Gulf Island Fabrication(GIFI) - 2020 Q1 - Quarterly Report

Financial Position - As of March 31, 2020, the company's cash and short-term investments totaled $68.6 million, with an additional $30.2 million available under its Credit Agreement[111]. - Available liquidity as of March 31, 2020, was $68.6 million, including cash and cash equivalents of $48.6 million and short-term investments of $19.9 million[146]. - As of March 31, 2020, the company's working capital was negative $4.4 million, with total cash, cash equivalents, and short-term investments amounting to $68.6 million[147]. - The ratio of current assets to current liabilities was 1.80 to 1.00 as of March 31, 2020, indicating strong liquidity[158]. - The company had $411.8 million of outstanding surety bonds as of March 31, 2020, indicating significant project support[159]. Revenue and Profitability - Revenue for Q1 2020 was $78.6 million, up 16.2% from $67.6 million in Q1 2019[126]. - Gross profit for Q1 2020 was a loss of $254, compared to a profit of $553 in Q1 2019, reflecting a 145.9% decline[126]. - Operating income for Q1 2020 was $5.9 million, a significant improvement from a loss of $3.3 million in Q1 2019[126]. - Revenue for 2020 was $78.6 million, an increase of 16.2% compared to $67.6 million in 2019[127]. - Gross loss for 2020 was $0.3 million (0.3% of revenue), compared to a gross profit of $0.6 million (0.8% of revenue) in 2019[127]. - Revenue for the Fabrication & Services Division increased by 9.3% to $33.4 million in 2020 from $30.6 million in 2019[138]. - Gross profit for the Fabrication & Services Division was $1.0 million (2.9% of revenue) in 2020, compared to $1.0 million (3.2% of revenue) in 2019[139]. Project Awards and Backlog - New project awards for Q1 2020 totaled $141.6 million, a significant increase from $45.8 million in Q1 2019, representing a 209% growth[121]. - New project awards for 2020 were $128.9 million, significantly higher than $2.8 million in 2019, primarily due to U.S. Navy contracts[134]. - Backlog as of March 31, 2020, was $500.3 million, an increase from $437.3 million at December 31, 2019[122]. - 95% of the backlog within the Shipyard Division is attributable to government and non-oil and gas customers, including three research vessels and five rescue ships[117]. - The company expects to recognize $144.7 million of backlog revenue in the remainder of 2020, $183.3 million in 2021, and $127.8 million in 2022[123]. - The U.S. Navy has options for three additional vessels, which could increase backlog by approximately $203 million if exercised[124]. Operational Adjustments and Challenges - The company has experienced a significant decline in oil prices and demand due to COVID-19, impacting revenue and project execution[106]. - The company is implementing measures to mitigate COVID-19 impacts, including employee wellness protocols and operational adjustments[109]. - The company anticipates that large project opportunities may not be awarded until late 2020 or 2021 due to market uncertainty[116]. - The company is addressing operational challenges through cost reduction efforts and the sale of underutilized assets to improve liquidity[109]. - The company continues to focus on securing profitable new project awards and improving project gross profit despite challenges from COVID-19[117]. - The company plans to focus on securing profitable new project awards and improving liquidity through cost reductions and asset sales[162]. Corporate Structure and Strategy - The company plans to close the Jennings Yard upon completion of harbor tug projects, expected in Q3 2020, to consolidate marine vessel construction activities and improve resource utilization[115]. - The company has combined its Fabrication and Services Divisions into a new division called Fabrication & Services to enhance project execution and resource utilization[115]. - The company is enhancing its competitiveness by improving proposal and project execution processes, increasing accountability, and incorporating lessons learned into future projects[113]. - The company has made significant progress in improving cash flow from projects in backlog, although it cannot assure the successful sale of $8.1 million in assets held for sale[162].