Company Updates - Gulf Island Fabrication (GIFI) has completed the divestment of its shipyard division, marking the first quarter without losses from this division in a long time, resulting in a net income of $6 million for Q1, supported by a $3 million gain on asset sales [2][3] - The company generated $4.5 million in free cash flow and approximately $3.5 million in EBITDA during the same quarter [2] - Management expressed caution regarding the timeline for large fabrication project bids due to regulatory uncertainties and interest rate fluctuations, indicating that no large contracts are expected this year unless interest rates decline [2][3] Financial Performance and Valuation - GIFI's Services division revenue increased nearly 20% year-over-year, contributing to improved profitability [4] - Extrapolating Q1 performance for the full year suggests a net income of $15 million, free cash flow of $18 million, and EBITDA of $14 million [5] - Applying a conservative 10x multiple to free cash flow or net income results in a market cap estimate between $150 million and $180 million, translating to a share price of $9 to $11 [5] - Industry averages for profitable companies in the "Metal Fabrication" sector suggest a P/E multiple above 20 and an EV/EBITDA ratio over 12, which could imply a share price of $14.75 and $12.75 respectively [5] Growth Opportunities - GIFI is actively seeking strategic partnerships and acquisition opportunities to enhance its capabilities and market presence, with over $60 million in cash available for potential M&A [2][3] - A successful acquisition or signing a large fabrication contract could significantly boost the company's revenue and market perception [6] - The company is currently perceived as undervalued and overlooked, which may hinder its ability to attract investor attention despite positive operational metrics [6] Market Outlook - GIFI's share price has increased over 50% year-to-date, with potential for further growth of 60% or more, even if current performance levels are maintained [8] - The management's efforts have restored the company to a position of profitability and free cash flow generation, suggesting a positive outlook for future performance [8]

PART I FINANCIAL INFORMATION [Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for Q1 2024, highlighting increased net income from asset sale and stable liquidity Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $99,731 | $101,627 | | **Total Assets** | $127,758 | $128,428 | | **Total Current Liabilities** | $22,830 | $29,847 | | **Total Liabilities** | $42,314 | $49,457 | | **Total Shareholders' Equity** | $85,444 | $78,971 | Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $42,881 | $62,168 | | Gross Profit | $6,124 | $5,034 | | Operating Income | $5,708 | $328 | | Net Income | $6,240 | $641 | | Diluted Income per Share | $0.37 | $0.04 | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,019 | $1,296 | | Net cash used in investing activities | ($12,453) | ($5,219) | | Net cash used in financing activities | ($273) | ($1,184) | | Net decrease in cash | ($5,707) | ($5,107) | - In February 2024, the company sold excess real property from its Fabrication Division (Houma AHFS) for net cash proceeds of **$8.5 million**, resulting in a net gain of **$2.9 million**[44](index=44&type=chunk)[57](index=57&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reviews Q1 2024 performance, highlighting revenue decline, net income growth from asset sale, and strategic diversification [Overview and Strategic Initiatives](index=31&type=section&id=Overview%20and%20Strategic%20Initiatives) Winding down its Shipyard Division, the company focuses on workforce expansion, project execution, and diversifying into onshore and green energy - The wind-down of the Shipyard Division is substantially complete, with final completion expected in **Q1 2025** after the warranty periods for the Ferry Projects expire[110](index=110&type=chunk)[122](index=122&type=chunk) - Strategic initiatives are focused on generating **stable, profitable growth** by expanding the skilled workforce, improving project execution, diversifying the services business, and pursuing new end markets[119](index=119&type=chunk)[120](index=120&type=chunk) - The company is actively pursuing **new growth end markets** to reduce reliance on offshore oil and gas, including fabricating structures for onshore industrial facilities, green energy transitions (biofuels, hydrogen), and offshore wind developments[126](index=126&type=chunk)[127](index=127&type=chunk) [New Project Awards and Backlog](index=36&type=section&id=New%20Project%20Awards%20and%20Backlog) New project awards increased to **$43.8 million** in Q1 2024, with backlog rising to **$13.9 million**, primarily in Fabrication New Project Awards by Division (in thousands) | Division | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Services | $25,468 | $21,472 | | Fabrication | $18,272 | $16,706 | | Shipyard | $278 | ($122) | | **Total** | **$43,818** | **$37,628** | Backlog by Division (in thousands) | Division | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Services | $437 | $502 | | Fabrication | $12,873 | $11,739 | | Shipyard | $577 | $709 | | **Total** | **$13,887** | **$12,950** | [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Consolidated revenue decreased **31.0%** to **$42.9 million** due to a canceled project, but net income significantly rose to **$6.2 million** from an asset sale and reduced G&A Consolidated Results Summary (in thousands) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $42,881 | $62,168 | $(19,287) | | Gross Profit | $6,124 | $5,034 | $1,090 | | Gross Profit % | 14.3% | 8.1% | +6.2 p.p. | | Net Income | $6,240 | $641 | $5,599 | - The revenue decrease was primarily driven by the Fabrication Division, which saw revenue fall by **$22.5 million** due to the absence of the offshore jackets project that was canceled in July 2023[135](index=135&type=chunk)[150](index=150&type=chunk) - Net income was significantly boosted by a **$2.9 million** gain on the sale of the Houma AHFS and a **$1.7 million** decrease in G&A expense due to the elimination of legal fees from the resolved MPSV Litigation[136](index=136&type=chunk)[139](index=139&type=chunk)[142](index=142&type=chunk) - The Services Division revenue grew **18.3%** YoY to **$25.5 million**, driven by higher offshore services work and its welding enclosures business line[143](index=143&type=chunk)[145](index=145&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with **$61.3 million** in total cash and investments, generating **$7.0 million** in operating cash flow, and anticipates further capital expenditures Available Liquidity (in thousands) | Component | March 31, 2024 | | :--- | :--- | | Cash and cash equivalents | $32,469 | | Short-term investments | $27,352 | | Restricted cash | $1,475 | | **Total** | **$61,296** | - Net cash provided by operating activities was **$7.0 million** in Q1 2024, a significant improvement from **$1.3 million** in Q1 2023[163](index=163&type=chunk) - The company anticipates capital expenditures of approximately **$2.5 million to $3.0 million** for the remainder of 2024, primarily for upgrades to its Houma Facilities[170](index=170&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2024, with no material changes to internal control over financial reporting in Q1 2024 - Based on an evaluation as of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[173](index=173&type=chunk) - There were **no changes** in internal control over financial reporting during Q1 2024 that have materially affected, or are reasonably likely to materially affect, internal controls[174](index=174&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section details legal matters, primarily the resolution of the MPSV Litigation in October 2023, dismissed with prejudice, leading to a **$20.0 million** Note Agreement - The MPSV Litigation against Hornbeck Offshore Services, LLC was **dismissed in full with prejudice** on October 4, 2023, after the parties reached an agreement[86](index=86&type=chunk)[177](index=177&type=chunk) - In connection with the litigation resolution, the company entered into a Settlement Agreement and a **$20.0 million** promissory note with Zurich, payable in **15 annual installments** starting December 31, 2024[79](index=79&type=chunk)[86](index=86&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those disclosed in its 2023 Annual Report on Form 10-K - There have been **no material changes** to the company's risk factors from those disclosed in the 2023 Annual Report[178](index=178&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **60,860 shares** for approximately **$0.3 million** in Q1 2024, with **$4.6 million** remaining under the Share Repurchase Program Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program (in thousands) | | :--- | :--- | :--- | :--- | | Jan 2024 | 40,360 | $4.47 | $4,691 | | Feb 2024 | 20,500 | $4.50 | $4,599 | | Mar 2024 | 0 | $— | $4,599 | | **Total** | **60,860** | **$4.48** | | - The Share Repurchase Program, approved in December 2023, authorizes up to **$5.0 million** in stock repurchases through December 15, 2024[95](index=95&type=chunk)[180](index=180&type=chunk) [Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including corporate governance documents, CEO and CFO certifications, and Inline XBRL financial data - The filing includes required **CEO and CFO certifications** (Exhibits 31.1, 31.2, 32) and financial data in **Inline XBRL format** (Exhibits 101, 104)[183](index=183&type=chunk)

