Gulf Island Fabrication(US:GIFI)2020-05-11 02:06Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2020 was $78.6 million, a 16% increase year-over-year from $67.6 million in Q1 2019 [28] - Consolidated net income for Q1 2020 was $5.9 million, compared to a net loss of $3 million in Q1 2019 [28] - Operating income for Q1 2020 was $5.9 million, reflecting a $10 million gain from a contract dispute settlement [29] Business Line Data and Key Metrics Changes - Shipyard division revenue was $45.6 million in Q1 2020, a 22% increase from $37.4 million in Q1 2019, but a slight decrease from $47.7 million in Q4 2019 [30] - Fabrication and services division revenue was $33.4 million in Q1 2020, a 9% increase from $30.6 million in Q1 2019 [32] - Operating loss for the shipyard division was $1.9 million in Q1 2020, compared to an operating loss of $904,000 in Q1 2019 [31] Market Data and Key Metrics Changes - Backlog totaled approximately $500 million at March 2020, an increase of $63 million from December 2019 and $166 million from March 2019 [36] - Approximately 95% of the backlog was attributable to the shipyard division, with significant contributions from U.S. Navy option exercises [36] Company Strategy and Development Direction - The company completed the consolidation of its fabrication and services divisions to improve efficiency and reduce costs [11] - The closure of the Jennings facility is scheduled for Q3 2020 to further enhance operational efficiency [11] - The company is focusing on strengthening relationships with customers and strategic partners, receiving positive feedback on recent initiatives [12] Management's Comments on Operating Environment and Future Outlook - The management acknowledged significant challenges due to COVID-19 and declining oil prices, impacting operations and project activities [18] - The company expects 2020 to be a challenging year for the newly integrated fabrication and services division [18] - Management did not provide specific guidance for EBITDA for the remainder of 2020 due to market uncertainty [43] Other Important Information - The company received a $10 million loan under the Payroll Protection Program to retain and bring back employees [22] - The company has over $400 million of outstanding surety bonds, which are dependent on its financial strength [40] Q&A Session Summary Question: What kind of project was the $30 million project that was suspended? - The projects were fabrication projects for components to offshore production rigs, which have been suspended due to market conditions [49][50] Question: Can you comment on the bidding environment? - The bidding environment has been impacted, especially in oil and gas, with larger CapEx projects still moving forward, but smaller projects have been put on hold [59][60] Question: How should gross margin develop given recent backlog additions? - The backlog includes a significant portion that is near breakeven, but challenges with gross profit are expected as lower margin projects are completed [61][62]