UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-22303
GULF ISLAND FABRICATION, INC.
(Exact Name of Registrant as Specified in its Charter)
LOUISIANA 72-1147390
(State or Other jurisdiction of (I.R.S Employer Identification No.)
Incorporation or Organization)
583 THOMPSON ROAD
HOUMA, LOUISIANA 70363
(Address of Principal Executive Offices) (Zip Code)
(504) 872-2100
(Registrant's Telephone Number, Including Area Code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes __X__ No _____
As of November 11, 1997, there were 11,600,000 shares of common stock,
no par value, outstanding.
GULF ISLAND FABRICATION, INC.
INDEX
Page
PART I Financial Information
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheet
"December 31, 1996 and September 30, 1997" 1
Consolidated Statement of Income
"Three and Nine Months Ended September 30, 1996 and 1997" 2
Consolidated Statement of Changes in Shareholders' Equity
"Nine Months Ended September 30, 1997" 3
Consolidated Statement of Cash Flows
"Three and Nine Months Ended September 30, 1996 and 1997" 4
Notes to Consolidated Financial Statements 5
Item 2 Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
PART II Other Information
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GULF ISLAND FABRICATION, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
<TABLE>
<CAPTION>
September 30,
December 31, 1997
1996 (unaudited)
-------------- --------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 1,357 $ 4,774
Contracts receivable, net 11,674 23,777
Contract retainage 1,806 1,209
Costs and estimated earnings in excess of billings
on uncompleted contracts 1,306 3,333
Prepaid expenses 500 579
Inventory 1,113 1,221
------------ ------------
Total current assets 17,756 34,893
Property, plant and equipment, net 17,735 31,533
Other assets 418 428
------------ ------------
$ 35,909 $ 66,854
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,081 $ 5,499
Billings in excess of costs and estimated
earnings on uncompleted contracts 2,205 5,635
Accrued employee costs 1,903 3,072
Accrued expenses 1,036 2,359
Income taxes payable - 1,441
Current portion of notes payable 530 -
------------ ------------
Total current liabilities 6,755 18,006
Deferred income taxes - 1,218
Notes payable 5,657 -
------------ ------------
Total liabilities 12,412 19,224
Contingencies (Note 5)
Shareholders' equity (Note 1):
Preferred stock, no par value, 5,000,000 shares
authorized, no shares issued and outstanding - -
Common stock, no par value, 20,000,000 shares authorized, outstanding
7,000,000 shares at December 31, 1996 and 11,600,000 shares at
September 30, 1997 1,000 4,133
Additional paid-in capital 6,670 34,865
Retained earnings 15,827 8,632
------------ ------------
Total shareholders' equity 23,497 47,630
------------ ------------
$ 35,909 $ 66,854
============ ============
See Accompanying Notes to Consolidated Financial Statements (Unaudited)
</TABLE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1997 1996 1997
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenue $ 19,168 $ 36,311 $ 60,376 $ 101,556
Cost of revenue 16,039 29,325 53,275 83,282
----------- ------------ ----------- ------------
Gross profit 3,129 6,986 7,101 18,274
General and administrative expense 567 1,115 1,567 3,262
----------- ------------ ----------- ------------
Operating income 2,562 5,871 5,534 15,012
Interest expense (income), net 104 (61) 297 212
----------- ------------ ----------- ------------
Income before income taxes 2,458 5,932 5,237 14,800
Provision for income taxes - 2,234 - 4,210
Cumulative deferred tax provision - - 1,144
----------- ------------ ----------- ------------
Net income $ 2,458 $ 3,698 $ 5,237 $ 9,446
=========== ============ =========== ============
Pro forma data (Note 3):
Income before income taxes $ 2,458 $ 5,932 $ 5,237 $ 14,800
Provision for income taxes - 2,234 - 4,210
Pro forma provision for income taxes
related to operations as S Corporation 934 - 1,990 1,379
----------- ------------ ----------- ------------
Pro forma net income $ 1,524 $ 3,698 $ 3,247 $ 9,211
=========== ============ =========== ============
Pro forma per share data (Notes 4 and 6):
Pro forma net income per share $ 0.19 $ 0.31 $ 0.41 $ 0.89
=========== ============ =========== ============
Pro forma weighted average common shares 7,854,000 11,742,000 7,854,000 10,370,000
=========== ============ =========== ============
See Accompanying Notes to Consolidated Financial Statements (Unaudited)
