable to recover associated costs from our customer, the projects would experience further losses. Changes in Estimates for 2021 – For the three months ended March 31, 2021, significant changes in estimated margins on projects positively impacted operating results for our Fabrication Division by $0.6 million and negatively impacted operating results for our Shipyard Division by $0.7 million. The changes in estimates were associated with the following: Fabrication Division • Offshore Facility Modules Project – Positive impact for the three months ended March 31, 2021 of $0.6 million for our offshore modules project, resulting from reduced forecast costs, primarily associated with reduced craft labor and subcontracted services costs and contingency associated with schedule related liquidated damages. The impacts were primarily due to better than anticipated labor productivity and favorable resolution of change orders with the customer Shipyard Division • Seventy-Vehicle Ferry Project – Negative impact for the three months ended March 31, 2021 of $0.7 million for our seventy-vehicle ferry project, resulting from increased forecast costs and forecast liquidated damages, primarily associated with extensions of schedule and associated duration related costs, including supervision and subcontracted services costs. The impacts were primarily due to engineering delays and lower than anticipated progress on the project. At March 31, 2021, the vessel was approximately 65% complete. The project was in a loss position at March 31, 2021 and our reserve for estimated losses was $0.6 million. If future craft labor productivity and subcontractor costs differ from our current estimates Other Operating and Project Matters Hurricane Ida – On August 29, 2021, Hurricane Ida made landfall near Houma, Louisiana as a high-end Category 4 hurricane, with high winds, heavy rains and storm surge causing significant damage and power outages throughout the region. Our Houma Facilities did not experience significant flood damage; however, the high winds and heavy rain damaged multiple buildings and equipment and resulted in significant debris throughout the facility. As a result of the storm, certain buildings and equipment were damaged and were determined to be complete losses. Accordingly, during 2021, we recorded impairments of $0.5 million associated with the damaged assets. The impairments were offset by corresponding insurance recoveries, as we have determined it is probable that we will receive insurance proceeds to replace the damaged assets up to the amount of impairments recognized. In addition, multiple other buildings and equipment were partially damaged by the storm. We expect to incur future repair costs in excess of our deductibles for such assets; however, we believe that recovery of insurance proceeds for such costs is probable, and accordingly, we have not accrued for any future repair costs related to the partially damaged assets at March 31, 2022. We continue to work with our insurance providers and advisors to assess the full extent of damage to buildings and equipment, and applicable insurance coverage amounts, and restoration efforts are ongoing. During the three months ended March 31, 2022, we incurred actual costs of $1.9 million associated with ongoing clean-up and restoration efforts. We recorded charges of $0.3 million associated with such amounts attributable to deductibles and estimated unrecoverable amounts, and we recorded insurance recoveries of $1.6 million for the remaining amounts as we believe such costs are probable of recovery under our insurance policies. At March 31, 2022, we had total insurance receivables on our Balance Sheet of $2.7 million, net of a $1.0 million advance payment from our insurance carriers. The charges are included in other (income) expense, net on our Statement of Operations. The insurance receivable amounts, net of the advance payment, are included in prepaid expenses and other assets on our Balance Sheet. In addition to damage to our Houma Facilities, the storm resulted in damage to our second forty-vehicle ferry project, the MPSVs (and associated equipment) that are in our possession and subject to dispute, and certain bulkheads where the vessels were moored. We have retained advisors to evaluate the extent to which any damage was the result of third-party vessels that broke free from their mooring during the storm and struck the ferry, MPSVs and bulkheads. During the three months ended March 31, 2022, we recorded charges of less than $0.1 million related to actual costs incurred associated with our insurance coverages, without giving consideration to potential recoveries from the third-parties associated with damage caused by their vessels, as we expect these deductibles to be met absent such recoveries. The charges are included in other (income) expense, net on our Statement of Operations. We are working with our insurance providers and advisors to assess the full extent of damage to the MPSVs and bulkheads and applicable insurance coverage amounts, which may be subject to further deductibles associated with our insurance coverages that range from $0.5 million to $1.0 million. See Note 7 for further discussion of our MPSV dispute. |
SHIPYARD TRANSACTION AND DISCON
SHIPYARD TRANSACTION AND DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Shipyard Transaction and Discontinued Operations | 3. SHIPYARD TRANSACTION AND DISCONTINUED OPERATIONS Shipyard Transaction Transaction Summary – On April 19, 2021 (“Transaction Date”), we entered into a definitive agreement and sold our Shipyard Division operating assets and certain construction contracts (“Shipyard Transaction”) to Bollinger Houma Shipyards, L.L.C. and Bollinger Shipyards Lockport, L.L.C. (collectively, “Bollinger”) for approximately $28.6 million (“Transaction Price”) ($26.1 million, net of transaction and other costs). We received $27.7 million of the Transaction Price during 2021 and the remaining $0.9 million (“Deferred Transaction Price”) will be received upon Bollinger’s collection of certain customer payments associated with the Divested Shipyard Contracts (defined below). The Deferred Transaction Price is anticipated to be received in the second quarter 2022, and has been reflected within prepaid expenses and other assets on our Balance Sheet at March 31, 2022. Included in the Shipyard Transaction were the Shipyard Division’s: • Shipyard Facility and inventory and equipment in Houma, Louisiana; • Contracts and related obligations for our three research vessel projects and five towing, salvage and rescue ship projects (collectively, the “Divested Shipyard Contracts”); • Contract retentions, contract assets, contract liabilities and certain accounts payable associated with the Divested Shipyard Contracts as of the Transaction Date; and • Four Bollinger offered employment to most of the employees of our Shipyard Division associated with the Divested Shipyard Contracts. Excluded from the Shipyard Transaction were the Shipyard Division’s: • • • • We retained those employees of our Shipyard Division associated with the Active Retained Shipyard Contracts. Impairment and Transaction Loss – During the first quarter 2021, events and changes in circumstances indicated that the carrying amount of our Shipyard Division’s long-lived assets may not be recoverable. These changes in circumstances were primarily attributable to a reassessment of our asset groups within our Shipyard Division as well as revisions to our probability assessment of net future cash flows of the applicable asset group based on the likelihood, that existed as of March 31, 2021, of the Shipyard Transaction occurring. Based on these assessments, we determined that an impairment of our Shipyard Division’s property, plant and equipment had occurred during the first quarter 2021. We measured the impairment by comparing the carrying amount of the applicable asset group at March 31, 2021 to an estimate of its fair value (which represents a Level 3 fair value measurement), resulting in an impairment charge of $22.8 million during three months ended March 31, 2021. We based our fair value estimate on the Transaction Price, inclusive of an estimate of the Working Capital True-Up, associated with the Shipyard Transaction. In addition, we incurred transaction costs of $0.7 million during the three months ended March 31, 2021 associated with the Shipyard Transaction. Other – At March 31, 2022 and December 31, 2021, the net liabilities on our Balance Sheet associated with the Retained Shipyard Contracts and other retained Shipyard Division operations totaled $6.2 million and $8.7 million, respectively. We are completing construction of the Active Retained Shipyard Contracts within our Houma Facilities and are winding down our Shipyard Division operations, which is anticipated to occur by the third quarter 2022. Discontinued Operations The Shipyard Transaction (which included, among other things, our owned Shipyard Facility, Divested Shipyard Contracts and drydocks), and the fourth quarter 2020 closures of our leased Lake Charles Facility and Jennings Facility, represented the disposal and closure of a substantial portion of our Shipyard Division operations and the culmination of a strategic shift that will have a major effect on our ongoing operations and financial results. Therefore, we determined the assets, liabilities and operations associated with the Shipyard Transaction, and associated with the previously closed Shipyard Division facilities, to be discontinued operations in the second quarter 2021. Accordingly, such operating results for the three months ended March 31, 2021 have been classified as discontinued operations on our Statement of Operations. We had no material operating results of discontinued operations for the three months ended March 31, 2022, and no material assets and liabilities of discontinued operations at March 31, 2022 or December 31, 2021. The assets, liabilities and operating results attributable to the Retained Shipyard Contracts and remaining assets and liabilities of our Shipyard Division operations that were excluded from the Shipyard Transaction, and are not associated with the previously closed facilities, represent our Shipyard Division and are classified as continuing operations on our Balance Sheet and Statement of Operations. Discontinued operations are presented separately from continuing operations on our Balance Sheet and Statement of Operations; however, they are not presented separately on our Statement of Cash Flows. A summary of the operating results and cash flows from discontinued operations for the three months ended March 31, 2021, is as follows (in thousands): Three Months Ended March 31, 2021 Revenue $ 35,166 Cost of revenue 27,506 Gross profit ( 1) 7,660 General and administrative expense 340 Impairments and (gain) loss on assets held for sale, net ( 2) 23,428 Other (income) expense, net 13 Operating loss (16,121 ) Income tax (expense) benefit ( 3) — Loss from discontinued operations, net of taxes $ (16,121 ) Three Months Ended March 31, 2021 Operating cash flows from discontinued operations $ 4,774 Investing cash flows from discontinued operations $ (261 ) (1) Gross profit was positively impacted by changes in estimated margins on projects of $8.4 million for our towing, salvage and rescue ship projects. (2) Includes impairments of $22.8 million and transaction and other costs of $ 0.7 (3) Income taxes attributable to discontinued operations were not material. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination And Asset Acquisition [Abstract] | |
