UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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 August 11, 1997, there were 5,800,000 shares of common stock, no par
value, outstanding.
GULF ISLAND FABRICATION, INC.
INDEX
Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
December 31, 1996 and June 30, 1997 1
Consolidated Statements of Income -
Three and Six Months Ended June 30, 1996 and June 30, 1997 2
Consolidated Statements of Changes in Shareholders' Equity -
Three and Six Months Ended June 30, 1997 3
Consolidated Statements of Cash Flows -
Three and Six Months Ended June 30, 1996 and June 30, 1997 4
Notes to the Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Part II. Other Information 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
GULF ISLAND FABRICATION, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
December 31, June 30,
1996 1997
ASSETS
Current assets:
Cash $ 1,357 $ 4,302
Contracts receivable, net 11,674 24,536
Contract retainage 1,806 998
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,306 3,326
Prepaid expenses 500 695
Inventory 1,113 1,396
Total current assets 17,756 35,253
Property, plant and equipment, net 17,735 26,994
Other assets 418 428
$ 35,909 $ 62,675
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,081 $ 6,148
Billings in excess of costs and estimated earnings
on uncompleted contracts 2,205 4,587
Accrued employee costs 1,903 2,417
Accrued expenses 1,036 2,336
Income taxes payable - 1,976
Current portion of notes payable 530 135
Total current liabilities 6,755 17,599
Deferred income taxes (Note 3) - 1,144
Notes payable, less current portion 5,657 -
Total liabilities 12,412 18,743
Commitments and contingent liabilities (Note 6)
Shareholders' equity (Note 5):
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, 3,500,000 and 5,800,000 shares
issued and outstanding 1,000 4,133
Additional paid-in capital 6,670 34,865
Retained earnings 15,827 4,934
Total shareholders' equity 23,497 43,932
$ 35,909 $ 62,675
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
<S> <C> <C> <C> <C>
1996 1997 1996 1997
Revenue $ 21,704 $ 35,023 $ 41,208 $ 65,247
Costs of revenue 19,078 28,599 37,236 53,958
Gross profit 2,626 6,424 3,972 11,289
General and administrative
expenses 488 1,144 1,000 2,146
Operating income 2,138 5,280 2,972 9,143
Interest expense, net 141 39 193 275
Income before provision for
income taxes 1,997 5,241 2,779 8,868
Provision for income taxes:
Current provision - 1,976 - 1,976
Cumulative deferred provision - 1,144 - 1,144
Net income $ 1,997 $ 2,121 $ 2,779 $ 5,748
Pro forma data (Note 3):
Income before provision for
income taxes, reported above $ 1,997 $ 5,241 $ 2,779 $ 8,868
Current provision - 1,976 - 1,976
Pro forma provision for income
taxes related to operations as
S Corporation 759 - 1,056 1,379
Pro forma net income $ 1,238 $ 3,265 $ 1,723 $ 5,513
Pro forma per share data (Note 4):
Pro forma net income per share $ 0.32 0.57 0.44 $ 1.14
Pro forma weighted average
common shares 3,927,000 5,732,000 3,927,000 4,835,000
</TABLE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(in thousands, except share data)
<TABLE>
<S> <C> <C> <C> <C> <C>
Common Common Additional Total
Stock Stock Paid-In Retained
Shares Amount Capital Earnings
--------- ------- ---------- ---------
Balance at December 31, 1996 3,500,000 $ 1,000 $ 6,670 $ 15,827 $ 23,497
Net proceeds from issuance of
common stock 2,300,000 $ 3,133 $ 28,195 - $ 31,328
Dividends paid - - - $ (16,641) $ (16,641)
Net income - - - $ 5,748 $ 5,748
Balance at June 30, 1997 5,800,000 $ 4,133 $ 34,865 $ 4,934 $ 43,932
</TABLE>
GULF ISLAND FABRICATION, INC
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Three months ended Six Months ended
June 30, June 30,
<S> <C> <C> <C> <C>
1996 1997 1996 1997
Cash flows from operating activities:
Cash received from customers $ 18,839 $ 34,250 $ 33,320 $ 58,112
Cash paid to suppliers and employees (18,659) (29,347) (33,016) (49,926)
Interest paid (145) (37) (192) (273)
Net cash provided by operating
activities 35 4,866 112 7,913
Cash flows from investing activities:
Capital expenditures, net (3,307) (1,818) (5,083) (7,481)
Payment for purchase of Dolphin
Services, net of cash acquired - - - (5,803)
Proceeds from cash surrender value
of insurance policy - - - 253
Net cash used in investing activities (3,307) (1,818) (5,083) (13,031)
Cash flows from financing activities:
Proceeds from issuance of notes payable 7,698 19,400 14,098 41,900
Principal payments on notes payable (4,033) (36,027) (10,110) (48,524)
Net proceeds from initial public offering - 31,471 - 31,471
Dividends paid (313) (14,000) (910) (16,641)
Payment of costs associated with initial
public offering - - - (143)
Net cash provided by financing activities 3,352 844 3,078 8,063
Net increase (decrease) in cash 80 3,892 (1,893) 2,945