</TABLE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(in thousands, except share data)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Retained
Shares Amount Capital Earnings Total
---------- ---------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Balance at January 1,1997 7,000,000 $ 1,000 $ 6,670 $ 15,827 $ 23,497
Net proceeds from issuance of
common stock 4,600,000 3,133 28,195 - 31,328
Dividends paid - - - (16,641) (16,641)
Net income - - - 9,446 9,446
----------- ----------- ----------- ------------ -----------
Balance at September 30, 1997 11,600,000 $ 4,133 $ 34,865 $ 8,632 $ 47,630
=========== =========== =========== ============ ===========
See Accompanying Notes to Consolidated Financial Statements (Unaudited)
</TABLE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
1996 1997 1996 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 25,728 $ 37,897 $ 59,048 $ 96,009
Cash paid to suppliers and employees (17,788) (32,045) (50,804) (81,971)
Interest collected (paid) (106) 61 (298) (212)
------------- ------------- ------------- -------------
Net cash provided by operating activities 7,834 5,913 7,946 13,826
------------- ------------- ------------- -------------
Cash flows from investing activities:
Capital expenditures, net (398) (5,306) (5,481) (12,787)
Payment for purchase of Dolphin Services, net of
cash acquired (Note 2) - - - (5,803)
Proceeds form cash surrender value policy - - - 253
------------- ------------- ------------- -------------
Net cash used in investing activities (398) (5,306) (5,481) (18,337)
------------- ------------- ------------- -------------
Cash flows from financing activities:
Proceeds from initial public offering - - - 31,328
Proceeds from issuance of notes payable 1,800 - 15,898 41,900
Principal payments on notes payable (6,918) (135) (17,028) (48,659)
Dividends paid (797) - (1,707) (16,641)
------------- ------------- ------------- -------------
Net cash provided by (used in) financing activities (5,915) (135) (2,837) 7,928
------------- ------------- ------------- -------------
Net increase (decrease) in cash 1,521 472 (372) 3,417
------------- ------------- ------------- -------------
Cash at beginning of period 191 4,302 2,084 1,357
------------- ------------- ------------- -------------
Cash at end of period $ 1,712 $ 4,774 $ 1,712 $ 4,774
============= ============= ============= =============
Reconciliation of net income to net cash provided
by operating activities:
Net income $ 2,458 $ 3,698 5,237 $ 9,446
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 442 765 1,128 2,104
(Increase) Decrease in accounts receivable 8,931 758 (999) (7,307)
(Increase) Decrease in retainage 313 (211) 436 790
Increase in costs and estimated earnings in excess
of billings on uncompleted contracts (119) (8) (458) (1,972)
(Increase) Decrease in other current assets (504) 294 (635) 967
Increase (Decrease) in accounts payable and accrued expenses (1,120) 29 3,546 4,649
Increase (Decrease) in income taxes payable - (535) - 988
Increase in deferred income taxes - 74 - 1,218
Increase (Decrease) in billings in excess of costs
and estimated earnings on uncompleted contracts (2,567) 1,049 (309) 2,943
------------ ------------- ------------- -------------
Net cash provided by operating activities $ 7,834 $ 5,913 $ 7,946 $ 13,826
============= ============= ============= =============
See Accompanying Notes to Consolidated Financial Statements (Unaudited)
</TABLE>
GULF ISLAND FABRICATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
(UNAUDITED)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING PRINCIPLES
The consolidated financial statements include the accounts of Gulf Island
Fabrication, Inc. and its wholly-owned subsidiaries (the "Company"). The
Company, located in Houma, Louisiana, is engaged in the fabrication and
refurbishment of offshore oil and gas platforms for oil and gas industry
companies. The Company's principal markets are concentrated in the offshore
regions of the Gulf of Mexico.
On January 2, 1997, the Company acquired all outstanding shares of Dolphin
Services, Inc., Dolphin Steel Sales, Inc. and Dolphin Sales and Rentals, Inc.
for $5.9 million (the "Dolphin Acquisition"). The acquired corporations perform
fabrication, sandblasting, painting and construction for offshore oil and gas
platforms in inland and offshore regions of the coast of the Gulf of Mexico.
