Gulf Island Fabrication(GIFI) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Overview This report details Gulf Island's Q2 2025 financial and operational results, including the Englobal acquisition and key financial statements Q2 2025 Financial & Operational Highlights Gulf Island reported Q2 2025 consolidated revenue of $37.5 million, a net loss of $0.6 million, and positive adjusted EBITDA of $1.9 million, alongside the acquisition of ENGlobal Corporation assets Q2 2025 Key Financial Metrics | Metric | Value (USD) | | :--- | :--- | | Consolidated Revenue | $37.5 million | | Consolidated Net Loss | $0.6 million | | Consolidated Adjusted EBITDA | $1.9 million | | Services Division Operating Income | $1.6 million | | Services Division EBITDA | $2.0 million | | Fabrication Division Operating Income | $0.4 million | | Fabrication Division EBITDA | $1.1 million | - The company completed the acquisition of certain assets from ENGlobal Corporation related to its automation, engineering, and government services businesses during the quarter[5] Management Commentary Management emphasized business model durability with $1.9 million adjusted EBITDA, noted improved bidding activity, and expects the Englobal acquisition to be accretive from 2026, supported by a strong $62.2 million cash position - Despite market softness, the company achieved adjusted EBITDA of $1.9 million and is seeing improved bidding activity, securing a limited notice to proceed on a contract worth approximately $20.0 million[4] - The acquisition of Englobal is strategically significant, expected to broaden service offerings and diversify end markets. While post-acquisition losses are anticipated for 2025, the business is projected to contribute to profitability in 2026[4] - The company maintains a strong balance sheet with $62.2 million in cash and investments. It executed on its capital allocation strategy by repurchasing 437,000 shares for $2.8 million in Q2 2025[4] Detailed Financial Performance Q2 2025 consolidated revenue declined to $37.5 million, resulting in a $0.6 million net loss, impacted by lower divisional activity and $2.3 million in Englobal acquisition-related costs and losses Consolidated Results Q2 2025 consolidated revenue decreased to $37.5 million, resulting in a $0.6 million net loss and a $1.9 million adjusted EBITDA, impacted by $2.3 million in Englobal acquisition-related costs and losses Consolidated Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $37.5M | $41.3M | -9.2% | | Net Income (Loss) | ($0.6M) | $1.9M | Decline | | Adjusted EBITDA | $1.9M | $2.5M | -24.0% | Services Division Services Division revenue decreased 3.5% to $22.0 million in Q2 2025, with operating income falling to $1.6 million and EBITDA margin contracting to 9.1%, due to lower activity and Englobal losses Services Division Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $22.0M | $22.8M (approx) | -3.5% | | Operating Income | $1.6M | $2.2M | -27.3% | | EBITDA | $2.0M | $2.7M | -25.9% | | EBITDA Margin | 9.1% | 11.7% | -2.6 p.p. | Fabrication Division Fabrication Division revenue declined 15.4% to $15.8 million in Q2 2025, with operating income decreasing to $0.4 million due to lower activity, reduced utilization, and Englobal automation business losses Fabrication Division Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $15.8M | $18.7M (approx) | -15.4% | | Operating Income | $0.4M | $1.1M | -63.6% | | EBITDA | $1.1M | $1.8M | -38.9% | Corporate Division Corporate Division's operating loss widened to $3.1 million in Q2 2025, while adjusted EBITDA improved to a loss of $1.2 million, excluding $1.8 million in Englobal acquisition transaction costs Corporate Division Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Loss | ($3.1M) | ($2.0M) | | Adjusted EBITDA | ($1.2M) | ($2.0M) | Balance Sheet and Liquidity As of June 30, 2025, Gulf Island maintained strong liquidity with $62.2 million in cash and investments, $19.0 million total debt at 3.0% fixed interest, and repurchased 437,229 shares for $2.8 million - The company's cash and short-term investments balance was $62.2 million at the end of Q2 2025[12] - Total debt was $19.0 million, bearing a fixed interest rate of 3.0% per annum[12] - The company repurchased 437,229 shares of its common stock for $2.8 million, at an average price of $6.41 per share[13] Englobal Acquisition In Q2 2025, Gulf Island acquired ENGlobal Corporation's automation, engineering, and government services businesses for a $5.5 million capital commitment, expecting initial operating losses of $0.5 million in Q2 and $1.5-$2.0 million for H2 2025 - The acquisition adds automation, engineering, and government services to Gulf Island's portfolio, aiming to expand offerings and customer base[14] Englobal Acquisition Financial Summary | Item | Amount (USD) | | :--- | :--- | | Total Capital Commitment | $5.5 million | | Purchase Price (DIP Financing) | $3.5 million | | Loan Assumption Payment | $1.5 million | | Transaction Costs | $0.5 million | | Q2 2025 Operating Loss | $0.5 million | | Expected H2 2025 Operating Loss | $1.5M - $2.0M | Financial Statements This section presents the unaudited consolidated financial statements for the three and six months ended June 30, 2025, including the Income Statement, Balance Sheets, and Cash Flow Statements, with non-GAAP reconciliations Consolidated Results of Operations Q2 2025 saw a net loss of $574 thousand and diluted loss per share of ($0.04), a decline from Q2 2024's net income of $1,889 thousand and diluted EPS of $0.11, with revenue decreasing to $37.5 million Q2 2025 Income Statement Highlights (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $37,538 | $41,262 | | Gross Profit | $3,561 | $4,158 | | Operating Income (Loss) | $(1,079) | $1,283 | | Net Income (Loss) | $(574) | $1,889 | | Diluted EPS | $(0.04) | $0.11 | Consolidated Balance Sheets As of June 30, 2025, total assets were $134.3 million, total liabilities $41.6 million, and shareholders' equity $92.8 million, with cash and cash equivalents significantly increasing to $46.8 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $46,825 | $27,284 | | Total Current Assets | $105,398 | $105,409 | | Total Assets | $134,348 | $133,216 | | Total Liabilities | $41,590 | $40,114 | | Total Shareholders' Equity | $92,758 | $93,102 | Consolidated Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities was $4.8 million, investing activities $19.0 million, and net cash used in financing activities $4.2 million, leading to a $19.5 million net increase in cash Six Months Ended June 30, 2025 Cash Flow (in thousands) | Cash Flow Category | Amount | | :--- | :--- | | Net cash provided by operating activities | $4,758 | | Net cash provided by investing activities | $19,012 | | Net cash used in financing activities | $(4,229) | | Net increase in cash | $19,541 |