Cash at beginning of period 111 410 2,084 1,357
Cash at end of period 191 4,302 191 4,302
Reconciliation of net income to net cash
provided by operating activities:
Net income 1,997 2,121 2,779 5,748
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 348 692 686 1,339
Decrease in contracts receivable (473) (1,928) (9,930) (8,065)
(Increase) decrease in contract retainage 208 (357) 123 1,001
Decrease in costs and estimated earnings
in excess of billings on uncompleted
contracts (658) (1,718) (339) (1,964)
(Increase) decrease in prepaid expenses
and other assets (250) 254 (131) 679
Decrease in inventory - (104) - (6)
Increase (decrease) in accounts payable
and accrued expenses 805 (361) 4,666 4,620
Decrease in other liabilities - - - -
Increase in deferred taxes - 1,144 - 1,144
Increase in income taxes payable - 1,892 - 1,523
Increase (decrease) in billings in excess
of costs and estimated earnings on
uncompleted contracts (1,942) 3,231 2,258 1,894
Net cash provided by operating activities $ 35 $ 4,866 $ 112 $ 7,913
</TABLE>
GULF ISLAND FABRICATION, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 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 2.3 million shares of common
stock. Shortly before the 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.)
The information presented for June 30, 1997 and for the three-month and
six-month periods then ended, 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 June 30, 1997 and the results of its
operations and its cash flows for the three-month and six-month periods
ending June 30, 1996 and 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, certain information and disclosures normally included
in financial statements have been condensed or omitted. These financial
statements should be read in conjunction with the Company's audited
financial statements for the year ended December 31, 1996, which were
included as part of the Company's Registration Statement on Form S-1
(Registration No. 333-21863), as declared effective by the Securities and
Exchange Commission on April 3, 1997.
The results of operations for the three and six months ended June 30,
1997 are not necessarily indicative of the results that may be expected
for the year ending December 31, 1997.
NOTE 2 - ACQUISITION OF DOLPHIN SERVICES
On January 2, 1997, the Company acquired all outstanding shares of
Dolphin Services for $5.9 million which was financed by borrowings under
the Company's line of credit. 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 of Dolphin Services had occurred on
January 1, 1996, pro forma revenue and pro forma net income for the three
months and six months ended June 30, 1996 would have been $27.3 million
and $1.4 million and $51.4 and $2.0 million, 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 six
months ended June 30, 1996 would have been $.37 and $.52, based on
average common shares outstanding of 3,927,000.
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 June 30, 1997 reflects a deferred
income tax liability of $1.1 million 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 subchapter S Corporation status in 1989 and earnings for the
three months ended June 30, 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 six month periods ended June
30, 1997 consists of the Company's historical income, adjusted to reflect
income taxes as if the Company had operated as a C Corporation for all of
the periods ended June 30, 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 included the assumed issuance of additional shares
sufficient to pay the distributions to shareholders, 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 $1.07 for
the six months ended June 30, 1997 (effect immaterial for three months
ended June 30, 1997). The supplemental amount is calculated by (a)
dividing the pro forma 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 $15 per share, net of offering expenses.
NOTE 5 - SHAREHOLDERS' EQUITY
On April 3, 1997, the Company's Registration Statement on Form S-1
(Registration No. 333-21863) was declared effective by the Securities and
Exchange Commission. On April 9, 1997, the Company sold 2.3 million
common shares pursuant to the registration statement, increasing the
total shares outstanding to 5.8 million. The Company received net
proceeds from the sale of $31.3 million.
NOTE 6 - COMMITMENTS AND CONTINGENT LIABILITIES
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 7 - SUBSEQUENT EVENT
Subsequent to June 30, 1997, options to purchase 100,000 shares of Common
Stock have been granted to employees of the Company under the Long-Term
Incentive Plan. The option exercise price is equal to the fair market
value of the Common Stock on the date of the grant and, accordingly, no
compensation expense was recognized in connection with the issuance of
these options.