On April 30, 1997, Dolphin Steel sales, Inc. and Dolphin Sales and Rentals, Inc.
merged into Dolphin Services, Inc. The three corporations are referred to
hereinafter collectively as "Dolphin Services." (See Note 2)
On February 13, 1997, the Board of Directors approved the filing of an initial
registration statement on Form S-1 with the Securities and Exchange commission
to register and sell 4.6 million shares of common stock. Shortly before closing
of the offering on April 9, 1997, the Company's current shareholders elected to
terminate its status as an S Corporation, and the Company has become subject to
federal and state income taxes. (See Note 3.)
On April 3, 1997, the Securities and Exchange Commission declared the Company's
Registration Statement on Form S-1 (Registration No. 333-21863) effective. On
April 9, 1997, the Company sold 4.6 million common shares pursuant to the
registration statement, increasing the total shares outstanding to 11.6 million
(the "Initial Public Offering"). The Company received net proceeds from the
sale of $31.3 million.
The information presented as of September 30, 1997 and for the three-month and
nine-month periods ended September 30, 1996 and 1997, is unaudited. In the
opinion of the Company's management, the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring adjustments)
which the Company considers necessary for the fair presentation of the Company's
financial position as of September 30, 1997 and the results of its operations
and its cash flows for the three-month and nine-month periods ended September
30, 1996 and 1997. The results of operations for the three and nine months
ended September 30, 1997 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1997.
In the opinion of management, the financial statements included herein have been
prepared in accordance with generally accepted accounting principles and the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
NOTE 2 - ACQUISITION OF DOLPHIN SERVICES
The Dolphin Acquisition was financed by borrowings under the Company's line of
credit. The Company acquired assets with a fair value of $9.6 million and
assumed liabilities of $3.8 million. The acquisition was accounted for under
the purchase method of accounting. Accordingly, the operations of Dolphin
Services are included in the Company's operations from January 2, 1997.
Assuming the acquisition had occurred on January 1, 1996, pro forma revenue
and pro forma net income for the three months and nine months ended September
30, 1996 would have been $26.1 million and $2.2 million and $77.4 million and
$4.3 million, respectively, including a pro forma provision for income taxes
assuming the Company had operated as a C Corporation. Pro forma net income per
share for the three months and nine months ended September 30, 1996 would have
been $.28 and $.54, respectively, based on pro forma weighted average common
shares outstanding of 7,854,000.
NOTE 3 - TERMINATION OF S CORPORATION STATUS
On April 4, 1997, the Company's shareholders elected to terminate the Company's
status as an S Corporation, and the Company became subject to federal and state
income taxes. In conjunction with the termination of S Corporation status,
the Company paid a distribution of $14 million to its current shareholders
representing substantially all of the Company's remaining undistributed S
Corporation earnings through April 4, 1997. The S Corporation earnings for the
period April 1, 1997 to April 4, 1997 were an immaterial part of the total
distribution.
The balance sheet of the Company as of September 30, 1997 reflects a deferred
income tax liability of $1.2 million, which includes $1.1 million of deferred
income tax liability resulting from the termination of the S Corporation
status. The amount of the Company's retained earnings represents primarily the
C Corporation earnings prior to the Company's election of S Corporation status
in 1989 and earnings after April 4, 1997.
The pro forma income statement presentation reflects an additional provision for
income taxes as if the Company had been subject to federal and state income
taxes since January 1, 1996 using an assumed effective tax rate of approximately
38%.
NOTE 4 - PRO FORMA PER SHARE DATA
Pro forma per share data for the three and nine month periods ended September
30, 1996 and 1997 consists of the Company's historical income, adjusted to
reflect income taxes as if the Company had operated as a C Corporation for the
three month and nine month periods ended September 30, 1996 and 1997. This
calculation excludes the charge of $1,144,000 related to cumulative deferred
income taxes resulting from conversion to a C Corporation on April 4, 1997. The
weighted average share calculations include the assumed issuance of additional
shares sufficient to pay the distributions made to shareholders in connection
with the Company's Initial Public Offering in 1997, to the extent such
distributions exceeded net income for the year ended December 31, 1996.
The Company used proceeds received from its public offering to repay all
outstanding debt at the time of the offering. Accordingly, the Company has
calculated a pro forma supplemental net income per share of $.83 for the nine
months ended September 30, 1997 (effect immaterial for three months ended
September 30, 1997). The amount is calculated by (a) dividing the pro forma
supplemental net income, increased by the interest expense, net of tax, on the
debt extinguished, by (b) average shares outstanding, as increased to reflect
the assumed issuance of sufficient additional shares to retire the debt
calculated based on the date of issue of the debt. All such additional shares
are assumed to be issued at the offering price of $7.50 per share, net of
offering expenses.