ACQUISITION | 4. ACQUISITION Acquisition Summary – On December 1, 2021 (“Acquisition Date”), we entered into a definitive agreement and acquired (“DSS Acquisition”) the services and industrial staffing businesses (“DSS Business”) of Dynamic Industries, Inc. (“Dynamic”) for $7.6 million (“Purchase Price”). We also hired substantially all of the employees of the DSS Business. Preliminary Purchase Price Allocation – The Purchase Price was allocated to the major categories of assets and liabilities acquired based upon preliminary estimates of their fair values at the Acquisition Date, which were based, in part, upon outside appraisals for certain assets, including property, machinery and equipment and specifically-identifiable intangible assets. The excess of the Purchase Price over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The factors contributing to the goodwill (which is all deductible for tax purposes) include the acquired established workforce, estimated future cost savings and revenue synergies associated with the DSS Business. The following table summarizes our preliminary purchase price allocation at the Acquisition Date: Tangible assets and liabilities: Land and buildings (1) $ 475 Machinery and equipment (2) 2,557 Right-of-use asset (3) 2,000 Accrued expenses and other liabilities (672 ) Net tangible assets and liabilities 4,360 Intangible assets - customer relationships (4) 996 Goodwill 2,217 Purchase Price (5) $ 7,573 (1) Land and buildings – Represents an acquired operating facility located in Ingleside, Texas (“Ingleside Facility”). The fair value of the facility was estimated based on a third-party appraisal. (2) Machinery and equipment – Represents acquired machinery, equipment and vehicles. The fair values of the assets were estimated based on third-party appraisals. (3) Right-of-use asset – Represents a fabrication and operating facility located in Harvey, Louisiana (“Harvey Facility”) that is subject to a lease arrangement with Dynamic that expires on June 30, 2022. The Harvey Facility is also subject to a separate purchase option that enables us to buy the facility from Dynamic prior to December 2, 2022, for a nominal amount (“Harvey Option”). We believe it is probable we will exercise the Harvey Option, and accordingly, have concluded that the arrangement represents a finance lease under the guidance of ASC 842, “Leases ”, due to the Harvey Option representing a bargain purchase option. We have reflected the estimated fair value of the Harvey Facility plus future lease payment obligations as a right-of-use asset in our preliminary purchase price allocation, with the estimated fair value based on a combination of a third-party appraisal, third-party indications of interest for the facility, and indications of value communicated by and between us and Dynamic during the due diligence process. The corresponding lease liability is not material. (4) Customer relationships – Represents the estimated fair value of existing underlying customer relationships with estimated lives of 7 years. The fair value was estimated based on a multi-period excess earnings method which incorporated Level 3 inputs. The significant assumptions used in estimating fair value included revenue and income projections for the DSS Business and the estimated discount rate that reflects the level of risk associated with receiving future cash flows. For the three months ended March 31, 2022, amortization expense for our intangible assets was less than $0.1 million, and our amortization expense is estimated to be $0.1 million to $0.2 million for each of 2022, 2023, 2024, 2025 and 2026, and $0.3 million thereafter. (5) Purchase Price – Represents a base cash purchase price of $8.0 million, less $0.4 million attributable to assumed employee vacation obligations. The purchase price allocation and related amortization periods are based on preliminary information and are subject to change when additional information concerning final asset and liability valuations is obtained. We have not completed our final assessment of the fair value of the right-of-use asset. Our final purchase price allocation may result in adjustments to such asset, including the residual amount allocated to goodwill. Supplemental Pro Forma Financial Information – The following unaudited pro forma condensed combined financial information (“Pro Forma Information”) gives effect to the DSS Acquisition, accounted for as a business combination using the purchase method of accounting. The Pro Forma Information reflects the DSS Acquisition and related events as if they occurred on January 1, 2021, and gives effect to pro forma events that are directly attributable to the DSS Acquisition, factually supportable and expected to have a continuing impact on the combined results of the Company and the DSS Business following the DSS Acquisition. The Pro Forma Information for the three months ended March 31, 2021, reflects adjustments to include: (1) incremental intangibles amortization and depreciation expense of $0.1 million associated with fair value adjustments related to the DSS Acquisition and (2) the historical results of the DSS Business for the period. Revenue and net loss attributable to the DSS Business for the three months ended March 31, 2021 were $10.7 million and $0.2 million, respectively Three Months Ended March 31, 2021 Pro forma revenue from continuing operations $ 34,463 Pro forma net loss from continuing operations (2,590 ) Per share data: Basic and diluted loss from continuing operations $ (0.17 ) |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 3 Months Ended |
Mar. 31, 2022 | |
Assets Held For Sale Not Part Of Disposal Group [Abstract] | |
ASSETS HELD FOR SALE | 5. ASSETS HELD FOR SALE At March 31, 2022, our assets held for sale consisted of one 660-ton crawler crane within our Fabrication Division. A summary of our assets held for sale at March 31, 2022 and December 31, 2021, is as follows (in thousands): March 31, 2022 December 31, 2021 Machinery and equipment $ 4,587 $ 4,587 Accumulated depreciation (2,787 ) (2,787 ) Total $ 1,800 $ 1,800 |
CREDIT FACILITIES AND DEBT
CREDIT FACILITIES AND DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITIES AND DEBT | 6. CREDIT FACILITIES AND DEBT LC Facility We have a letter of credit facility with Whitney Bank that provides for up to $20.0 million of letters of credit (“LC Facility”), subject to our cash securitization of the letters of credit, with a maturity date of June 30, 2023. Commitment fees on the unused portion of the LC Facility are 0.4% per annum and interest on outstanding letters of credit is 1.5% per annum. At March 31, 2022, we had $1.7 million of outstanding letters of credit under the LC Facility. Loan Agreement On April 17, 2020, we entered into an unsecured loan in the aggregate amount of $10.0 million (“PPP Loan”) with Whitney Bank pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act, as amended (“CARES Act”). The PPP Loan, and accrued interest, were eligible to be forgiven partially or in full, if certain conditions were met. Following the approval of our application for forgiveness by the Small Business Administration (“SBA”), on July 28, 2021, Whitney Bank received $9.1 million from the SBA, which was the amount of loan forgiveness requested, plus accrued interest. The forgiveness of the PPP Loan and accrued interest resulted in a gain of $9.1 million during the third quarter 2021. On July 29, 2021, we repaid Whitney Bank the remaining balance of the PPP Loan, together with accrued interest. Because the amount borrowed exceeded $2.0 million, we are required by the SBA to retain all records relating to the PPP Loan for six years from the date the loan was forgiven and permit authorized representatives of the SBA to access such records upon request. While we believe we are a qualifying business and have met the eligibility requirements of the PPP Loan, and believe we have used the loan proceeds only for expenses which may be paid using proceeds from the PPP Loan, we can provide no assurances that any potential SBA review or audit will verify the amount forgiven, in whole or in part, and we could be required to repay all or part of the forgiven amount. Surety Bonds We issue surety bonds in the ordinary course of business to support our projects. At March 31, 2022, we had $110.8 million of outstanding surety bonds, of which $50.0 million relates to our MPSV projects that are subject to dispute and $55.8 million relates to our Active Retained Shipyard Contracts. See Note 7 for further discussion of our MPSV dispute. Mortgage Agreement and Restrictive Covenant Agreement On April 19, 2021, and in connection with the receipt of a consent for the Shipyard Transaction from one of our Sureties, we entered into a multiple indebtedness mortgage (“Mortgage Agreement”) and a restrictive covenant arrangement (“Restrictive Covenant Agreement”) with such Surety to secure our obligations for our MPSV projects and two forty-vehicle ferry projects. The Mortgage Agreement encumbers the real estate associated with our Houma Facilities and includes certain covenants and events of default. Further, the Restrictive Covenant Agreement precludes us from paying dividends or repurchasing shares of our common stock. The Mortgage Agreement and Restrictive Covenant Agreement will terminate when the obligations and liabilities of the Surety associated with the outstanding surety bonds are discharged, or any judgment against us or the Surety arising out of litigation related to such contracts is satisfied by us. See Note 3 for further discussion of the Shipyard Transaction. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Routine Legal Proceedings We are subject to various routine legal proceedings in the normal conduct of our business, primarily involving commercial disputes and claims, workers’ compensation claims, and claims for personal injury under general maritime laws of the U.S. and the Jones Act. While the outcome of these legal proceedings cannot be predicted with certainty, we believe that the outcome of any such proceedings, even if determined adversely, would not have a material adverse effect on our financial position, results of operations or cash flows. MPSV Dispute During the first quarter 2018, we received notices of termination from our customer of the contracts for the construction of two MPSVs within our Shipyard Division. We dispute the purported terminations and disagree with the customer’s reasons for such terminations. We have ceased all work and the partially completed vessels and associated equipment and materials remain in our possession at our Houma Facilities. The customer also made claims under the performance bonds issued by the Surety in connection with the construction of the vessels, which total $50.0 million. On October 2, 2018, we filed a lawsuit against the customer to enforce our rights and remedies under the applicable construction contracts for the two MPSVs. The lawsuit was filed in the Twenty-Second Judicial District Court for the Parish of St. Tammany, State of Louisiana and is styled Gulf Island Shipyards, LLC v. Hornbeck Offshore Services, LLC On May 19, 2020, the customer filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The customer’s prepackaged Chapter 11 plan of reorganization was subsequently confirmed by the bankruptcy court and that plan of reorganization is effective. In connection with its bankruptcy case, on June 3, 2020, the customer filed a separate bankruptcy adversary proceeding against us, in which it again sought to obtain possession of the vessels; however, the bankruptcy court’s decision was ultimately delayed to allow the parties an opportunity to mediate the dispute. The parties engaged in mediation until January 26, 2021, when the customer unilaterally and voluntarily dismissed its adversary proceeding seeking possession of the vessels. The mediation between the parties was not successful. The lawsuit was temporarily stayed during the pendency of the customer’s Chapter 11 bankruptcy case; however, the lawsuit is no longer stayed and will proceed in the ordinary course. Discovery in connection with the lawsuit is ongoing, and the trial of the case is scheduled to begin on March 6, 2023. Other trial related deadlines have been established as well. We are conferring with the Surety regarding the lawsuit. We are unable to estimate the probability of a favorable or unfavorable outcome with respect to the dispute or estimate the amount of potential loss, if any, related to this matter. We can provide no assurances that we will not incur additional costs as we pursue our rights and remedies under the contracts and defend against the customer’s claims. At both March 31, 2022 and December 31, 2021, other noncurrent assets on our Balance Sheet included a net contract asset of $12.5 million, representing our net receivable amount at the time of the customer's purported terminations of the construction contracts. We continue to hold first priority security interests and liens against the vessels that secure the obligations owed to us by the customer. See Note 2 for discussion of damage to the MPSVs resulting from Hurricane Ida. Insurance We maintain insurance coverage for various aspects of our business and operations. However, we may be exposed to future losses through our use of deductibles and self-insured retentions for our exposures related to third party liability and workers' compensation claims. We expect liabilities in excess of any deductibles and self-insured retentions to be covered by insurance; however, because we do not have an offset right, we have recorded a liability for estimated amounts in excess of our deductibles, and have recorded a corresponding asset related to estimated insurance recoveries, on our Balance Sheet. To the extent we are self-insured, reserves are recorded based upon our estimates, with input from legal and insurance advisors. Changes in assumptions, as well as changes in actual experience, could cause these estimates to change. See Note 2 for discussion of insurance deductibles incurred associated with damage caused by Hurricanes Ida. Letters of Credit and Surety Bonds We obtain letters of credit under our LC Facility or surety bonds from financial institutions to provide to our customers in order to secure advance payments or guarantee performance under our contracts, or in lieu of retention being withheld on our contracts. Letters of credit under our LC Facility are subject to cash securitization of the full amount of the outstanding letters of credit. In the event of non-performance under a contract, our cash securitization with respect to the letter of credit supporting such contract would become property of Whitney Bank. With respect to a surety bond, any payment in the event of non-performance is subject to indemnification of the Surety by us. When a contract is complete, the contingent obligation terminates, and letters of credit or surety bonds are returned. See Note 6 for further discussion of our LC Facility and surety bonds. Environmental Matters Our operations are subject to extensive and changing U.S. federal, state and local laws and regulations, as well as the laws of other countries, that establish health and environmental quality standards. These standards, among others, relate to air and water pollutants and the management and disposal of hazardous substances and wastes. We are exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes. In connection with the historical operation of our facilities, including those associated with acquired operations, substances which currently are or might be considered hazardous were used or disposed of at some sites that will or may require us to make expenditures for remediation. We believe we are in compliance, in all material respects, with environmental laws and regulations and maintain insurance coverage to mitigate exposure to environmental liabilities. We do not believe any environmental matters will have a material adverse effect on our financial condition, results of operations or cash flow. Leases We maintain operating leases for our corporate office and certain operating facilities and equipment. See Note 1 for further discussion of our leases. |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
INCOME (LOSS) PER SHARE | 8. INCOME (LOSS) PER SHARE The following table presents the computation of basic and diluted income (loss) per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data): Three Months Ended March 31, 2022 2021 Loss from continuing operations $ (5,027 ) $ (2,416 ) Loss from discontinued operations, net of taxes — (16,121 ) Net loss $ (5,027 ) $ (18,537 ) Basic and diluted loss from continuing operations $ (0.32 ) $ (0.15 ) Basic and diluted loss from discontinued operations — (1.05 ) Basic and diluted loss per common share $ (0.32 ) $ (1.20 ) Weighted average shares 15,662 15,403 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | 9. OPERATING SEGMENTS During 2021, we operated and managed our business through two operating divisions (“Fabrication & Services” and “Shipyard”) and one non-operating division (“Corporate”), which represented our reportable segments. In the first quarter 2022, we realigned our operating divisions due to the DSS Acquisition and related changes in our management structure and oversight of our various lines of business. As a result, we currently operate and manage our business through three operating divisions (“Services”, “Fabrication” and “Shipyard”) and one non-operating division (“Corporate”), which represent our reportable segments. Accordingly, financial information (including the effects of eliminations) for our Fabrication & Services Division for the three months ended March 31, 2021 has been recast to conform to the presentation of our reportable segments for the three months ended March 31, 2022. Our three operating divisions and Corporate Division are discussed below: Services Division – Our Services Division provides maintenance, repair, construction, scaffolding, coatings and other specialty services on offshore and inland platforms and structures and at industrial facilities; provides services required to connect production equipment and service modules and equipment on offshore platforms; provides project management and commissioning services; provides industrial staffing services; and performs municipal and drainage projects, including pump stations, levee reinforcement, bulkheads and other public works. Our services activities are managed from our various Facilities. See Note 4 for further discussion of the DSS Acquisition. Fabrication Division – Our Fabrication Division fabricates modules, skids and piping systems for onshore refining, petrochemical, LNG and industrial facilities and offshore facilities; fabricates foundations, secondary steel components and support structures for alternative energy developments and coastal mooring facilities; fabricates offshore production platforms and associated structures, including jacket foundations, piles and topsides for fixed production and utility platforms, as well as hulls and topsides for floating production and utility platforms; and fabricates other complex steel structures and components. Our fabrication activities are performed at our Houma Facilities . Shipyard Division – Our Shipyard Division previously fabricated newbuild marine vessels and provided marine repair and maintenance services. The activities were performed at our Shipyard Facility. However, on April 19, 2021, we completed the Shipyard Transaction, which included the Divested Shipyard Contracts and our Shipyard Facility. W e determined the assets, liabilities and operations associated with the Shipyard Transaction and certain previously closed facilities to be discontinued operations in the second quarter 2021. Accordingly, such operating results for the three months ended March 31, 2021 have been classified as discontinued operations on our Statement of Operations. The assets, liabilities and operating results attributable to the Retained Shipyard Contracts and remaining assets and liabilities of our Shipyard Division operations that were excluded from the Shipyard Transaction, and are not associated with the previously closed facilities, represent our Shipyard Division and are classified as continuing operations on our Balance Sheet and Statement of Operations. The Active Retained Shipyard Contracts are being completed at our Houma Facilities and we intend to wind down our Shipyard Division operations by the third quarter 2022. See Note 3 for further discussion of the Shipyard Transaction and our discontinued operations. Corporate Division – Our Corporate Division