Revenue Performance - Consolidated revenue for Q1 2024 was $42.9 million, down from $62.2 million in Q1 2023, representing a decrease of 30.5%[4] - Revenue for Q1 2024 was $42.9 million, down from $44.6 million in Q4 2023 and significantly lower than $62.2 million in Q1 2023, indicating a year-over-year decline of approximately 30.9%[29] - Adjusted revenue for Q1 2024 was $42.5 million, down from $44.0 million in Q4 2023 and $60.8 million in Q1 2023[30] - The Fabrication Division's revenue for Q1 2024 was $17.1 million, down from $19.7 million in Q4 2023 and significantly lower than $39.7 million in Q1 2023[34] - Revenue for the Shipyard Division was $409 million in Q1 2024, down from $556 million in Q4 2023, a decrease of 26.5%[35] Net Income and Earnings - Consolidated net income for Q1 2024 was $6.2 million, compared to $0.6 million in Q1 2023, indicating a significant increase[4] - Net income for Q1 2024 was $6.2 million, a decrease from $7.1 million in Q4 2023 and an increase from $0.6 million in Q1 2023[29] - Basic income per share for Q1 2024 was $0.38, down from $0.44 in Q4 2023 but up from $0.04 in Q1 2023[29] - The company reported a net income of $6,240 thousand for Q1 2024, compared to $7,090 thousand in Q4 2023, a decrease of 12.0%[41] Segment Performance - Services Segment revenue increased by $3.9 million, or 18.3%, to $25.5 million in Q1 2024, driven by higher offshore services activity[8] - Fabrication Segment revenue decreased by $22.5 million, or 56.8%, to $17.1 million in Q1 2024, primarily due to the cancellation of a large project[11] - Services operating margins expanded by 40 basis points to 11.2% in Q1 2024[6] - Corporate Segment EBITDA is expected to be a loss of approximately $8.0 million for 2024, consistent with historical performance[18] Project Awards and Backlog - New project awards for Q1 2024 totaled $25.5 million, an 18.6% year-over-year increase, with backlog at $0.4 million[9] - New project awards for Q1 2024 totaled $43.8 million, a slight decrease from $44.4 million in Q4 2023 but an increase from $37.6 million in Q1 2023[29] - The Services Division reported new project awards of $25.5 million in Q1 2024, up from $24.5 million in Q4 2023 and $21.6 million in Q1 2023[34] - New project awards for the Shipyard Division decreased to $278 million in Q1 2024 from $539 million in Q4 2023, representing a decline of 48.7%[35] Cash and Investments - Cash and short-term investments balance was $61.3 million at March 31, 2024, including $1.5 million of restricted cash[17] - Cash and cash equivalents decreased to $32,469 thousand in Q1 2024 from $38,176 thousand in Q4 2023, a decrease of 15.5%[40] - Net cash provided by operating activities was $7,019 thousand in Q1 2024, compared to $7,369 thousand in Q4 2023, a decrease of 4.8%[41] Other Financial Metrics - Gross profit for Q1 2024 was $6.1 million, compared to $8.5 million in Q4 2023 and $5.0 million in Q1 2023, reflecting a decrease of 27.7% from the previous quarter[29] - Adjusted EBITDA for Q1 2024 was $3.7 million, a decrease from $6.6 million in Q4 2023 and comparable to $3.7 million in Q1 2023[32] - Operating income for Q1 2024 was $5.7 million, compared to $6.7 million in Q4 2023 and $0.3 million in Q1 2023[29] - Total current assets decreased to $99,731 thousand as of March 31, 2024, from $101,627 thousand at December 31, 2023, a decline of 1.8%[40] - Total liabilities decreased to $42,314 thousand as of March 31, 2024, from $49,457 thousand at December 31, 2023, a decline of 14.5%[40]

THE WOODLANDS, Texas, April 30, 2024 (GLOBE NEWSWIRE) -- Gulf Island Fabrication, Inc. ("Gulf Island" or the "Company") (NASDAQ:GIFI), a leading steel fabricator and service provider to the industrial and energy sectors, today announced that it will report financial results for the first quarter 2024 after the market close on Tuesday, May 7, 2024. Gulf Island management will hold a conference call on Tuesday, May 7, 2024, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss the Company's financial ...

Financial Data and Key Metrics Changes - The company reported a consolidated revenue of $44.6 million for Q4 2023, representing a 17% increase from the prior year period [79] - Adjusted EBITDA for Q4 2023 was $6.6 million, up from $2.3 million in the prior year period, reflecting improved performance in both Services and Fabrication segments [79][80] - The cash and investments balance at year-end was approximately $48 million, an increase of roughly $6 million from September 30 [48] Business Line Data and Key Metrics Changes - The Services division generated revenue of $24.5 million in Q4 2023, a 13% increase year-over-year, primarily driven by the Spark Safety business line [81] - The Fabrication division reported revenue of $19.7 million for Q4 2023, nearly a 20% increase compared to the prior year, attributed to strong growth in small-scale fabrication [82] - Services EBITDA for Q4 2023 was $3.2 million, up 25% compared to the prior year, with an EBITDA margin of 13.2%, an increase of 130 basis points [44] Market Data and Key Metrics Changes - The company remains optimistic about activity in key end markets in the Gulf Coast region, including LNG, petrochemicals, and green energy, with tight industry capacity [17] - Demand trends for the Services business are encouraging as the company enters 2024, driven by favorable spending from oil and gas customers, particularly in the Gulf of Mexico [18] Company Strategy and Development Direction - The company is focused on generating stable, profitable growth by pursuing new end markets and diversifying its Services business while strengthening project execution [23] - The strategy includes expanding the skilled workforce and continuing to pursue opportunities in traditional offshore markets [23] - The company aims to leverage its strong financial flexibility to explore acquisition opportunities to enhance its business base [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong foundation and recurring revenue from its base business, anticipating continued growth in 2024 [35] - The company acknowledged challenges in the capital market affecting large projects, with some projects experiencing delays due to permitting issues [30][50] - Management expects another strong year for the Services business in 2024, driven by the growth of the Spark Safety offering [26] Other Important Information - The company completed the sale of excess property at its Houma facility, generating net cash proceeds of approximately $8.5 million, which will bolster liquidity [49][58] - Capital expenditures for 2024 are anticipated to be between $4.5 million and $5.5 million, with a focus on facility upgrades and technologically advanced equipment [62] Q&A Session Summary Question: What is the bidding environment for large fabrication projects? - Management noted that there is still a good volume of projects in LNG and petrochemicals, but challenges in capital markets have caused some projects to be delayed [37][38] Question: Why does the Fabrication division expect growth in 2024? - The company sees robustness in Services customers in the Gulf of Mexico, leading to projected opportunities for Fabrication growth [43] Question: What was the impact of change orders in Q4? - Approximately $2.5 million to $3 million of the nearly $4 million benefit in Q4 was from change orders, with the rest attributed to project improvements [69] Question: What was sold in the recent property sale? - The company sold a piece of underutilized property, which allowed for asset monetization and consolidation of its footprint [73][87] Question: What are the expectations for capital expenditures in 2024? - Capital expenditures are expected to be higher than in 2023, with a focus on facility improvements and equipment upgrades [94]

THE WOODLANDS, Texas, March 07, 2024 (GLOBE NEWSWIRE) -- Gulf Island Fabrication, Inc. (NASDAQ:GIFI) ("Gulf Island" or the "Company"), a leading steel fabricator and service provider to the industrial and energy sectors, today announced results for the fourth quarter and full year 2023. FOURTH QUARTER 2023 SUMMARY Consolidated revenue of $44.6 millionConsolidated net income of $7.1 million; Adjusted EBITDA of $6.6 millionServices Division operating income of $2.7 million; EBITDA of $3.2 millionFabrication ...