NOTE 5 - CONTINGENCIES
The Company is one of four defendants in a lawsuit in which the plaintiff claims
that the Company improperly installed certain attachments to a jacket that it
had fabricated for the plaintiff. The plaintiff, which has recovered most of
its out-of-pocket losses from its insurer, seeks to recover the remainder of its
claimed out-of-pocket losses (approximately $1 million) and approximately $63
million for punitive damages and for economic losses which it alleges resulted
from the delay in oil and gas production that was caused by these events. The
Company is vigorously contesting the plaintiff's claims and, based on the
Company's analysis of those claims, the Company's defenses thereto, and the
Court's rulings received to date, the Company believes that its liability for
such claims, if any, will not be material to its financial position. In view of
the uncertainties inherent in litigation, however, no assurance can be given as
to the ultimate outcome of such claims.
The Company is subject to claims arising through the normal conduct of its
business. While the ultimate outcome of such claims cannot be determined,
management does not expect that these matters will have a material adverse
effect on the financial position or results of operations of the Company.
NOTE 6 - STOCK SPLIT
On October 6, 1997, the Company's Board of Directors authorized a two-for-one
stock split effected in the form of a stock dividend that became effective on
October 28, 1997 to shareholders of record on October 21, 1997. All share and
per share data included in the financial statements have been restated to
reflect the stock split.
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations
The following discussion should be read in conjunction with the
unaudited consolidated financial statements and related disclosures included
elsewhere herein and Management's Discussion and Analysis of Financial Condition
and Results of Operations beginning on page 18 of the prospectus included as
part of the Company's registration statement on Form S-1 (Registration No.
333-39695), as filed with the Securities and Exchange Commission on November 6,
1997.
Results of Operations
On January 2, 1997, the Company acquired all the outstanding stock of Dolphin
Services, Inc. and its two affiliated corporations (collectively, "Dolphin
Services"). As used hereinafter, unless the context requires otherwise, the
term "Company" refers to the Company and Dolphin Services on a consolidated
basis, the term "Dolphin Services" refers to Dolphin Services only. The
Statement of Income included in the unaudited financial statements presents the
consolidated results of operations of the Company and Dolphin Services for the
three and nine month periods ended September 30, 1997, compared to the results
of operations of the Company for the three and nine month periods ended
September 30, 1996, without giving effect to the Dolphin Acquisition.
The Company's revenue for the three and nine month periods ended September 30,
1997, was $36.3 million and $101.6 million, respectively, an increase of 89% and
68% compared to $19.2 million and $60.4 million in revenue for the three and
nine month periods ended September 30, 1996. Revenue increased as a result of
the Dolphin Acquisition and high activity levels in the oil industry during
1997, which caused increased demand and thus, upward pressure on the pricing of
the Company's goods and services. In addition, the on-going labor recruiting
and retention efforts at the Company generated an increase in the volume of
direct labor hours applied to contracts for the three and nine month periods
ended September 30, 1997, compared to the same periods in 1996.
The increased volume and strong pricing enabled the Company to produce gross
profit of $7.0 million (19.2% of revenue) and $18.3 million (18.0% of revenue)
for the three and nine month periods ended September 30, 1997, respectively,
compared to the $3.1 million (16.3% of revenue) and $7.1 million (11.8% of
revenue) of gross profit, respectively, for the three and nine month periods
ended September 30, 1996.
The Company's general and administrative expense was $1.1 million and $3.3
million, respectively, for the three month and nine month periods ended
September 30, 1997, compared to $567,000 and $1.6 million, respectively, for
the three month and nine month periods ended September 30, 1996. This increase
of $548,000 and $1.7 million, respectively, for the three month and nine month
periods was caused by: (i) additional general and administrative costs
associated with Dolphin Services, (ii) greater accrual of performance-based
employee incentives, which resulted from increased profits for the three month
and nine month periods ended September 30, 1997, and (iii) additional costs
associated with increased production levels and the reporting requirements of
a public company for 1997.
The Company had net interest income of $61,000 for the three months ended
September 30, 1997 compared to $104,000 of interest expense for the three
months ended September 30, 1996. Interest expense decreased to $212,000 for
the nine months ended September 30, 1997 compared to $297,000 for the nine
months ended September 30, 1996. As a result of the use of the net proceeds from
the Company's Initial Public Offering and greater net cash provided by
operations, the weighted average borrowings for the nine months ended September
30, 1997 was lower in comparison to the corresponding nine months of 1996.