includes costs that do not directly relate to our operating divisions. Such costs include, but are not limited to, costs of maintaining our corporate office, executive management salaries and incentives, board of directors' fees, certain insurance costs and costs associated with overall corporate governance and being a publicly traded company. Shared resources and costs that benefit more than one operating division are allocated amongst the operating divisions. Such costs include, but are not limited to, human resources, insurance, information technology, accounting and business development. Other – We have made adjustments to our previously issued financial statements for the three months ended March 31, 2021 to correct prior period immaterial errors, and in connection therewith, we have made adjustments to our previously reported segment results. See Note 1 for further discussion of the error corrections. Segment Results – We generally evaluate the performance of, and allocate resources to, our divisions based upon gross profit or loss and operating income or loss. Segment assets are comprised of all assets attributable to each division. Intersegment revenues are priced at the estimated fair value of work performed. Summarized financial information for our segments as of, and for the three months ended March 31, 2022 and 2021, is as follows (in thousands): Three Months Ended March 31, 2022 Services Fabrication Shipyard Corporate Consolidated Revenue $ 20,664 $ 5,617 $ 2,497 $ (92 ) $ 28,686 Gross profit (loss) 1,928 (2,021 ) (327 ) — (420 ) Operating income (loss) 1,187 (2,933 ) (1,188 ) (2,048 ) (4,982 ) Depreciation and amortization expense 360 816 — 75 1,251 Capital expenditures 318 122 — — 440 Total assets ( 1) 29,939 35,121 16,459 48,686 130,205 Three Months Ended March 31, 2021 Services Fabrication Shipyard Corporate Consolidated Revenue $ 7,506 $ 11,736 $ 5,130 $ (587 ) $ 23,785 Gross profit (loss) 564 481 (932 ) (88 ) 25 Operating income (loss) 273 646 (1,205 ) (1,947 ) (2,233 ) Depreciation and amortization expense 157 831 — 79 1,067 Capital expenditures — 160 — — 160 Total assets ( 1) 10,203 45,279 17,909 59,345 132,736 (1) Cash and short-term investments are reported within our Corporate Division. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Gulf Island Fabrication, Inc. (together with its subsidiaries, “Gulf Island,” “the Company,” “we,” “us” and “our”) is a leading fabricator of complex steel structures and modules and provider of specialty services, including project management, hookup, commissioning, repair, maintenance, scaffolding, coatings, civil construction and staffing services to the industrial and energy sectors. Our customers include U.S. and, to a lesser extent, international energy producers; refining, petrochemical, LNG, industrial and power operators; and EPC companies. We currently operate and manage our business through three operating divisions (“Services”, “Fabrication” and “Shipyard”) and one non-operating division (“Corporate”), which represent our reportable segments. Our corporate headquarters is located in Houston, Texas and our primary operating facilities are located in Houma, Louisiana (“Houma Facilities”). See Note 9 for discussion of our realigned reportable segments. On April 19, 2021, we sold our Shipyard Division operating assets and certain construction contracts (“Shipyard Transaction”) and intend to wind down our remaining Shipyard Division operations by the third quarter 2022. See “Basis of Presentation” On December 1, 2021, we acquired (“DSS Acquisition”) the services and industrial staffing businesses (“DSS Business”) of Dynamic Industries, Inc. (“Dynamic”). The operating results of the DSS Business are included within our Services Division. See Note 4 for further discussion of the DSS Acquisition. |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated Financial Statements (“Financial Statements”) reflect all wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial statements, the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, the Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, 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, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Our Consolidated Balance Sheet (“Balance Sheet”) at December 31, 2021, has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the Financial Statements and related footnotes included in our 2021 Annual Report. We determined the Shipyard Division assets, liabilities and operations associated with the Shipyard Transaction, and associated with certain previously closed Shipyard Division facilities, to be discontinued operations in the second quarter 2021. Accordingly, such operating results for the three months ended March 31, 2021 have been classified as discontinued operations on our Consolidated Statements of Operations (“Statement of Operations”). We had no material operating results of discontinued operations for the three months ended March 31, 2022, and had no material assets and liabilities of discontinued operations at March 31, 2022 or December 31, 2021. Discontinued operations are not presented separately on our Consolidated Statements of Cash Flows (“Statement of Cash Flows”) or our Consolidated Statements of Changes in Shareholders’ Equity (“Statement of Shareholders’ Equity”). Unless otherwise noted, the amounts presented throughout the notes to our Financial Statements relate to our continuing operations. See Note 3 for further discussion of the Shipyard Transaction and our discontinued operations. |
Revision of Previously Issued Financial Statements | Revision of Previously Issued Financial Statements During the fourth quarter 2021, we determined that we had immaterial errors in our previously issued financial statements. The adjustments required to reflect the corrections attributable to our previously issued financial statements for the three months ended March 31, 2021, were summarized in the footnotes to our Financial Statements in our 2021 Annual Report. Our results for the three months ended March 31, 2021 in this Report reflect the aforementioned corrections. |
Operating Cycle | Operating Cycle The duration of our contracts vary, but may extend beyond twelve months from the date of contract award. Consistent with industry practice, assets and liabilities have been classified as current under the operating cycle concept whereby all contract-related items are classified as current regardless of whether cash will be received or paid within a twelve-month period. Assets and liabilities classified as current, which may not be received or paid within the next twelve months, include contract retainage, contract assets and contract liabilities. Variations from normal contract terms may result in the classification of assets and liabilities as long-term. |
Use of Estimates | Use of Estimates General – The preparation of our Financial Statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We believe our most significant estimates and judgments are associated with: • Revenue recognition for our contracts, including application of the percentage-of-completion method, estimating costs to complete each contract and the recognition of incentives, unapproved change orders, claims and liquidated damages; • Determination of fair value with respect to acquired tangible and intangible assets; • Fair value and recoverability assessments that must be periodically performed with respect to long-lived tangible assets, assets held for sale, goodwill and other intangible assets; • Determination of deferred income tax assets, liabilities and related valuation allowances; • Reserves for bad debts; • Liabilities related to self-insurance programs; • Costs and insurance recoveries associated with damage to our Houma Facilities resulting from Hurricane Ida discussed further below; and • The impacts of volatile oil prices, the ongoing global coronavirus pandemic (“COVID-19”) and Russia’s invasion of Ukraine on our business, estimates and judgments as discussed further below. If the underlying estimates and assumptions upon which our Financial Statements are based change in the future, actual amounts may differ materially from those included in the Financial Statements. Volatile Oil Prices, COVID-19 and Russia’s Invasion of Ukraine – Since 2008, the price of oil has experienced significant volatility, including depressed prices over extended periods, resulting in reductions in capital spending and drilling activities from our traditional offshore oil and gas customer base. Consequently, our operating results and cash flows have been negatively impacted as we experienced reductions in revenue, lower margins due to competitive pricing and under-utilization of our operating facilities and resources. Beginning in 2020, COVID-19 added another layer of pressure and uncertainty on oil prices (with oil prices reaching a twenty-year low), which further negatively impacted our end markets during 2021 and the first quarter 2022. This volatility in oil prices has been compounded by Russia’s invasion of Ukraine in February 2022, and the U.S. and other countries actions in response (with oil prices reaching an eight-year high), which may positively impact our end markets during 2022; however, the duration and broader consequences of this conflict are difficult to predict at this time. In addition to the impacts on our end markets, our operations, as well as the operations of our customers, subcontractors and counterparties, were negatively impacted in 2020 and 2021 by physical distancing, quarantine and isolation measures and mandatory business closures that were enacted in an attempt to control the spread of COVID-19, and which could be reenacted in response to new and emerging strains and variants of COVID-19 or any future major public health crisis. The ultimate business and financial impacts of oil price volatility, COVID-19 and Russia’s invasion of Ukraine on our business and results of operations continues to be uncertain, but the impacts have included , or may include, among other things, reduced bidding activity; suspension or termination of backlog; deterioration of customer financial condition; supply chain interruptions; and unanticipated project costs due to project disruptions and schedule delays, material price increases, lower labor productivity, increased employee and contractor absenteeism and turnover, craft labor hiring challenges, lack of performance by subcontractors and suppliers, and contract disputes. We continue to monitor the impacts of oil price volatility, COVID-19 and Russia’s invasion of Ukraine on our operations, and our estimates in future periods will be revised for any events and changes in circumstances arising after the date of this Report. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income (loss) per share reflects the assumed conversion of dilutive securities in periods in which income is reported. See Note 8 for calculations of our basic and diluted income (loss) per share. |