Part I [Business and Properties](index=9&type=section&id=Items%201%20and%202.%20Business%20and%20Properties) Gulf Island Fabrication, Inc. is a fabricator of complex steel structures and a provider of specialty services primarily for the industrial and energy sectors [Description of Operations](index=9&type=section&id=Description%20of%20Operations) The company operates through three reportable segments: Services, Fabrication, and Shipyard, with the Shipyard division largely winding down its legacy obligations - The company's business is managed through three operating divisions: Services, Fabrication, and Shipyard, plus a Corporate division[22](index=22&type=chunk) - The Services Division provides a range of specialty services including maintenance, repair, construction, scaffolding, and staffing[23](index=23&type=chunk) - The Fabrication Division fabricates complex steel structures and modules for various sectors including refining, petrochemical, LNG, and alternative energy[24](index=24&type=chunk) - The Shipyard Division has largely ceased new operations after a 2021 asset sale, with remaining activities focused on completing legacy Ferry Projects. The wind-down was substantially complete in Q4 2023, with final warranty periods ending in Q1 2025[25](index=25&type=chunk) [Facilities and Equipment](index=10&type=section&id=Facilities%20and%20Equipment) The company's primary operating facilities are the Houma Facilities in Louisiana, situated on approximately 160 acres with significant water frontage and extensive buildings - The main operating base is the Houma Facilities in Louisiana, covering 160 acres with 3,305 linear feet of water frontage, and includes over 420,000 square feet of covered facilities[27](index=27&type=chunk) - In February 2024, the company sold a portion of its Houma Facilities that had been classified as an asset held for sale at year-end 2023[28](index=28&type=chunk) [Human Capital Management](index=12&type=section&id=Human%20Capital%20Management) As of December 31, 2023, the company had 839 full-time employees, supplemented by 94 independent contractors, and actively promotes diversity and workforce development Employee Statistics (as of Dec 31) | Year | Full-Time Employees | Independent Contractors | | :--- | :--- | :--- | | **2023** | 839 | 94 | | **2022** | 874 | 83 | - The company utilizes Texas and Louisiana state grants for workforce skills development, training 772 employees in 2023 through these programs[36](index=36&type=chunk) - The workforce is diverse, with approximately **54%** being women or minorities at the end of 2023, an increase from **51%** in 2022[39](index=39&type=chunk) [Customers](index=15&type=section&id=Customers) The company's customer base includes U.S. and international energy producers and industrial operators, with revenue concentrated among a few key customers - In 2023, **two customers** accounted for **53%** of consolidated revenue (excluding the negative revenue from the MPSV Litigation resolution)[50](index=50&type=chunk) - In 2022, **two customers** accounted for **48%** of consolidated revenue[50](index=50&type=chunk) [New Project Awards and Backlog](index=16&type=section&id=New%20Project%20Awards%20and%20Backlog) New project awards represent the value of new contract commitments, while backlog is the unrecognized revenue from these awards, both subject to significant variability and potential customer changes - Backlog represents the unrecognized revenue from new project awards and is consistent with the value of remaining performance obligations under Topic 606[54](index=54&type=chunk) - Projects in backlog are subject to potential changes by the customer, including delay, suspension, or termination, which could significantly impact expected revenue[55](index=55&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including its dependence on the cyclical oil and gas industry, intense competition, and reliance on a small number of customers - **Business/Industry Risks:** The company's revenue is highly dependent on the cyclical offshore oil and gas industry, faces intense competition, and derives a significant portion of revenue from a small number of customers[71](index=71&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk) - **Operational Risks:** A substantial number of projects are fixed-price, exposing the company to cost overruns. The business depends on winning new contracts, and its backlog is subject to cancellation, as exemplified by a **major offshore jackets project cancellation** in July 2023[78](index=78&type=chunk)[80](index=80&type=chunk)[87](index=87&type=chunk) - **Financial Risks:** The company may need additional capital, faces credit risks from its customers, and its insurance coverage has limitations. It is now generally **self-insured** for property and equipment damage[102](index=102&type=chunk)[110](index=110&type=chunk)[86](index=86&type=chunk) - **Workforce Risks:** Profitability depends on attracting and retaining skilled labor, which is challenging in a competitive market. The loss of key personnel could also impact operations[115](index=115&type=chunk)[118](index=118&type=chunk) - **Legal/Regulatory Risks:** The business is subject to complex regulations, potential impacts from climate change policies, and actions of activist shareholders, with **over one-third** of stock held by institutional investors and funds with a history of activism[129](index=129&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk) [Unresolved Staff Comments](index=37&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - **None**[136](index=136&type=chunk) [Cybersecurity](index=37&type=section&id=Item%201C.%20Cybersecurity) The company has an integrated cyber risk management program overseen by the Corporate Manager of Information Technology and the Board's Audit Committee - The company's cyber risk management is integrated into its overall risk oversight program, utilizing both internal and external personnel for assessment and response[137](index=137&type=chunk)[138](index=138&type=chunk) - The Board's Audit Committee is responsible for overseeing cyber and IT security risks, receiving annual reports on the company's enterprise risks, including cybersecurity[142](index=142&type=chunk) [Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) The company refers to Note 7 of its Financial Statements for a discussion of its legal proceedings, including details on the resolution of the significant MPSV Litigation - Details regarding legal proceedings, including the resolution of the MPSV Litigation, are incorporated by reference from Note 7 of the Financial Statements[143](index=143&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[144](index=144&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the **Nasdaq Global Select Market** under the symbol "**GIFI**", and the Board authorized a **$5.0 million** share repurchase program in December 2023 - The company's common stock is traded on the **Nasdaq Global Select Market** under the symbol "**GIFI**"[146](index=146&type=chunk) Issuer Purchases of Equity Securities (Q4 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Total Purchased as Part of Program | Approx. Dollar Value Remaining ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Oct 2023 | — | $ — | — | — | | Nov 2023 | — | $ — | — | — | | Dec 2023 | **29,578** | $ 4.34 | **29,578** | $ 4,872 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, Gulf Island reported a net loss of **$24.4 million** on revenue of **$151.1 million**, driven by a **$32.5 million** charge from the MPSV Litigation resolution, while maintaining solid liquidity [Results of Operations – Comparison of 2023 and 