The Company converted to C Corporation status on April 4, 1997. Pro forma
provision for income taxes and pro forma net income give effect to federal and
state income taxes as if all entities presented had been taxed as C Corporations
during all the periods presented of both 1996 and 1997. Pro forma net income
excludes the non-recurring charge of $1.1 million to record the cumulative
deferred income tax provision upon the election on April 4, 1997 to convert from
S Corporation status to C Corporation status.
Liquidity and Capital Resources
The Company completed the Initial Public Offering on April 9, 1997 in which it
sold 4.6 million shares of common stock for net proceeds of $31.3 million after
underwriting discounts and other costs of $3.2 million. Of the net proceeds,
the Company used $31.1 million to repay all of the indebtedness outstanding
under the Company's bank credit facility. The balance of the proceeds was used
by the Company as additional working capital.
Historically the Company has funded its business activities through funds
generated from operations and borrowings under its bank credit facility. Net
cash provided by operations was $13.8 million for the nine months ended
September 30, 1997, primarily attributable to cash received from customers
related to increased sales. Net cash used in investing activities for the nine
months ended September 30, 1997 was $18.3 million, related to the $5.9 million
purchase of Dolphin Services and $12.8 million of capital expenditures. The
Company's capital expenditures were for improvements to its production
facilities and for equipment designed to increase the capacity of its facilities
and the productivity of its labor force. During the nine months ended September
30, 1997, the Company purchased four new Manitowoc cranes and a used American
crane, installed construction skidways, and acquired various other fabrication
equipment and facilities.
Net cash provided by financing activities of $7.9 million for the nine months
ended September 30, 1997 represented the net proceeds of $31.3 million of the
Initial Public Offering offset by $16.6 million of dividends paid to
shareholders in connection with the termination of the Company's S Corporation
status prior to the initial public offering, and $6.8 million net payments of
notes payable under the Company's bank credit facility.
The Company's bank credit facility currently provides for a revolving line of
credit (the "Revolver") of up to $20.0 million which bears interest equal to,
at the Company's option, the prime lending rate established by Citibank, N.A. or
LIBOR plus 11/2%. The Revolver matures December 31, 1999 and is secured by a
mortgage on the Company's real estate, equipment and fixtures, and by the stock
of Dolphin Services. As additional security the Company has caused Dolphin
Services to guarantee the Company's obligations under the Revolver. At
September 30, 1997 there were no borrowings outstanding under the credit
facility.
Capital expenditures for the remaining three months of 1997 are estimated to be
approximately $4.9 million, including the purchase of one new Manitowoc crawler
crane, expansion of the main yard fabrication shop, improvements to the West
Yard fabrication area and various other fabrication equipment purchases and
facility expansions. Management believes that its available funds, cash
generated by operating activities and funds available under the Revolver will be
sufficient to fund these capital expenditures and its working capital needs.
However, the Company may expand its operations through acquisitions in the
future, which may require additional equity or debt financing.
PART II. OTHER INFORMATION
No information is applicable to Part II for the current quarter, except as noted
below:
Item 5. Other Information
On October 2, October 6, October 23 and November 7, 1997 the Company issued
the press releases attached hereto as, respectively, Exhibits 99.1, 99.2, 99.3
and 99.4.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27.1 Financial data Schedule
99.1 Press release issued by the Company on October 2, 1996 announcing its
signing of a letter of intent with Atlantia Corporation to fabricate
another SeaStar mini-tension leg platform (TLP).
99.2 Press release issued by the Company on October 6, 1997 announcing that its
Board of Directors declared a two-for-one stock split.
99.3 Press release issued by the Company on October 23, 1997 announcing its
third quarter earnings.
99.4 Press release issued by the Company on November 7, 1997 announcing a
secondary offering by major shareholders.
(b) On August 28, 1997 the Company filed a report on Form 8-K dated August 25,
1997, reporting on matters described in Item 4 of such form.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GULF ISLAND FABRICATION, INC.