Cash Equivalents, Restricted Cash and Short-Term Investments | Cash Equivalents, Restricted Cash and Short-Term Investments Cash Equivalents – We consider investments with original maturities of three months or less when purchased to be cash equivalents. Restricted Cash – At both March 31, 2022 and December 31, 2021, we had $1.7 million of restricted cash as security for letters of credit issued under our letter of credit facility (“LC Facility”) with Hancock Whitney Bank (“Whitney Bank”). Our restricted cash is held in an interest-bearing money market account with Whitney Bank. The classification of the restricted cash as current and noncurrent is determined by the contractual maturity dates of the letters of credit being secured, with letters of credit having maturity dates of twelve months or less from the balance sheet date classified as current, and letters of credit having maturity dates of longer than twelve months from the balance sheet date classified as noncurrent. See Note 6 for further discussion of our cash security requirements under our LC Facility. Short-Term Investments – We consider investments with original maturities of more than three months but less than twelve months to be short-term investments. We had no short-term investments at March 31, 2022 or December 31, 2021. |
Inventory | Inventory Inventory is recorded at the lower of cost or net realizable value determined using the first-in-first-out basis. The cost of inventory includes acquisition costs, production or conversion costs, and other costs incurred to bring the inventory to a current location and condition. Net realizable value is our estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation. An allowance for excess or inactive inventory is recorded based on an analysis that considers current inventory levels, historical usage patterns, estimates of future sales and salvage value. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts In the normal course of business, we extend credit to our customers on a short-term basis and contract receivables are generally not collateralized; however, we typically have the right to place liens on our projects in the event of nonpayment by our customers. We routinely review individual contract receivable balances for collectability and make provisions for probable uncollectible amounts as necessary. Among the factors considered in our review are the financial condition of our customer and its access to financing, underlying disputes with the customer, the age and value of the receivable balance, and economic conditions in general. See Note 2 for further discussion of our allowance for doubtful accounts. |
Stock-Based Compensation | Stock-Based Compensation Awards under our stock-based compensation plans are calculated using a fair value-based measurement method. We use the straight-line and graded vesting methods to recognize share-based compensation expense over the requisite service period of the award. We recognize the excess tax benefit or tax deficiency resulting from the difference between the deduction we receive for tax purposes and the stock-based compensation expense we recognize for financial reporting purposes created when common stock vests, as an income tax benefit or expense on our Statement of Operations. Tax payments made on behalf of employees to taxing authorities in order to satisfy employee income tax withholding obligations from the vesting of shares under our stock-based compensation plans are classified as a financing activity on our Statement of Cash Flows. |
Assets Held for Sale | Assets Held for Sale Assets held for sale are measured at the lower of their carrying amount or fair value less cost to sell. See Note 5 for further discussion of our assets held for sale. |
Depreciation and Amortization Expense | Depreciation and Amortization Expense Property, plant and equipment are depreciated on a straight-line basis over estimated useful lives ranging from three to 25 years. Ordinary maintenance and repairs, which do not extend the physical or economic lives of the plant or equipment, are charged to expense as incurred. Intangible assets are amortized on a straight-line basis over 7 years and amortization expense is reflected within general and administrative expense on our Statement of Operations. |
Long-Lived Assets | Long-Lived Assets Goodwill – Our goodwill is associated with the DSS Acquisition. Goodwill is not amortized, but instead is reviewed for impairment at least annually at a reporting unit level, absent any indicators of impairment or when other actions require an impairment assessment (such as a change in reporting units). Our Services Division includes one reporting unit associated with our DSS Acquisition. We perform our annual impairment assessment during the fourth quarter of each year based upon balances as of October 1. In evaluating goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is greater than its carrying value. If we determine that it is more likely than not that the carrying value of the reporting unit is greater than its fair value, we perform a quantitative impairment test by calculating the fair value of the reporting unit and comparing it to the carrying value of the reporting unit, and we recognize an impairment charge to the extent its carrying value exceeds its fair value. We had no indicators of impairment during the three months ended March 31, 2022. If, based on future assessments, our goodwill is deemed to be impaired, the impairment would result in a charge to our operating results in the year of impairment. See Note 4 for discussion of the DSS Acquisition and related goodwill. Other Long-Lived Assets – Our property, plant and equipment, lease assets (included within other noncurrent assets), and finite-lived intangible assets (associated with the DSS Acquisition) are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If a recoverability assessment is required, we compare the estimated future undiscounted cash flow associated with the asset or asset group to its carrying amount to determine if an impairment exists. An asset group constitutes the minimum level for which identifiable cash flows are principally independent of the cash flows of other assets or asset groups. An impairment loss is measured by comparing the fair value of the asset or asset group to its carrying amount and the excess of the carrying amount of the asset or asset group over its fair value is recorded as an impairment charge. Fair value is determined based on discounted cash flows, appraised values or third-party indications of value, as appropriate. We had no indicators of impairment during the three months ended March 31, 2022. See Note 2 for discussion of our long-lived asset impairments associated with Hurricane Ida, Note 3 for discussion of our long-lived asset impairments within discontinued operations, and Note 4 for discussion of the DSS Acquisition and related long-lived assets. |
Leases | Leases We record a right-of-use asset and an offsetting lease liability on our Balance Sheet equal to the present value of our lease payments for leases with an original term of longer than twelve months. We do not record an asset or liability for leases with an original term of twelve months or less and we do not separate lease and non-lease components for our leases. Our lease assets are reflected within other noncurrent assets, and the current and noncurrent portions of our lease liabilities are reflected within accrued expenses and other liabilities, and other noncurrent liabilities, respectively, on our Balance Sheet. For leases with escalations over the life of the lease, we recognize expense on a straight-line basis. |
Fair Value Measurements | Fair Value Measurements Fair value determinations for financial assets and liabilities are based on the particular facts and circumstances. Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: • 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 based upon model-based valuation techniques for which significant assumptions are generally not observable in the market and typically reflect estimates and assumptions that we believe market participants would use in pricing the asset or liability. These include discounted cash flow models and similar valuation techniques. The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximate their fair values. Our fair value assessments for determining the impairments of goodwill, inventory, long-lived assets and assets held for sale, are non-recurring fair value measurements that fall within Level 3 of the fair value hierarchy. See Note 4 for discussion of the fair value measurements associated with the DSS Acquisition and Note 5 for further discussion of our assets held for sale. |
Revenue Recognition | Revenue Recognition General – Our revenue is derived from customer contracts and agreements that are awarded on a competitively bid and negotiated basis using a range of contracting options, including fixed-price, unit-rate and T&M. Our contracts primarily relate to the fabrication and construction of steel structures, modules and marine vessels, and project management services and other service arrangements. We recognize revenue from our contracts in accordance with Accounting Standards Update (“ASU”) 2014-09, Topic 606 (“Topic 606”). Topic 606 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. Additionally, provisions of Topic 606 specify which goods and services are distinct and represent separate performance obligations (representing the unit of account in Topic 606) within a contract and which goods and services (which could include multiple contracts or agreements) should be aggregated. In general, a performance obligation is a contractual obligation to construct and/or transfer a distinct good or service to a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenue for performance obligations satisfied over time are recognized as the work progresses. Revenue for performance obligations that do not meet the criteria for over time recognition are recognized at a point-in-time when a performance obligation is complete and a customer has obtained control of a promised asset. Fixed-Price and Unit-Rate Contracts – Revenue for our fixed-price and unit-rate contracts is recognized using the percentage-of-completion method based on contract costs incurred to date compared to total estimated contract costs (an input method). Contract costs include direct costs, such as materials and labor, and indirect costs attributable to contract activity. Material costs