Gulf Island Fabrication(US:GIFI)2020-08-09 14:51Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2020 was $60 million, a decrease of approximately 24% sequentially and 25% year-over-year [17] - Consolidated net loss for Q2 2020 was $5.5 million, compared to net income of $5.9 million in Q1 2020 and a net loss of $5.2 million in Q2 2019 [18] - EBITDA for Q2 2020 was a loss of $3.4 million, compared to a gain of $8.2 million in the previous quarter and a loss of $3 million in the same quarter last year [18] Segment Performance Changes - Shipyard Division revenue was $33.9 million for Q2 2020, down 26% from Q1 2020 and down 15% from Q2 2019 [19] - Fabrication & Services Division revenue was $26.6 million for Q2 2020, a decrease of 20% from Q1 2020 and 35% from Q2 2019 [22] - Operating loss for the Shipyard Division was $1.7 million, while the Fabrication & Services Division reported an operating loss of $1.4 million [20][23] Market Data and Key Metrics Changes - Total backlog was approximately $470 million at the end of June 2020, a decrease of $30 million from March 2020 but an increase of $33 million from June 2019 [27] - Approximately 93% of the backlog was attributable to the Shipyard Division, excluding customer options for three additional vessels valued at approximately $200 million [27] Company Strategy and Industry Competition - The company is focusing on process improvements and enhancing project execution to better navigate the challenges posed by COVID-19 and oil price volatility [7][10] - Management is being selective in bidding for projects, particularly in the Fabrication & Services sector, where the company is targeting opportunities with the best chance of moving forward [10][53] - The company is not significantly diversifying into new markets but is concentrating on onshore petrochemical and LNG projects in Texas and Louisiana [55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the duration and uncertainty of COVID-19 and volatile oil prices will continue to be headwinds [69] - The company is proactively managing variables within its control and is making progress on key initiatives to improve project execution and resource utilization [69] - There is no guidance on EBITDA for the remainder of 2020 due to ongoing market uncertainty [31] Other Important Information - Operating cash flow for the quarter was negative $3.8 million, with capital expenditures of $5.6 million [28] - The company amended its credit facility to extend the maturity date from June 2021 to June 2022 [30] Q&A Session Summary Question: When do you anticipate submitting your PPP loan forgiveness application? - The company will submit as soon as the SBA starts accepting applications, expected in the next several weeks [37][38] Question: What is the status of the $3 million receivable for billables? - The receivable was paid prior to quarter end [40] Question: Were any covenants changed in the debt facility? - No changes to covenants, except for a minimum LIBOR floor of 1% for borrowings [43][44] Question: Any updates on bidding activity and margins? - The company is being selective in bidding, with a focus on smaller projects due to financial challenges in the oil and gas sector [53] Question: Is there any discussion regarding stock buybacks? - The topic is discussed at the Board level, but a strong balance sheet is required to compete for projects, so buybacks are not imminent [62][63]