By:__________________________
Joseph P. Gallagher, III
Vice President - Finance
(Principal Financial Officer
and Duly Authorized Officer)
Date: November 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,774
<SECURITIES> 0
<RECEIVABLES> 23,859
<ALLOWANCES> 82
<INVENTORY> 1,221
<CURRENT-ASSETS> 34,893
<PP&E> 48,015
<DEPRECIATION> 16,482
<TOTAL-ASSETS> 66,854
<CURRENT-LIABILITIES> 18,006
<BONDS> 0
0
0
<COMMON> 4,133
<OTHER-SE> 43,497
<TOTAL-LIABILITY-AND-EQUITY> 66,854
<SALES> 36,311
<TOTAL-REVENUES> 36,311
<CGS> 29,325
<TOTAL-COSTS> 30,440
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (61)
<INCOME-PRETAX> 5,932
<INCOME-TAX> 2,234
<INCOME-CONTINUING> 3,698
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,698
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
</TABLE>
NEWS RELEASE
For further information contact:
Kerry J. Chauvin Joseph "Duke" Gallagher
Chief Executive Officer Chief Financial Officer
(504) 872-2100 (504) 872-2100
FOR IMMEDIATE RELEASE
THURSDAY, OCTOBER 2, 1997
GULF ISLAND FABRICATION, INC.
ANNOUNCES LETTER OF INTENT FOR
BRITISH-BORNEO'S ALLEGHENY FIELD SEASTAR(r) (TLP)
Gulf Island Fabrication, Inc. announces that it has signed a letter of
intent with Atlantia Corporation to fabricate another SeaStar(r) mini-tension
leg platform (TLP), this one for British-Borneo operated (60% equity) and
Reading & Bates (40% equity) Allegheny field. This letter of intent is based on
negotiating a mutually agreeable contract.
The first SeaStar(r) platform was contracted by Atlantia Corporation
with Gulf Island Fabrication for placement in British-Borneo's Morpeth field at
Ewing Bank 921. The Morpeth SeaStar(r) is under construction at Gulf Island
Fabrication's facility and is scheduled to be installed in mid 1998. The
Allegheny SeaStar(r) will be installed in second quarter 1999 at Green Canyon
Block 254, in a water depth of 3,200 feet. The SeaStar(r) is an Atlantia
Corporation patented design for the production of oil and gas in deep water.
Gulf Island Fabrication is a leading fabricator of offshore drilling and
production platforms and other specialized structures used in the development
and production of offshore oil and gas reserves.
- 13 -
NEWS RELEASE
For further information contact:
Kerry J. Chauvin Joseph "Duke" Gallagher
Chief Executive Officer Chief Financial Officer
(504) 872-2100 (504) 872-2100
FOR IMMEDIATE RELEASE
MONDAY, OCTOBER 6, 1997
GULF ISLAND FABRICATION, INC.
ANNOUNCES TWO-FOR-ONE STOCK SPLIT
Gulf Island Fabrication, Inc. (Nasdaq - GIFI) announced that its Board
of Directors today declared a two-for-one stock split. The stock split will be
accomplished by way of a dividend of one share of Common Stock, no par value per
share, on each outstanding share of such stock.
The stock dividend will be paid on October 28, 1997 to shareholders of
record at the close of business on October 21, 1997.
The stock split will increase the number of outstanding shares of Gulf
Island Fabrication, Inc.'s Common Stock from 5,800,000 to 11,600,000.
Gulf Island Fabrication, Inc. is a leading fabricator of offshore
drilling and production platforms and other specialized structures used in the
development and production of offshore oil and gas reserves.
- 14 -
NEWS RELEASE
For further information contact:
Kerry J. Chauvin Joseph "Duke" Gallagher
Chief Executive Officer Chief Financial Officer
(504) 872-2100 (504) 872-2100
FOR IMMEDIATE RELEASE
THURSDAY, OCTOBER 23, 1997
GULF ISLAND FABRICATION, INC.
REPORTS THIRD QUARTER EARNINGS
Houma, LA - Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported
pro forma net income of $3.7 million ($.31 per share) on revenue of $36.3
million for its third quarter ended September 30, 1997, compared to pro forma
net income of $1.5 million ($.19 per share) on revenues of $19.2 million for the
third quarter of 1996. Pro forma net income for the first nine months of 1997
was $9.2 million ($.89 per share) on revenue of $101.6 million, compared to pro
forma net income of $3.2 million ($.41 per share) on revenues of $60.4 million
for the first nine months of 1996. Pro forma net income gives effect to
federal and state income taxes as if the company had been a C corporation for
tax purposes during all the periods of 1996 and 1997. Pro forma net income
excludes the non-recurring charge of $1.1 million to record the cumulative
deferred income tax provision upon the election on April 4, 1997 to convert from
S Corporation status to C Corporation status. At September 30, 1997, the
company had a revenue backlog of $92.8 million and a labor backlog of 1.4
million manhours remaining to be worked.