that are significant to a contract and do not reflect an accurate measure of project completion are excluded from the determination of our contract progress. Revenue for such materials is only recognized to the extent of costs incurred. Revenue and gross profit for contracts accounted for using the percentage-of-completion method can be significantly affected by changes in estimated cost to complete such contracts. Significant estimates impacting the cost to complete a contract include: forecast costs of engineering, materials, equipment and subcontracts; forecast costs of labor and labor productivity; schedule durations, including subcontractor and supplier progress; contract disputes, including claims; achievement of contractual performance requirements; and contingency, among others. Although our customers retain the right and ability to change, modify or discontinue further work at any stage of a contract, in the event our customers discontinue work, they are required to compensate us for the work performed to date. The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on contracts. Due to the various estimates inherent in our contract accounting, actual results could differ from those estimates, which could result in material changes to our Financial Statements and related disclosures. See Note 2 for further discussion of projects with significant changes in estimated margins during the three months ended March 31, 2022 and 2021. T&M Contracts – Revenue for our T&M contracts is recognized at contracted rates when the work is performed, the costs are incurred and collection is reasonably assured. Our T&M contracts provide for labor and materials to be billed at rates specified within the contract. The consideration from the customer directly corresponds to the value of our performance completed at the time of invoicing. Variable Consideration Revenue and gross profit for contracts can be significantly affected by variable consideration, which can be in the form of unapproved change orders, claims, incentives and liquidated damages that may not be resolved until the later stages of the contract or after the contract has been completed. We estimate variable consideration based on the amount we expect to be entitled and include estimated amounts in transaction price to the extent it is probable that a significant future reversal of cumulative revenue recognized will not occur or when we conclude that any significant uncertainty associated with the variable consideration is resolved. See Note 2 for further discussion of unapproved change orders, claims, incentives and liquidated damages for our projects. Additional Disclosures Topic 606 also requires disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. See Note 2 for required disclosures under Topic 606. |
Pre-Contract Costs | Pre-Contract Costs Pre-contract costs are generally charged to cost of revenue as incurred, but in certain cases their recognition may be deferred if specific probability criteria are met. At March 31, 2022 and December 31, 2021, we had no deferred pre-contract costs. |
Other (Income) Expense, Net | Other (Income) Expense, Net Other (income) expense, net, generally represents recoveries or provisions for bad debts, gains or losses associated with the sale or disposition of property and equipment other than assets held for sale, and income or expense associated with certain nonrecurring items. |
Income Taxes | Income Taxes Income taxes have been provided for using the liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using enacted rates expected to be in effect during the year in which the differences are expected to reverse. Due to state income tax laws related to the apportionment of revenue for our projects, judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. A valuation allowance is provided to reserve for deferred tax assets (“DTA(s)”) if, based upon the available evidence, it is more likely than not that some or all of the DTAs will not be realized. The realization of our DTAs depends on our ability to generate sufficient taxable income of the appropriate character and in the appropriate jurisdictions. Our effective tax rate differs from our statutory rate for the three months ended March 31, 2022 and 2021, as no federal benefit was recorded for our losses as a full valuation allowance was recorded against our federal deferred tax assets generated during the respective periods. Income taxes recorded for the three months ended March 31, 2022 and 2021 represent state income taxes. Reserves for uncertain tax positions are recognized when we consider it more likely than not that additional tax will be due in excess of amounts reflected in our income tax returns, irrespective of whether or not we have received tax assessments. Interest and penalties on uncertain tax positions are recorded within income tax expense. |
New Accounting Standards | New Accounting Standards Financial Instruments – In June 2016, the FASB issued ASU 2016-13, which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, short-term investments, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. ASU 2016-13 will be effective for us in the first quarter 2023. Early adoption of the new standard is permitted; however, we have not elected to early adopt the standard. The new standard is required to be applied using a cumulative-effect transition method. We are evaluating the effect that the new standard will have on our financial position, results of operations and related disclosures. |
Revenue, Contract Assets and _2
Revenue, Contract Assets and Liabilities and Other Contract Matters (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following tables summarize revenue for each of our operating segments, disaggregated by contract type, for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 Services Fabrication Shipyard Eliminations Total Fixed-price and unit-rate ( 1) $ 1,609 $ 5,044 $ 2,497 $ (1 ) $ 9,149 T&M ( 2) 18,463 573 — — 19,036 Other 592 — — (91 ) 501 Total $ 20,664 $ 5,617 $ 2,497 $ (92 ) $ 28,686 Three Months Ended March 31, 2021 Services Fabrication Shipyard Eliminations Total Fixed-price and unit-rate ( 1) $ 321 $ 11,018 $ 5,130 $ (190 ) $ 16,279 T&M ( 2) 5,551 718 — — 6,269 Other 1,634 — — (397 ) 1,237 Total $ 7,506 $ 11,736 $ 5,130 $ (587 ) $ 23,785 (1) Revenue is recognized as the contract is progressed over time. (2) Revenue is recognized at contracted rates when the work is performed and costs are incurred. |
Summary of Remaining Performance Obligation by Operating Segment | The following table summarizes our remaining performance obligations by operating segment at March 31, 2022 (in thousands): Performance Obligations Services $ 1,237 Fabrication 7,027 Shipyard 7,611 Total $ 15,875 |
Summary of Contract with Customer, Asset and Liability | Information with respect to contracts that were incomplete at March 31, 2022 and December 31, 2021, is as follows (in thousands): March 31, December 31, 2022 2021 Contract assets ( 1) (2) $ 2,694 $ 4,759 Contract liabilities ( 3), (4), (5) (4,198 ) (6,648 ) Contracts in progress, net $ (1,504 ) $ (1,889 ) (1) The decrease in contract assets compared to December 31, 2021, was primarily due to decreased unbilled positions on various projects within our Fabrication Division. (2) Contract assets at March 31, 2022 and December 31, 2021, excludes $4.3 million and $2.3 million, respectively, associated with revenue recognized in excess of amounts billed for which we have an unconditional right to the consideration. Such amounts are reflected within contract receivables. (3) The decrease in contract liabilities compared to December 31, 2021, was primarily due to a decrease in accrued contract losses and the unwind of advance payments on our forty-vehicle ferry projects within our Shipyard Division. (4) Revenue recognized during the three months ended March 31, 2022 and 2021, related to amounts included in our contract liabilities balance at December 31, 2021 and 2020, was $2.1 million and $1.8 million, respectively. (5) Contract liabilities at March 31, 2022 and December 31, 2021, includes accrued contract losses of $2.9 million and $3.9 million, respectively. See “ Changes in Project Estimates” below for further discussion of our accrued contract losses. |
SHIPYARD TRANSACTION AND DISC_2
SHIPYARD TRANSACTION AND DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Disposal Groups Including Discontinued Operations | A summary of the operating results and cash flows from discontinued operations for the three months ended March 31, 2021, is as follows (in thousands): Three Months Ended March 31, 2021 Revenue $ 35,166 Cost of revenue 27,506 Gross profit ( 1) 7,660 General and administrative expense 340 Impairments and (gain) loss on assets held for sale, net ( 2) 23,428 Other (income) expense, net 13 Operating loss (16,121 ) Income tax (expense) benefit ( 3) — Loss from discontinued operations, net of taxes $ (16,121 ) Three Months Ended March 31, 2021 Operating cash flows from discontinued operations $ 4,774 Investing cash flows from discontinued operations $ (261 ) (1) Gross profit was positively impacted by changes in estimated margins on projects of $8.4 million for our towing, salvage and rescue ship projects. (2) Includes impairments of $22.8 million and transaction and other costs of $ 0.7 (3) Income taxes attributable to discontinued operations were not material. |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination And Asset Acquisition [Abstract] | |
