NEWS RELEASE EXHIBIT 99.2
For further information contact:
Kerry J. Chauvin Joseph "Duke" Gallagher
Chief Executive Officer Chief Financial Officer
(985) 872-2100 (985) 872-2100
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FOR IMMEDIATE RELEASE
WEDNESDAY, OCTOBER 23, 2002
GULF ISLAND FABRICATION, INC.
REPORTS THIRD QUARTER EARNINGS
Houma, LA - Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported
net income of $3.8 million ($.32 diluted EPS) on revenue of $40.3 million for
its third quarter ended September 30, 2002, compared to net income of $2.2
million ($.18 diluted EPS) on revenue of $30.5 million for the third quarter
ended September 30, 2001. Net income for the first nine months of 2002 was $6.9
million ($.59 diluted EPS), before a cumulative effect of change in accounting
principle, on revenue of $100.6 million, compared to net income of $6.0 million
($.51 diluted EPS) on revenue of $92.3 million for the first nine months of
2001.
Effective January 1, 2002 the Company adopted Statement of Financial
Accounting Standards Board No. 142, ("SFAS No. 142"), "Goodwill and Other
Intangibles Assets", which resulted in a $4.8 million non-cash charge for the
impairment of goodwill, which was recorded as a cumulative effect of change in
accounting principle. The recording of this non-cash charge for the impairment
of goodwill resulted in net earnings of $2.2 million ($.18 diluted EPS) for the
nine months ended September 30, 2002.
At September 30, 2002, the company had a revenue backlog of $60.5
million and a labor backlog of approximately 920 thousand man-hours remaining to
work.
SELECTED BALANCE SHEET INFORMATION
(in thousands)
<Table>
<Caption>
September 30, December 31,
2002 2001
------------- ------------
Cash and short-term investments $ 35,031 $ 35,032
Total current assets 71,309 55,461
Property, plant and equipment, at cost, net 47,108 41,666
Total assets 119,062 102,538
Total current liabilities 22,445 8,860
Debt 0 0
Shareholders' equity(a) 91,576 88,905
Total liabilities and shareholders' equity 119,062 102,538
</Table>
Gulf Island Fabrication, Inc., based in Houma, Louisiana, is a leading
fabricator of offshore drilling and production platforms, offshore living
quarters and other specialized structures used in the development and production
of offshore oil and gas reserves. The Company also offers offshore interconnect
pipe hook-up, inshore marine construction, manufacture and repair of pressure
vessels, and steel warehousing and sales.
(a) Reference to Footnote 1 shown on page 2 (Consolidated Statements of
Income).
EXHIBIT 99.2
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except per share data)
<Table>
<Caption>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Revenue $ 40,255 $ 30,496 $ 100,554 $ 92,321
Cost of revenue 33,483 25,826 87,504 79,731
---------- ---------- ---------- ----------
Gross profit 6,772 4,670 13,050 12,590
General and administrative expenses 1,103 1,051 3,029 3,394
---------- ---------- ---------- ----------
Operating income 5,669 3,619 10,021 9,196
Other income (expense):
Interest expense (14) (9) (32) (27)
Interest income 151 295 479 874
Other 1 (628) 58 (737)
---------- ---------- ---------- ----------
138 (342) 505 110
---------- ---------- ---------- ----------
Income before income taxes 5,807 3,277 10,526 9,306
Income taxes 1,974 1,120 3,579 3,291
---------- ---------- ---------- ----------
Net income before cumulative effect of
change in accounting principle 3,833 2,157 6,947 6,015
Cumulative effect of change in accounting principle(1) -- -- (4,765) --
---------- ---------- ---------- ----------
Net income (loss) $ 3,833 $ 2,157 $ 2,182 $ 6,015
========== ========== ========== ==========
Per share data:
Basic earnings (loss) per share:(4)
Net income before cumulative effect of
change in accounting principle $ 0.33 $ 0.18 $ 0.59 $ 0.51
========== ========== ========== ==========
Cumulative effect of change in accounting principle(1) $ -- $ -- $ (0.41) $ --
========== ========== ========== ==========
Basic earnings (loss) per share $ 0.33 $ 0.18 $ 0.19 $ 0.51
========== ========== ========== ==========
Diluted income (loss) per share:(2)(4)
Net income before cumulative effect of
change in accounting principle $ 0.32 $ 0.18 $ 0.59 $ 0.51
========== ========== ========== ==========
Cumulative effect of change in accounting principle(1) $ -- $ -- $ (0.40) $ --
========== ========== ========== ==========
Diluted earnings (loss) per share $ 0.32 $ 0.18 $ 0.18 $ 0.51
========== ========== ========== ==========
Weighted-average shares 11,744 11,706 11,727 11,702
Effect of dilutive securities: employee stock options 71 52 87 100
---------- ---------- ---------- ----------
Adjusted weighted-average shares(2) 11,815 11,758 11,814 11,802
========== ========== ========== ==========
Depreciation and amortization included in expense above(3) $ 1,150 $ 1,222 $ 3,439 $ 3,627
========== ========== ========== ==========
</Table>
(1) The Company recorded a $4.8 million non-cash charge for the impairment
of goodwill resulting from the adoption of Statement of Financial
Accounting Standards Board No. 142, "Goodwill and Other Intangible
Assets".
(2) The calculation of diluted earnings per share assumes that all stock
options are exercised and that the assumed proceeds are used to
purchase shares at the average market price for the period.
(3) Amortization of $108,000 and $325,000 included in the three months and
nine months ended September 30, 2001, respectively.
(4) For the nine months ended September 30, 2002, the calculation of
earnings per share for net income before cumulative effect of change in
accounting principle and cumulative effect of change in accounting
principle do not total due to rounding.