Gulf Island Fabrication(GIFI)2021-03-30 01:48Financial Data and Key Metrics Changes - Consolidated revenue for Q4 2020 was $57.6 million, a 5% increase from Q3 2020 but a 28% decrease from Q4 2019 [28] - Consolidated net loss for Q4 2020 was $15.4 million, compared to a net loss of $12.3 million in Q3 2020 and $34.3 million in Q4 2019 [30] - Adjusted EBITDA for Q4 2020 was a loss of $9.2 million, an improvement from a loss of $10 million in Q3 2020 and a loss of $14.9 million in Q4 2019 [31] Business Line Data and Key Metrics Changes - Shipyard division revenue was $37.2 million in Q4 2020, slightly up from $37.1 million in Q3 2020 but down 22% from $47.7 million in Q4 2019 [33] - Fabrication & Services division revenue was $21.2 million in Q4 2020, up 16% from $18.2 million in Q3 2020 but down 36% from $33.2 million in Q4 2019 [39] - Fabrication & Services reported adjusted EBITDA of $1.9 million for Q4 2020, compared to $225,000 in Q3 2020 and a loss of $2.5 million in Q4 2019 [41] Market Data and Key Metrics Changes - Backlog at year-end totaled $372 million, a decrease of 15% from the previous year and 13% from September 2020 [46] - Operating cash flow for Q4 2020 was negative $11.7 million, with capital expenditures of $1 million [46] Company Strategy and Development Direction - The company is consolidating operations to improve resource utilization and reduce costs, including the relocation of the pipe mill to enhance efficiency [8][10] - There is a strategic focus on expanding into green energy markets, including renewable biofuel and hydrogen production [13][71] - The company aims to enhance customer value propositions through strategic partnerships and in-house engineering capabilities [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by COVID-19, crude oil volatility, and labor availability, but expressed confidence in the company's long-term foundation and strategic initiatives [7][27] - The company is optimistic about increasing project bidding opportunities in LNG and petrochemical sectors in Texas and Louisiana [12] Other Important Information - The company has submitted a claim to recover costs associated with design deficiencies impacting vessel projects [20] - A change order with the U.S. Navy is expected to result in a benefit of $7 million to $10 million in Q1 2021 [24] Q&A Session Summary Question: What percentage of backlog is in a loss position? - The majority of the backlog in the Shipyard division is in a loss or breakeven position, contributing no incremental profitability [53][54] Question: Outlook for bidding on modular work? - The company is confident in pursuing modular work, particularly in LNG and petrochemical projects, despite previous delays [55][56] Question: Opportunities in offshore wind? - The company is selectively looking at offshore wind opportunities but faces challenges due to the shift towards monopile foundations [61][65] Question: What type of work is being pursued? - The company is winning smaller service work and is focused on engineered equipment for sustainable end markets [67][71] Question: Mitigation of skilled labor challenges? - The company is working with technical schools to improve training and retention of skilled labor [72] Question: Any further consolidation opportunities? - The company has consolidated operations in Houma and is focused on making that footprint efficient [75][78] Question: Timeline for vessel deliveries? - The second 40-vehicle ferry is expected to be delivered in Q2 2021, with the remaining vessels staggered through 2024 [80][84]