Summary of Preliminary Purchase Price Allocation | The following table summarizes our preliminary purchase price allocation at the Acquisition Date: Tangible assets and liabilities: Land and buildings (1) $ 475 Machinery and equipment (2) 2,557 Right-of-use asset (3) 2,000 Accrued expenses and other liabilities (672 ) Net tangible assets and liabilities 4,360 Intangible assets - customer relationships (4) 996 Goodwill 2,217 Purchase Price (5) $ 7,573 (1) Land and buildings – Represents an acquired operating facility located in Ingleside, Texas (“Ingleside Facility”). The fair value of the facility was estimated based on a third-party appraisal. (2) Machinery and equipment – Represents acquired machinery, equipment and vehicles. The fair values of the assets were estimated based on third-party appraisals. (3) Right-of-use asset – Represents a fabrication and operating facility located in Harvey, Louisiana (“Harvey Facility”) that is subject to a lease arrangement with Dynamic that expires on June 30, 2022. The Harvey Facility is also subject to a separate purchase option that enables us to buy the facility from Dynamic prior to December 2, 2022, for a nominal amount (“Harvey Option”). We believe it is probable we will exercise the Harvey Option, and accordingly, have concluded that the arrangement represents a finance lease under the guidance of ASC 842, “Leases ”, due to the Harvey Option representing a bargain purchase option. We have reflected the estimated fair value of the Harvey Facility plus future lease payment obligations as a right-of-use asset in our preliminary purchase price allocation, with the estimated fair value based on a combination of a third-party appraisal, third-party indications of interest for the facility, and indications of value communicated by and between us and Dynamic during the due diligence process. The corresponding lease liability is not material. (4) Customer relationships – Represents the estimated fair value of existing underlying customer relationships with estimated lives of 7 years. The fair value was estimated based on a multi-period excess earnings method which incorporated Level 3 inputs. The significant assumptions used in estimating fair value included revenue and income projections for the DSS Business and the estimated discount rate that reflects the level of risk associated with receiving future cash flows. For the three months ended March 31, 2022, amortization expense for our intangible assets was less than $0.1 million, and our amortization expense is estimated to be $0.1 million to $0.2 million for each of 2022, 2023, 2024, 2025 and 2026, and $0.3 million thereafter. (5) Purchase Price – Represents a base cash purchase price of $8.0 million, less $0.4 million attributable to assumed employee vacation obligations. |
Summary of Proforma Information | The Pro Forma Information has been presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the pro forma events taken place on the dates indicated. Further, the Pro Forma Information does not purport to project the future operating results of the combined Company following the DSS Acquisition. Three Months Ended March 31, 2021 Pro forma revenue from continuing operations $ 34,463 Pro forma net loss from continuing operations (2,590 ) Per share data: Basic and diluted loss from continuing operations $ (0.17 ) |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Assets Held For Sale Not Part Of Disposal Group [Abstract] | |
Summary of Assets Held for Sale | A summary of our assets held for sale at March 31, 2022 and December 31, 2021, is as follows (in thousands): March 31, 2022 December 31, 2021 Machinery and equipment $ 4,587 $ 4,587 Accumulated depreciation (2,787 ) (2,787 ) Total $ 1,800 $ 1,800 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Income (Loss) Per Share | The following table presents the computation of basic and diluted income (loss) per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data): Three Months Ended March 31, 2022 2021 Loss from continuing operations $ (5,027 ) $ (2,416 ) Loss from discontinued operations, net of taxes — (16,121 ) Net loss $ (5,027 ) $ (18,537 ) Basic and diluted loss from continuing operations $ (0.32 ) $ (0.15 ) Basic and diluted loss from discontinued operations — (1.05 ) Basic and diluted loss per common share $ (0.32 ) $ (1.20 ) Weighted average shares 15,662 15,403 |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Summarized Segment Financial Information | Summarized financial information for our segments as of, and for the three months ended March 31, 2022 and 2021, is as follows (in thousands): Three Months Ended March 31, 2022 Services Fabrication Shipyard Corporate Consolidated Revenue $ 20,664 $ 5,617 $ 2,497 $ (92 ) $ 28,686 Gross profit (loss) 1,928 (2,021 ) (327 ) — (420 ) Operating income (loss) 1,187 (2,933 ) (1,188 ) (2,048 ) (4,982 ) Depreciation and amortization expense 360 816 — 75 1,251 Capital expenditures 318 122 — — 440 Total assets ( 1) 29,939 35,121 16,459 48,686 130,205 Three Months Ended March 31, 2021 Services Fabrication Shipyard Corporate Consolidated Revenue $ 7,506 $ 11,736 $ 5,130 $ (587 ) $ 23,785 Gross profit (loss) 564 481 (932 ) (88 ) 25 Operating income (loss) 273 646 (1,205 ) (1,947 ) (2,233 ) Depreciation and amortization expense 157 831 — 79 1,067 Capital expenditures — 160 — — 160 Total assets ( 1) 10,203 45,279 17,909 59,345 132,736 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021 | Dec. 31, 2021USD ($)segment | |
Significant Accounting Policies [Line Items] | |||
Number of operating segments | segment | 3 | 2 | |
Number of corporate non-operating segments | segment | 1 | 1 | |
Short-term investments | $ 0 | $ 0 | |
Intangible assets, useful life | 7 years | ||
Prepaid contract costs | $ 0 | 0 | |
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 25 years | ||
LC Facility | |||
Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 1,700,000 | $ 1,700,000 | |
LC Facility | Balance Sheet Date Classified as Current | |||
Significant Accounting Policies [Line Items] | |||
Maturity date, description | maturity dates of twelve months or less from the balance sheet date classified as current | ||
LC Facility | Balance Sheet Date Classified as Noncurrent | |||
Significant Accounting Policies [Line Items] | |||
Maturity date, description | maturity dates of longer than twelve months from the balance sheet date classified as noncurrent |
Revenue, Contract Assets and _3
Revenue, Contract Assets and Liabilities and Other Contract Matters - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 28,686 | $ 23,785 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (92) | (587) |
Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 20,664 | 7,506 |
Fabrication | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,617 | 11,736 |
Shipyard | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,497 | 5,130 |
Fixed-price and unit-rate | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,149 | 16,279 |
Fixed-price and unit-rate | Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (1) | (190) |
Fixed-price and unit-rate | Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,609 | 321 |
Fixed-price and unit-rate | Fabrication | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,044 | 11,018 |
Fixed-price and unit-rate | Shipyard | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,497 | 5,130 |
T&M | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 19,036 | 6,269 |
T&M | Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 18,463 | 5,551 |
T&M | Fabrication | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 573 | 718 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 501 | 1,237 |
Other | Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (91) | (397) |
Other | Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 592 | $ 1,634 |
Revenue, Contract Assets and _4
Revenue, Contract Assets and Liabilities and Other Contract Matters - Summary of Remaining Performance Obligation by Operating Segment (Details) - Operating Segments $ in Thousands | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 15,875 |
Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 1,237 |
Fabrication | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 7,027 |
Shipyard | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 7,611 |
Revenue, Contract Assets and _5
Revenue, Contract Assets and Liabilities and Other Contract Matters - Summary of Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue From Contract With Customer [Abstract] | ||
Contract assets | $ 2,694 | $ 4,759 |
Contract liabilities | (4,198) | (6,648) |
Contracts in progress, net | $ (1,504) | $ (1,889) |
Revenue, Contract Assets and _6
Revenue, Contract Assets and Liabilities and Other Contract Matters - Summary of Contract with Customer, Asset and Liability (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |||
Contract with customer, asset, revenue recognized in excess of amounts billed, current | $ 4.3 | $ 2.3 | |
Contract with customer, liability, revenue recognized | 2.1 | $ 1.8 | |
Contract with customer, liability, accrued contract losses, current | $ 2.9 | $ 3.9 |
Revenue, Contract Assets and _7
Revenue, Contract Assets and Liabilities and Other Contract Matters - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020Vechicle | |
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Reduction of estimated contract price for liquidated damages, amount | $ 1,300 | $ 1,200 | ||
Asset impairments | $ 22,750 | |||
Hurricane Ida | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Date of landfall | Aug. 29, 2021 | |||
Impact of Hurricane Ida, description | On August 29, 2021, Hurricane Ida made landfall near Houma, Louisiana as a high-end Category 4 hurricane, with high winds, heavy rains and storm surge causing significant damage and power outages throughout the region. Our Houma Facilities did not experience significant flood damage; however, the high winds and heavy rain damaged multiple buildings and equipment and resulted in significant debris throughout the facility. | |||
Asset impairments | $ 500 | |||
Costs associated with clean-up and restoration efforts | $ 1,900 | |||
Charges associated with deductibles and estimated unrecoverable amounts | 300 | |||
Recorded insurance recoveries | 1,600 | |||
Total insurance receivables | 2,700 | |||
Advance payment from insurance carriers | (1,000) | |||
Fabrication | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Change in estimated margins | 600 | |||
Shipyard | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Change in estimated margins | 700 | |||
Second Forty-Vehicle Ferry | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Deductible associated with insurance coverage for incident | 100 | |||
Current estimate of costs to repair damage | 400 | |||
Second Forty-Vehicle Ferry | Hurricane Ida | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Total charges related to deductibles | 100 | |||
Second Forty-Vehicle Ferry | Hurricane Ida | Minimum | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Charges related to deductibles with insurance coverages | 500 | |||
Second Forty-Vehicle Ferry | Hurricane Ida | Maximum | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Charges related to deductibles with insurance coverages | 1,000 | |||
Forty-Vehicle Ferry | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Number of vehicle ferry projects with rework and construction challenges. | Vechicle | 2 | |||
Reserve for loss | $ 2,200 | |||
Forty-Vehicle Ferry Vessel Two | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Projects, percent complete (percentage) | 96.00% | |||
Forty-Vehicle Ferry Vessel One | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Projects, percent complete (percentage) | 77.00% | |||
Offshore Facility Modules | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Change in estimated margins | $ 600 | |||
Seventy-Vehicle Ferry | ||||
Long Term Contracts Or Programs Disclosure [Line Items] | ||||
Projects, percent complete (percentage) | 65.00% | |||