2022](index=51&type=section&id=Results%20of%20Operations%20%E2%80%93%20Comparison%20of%202023%20and%202022) For 2023, consolidated revenue increased to **$151.1 million** from **$142.3 million** in 2022, but the company posted a gross loss of **$11.9 million** and a net loss of **$24.4 million**, primarily due to a **$32.5 million** charge in the Shipyard division Consolidated Results of Operations (in thousands) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $ 151,067 | $ 142,320 | $ 8,747 | | Gross Profit (Loss) | $ (11,901) | $ 7,895 | $ (19,796) | | Operating Loss | $ (25,883) | $ (3,415) | $ (22,468) | | Net Loss | $ (24,402) | $ (3,352) | $ (21,050) | - The 2023 gross loss was primarily driven by a **$32.5 million** charge from the MPSV Litigation resolution and **$2.7 million** in charges on Ferry Projects in the Shipyard Division[195](index=195&type=chunk)[198](index=198&type=chunk) - General and administrative expenses decreased by **10.6%** to **$16.3 million** in 2023, mainly due to lower legal fees associated with the now-resolved MPSV Litigation[196](index=196&type=chunk) [New Project Awards and Backlog](index=44&type=section&id=New%20Project%20Awards%20and%20Backlog) New project awards decreased to **$157.7 million** in 2023 from **$240.2 million** in 2022, and backlog fell sharply to **$13.0 million** due to a major contract cancellation New Project Awards by Segment (in thousands) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Services | $ 92,728 | $ 85,846 | | Fabrication | $ 66,629 | $ 154,239 | | Shipyard | $ (528) | $ 834 | | **Total** | **$ 157,719** | **$ 240,247** | Backlog by Segment (in thousands) | Segment | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Services | $ 502 | $ 1,322 | | Fabrication | $ 11,739 | $ 110,287 | | Shipyard | $ 709 | $ 3,272 | | **Total** | **$ 12,950** | **$ 114,881** | - A large offshore jackets contract awarded in 2022 was cancelled by the customer in July 2023, reducing performance obligations by **$76.1 million** during 2023[174](index=174&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, the company had total cash, cash equivalents, short-term investments, and restricted cash of **$47.9 million**, with positive cash from operations of **$7.2 million** Available Liquidity (in thousands) | Component | Dec 31, 2023 | | :--- | :--- | | Cash and cash equivalents | $ 38,176 | | Short-term investments | $ 8,233 | | **Available cash, cash equivalents and short-term investments** | **$ 46,409** | | Restricted cash | $ 1,475 | | **Total** | **$ 47,884** | Cash Flow Summary (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $ 7,197 | $ (8,923) | | Net cash used in investing activities | $ (503) | $ (8,870) | | Net cash used in financing activities | $ (1,867) | $ (1,972) | - The company anticipates capital expenditures of **$4.5 million** to **$5.5 million** for 2024, primarily for upgrades to its Houma Facilities and new equipment[228](index=228&type=chunk) [Critical Accounting Policies](index=45&type=section&id=Critical%20Accounting%20Policies) The company's most significant accounting policies involve considerable judgment and estimates, particularly revenue recognition for long-term contracts, impairment assessments, and deferred tax assets - Revenue for long-term contracts is recognized over time using the percentage-of-completion (POC) method, based on costs incurred to date versus total estimated costs. This requires significant estimates for costs to complete, which can materially affect results[178](index=178&type=chunk) - Goodwill is tested for impairment annually. The Services Division is the only reporting unit with goodwill, and a qualitative assessment in 2023 indicated **no impairment**[182](index=182&type=chunk) - A **full valuation allowance** is maintained against deferred tax assets (DTAs) because, based on available evidence including cumulative losses, it is more likely than not that the DTAs will not be realized[185](index=185&type=chunk)[360](index=360&type=chunk) - The company is now generally **self-insured** for property and equipment damage due to high premium costs and coverage limitations, exposing it to future losses[188](index=188&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - **Not applicable**[231](index=231&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's Consolidated Financial Statements and accompanying notes are included in the report, starting on page F-1 - The Financial Statements and related notes are incorporated by reference and appear on pages F-1 through F-26[232](index=232&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=61&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - **None**[233](index=233&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were **effective** as of December 31, 2023 - Management concluded that disclosure controls and procedures were **effective** as of December 31, 2023[234](index=234&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2023[235](index=235&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=62&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item, including details on directors, executive officers, and corporate governance practices, is incorporated by reference from the company's definitive proxy statement for its 2024 annual meeting of shareholders - Information is incorporated by reference from the 2024 annual meeting proxy statement[241](index=241&type=chunk) [Executive Compensation](index=62&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item regarding executive compensation is incorporated by reference from the company's definitive proxy statement for its 2024 annual meeting of shareholders - Information is incorporated by reference from the 2024 annual meeting proxy statement[242](index=242&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=62&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information required for this item concerning security ownership is incorporated by reference from the company's definitive proxy statement for its 2024 annual meeting of shareholders - Information is incorporated by reference from the 2024 annual meeting proxy statement[243](index=243&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=62&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item regarding related party transactions and director independence is incorporated by reference from the company's definitive proxy statement for its 2024 annual meeting of shareholders - Information is incorporated by reference from the 2024 annual meeting proxy statement[244](index=244&type=chunk) [Principal Accounting Fees and Services](index=62&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required for this item concerning principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for its 2024 annual meeting of shareholders - Information is incorporated by reference from the 2024 annual meeting proxy statement[245](index=245&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=63&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section indicates that the required financial statement schedules and exhibits are filed as part of the Form 10-K report, with a detailed list available in the Exhibit Index - Required financial statement schedules and exhibits are filed as part of the report, detailed in the Exhibit Index on page E-1[248](index=248&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=64&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an **unqualified opinion** on the consolidated financial statements, identifying "Revenue recognition for long-term contracts" as a **critical audit matter** due to complex management judgments - The auditor, Ernst & Young LLP, issued an **unqualified opinion** on the consolidated financial statements[254](index=254&type=chunk) - The **critical audit matter** identified was "Revenue recognition for long-term contracts" due to the significant management judgment involved in estimating costs to complete and variable consideration[259](index=259&type=chunk)[260](index=260&type=chunk) [Consolidated Financial Statements](index=67&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show a decrease in total assets from **$134.9 million** in 2022 to **$128.4 million** in 2023, an increase in total liabilities to **$49.5 million**, and a net loss of **$24.4 million** for 2023 Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $ 101,627 | $ 87,069 | | Total Assets | $ 128,428 | $ 134,866 | | Total Current Liabilities | $ 29,847 | $ 30,789 | | Total Liabilities | $ 49,457 | $ 32,242 | | Total Shareholders' Equity | $ 78,971 | $ 102,624 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | $ 151,067 | $ 142,320 | | Gross Profit (Loss) | $ (11,901) | $ 7,895 | | Operating Loss | $ (25,883) | $ (3,415) | | Net Loss | $ (24,402) | $ (3,352) | | Basic and Diluted Loss Per Share | $ (1.51) | $ (0.21) | [Notes to Consolidated Financial Statements](index=71&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosure on the company's accounting policies, segment performance, and key events, including the **$32.5 million** charge for the MPSV litigation and the new **$20.0 million** promissory note with Zurich - **MPSV Litigation Resolution:** The company resolved its MPSV litigation, resulting in a **$32.5 million** charge (a **$12.5M** non-cash write-off and a **$20.0M** liability). As part of the settlement, the company entered into a **$20.0 million** promissory note with Zurich, payable over **15 years**[374](index=374&type=chunk)[375](index=375&type=chunk)[352](index=352&type=chunk) - **Ferry Project Losses:** The Shipyard division recorded an additional **$2.7 million** in negative margin changes on its legacy Ferry Projects in 2023 due to increased material/subcontractor costs, schedule delays, and warranty costs[329](index=329&type=chunk)[330](index=330&type=chunk) - **Asset Sale:** In February 2024, the company sold a portion of its Houma Facilities (classified as held for sale) for **$8.5 million** net of costs. The carrying value was **$5.6 million**[340](index=340&type=chunk)[393](index=393&type=chunk) - **Share Repurchase Program:** A **$5.0 million** share repurchase program was approved in December 2023. The company repurchased **29,578 shares** for **$0.1 million** before year-end[383](index=383&type=chunk)

[Report Overview](index=1&type=section&id=ReportOverview) Gulf Island reported strong Q4 and full-year 2023 results, driven by services and fabrication, while strategically winding down the Shipyard Division and resolving litigation [Fourth Quarter 2023 Performance Summary](index=1&type=section&id=Q42023Summary) Gulf Island reported strong fourth-quarter 2023 results with significant increases in revenue, net income, and adjusted EBITDA compared to the prior year, driven by momentum in small-scale fabrication and services, including Spark Safety Q4 2023 Consolidated Financial Highlights | Metric | Q4 2023 ($ million) | Q4 2022 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $44.6 | $38.1 | +17.1% | | Consolidated Net Income | $7.1 | $0.5 | +1320% | | Consolidated Adjusted EBITDA | $6.6 | $2.3 | +187% | - Services Division operating income was **$2.7 million**; EBITDA was **$3.2 million**[6](index=6&type=chunk) - Fabrication Division operating income was **$6.1 million**; Adjusted EBITDA was **$5.4 million**[6](index=6&type=chunk) - Cash and short-term investments balance reached **$47.9 million** at December 31, 2023[6](index=6&type=chunk) - Substantially completed remaining ferry projects for the Shipyard Division[6](index=6&type=chunk) [Full Year 2023 Performance Summary](index=1&type=section&id=FY2023Summary) For the full year 2023, Gulf Island saw an increase in consolidated revenue and a significant improvement in adjusted EBITDA, despite reporting a net loss, largely due to the resolution of the MPSV Litigation and the wind-down of the Shipyard Division FY 2023 Consolidated Financial Highlights | Metric | FY 2023 ($ million) | FY 2022 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $151.1 | $142.3 | +6.2% | | Consolidated Adjusted Revenue | $181.5 | $134.6 | +34.8% | | Consolidated Net Loss | ($24.4) | ($3.4) | -617.6% | | Consolidated Adjusted EBITDA | $17.0 | $2.3 | +639.1% | - Services Division operating income was **$10.9 million**; EBITDA was **$12.9 million**[7](index=7&type=chunk) - Fabrication Division operating income was **$10.6 million**; Adjusted EBITDA was **$11.8 million**[7](index=7&type=chunk) - Resolved MPSV Litigation, which included a **$32.5 million** revenue reversal for the Shipyard Division[4](index=4&type=chunk)[7](index=7&type=chunk) [Management Insights & Strategic Direction](index=2&type=section&id=ManagementInsightsStrategicDirection) Management highlighted strong Q4 and full-year 2023 results, attributing success to favorable Gulf Coast market trends and strategic execution, now fully focused on profitable growth in services and fabrication after completing the shipyard wind-down and resolving the MPSV Litigation [Management Commentary](index=2&type=section&id=ManagementCommentary) Management highlighted strong Q4 and full-year 2023 results, attributing success to favorable Gulf Coast market trends and strategic execution, now fully focused on profitable growth in services and fabrication after completing the shipyard wind-down and resolving the MPSV Litigation - Q4 revenue increased **17% YoY**, driven by small-scale fabrication and services, including Spark Safety[8](index=8&type=chunk) - Services operating income increased **35% for FY2023** due to asset deployment to higher-margin opportunities and Spark Safety growth[8](index=8&type=chunk) - Fabrication gross margins exceeded **11% for FY2023**, reflecting strong project execution and bidding discipline[8](index=8&type=chunk) - Key achievements in 2023 include substantial completion of shipyard wind-down and successful resolution of MPSV Litigation[8](index=8&type=chunk) 2024 Segment EBITDA Expectations | Segment | Expected 2024 EBITDA ($ million) | | :--- | :--- | | Services | ~$14.0 | | Fabrication | ~$8.0 (excludes large project awards) | - Year-end cash balance was nearly **$48 million**, with an expected increase to **$60 million** after a February 2024 property sale, providing significant financial flexibility for growth[8](index=8&type=chunk) [Resolution of MPSV Litigation](index=3&type=section&id=ResolutionOfMPSVLitigation) The company's MPSV Litigation was dismissed in Q4 2023, leading to a settlement agreement that released the company from performance bond obligations and resulted in a **$32.5 million** charge in Q3 2023, including a **$20.0 million** promissory note - Lawsuit dismissed in full with prejudice on **October 4, 2023**[10](index=10&type=chunk) - Settlement Agreement on **November 6, 2023**, released the Company from performance bond obligations and transferred MPSVs to the Surety[10](index=10&type=chunk) - Company entered into a promissory note for **$20.0 million**, payable in 15 equal annual installments starting December 31, 2024, at **3.0% interest**[10](index=10&type=chunk) - A **$32.5 million** charge was recorded in Q3 2023 for the Shipyard Division, consisting of a **$12.5 million** non-cash write-off and a **$20.0 million** liability for the settlement[10](index=10&type=chunk) [Strategic Update](index=3&type=section&id=StrategicUpdate) Gulf Island continued its strategic transformation in 2023, focusing on profitable growth by pursuing new end markets, diversifying services, strengthening project execution, and