Gulf Island Fabrication(GIFI)2019-03-01 18:15Financial Data and Key Metrics Changes - Consolidated revenue for Q4 2018 was $60.2 million, compared to $37.3 million in Q4 2017, reflecting a significant increase [16] - Net loss for Q4 2018 was $4.7 million, or diluted loss per share of $0.31, an improvement from a net loss of $24.3 million, or diluted loss per share of $1.63 in Q4 2017 [16] - The operating results were impacted by a forecast cost increase of $5.8 million on harbor tug projects and lower revenue volume in the Fabrication division [17] Business Line Data and Key Metrics Changes - Shipyard division revenue was $29.7 million for Q4 2018, up from $900,000 in the same period of 2017, with an operating loss of $6.6 million compared to $27.5 million in Q4 2017 [20] - Fabrication division revenue decreased by 36% to $9.8 million from $15.4 million in Q4 2017, but operating income improved to $2.2 million from an operating loss of $9.8 million [23] - Services division revenue was $21.5 million, slightly down from $21.7 million in Q4 2017, with operating income increasing to $2.1 million from $1.5 million [26] Market Data and Key Metrics Changes - Backlog as of December 31, 2018, totaled approximately $357 million, an increase of $135 million from the previous year [29] - The backlog by segment included $282 million for the Shipyard division, $64 million for Fabrication, $11 million for Services, and $400,000 for EPC [29] - Cash and short-term investments at year-end were $79.2 million, an increase of almost $25 million from September 2018 [30] Company Strategy and Development Direction - The company is focusing on improving estimating functions by centralizing efforts at the Houma shipyard to prevent future cost overruns [10][46] - Management remains optimistic about future opportunities across all business lines, citing significant bidding activity [33] - The company is targeting recovery of underutilized overheads and is actively pursuing new projects [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges with the harbor tug projects but emphasized lessons learned will be applied to future work [33] - The company anticipates starting work on Navy vessels in the latter part of 2019, with ongoing negotiations to finalize contracts [36][37] - There is a positive outlook for profitability in 2019, with expectations of improved operating income as backlog projects progress [40][41] Other Important Information - The company reported a $2.8 million benefit from the recovery of bad debt in the Fabrication division [18] - The company is experiencing strong liquidity with total cash, investments, and credit availability of approximately $116 million [31] Q&A Session Summary Question: Discussion on the pace of work on Navy vessels and potential further awards - Management indicated that negotiations with the Navy are ongoing, with work expected to start in the third or fourth quarter of 2019 [36][37] Question: Insights on profitability and timing for 2019 - Management expects to recover overheads and improve margins, with a goal of returning to profitability in the latter part of 2019 [40][41] Question: Changes with the tug projects and mitigation strategies - Management is centralizing estimating efforts to improve accuracy and prevent future issues, acknowledging that the current project is not profitable [46][48] Question: Scope and impact of the jacket projects in the Fabrication division - Management expressed excitement about the jacket project, which is expected to improve utilization in the Fabrication division [49][50] Question: Market outlook and relationship with SeaOne - Management noted high levels of bidding activity, particularly in the petrochemical industry, while the status of SeaOne's financing remains uncertain [52][54]