Reserve for loss | $ 600 | |||
Change in estimated margins | $ 700 |
Shipyard Transaction and Disc_3
Shipyard Transaction and Discontinued Operations - Additional Information (Details) | Apr. 19, 2021USD ($)VechiclevesselShip_projectdrydock | Mar. 31, 2022USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Asset impairments | $ 22,750,000 | ||||
Liabilities | $ 30,812,000 | $ 31,365,000 | |||
Shipyard Transaction | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Number of research vessels projects | vessel | 3 | ||||
Number of divested shipyard contracts | Ship_project | 5 | ||||
Number of drydocks | drydock | 4 | ||||
Number of drydocks previously supported for shipyard division operations | drydock | 3 | ||||
Number of MPSV projects | vessel | 2 | ||||
Asset impairments | 22,800,000 | ||||
Transaction costs | $ 700,000 | ||||
Material operating results of discontinued operations | 0 | ||||
Material assets of discontinued operations | 0 | 0 | |||
Material liabilities of discontinued operations | 0 | 0 | |||
Shipyard Transaction | Retained Shipyard Contracts And Other Shipyard Division Liabilities | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Liabilities | $ 6,200,000 | 8,700,000 | |||
Shipyard Transaction | Forty-Vehicle Ferry | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Number of vehicle ferry projects | Vechicle | 2 | ||||
Bollinger | Shipyard Transaction | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
Transaction price | $ 28,600,000 | ||||
Net of estimated transaction and other costs | $ 26,100,000 | ||||
Transaction price on closing date | 27,700,000 | ||||
Deferred transaction price | $ 900,000 | ||||
Estimate change in working capital for divested shipyard contracts | $ 7,800,000 |
Shipyard Transaction and Disc_4
Shipyard Transaction and Discontinued Operations - Summary of Operating Results From Discontinued Operations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Discontinued Operations And Disposal Groups [Abstract] | |
Revenue | $ 35,166 |
Cost of revenue | 27,506 |
Gross profit | 7,660 |
General and administrative expense | 340 |
Impairments and (gain) loss on assets held for sale, net | 23,428 |
Other (income) expense, net | 13 |
Operating loss | (16,121) |
Loss from discontinued operations, net of taxes | $ (16,121) |
Shipyard Transaction and Disc_5
Shipyard Transaction and Discontinued Operations - Summary of Cash Flows From Discontinued Operations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Discontinued Operations And Disposal Groups [Abstract] | |
Operating cash flows from discontinued operations | $ 4,774 |
Investing cash flows from discontinued operations | $ (261) |
Shipyard Transaction and Disc_6
Shipyard Transaction and Discontinued Operations - Summary of Operating Results From Discontinued Operations (Parenthetical) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Shipyard Transaction | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Estimated loss related to impairment of long lived assets and transaction costs | $ 22.8 |
Additional loss related to additional transaction and other costs | 0.7 |
Towing Salvage and Rescue Ship | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Change in estimated margins | $ 8.4 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - DSS Acquisition - USD ($) $ in Millions | Dec. 01, 2021 | Mar. 31, 2021 |
Business Acquisition [Line Items] | ||
Date of acquisition | Dec. 1, 2021 | |
Business acquisition, description of acquired entity | (“DSS Business”) of Dynamic Industries, Inc. (“Dynamic”) | |
Purchase price | $ 7.6 | |
Incremental intangibles amortization and depreciation expense | $ 0.1 | |
Revenue attributable to DSS Business | 10.7 | |
Net loss attributable to DSS Business | $ (0.2) |
Acquisition - Summary of Prelim
Acquisition - Summary of Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 01, 2021 |
Tangible assets and liabilities: | |||
Goodwill | $ 2,217 | $ 2,217 | |
DSS Acquisition | |||
Tangible assets and liabilities: | |||
Land and buildings | $ 475 | ||
Machinery and equipment | 2,557 | ||
Right-of-use asset | 2,000 | ||
Accrued expenses and other liabilities | (672) | ||
Net tangible assets and liabilities | 4,360 | ||
Intangible assets - customer relationships | 996 | ||
Goodwill | 2,217 | ||
Purchase Price | $ 7,573 |
Acquisition - Summary of Prel_2
Acquisition - Summary of Preliminary Purchase Price Allocation (Parenthetical) (Details) - USD ($) | Dec. 01, 2021 | Mar. 31, 2022 |
Business Acquisition [Line Items] | ||
Intangible assets, useful life | 7 years | |
DSS Acquisition | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 7,600,000 | |
DSS Acquisition | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets, useful life | 7 years | |
Amortization expense, 2022 | $ 100,000 | $ 200,000 |
Amortization expense, 2023 | 100,000 | 200,000 |
Amortization expense, 2024 | 100,000 | 200,000 |
Amortization expense, 2025 | 100,000 | 200,000 |
Amortization expense, 2026 | 100,000 | 200,000 |
Amortization expense, thereafter | 300,000 | |
DSS Acquisition | Maximum | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Intangible balance | $ 100,000 | |
DSS Acquisition | Base Cash Purchase Price | ||
Business Acquisition [Line Items] | ||
Purchase price | 8,000,000 | |
DSS Acquisition | Assumed Employee Vacation Obligations | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 400,000 |
Acquisition - Summary of Profor
Acquisition - Summary of Proforma Information (Details) - DSS Acquisition $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Pro forma revenue from continuing operations | $ 34,463 |
Pro forma net loss from continuing operations | $ (2,590) |
Per share data: | |
Basic and diluted loss from continuing operations | $ / shares | $ (0.17) |
Assets Held for Sale - Addition
Assets Held for Sale - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022crane | |
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Long Lived Assets Held-for-sale [Line Items] | |
Number of cranes | 1 |
Assets Held for Sale - Summary
Assets Held for Sale - Summary of Assets Held for Sale (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - Shipyard - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Long Lived Assets Held-for-sale [Line Items] | ||
Machinery and equipment | $ 4,587 | $ 4,587 |
Accumulated depreciation | (2,787) | (2,787) |
Total | $ 1,800 | $ 1,800 |
Credit Facilities and Debt - Ad
Credit Facilities and Debt - Additional Information (Details) - USD ($) | Jul. 28, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | Apr. 17, 2020 |
Line Of Credit Facility [Line Items] | ||||
Maturity date | Jun. 30, 2023 | |||
Surety bonds | $ 110,800,000 | |||
Surety bonds subject to dispute | 50,000,000 | |||
Surety bonds relates to Active Retained Shipyard Contracts | 55,800,000 | |||
Maximum | ||||
Line Of Credit Facility [Line Items] | ||||
Letter of credit facility | $ 20,000,000 | |||
LC Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Fees on undrawn borrowings (percentage) | 0.40% | |||
Total outstanding letters of credit | $ 1,700,000 | |||
Letter of Credit | ||||
Line Of Credit Facility [Line Items] | ||||
Stated interest rate (percentage) | 1.50% | |||
PPP Loan | ||||
Line Of Credit Facility [Line Items] | ||||
Unsecured loan amount | $ 10,000,000 | |||
Loan payments | $ 9,100,000 | |||
Gain on extinguishment of debt | $ 9,100,000 | |||
PPP Loan threshold requiring an audit by the SBA | $ 2,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)vessel | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | |
Loss Contingencies [Line Items] | |||
Number of multi-purpose service vessels | vessel | 2 | ||
Contract asset under dispute, noncurrent | $ 12.5 | $ 12.5 | |
Surety Bond | |||
Loss Contingencies [Line Items] | |||
Claims under performance bonds issued | $ 50 |
Income (Loss) Per Share - Compu
Income (Loss) Per Share - Computation of Basic and Diluted Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Loss from continuing operations | $ (5,027) | $ (2,416) |
Loss from discontinued operations, net of taxes | (16,121) | |
Net loss | $ (5,027) | $ (18,537) |
Basic and diluted loss from continuing operations | $ (0.32) | $ (0.15) |
Basic and diluted loss from discontinued operations | (1.05) | |
Basic and diluted loss per share | $ (0.32) | $ (1.20) |
Weighted average shares | 15,662 | 15,403 |
Operating Segments - Additional
Operating Segments - Additional Information (Details) - segment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 3 | 2 |
Number of corporate non-operating segments | 1 | 1 |
Operating Segments - Summarized
Operating Segments - Summarized Segment Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 28,686 | $ 23,785 | |
Gross profit (loss) | (420) | 25 | |
Operating income (loss) | (4,982) | (2,233) | |
Depreciation and amortization expense | 1,251 | 1,940 | |
Capital expenditures | 440 | 460 | |
Total assets | 130,205 | $ 135,273 | |
Operating Segments | Services | |||
Segment Reporting Information [Line Items] | |||
Revenue | 20,664 | 7,506 | |
Operating Segments | Fabrication | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,617 | 11,736 | |
Operating Segments | Shipyard | |||
Segment Reporting Information [Line Items] | |||
Revenue | 2,497 | 5,130 | |
Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Revenue | 28,686 | 23,785 | |
Gross profit (loss) | (420) | 25 | |
Operating income (loss) | (4,982) | (2,233) | |
Depreciation and amortization expense | 1,251 | 1,067 | |
Capital expenditures | 440 | 160 | |
Total assets | 130,205 | 132,736 | |
Continuing Operations | Operating Segments | Services | |||
Segment Reporting Information [Line Items] | |||
Revenue | 20,664 | 7,506 | |
Gross profit (loss) | 1,928 | 564 | |
Operating income (loss) | 1,187 | 273 | |
Depreciation and amortization expense | 360 | 157 | |
Capital expenditures | 318 | ||
Total assets | 29,939 | 10,203 | |
Continuing Operations | Operating Segments | Fabrication | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,617 | 11,736 | |
Gross profit (loss) | (2,021) | 481 | |
Operating income (loss) | (2,933) | 646 | |
Depreciation and amortization expense | 816 | 831 | |
Capital expenditures | 122 | 160 | |
Total assets | 35,121 | 45,279 | |
Continuing Operations | Operating Segments | Shipyard | |||
Segment Reporting Information [Line Items] | |||
Revenue | 2,497 | 5,130 | |
Gross profit (loss) | (327) | (932) | |
Operating income (loss) | (1,188) | (1,205) | |
Total assets | 16,459 | 17,909 | |
Continuing Operations | Corporate | |||
Segment Reporting Information [Line Items] | |||
Revenue | (92) | (587) | |
Gross profit (loss) | (88) | ||
Operating income (loss) | (2,048) | (1,947) | |
Depreciation and amortization expense | 75 | 79 | |
Total assets | $ 48,686 | $ 59,345 |