expanding its skilled workforce, while maintaining presence in traditional offshore markets [Pursue Traditional Offshore Markets](index=3&type=section&id=PursueTraditionalOffshoreMarkets) Robust demand in the Gulf of Mexico for traditional offshore activities in 2023 drove growth in services and small-scale fabrication, with momentum expected to continue into 2024 - Robust demand in the Gulf of Mexico for traditional offshore activities in 2023, driving growth in services and small-scale fabrication[11](index=11&type=chunk) - Momentum expected to continue into 2024 due to stable oil prices and healthy customer balance sheets[11](index=11&type=chunk) [Pursue New Growth End Markets](index=3&type=section&id=PursueNewGrowthEndMarkets) The company has a strong foundation to pursue new growth opportunities in LNG, petrochemical, and energy transition markets, while maintaining disciplined bidding practices - Strong foundation to pursue new growth opportunities in LNG, petrochemical, and energy transition markets in the Gulf Coast region[12](index=12&type=chunk) - Bidding activity for large fabrication projects remains active, but decision cycles are extending due to higher interest rates and a challenging permitting environment (e.g., LNG export project pause)[12](index=12&type=chunk) - Company remains disciplined, focusing on profitably growing its services and small-scale fabrication businesses[12](index=12&type=chunk) [Grow and Diversify Services Business](index=3&type=section&id=GrowAndDiversifyServicesBusiness) Services revenue grew by 7.5% in 2023, driven by favorable offshore demand and Spark Safety, with a 2024 focus on strategic opportunities in the Gulf of Mexico market - Services revenue grew by **7.5%** during 2023, driven by favorable offshore demand and contribution from Spark Safety[13](index=13&type=chunk) - Focus for 2024 is on strategic opportunities that capitalize on the Gulf of Mexico market[13](index=13&type=chunk) [Strengthen Project Execution and Bidding Discipline](index=3&type=section&id=StrengthenProjectExecutionAndBiddingDiscipline) The company prioritized strengthening project execution and bidding discipline in 2023, expanding services gross margins and achieving strong fabrication gross margins, a focus to continue in 2024 - Key priority given inflationary pressures and challenges with skilled labor availability[14](index=14&type=chunk) - Services gross margins expanded **180 basis points** year-over-year in 2023[14](index=14&type=chunk) - Fabrication gross margins reached **11.4% for 2023** despite partial under-utilization[14](index=14&type=chunk) - Company will maintain focus on project execution and disciplined bidding for adequate risk-adjusted returns in 2024[14](index=14&type=chunk) [Expand Skilled Workforce](index=4&type=section&id=ExpandSkilledWorkforce) The company maintained its skilled labor headcount in Services during 2023 and is confident in its ability to ramp up Fabrication headcount, evaluating expansion opportunities for 2024 - Maintained skilled labor headcount in Services during 2023 despite the challenging labor environment[15](index=15&type=chunk) - Confident in its proven ability to ramp up headcount in Fabrication to support new project awards[15](index=15&type=chunk) - Evaluating opportunities to expand skilled labor headcount in 2024, including strategic acquisitions[15](index=15&type=chunk) [Segment Performance (Fourth Quarter 2023)](index=4&type=section&id=SegmentPerformanceQ42023) This section details the financial performance of Gulf Island's Services, Fabrication, Shipyard, and Corporate segments for the fourth quarter of 2023 [Services Segment](index=4&type=section&id=ServicesSegment) The Services Segment experienced significant growth in Q4 2023, driven by its Spark Safety business line and a favorable project margin mix, leading to increased revenue, new project awards, and improved operating income and EBITDA Services Segment Q4 2023 Performance | Metric | Q4 2023 ($ million) | Q4 2022 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $24.5 | $21.6 | +13.4% | | New Project Awards | $24.2 | $21.3 | +13.5% | | Operating Income | $2.7 | $2.2 | +22.7% | | EBITDA | $3.2 | $2.6 | +25.1% | - Backlog totaled **$0.5 million** at December 31, 2023[17](index=17&type=chunk) - Improved operating results primarily due to higher revenue and a more favorable project margin mix, including the benefit of the division's Spark Safety business line[18](index=18&type=chunk) [Fabrication Segment](index=4&type=section&id=FabricationSegment) The Fabrication Segment demonstrated strong growth in Q4 2023, with increased revenue and new project awards, and a substantial rise in adjusted EBITDA, primarily due to higher small-scale fabrication activity and favorable resolution of customer change orders Fabrication Segment Q4 2023 Performance | Metric | Q4 2023 ($ million) | Q4 2022 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $19.7 | $16.4 | +19.8% | | New Project Awards | $19.9 | $17.3 | +15.1% | | Operating Income | $6.1 | $4.1 | +48.8% | | Adjusted EBITDA | $5.4 | $2.0 | +171.1% | - Backlog totaled **$11.7 million** at December 31, 2023[20](index=20&type=chunk) - Improved operating results (excluding Hurricane Ida impacts) primarily due to project improvements from the resolution of customer change orders and a more favorable project margin mix[21](index=21&type=chunk) [Shipyard Segment](index=4&type=section&id=ShipyardSegment) The Shipyard Segment's operations were substantially wound down in Q4 2023, with the completion and delivery of the remaining ferry projects, reporting a reduced operating loss compared to the prior year Shipyard Segment Q4 2023 Performance | Metric | Q4 2023 ($ million) | Q4 2022 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $0.6 | $0.4 | +50.0% | | Operating Loss | ($0.1) | ($3.6) | +97.2% | - Seventy-vehicle ferry completed, delivered and accepted by the customer during the fourth quarter 2023[22](index=22&type=chunk) - Final forty-vehicle ferry substantially completed and delivered during the fourth quarter 2023, with final customer acceptance expected in March 2024[22](index=22&type=chunk) [Corporate Segment](index=4&type=section&id=CorporateSegment) The Corporate Segment reported a slightly reduced operating loss and EBITDA loss in Q4 2023 compared to the prior year, reflecting general corporate overheads Corporate Segment Q4 2023 Performance | Metric | Q4 2023 ($ million) | Q4 2022 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Loss | ($2.1) | ($2.3) | +8.7% | | EBITDA Loss | ($2.0) | ($2.3) | +13.0% | [Segment Descriptions](index=5&type=section&id=SegmentDescriptions) Gulf Island operates through four reportable segments: Services (offshore/onshore work), Fabrication (on-site fabrication), Shipyard (ferry construction and MPSV litigation costs, now substantially wound down), and Corporate (general overheads) - Services Segment: Includes offshore and onshore services work performed at customer facilities, including offshore platforms[25](index=25&type=chunk) - Fabrication Segment: Includes all fabrication work performed on-site at the Company's facilities, including pull-through fabrication work for the Services Segment[25](index=25&type=chunk) - Shipyard Segment: Includes two ferries under construction (substantially completed in Q4 2023) and vessel holding costs and legal fees associated with the Company's previous MPSV Litigation. The wind down of operations was substantially completed in Q4 2023[25](index=25&type=chunk) - Corporate Segment: Includes costs not directly related to the Company's operating segments, such as costs of being a publicly traded company[25](index=25&type=chunk) [Financial Position & Outlook](index=5&type=section&id=FinancialPositionOutlook) This section provides an overview of Gulf Island's balance sheet, liquidity, and financial outlook for 2024, including segment EBITDA guidance [Balance Sheet and Liquidity](index=5&type=section&id=BalanceSheetAndLiquidity) Gulf Island maintained a strong liquidity position at year-end 2023, with a substantial cash balance, initiated a share repurchase program, and incurred debt related to the MPSV litigation settlement - Cash and short-term investments balance was **$47.9 million** at December 31, 2023, including **$1.5 million** of restricted cash[26](index=26&type=chunk) - Current and long-term debt totaled **$20.0 million** at December 31, 2023, associated with the Note Agreement from the MPSV Litigation[26](index=26&type=chunk) - Repurchased **29,578 shares** of common stock for **$0.1 million** in Q4 2023 under its share repurchase program commenced in December 2023[26](index=26&type=chunk) [2024 Financial Outlook](index=5&type=section&id=2024FinancialOutlook) Gulf Island provided indicative segment and consolidated EBITDA guidance for full year 2024, anticipating continued growth in Services and small-scale Fabrication, while Corporate segment loss is expected to be consistent with historical levels 2024 Segment EBITDA Guidance | Segment | Expected 2024 EBITDA ($ million) | | :--- | :--- | | Services | ~$14.0 (driven by Spark Safety) | | Fabrication | ~$8.0 (includes small-scale growth, excludes large project awards) | | Corporate | ~($8.0) Loss | - Forecast excludes an anticipated gain of approximately **$2.9 million** resulting from the previously disclosed property sale in February 2024[27](index=27&type=chunk) - Forecasted 2024 EBITDA for Fabrication is lower than 2023 levels due to the prior year benefiting from the contribution of a large fabrication project that was cancelled during the year[27](index=27&type=chunk) [Additional Information](index=5&type=section&id=AdditionalInformation) This section provides details on the Q4 2023 conference call, an overview of Gulf Island, definitions of non-GAAP measures, and a cautionary statement regarding forward-looking information [Fourth Quarter 2023 Conference Call](index=5&type=section&id=ConferenceCallDetails) Gulf Island scheduled a conference call for March 7, 2024, to discuss its financial results, accessible via webcast or dial-in, with a replay available online - Conference call held on Thursday, March 7, 2024, at **4:00 p.m. Central Time (5:00 p.m. Eastern Time)**[28](index=28&type=chunk) - Accessible via webcast on Gulf Island's website at www.gulfisland.com or by dialing **1.877.704.4453**[28](index=28&type=chunk) [About Gulf Island](index=5&type=section&id=AboutGulfIsland) Gulf Island Fabrication, Inc. is a leading steel fabricator and service provider to the industrial and energy sectors, offering complex steel structures, modules, and specialty services to a diverse customer base - Leading fabricator of complex steel structures and modules and provider of specialty services[29](index=29&type=chunk) - Specialty services include project management, hookup, commissioning, repair, maintenance, scaffolding, coatings, welding enclosures, civil construction and staffing services[29](index=29&type=chunk) - Customers include U.S. and international energy producers; refining, petrochemical, LNG, industrial and power operators; and EPC companies[29](index=29&type=chunk) - Headquartered in The Woodlands, Texas, with primary operating facilities in Houma, Louisiana[29](index=29&type=chunk) [Non-GAAP Measures](index=6&type=section&id=NonGAAPMeasures) This section defines the non-GAAP financial measures used by Gulf Island, including EBITDA, adjusted EBITDA, adjusted revenue, adjusted gross profit, new project awards, and backlog, explaining their relevance as supplemental indicators of performance - EBITDA: Reflects operating results and expectations of future performance excluding the non-cash impacts of depreciation and amortization[30](index=30&type=chunk) - Adjusted EBITDA: EBITDA adjusted to remove certain nonrecurring items (e.g., Hurricane Ida impacts, impairment charges) and the operating results of the Shipyard Division (including MPSV Litigation impacts)[30](index=30&type=chunk) - Adjusted Revenue and Adjusted Gross Profit: GAAP measures adjusted to remove revenue and gross profit/loss for the Shipyard Division (including MPSV Litigation impacts)[30](index=30&type=chunk) - New Project Awards and Backlog: Represent the expected revenue value of contract commitments received and the unrecognized revenue value of new project awards, respectively[31](index=31&type=chunk) - Non-GAAP measures are supplemental and not replacements or alternatives to GAAP measures[32](index=32&type=chunk) [Cautionary Statement](index=7&type=section&id=CautionaryStatement) The company's forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially, including economic factors, industry cycles, competition, project execution, and regulatory changes - Forward-looking statements discuss potential future performance, operations, and projects, identified by words like 'anticipates,' 'expects,' 'plans,' etc[34](index=34&type=chunk) - Actual results may differ materially due to factors such as supply chain disruptions, inflationary pressures, economic slowdowns, natural disasters, labor costs, geopolitical conflicts, and volatility in oil and gas prices[35](index=35&type=chunk) - Other important factors include competition, reliance on significant customers, competitive pricing and cost overruns on projects, ability to secure new project awards, and compliance with regulatory and environmental laws[35](index=35&type=chunk) - The Company cautions investors that it undertakes no obligation to publicly update or revise any forward-looking statements[36](index=36&type=chunk) [Company Information](index=7&type=section&id=CompanyInformation) Contact information for Gulf Island's Chief Executive Officer and Chief Financial Officer is provided - Richard W. Heo, Chief Executive Officer, contact: **713.714.6100**[37](index=37&type=chunk) - Westley S. Stockton, Chief Financial Officer, contact: **713.714.6100**[37](index=37&type=chunk) [Financial Statements](index=8&type=section&id=FinancialStatements) This section presents Gulf Island's consolidated financial statements, including results of operations, adjusted revenue, adjusted gross profit, EBITDA, and segment-level performance [Consolidated Results of Operations](index=8&type=section&id=ConsolidatedResultsOfOperations) The consolidated results of operations show detailed financial performance for Q4 and full year 2023, highlighting revenue, gross profit/loss, operating income/loss, and net income/loss, along with per share data Consolidated Results of Operations ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | New project awards | $44,400 | $38,417 | $37,945 | $157,719 | $240,247 | | Revenue | $44,550 | $5,023 | $38,139 | $151,067 | $142,320 | | Cost of revenue | $36,087 | $34,902 | $35,716 | $162,968 | $134,425 | | Gross profit (loss) | $8,463 | ($29,879) | $2,423 | ($11,901) | $7,895 | | General and administrative expense | $3,395 | $4,080 | $5,249 | $16,278 | $18,214 | | Other (income) expense, net | ($1,607) | ($324) | ($3,206) | ($2,296) | ($6,904) | | Operating income (loss) | $6,675 | ($33,635) | $380 | ($25,883) | ($3,415) | | Interest (expense) income, net | $383 | $397 | $190 | $1,440 | $86 | | Income (loss) before income taxes | $7,058 | ($33,238) | $570 | ($24,443) | ($3,329) | | Income tax (expense) benefit | $32 | $3 | ($21) | $41 | ($23) | | Net income (loss) | $7,090 | ($33,235) | $549 | ($24,402) | ($3,352) | | Basic income (loss) per share | $0.44 | ($2.04) | $0.04 | ($1.51) | ($0.21) | | Diluted