Gulf Island Fabrication(GIFI)2020-03-05 01:16Financial Data and Key Metrics Changes - Fourth quarter revenue was $79.4 million, an increase of approximately 5% sequentially and 32% year-over-year [21][23] - Consolidated net loss for the fourth quarter was $34.3 million, compared to a net loss of $6.8 million in the third quarter and $4.7 million in the fourth quarter of 2018 [21][23] - The company ended the year with total cash, investments, and availability under its credit facility of almost $100 million [22][34] Business Line Data and Key Metrics Changes - Fabrication division revenue was $15.5 million for the quarter, down from $19.5 million in the previous quarter but up from $10.2 million in the same period of 2018 [25] - Shipyard division revenue was $45.6 million for the quarter, up from $39.4 million in the previous quarter and $29.7 million in the same period of 2018 [27] - Services division revenue was $20.5 million for the quarter, up from $17.5 million in the previous quarter but down from $21.5 million in the same period of 2018 [30] Market Data and Key Metrics Changes - Backlog at December 2019 totaled approximately $437 million, a decrease of $25 million from September 2019 but an increase of $81 million from year-end 2018 [33] - The backlog by operating segment was $374 million for the shipyard division, $50 million for the fabrication division, and $13 million for the services division [33] Company Strategy and Development Direction - The company plans to be more disciplined in pursuing and evaluating prospects, focusing on profitable opportunities [10][19] - A new integrated segment combining fabrication and services divisions aims to leverage best practices and improve resource utilization [15] - The company is targeting onshore refining, petrochemical, LNG, and industrial facilities for future growth, capitalizing on anticipated capital projects within a 300-mile radius of Houma [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in profitability and emphasized a focus on improving execution capabilities and project management [8][19] - The company is committed to enhancing its bidding process and project execution to return to profitability [19][38] - Management expressed confidence in returning to profitability due to a strong balance sheet and strategic location [78] Other Important Information - The company experienced project charges of $14 million and non-cash asset impairments of $17.3 million during the quarter [21] - The company anticipates capital requirements in 2020 of approximately $10 million to $15 million [37] Q&A Session Summary Question: Outlook on EBITDA - Management noted that about 85% of the current backlog will contribute no future gross profit, emphasizing the need for new project awards to achieve positive EBITDA [56][57] Question: Competitive Advantage in New Opportunities - Management clarified that the company will not compete with international yards but will focus on strategic local projects that leverage its location and capabilities [59][60] Question: Changes in Bidding Process - Management described the implementation of a "go, no go" review process for evaluating project prospects, emphasizing a more rigorous approach to risk assessment [66][67] Question: Legal Disputes and Settlements - Management confirmed that a recent $10 million settlement was related to a change order dispute, while litigation with Hornbeck remains ongoing [74]