Gulf Island Fabrication(US:GIFI)2019-05-12 02:52Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2019 was $67.6 million, a 17% increase from $57.3 million in Q1 2018 and a 12% increase from $60.2 million in Q4 2018 [9][10] - Net loss for Q1 2019 was $3 million, or a diluted loss per share of $0.20, compared to a net loss of $5.3 million, or a diluted loss per share of $0.35 in Q1 2018 [9][10] - Operating loss decreased from $5.3 million in Q1 2018 to $3 million in Q1 2019, attributed to higher revenue and a better project mix [11][12] Business Line Data and Key Metrics Changes - Shipyard Division: Revenue was $36.6 million in Q1 2019, up from $18.6 million in Q1 2018 and $29.7 million in Q4 2018. Operating loss improved to $904,000 from $2 million in Q1 2018 [15][16] - Fabrication Division: Revenue decreased to $12.6 million in Q1 2019 from $17.3 million in Q1 2018, with an operating loss of $1.5 million compared to a loss of $2.5 million in Q1 2018 [20][22] - Services Division: Revenue was $19.6 million in Q1 2019, down from $21.9 million in Q1 2018, with operating income of $1.3 million, a decrease from $1.9 million in Q1 2018 [24][25] Market Data and Key Metrics Changes - Backlog as of March 31, 2019, totaled approximately $335 million, an increase of $43 million from March 2018 but a decrease of $22 million from year-end 2018 [29][30] - The backlog included $248 million for the Shipyard Division, $71 million for the Fabrication Division, and $15 million for the Services Division [30] Company Strategy and Development Direction - The company combined its EPC Division with the Fabrication Division to focus on modular fabrication in the petrochemical sector and offshore wind opportunities [8] - Approximately 90% of the backlog is now outside the oil and gas sector, indicating a strategic shift towards diversification [37] Management's Comments on Operating Environment and Future Outlook - Management expects improvement in facility utilization and revenue as construction activities ramp up for the backlog [39] - The company is optimistic about ongoing opportunities in onshore fabrication and traditional oil and gas maintenance [38] - A Special Committee has been established to evaluate options to enhance shareholder value, indicating a proactive approach to strategic alternatives [41] Other Important Information - The company ended Q1 2019 with cash and short-term investments of $70.2 million, an increase from $64 million in March 2018 [32][34] - The credit facility was amended to extend its maturity to June 2021, maintaining strong liquidity [34] Q&A Session Summary Question: Update on engineering and construction ramp-up for vessels - Management confirmed that engineering continues and construction for the Navy vessels is expected to start in Q3 2019, with the first vessel for Oregon State commencing construction this quarter [46][48] Question: Movement on SeaOne funding - Management indicated no significant movement on SeaOne financing, focusing efforts on petrochemical projects instead [55][58] Question: Status of disputed vessels - The two disputed vessels remain in the company's facilities, with $12.5 million related to those projects in long-term assets and $21 million in backlog [62][64] Question: Facility utilization and profitability - Management stated that full utilization is not currently achievable based solely on backlog, but improvements are expected by the end of the year [67][68] Question: Strategic alternatives and M&A activity - Management did not provide specific comments on M&A activity but emphasized the importance of maximizing shareholder returns through the strategic review process [79][80]