On October 6, 1997 the Board of Directors declared a two-for-one stock
split of the company's common stock to be effected in the form of a stock
dividend for shareholders of record at the close of business on October 21,
1997. Per share data for all periods presented has been adjusted to reflect
this stock split.
Gulf Island Fabrication, Inc., based in Houma, Louisiana, is a leading
fabricator of offshore drilling and production platforms and other specialized
structures used in the development and production of offshore oil and gas
reserves. The company also offers offshore interconnect pipe hook-up, inshore
marine construction, and steel warehousing and sales.
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GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1997 1996 1997
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenue $ 19,168 $ 36,311 $ 60,376 $ 101,556
Cost of revenue 16,039 29,325 53,275 83,282
Depreciation ----------- ------------ ----------- ------------
Gross profit 3,129 6,986 7,101 18,274
General and administrative expense 567 1,115 1,567 3,262
----------- ------------ ----------- ------------
Operating income 2,562 5,871 5,534 15,012
Interest expense (income), net 104 (61) 297 212
----------- ------------ ----------- ------------
Income before income taxes 2,458 5,932 5,237 14,800
Provision for income taxes - 2,234 - 4,210
Cumulative deferred tax provision* - - 1,144
----------- ------------ ----------- ------------
Net income $ 2,458 $ 3,698 $ 5,237 $ 9,446
=========== ============ =========== ============
Pro forma data:**
Income before income taxes $ 2,458 $ 5,932 $ 5,237 $ 14,800
Provision for income taxes - 2,234 - 4,210
Pro forma provision for income taxes
related to operations as S Corporation 934 - 1,990 1,379
----------- ------------ ----------- ------------
Pro forma net income $ 1,524 $ 3,698 $ 3,247 $ 9,211
=========== ============ =========== ============
Pro forma per share data (Notes 4 and 6):
Pro forma net income per share $ 0.19 $ 0.31 $ 0.41 $ 0.89
=========== ============ =========== ============
Pro forma weighted average common shares*** 7,854,000 11,742,000 7,854,000 10,370,000
=========== ============ =========== ============
* Cumulative deferred tax provision charged upon election on April 4, 1997
to convert from S Corporation status to C Corporation status.
** Pro forma information gives effect to federal and state income taxes as
if the Company had been a C Corporation for tax purposes during all
periods presented.
*** Includes the initial public offering completed on April 9, 1997 and
retroactively restates the two-for-one stock split declared by the
Board of Directors on October 6, 1997 for shareholders of record on
October 21, 1997.
</TABLE>
NEWS RELEASE
For further information contact:
Kerry J. Chauvin Joseph "Duke" Gallagher
Chief Executive Officer Chief Financial Officer
(504) 872-2100 (504) 872-2100
FOR IMMEDIATE RELEASE
FRIDAY, NOVEMBER 7, 1997
GULF ISLAND FABRICATION, INC.
ANNOUNCES SECONDARY OFFERING BY MAJOR SHAREHOLDERS
Houma, LA - Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today announced
that it has filed a registration statement with the Securities and Exchange
Commission for a proposed offering of 2,000,000 shares of its Common Stock,
along with an additional 300,000 shares to cover over-allotments. All such
shares are to be sold by the Company's principal shareholders, Alden J. Laborde
(age 81), and Huey J. Wilson (age 69), for asset diversification and estate
planning purposes. If the offering is completed, Messrs. Laborde and Wilson
will retain approximately 35% in combined ownership. The common shares
outstanding will remain at 11,600,000 shares.
The shares will be sold through an underwriting group managed by Morgan
Keegan & Company, Inc., Raymond James & Associates, Inc. and Johnson Rice &
Company L.L.C.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission but has not yet become effective.
These securities may not be sold nor may offers to buy be accepted prior to the
time that the registration statement becomes effective. This press release
shall not constitute an offer to sell, or the solicitation of an offer to buy,
nor shall there be any sale of these securities in any State in which such an
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
Gulf Island Fabrication, Inc., based in Houma, Louisiana, is a leading
fabricator of offshore drilling and production platforms and other specialized
structures used in the development and production of offshore oil and gas
reserves. The Company's services also include offshore interconnect pipe
hook-up, inshore marine construction, and steel warehousing and sales.
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