income (loss) per share | $0.43 | ($2.04) | $0.04 | ($1.51) | ($0.21) | [Consolidated Adjusted Revenue](index=8&type=section&id=ConsolidatedAdjustedRevenue) This table provides a reconciliation of consolidated revenue to adjusted revenue, which excludes the Shipyard Division's revenue, particularly the negative revenue impact from the MPSV Litigation resolution Consolidated Adjusted Revenue Reconciliation ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $44,550 | $5,023 | $38,139 | $151,067 | $142,320 | | Add (less): Shipyard revenue | ($556) | $32,702 | ($357) | $30,417 | ($7,671) | | Adjusted revenue | $43,994 | $37,725 | $37,782 | $181,484 | $134,649 | [Consolidated Adjusted Gross Profit](index=8&type=section&id=ConsolidatedAdjustedGrossProfit) This table reconciles consolidated gross profit (loss) to adjusted gross profit, by removing the gross loss (profit) attributable to the Shipyard Division, including the significant charge related to the MPSV Litigation Consolidated Adjusted Gross Profit Reconciliation ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Gross profit (loss) | $8,463 | ($29,879) | $2,423 | ($11,901) | $7,895 | | Add (less): Shipyard gross loss (profit) | ($93) | $34,356 | $2,299 | $35,862 | $3,058 | | Adjusted gross profit | $8,370 | $4,477 | $4,722 | $23,961 | $10,953 | [Consolidated EBITDA and Adjusted EBITDA](index=9&type=section&id=ConsolidatedEBITDAAndAdjustedEBITDA) This table provides reconciliations of net income (loss) to EBITDA and adjusted EBITDA, with adjustments for depreciation, amortization, hurricane insurance gains, non-cash impairments, and the Shipyard Division's operating loss Consolidated EBITDA and Adjusted EBITDA Reconciliations ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $7,090 | ($33,235) | $549 | ($24,402) | ($3,352) | | Operating income (loss) | $6,675 | ($33,635) | $380 | ($25,883) | ($3,415) | | EBITDA | $8,026 | ($32,245) | $1,714 | ($20,417) | $1,683 | | Adjusted EBITDA | $6,606 | $2,581 | $2,293 | $16,969 | $2,265 | [Results of Operations by Segment](index=10&type=section&id=ResultsOfOperationsBySegment) This section details the financial performance of each operating segment (Services, Fabrication, Shipyard, and Corporate) for the fourth quarter and full year, including revenue, gross profit, operating income/loss, and EBITDA/Adjusted EBITDA Services Division Results ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | New project awards | $24,150 | $22,776 | $21,274 | $92,728 | $85,846 | | Revenue | $24,515 | $22,976 | $21,609 | $93,548 | $87,022 | | Gross profit | $3,435 | $3,260 | $2,932 | $13,783 | $11,227 | | Operating income | $2,742 | $2,577 | $2,212 | $10,929 | $8,124 | | EBITDA | $3,228 | $3,079 | $2,580 | $12,855 | $9,620 | Fabrication Division Results ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | New project awards | $19,896 | $16,589 | $17,291 | $66,629 | $154,239 | | Revenue | $19,664 | $14,979 | $16,414 | $89,046 | $48,299 | | Gross profit (loss) | $4,935 | $1,217 | $1,790 | $10,178 | ($274) | | Operating income | $6,115 | $904 | $4,087 | $10,558 | $4,874 | | Adjusted EBITDA | $5,378 | $1,426 | $1,984 | $11,819 | $761 | Shipyard Division Results ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | New project awards | $539 | ($718) | ($379) | ($528) | $834 | | Revenue | $556 | ($32,702) | $357 | ($30,417) | $7,671 | | Gross profit (loss) | $93 | ($34,356) | ($2,299) | ($35,862) | ($3,058) | | Operating loss | ($106) | ($35,117) | ($3,589) | ($39,374) | ($7,554) | | EBITDA | ($106) | ($35,117) | ($3,589) | ($39,374) | ($7,554) | Corporate Division Results ($ thousand) | Metric | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating loss | ($2,076) | ($1,999) | ($2,330) | ($7,996) | ($8,859) | | EBITDA | ($2,000) | ($1,924) | ($2,271) | ($7,705) | ($8,600) | | Adjusted EBITDA | ($2,000) | ($1,924) | ($2,271) | ($7,705) | ($8,116) | [Consolidated Balance Sheets](index=13&type=section&id=ConsolidatedBalanceSheets) The consolidated balance sheets present the company's financial position at year-end 2023 and 2022, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets ($ thousand) | Asset/Liability/Equity | Dec 31, 2023 ($ thousand) | Dec 31, 2022 ($ thousand) | | :--- | :--- | :--- | | **ASSETS:** | | | | Cash and cash equivalents | $38,176 | $33,221 | | Restricted cash | $1,475 | $1,603 | | Short-term investments | $8,233 | $9,905 | | Total current assets | $101,627 | $87,069 | | Property, plant and equipment, net | $23,145 | $31,154 | | Total assets | $128,428 | $134,866 | | **LIABILITIES AND SHAREHOLDERS' EQUITY:** | | | | Accounts payable | $8,466 | $8,310 | | Total current liabilities | $29,847 | $30,789 | | Long-term debt, noncurrent | $18,925 | - | | Total liabilities | $49,457 | $32,242 | | Total shareholders' equity | $78,971 | $102,624 | | Total liabilities and shareholders' equity | $128,428 | $134,866 | [Consolidated Cash Flows](index=14&type=section&id=ConsolidatedCashFlows) The consolidated cash flow statement outlines the cash generated from or used in operating, investing, and financing activities for Q4 and full year 2023 and 2022 Consolidated Cash Flows ($ thousand) | Activity | Q4 2023 ($ thousand) | Q3 2023 ($ thousand) | Q4 2022 ($ thousand) | FY 2023 ($ thousand) | FY 2022 ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $7,369 | $2,021 | $9,902 | $7,197 | ($8,923) | | Net cash provided by (used in) investing activities | $6,088 | ($626) | ($2,150) | ($503) | ($8,870) | | Net cash used in financing activities | ($128) | ($128) | ($888) | ($1,867) | ($1,972) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $13,329 | $1,267 | $6,864 | $4,827 | ($19,765) | | Cash, cash equivalents and restricted cash, end of period | $39,651 | $26,322 | $34,824 | $39,651 | $34,824 | [2024 Financial Outlook - Segment and Consolidated EBITDA Reconciliations](index=15&type=section&id=2024FinancialOutlookSegmentConsolidatedEBITDAReconciliations) This table provides a reconciliation of forecasted net income (loss) to EBITDA for each segment and on a consolidated basis for the full year 2024, supporting the financial outlook 2024 Segment and Consolidated EBITDA Reconciliations ($ thousand) | Metric | Services ($ thousand) | Fabrication ($ thousand) | Shipyard ($ thousand) | Corporate ($ thousand) | Consolidated ($ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $12,000 | $5,200 | $0 | ($6,400) | $10,800 | | Operating income (loss) | $12,000 | $5,200 | $0 | ($8,300) | $8,900 | | EBITDA | $14,000 | $8,000 | $0 | ($8,000) | $14,000 | - Forecasted EBITDA excludes a gain of approximately **$2.9 million** for the Fabrication Division resulting from the sale of property in February 2024[55](index=55&type=chunk)

THE WOODLANDS, Texas, Feb. 29, 2024 (GLOBE NEWSWIRE) -- Gulf Island Fabrication, Inc. ("Gulf Island" or the "Company") (NASDAQ:GIFI), a leading steel fabricator and service provider to the industrial and energy sectors, today announced that it will report financial results for the fourth quarter and full year 2023 after the market close on Thursday, March 7, 2024. Gulf Island management will hold a conference call on Thursday, March 7, 2024, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss the ...

THE WOODLANDS, Texas, Feb. 27, 2024 (GLOBE NEWSWIRE) -- Gulf Island Fabrication, Inc. (NASDAQ:GIFI) (the "Company"), a leading steel fabricator and service provider to the industrial and energy sectors, announced today that it has completed the sale of certain excess property that was part of the Company's facilities located in Houma, Louisiana for net cash proceeds of approximately $8.5 million. "A key aspect of our strategic transformation has been to improve our resource and facility utilization and the ...