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations
This discussion and analysis of financial condition and results of
operations should be read in conjunction with the unaudited consolidated
financial statements and the related disclosures included elsewhere herein
and Management's Discussion and Analysis of Financial Condition and Results
of Operations included as part of the Company's Registration Statement on
Form S-1 (Registration No. 333-21863), as declared effective by the
Securities and Exchange Commission on April 3, 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 "Parent" refers to the Company only and the
term "Subsidiary" refers to Dolphin Services only. The Statement of Income
included in the unaudited financial statements presents the results of
operations of the Company for the second quarter and six months ended June
30, 1997, compared to the results of operations of the Parent for the second
quarter and six months ended June 30,1996.
The Company's revenues for the second quarter and six months ended
June 30, 1997, were $35.0 million ($29.0 million for the Parent) and $65.2
million ($51.6 million for the Parent), respectively, an increase of 61.3%
and 58.3% compared to $21.7 million and $41.2 million in revenues for the
Parent for the second quarter and six months ended June 30, 1996. The high
activity levels in the oil industry during 1997 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 second quarter and six months ended June 30, 1997,
respectively, over the comparable periods in 1996.
The increased volume and strong pricing enabled the Company to produce gross
profit of $6.4 million (18.3% of sales) and $11.3 million (17.3% of sales)
for the second quarter and six months ended June 30, 1997, respectively,
compared to the $2.6 million (12.1% of sales) and $4.0 million (9.6% of
sales) of gross profit, respectively, for the Parent, for the second quarter
and six months ended June 30, 1996.
Depreciation in Costs of Revenue for the Company for the second
quarter and six months ended June 30, 1997 was $655,000 and $1.3 million,
respectively, an increase of $324,000 and $606,000, compared to the $331,000
and $661,000 in depreciation for the Parent for the second quarter and six
months ended June 30, 1996. The on-going purchase of equipment and facilities
expansion and improvements at the Parent contributed $214,000 and $394,000,
respectively, of this increase, and the remaining $110,000 and $212,000
increase was generated by the newly acquired Subsidiary.
The Company's selling, general, and administrative (S,G, & A) expenses
were $1.1 million and $2.1 million respectively for the second quarter and
six months ended June 30, 1997, compared to $488,000 and $1.0 million,
respectively, for the Parent for the second quarter and six months ended
June 30, 1996. This increase of $656,000 and $1.1 million, respectively,
for the second quarter and six-month periods were caused by the following:
(a) $304,000 and $598,000, respectively, are due to the additional S,G, & A
costs of the Subsidiary (b) $200,000 and $300,000, respectively, were due to
the greater accrual of performance-based employee incentives at the Parent
which resulted from increased profits for the second quarter and six months
ended June 30, 1997, and (c) $152,000 and $249,000, respectively, were due
to the additional costs associated with increased production levels and the
reporting requirements of a public company for 1997.
The Company's interest expense decreased to $39,000 for the second
quarter of 1997 compared to $141,000 for the second quarter of 1996, but
increased to $275,000 for the first six months of 1997 compared to $193,000
for the first six months of 1996. Weighted average borrowings of the first
quarter of 1997 were high and, as a result of the use of the net proceeds
from the Company's initial public offering, the weighted average borrowings
of the second quarter of 1997 were low, in comparison to the same periods in
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.
(See Note 3 to the Financial Statements appearing elsewhere in this report).
Liquidity and Capital Resources
The Company completed its initial public offering on April 9, 1997 in
which it sold 2.3 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 $7.9 million for the six
months ended June 30, 1997, primarily attributable to cash received from
customers related to increased sales. Net cash used in investing activities
for the six months ended June 30, 1997 was $13.0 million, related to the
$5.9 million purchase of Dolphin Services and $7.5 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 six months ended June 30, 1997, the Company purchased two new Manitowoc
Model M250 cranes, a used American Model 5300 crane, installed construction
skidways, and acquired various other fabrication equipment and facilities.
Net cash provided by financing activities of $8.1 million for the six
months ended June 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 $6.6 million
net payments of notes payable under the 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 June 30, 1997 there were no borrowings outstanding
under the credit facility.
Capital expenditures for the remaining six months of 1997 are
estimated to be approximately $8.6 million, including the purchase of three
new Manitowoc Model 888 crawler cranes, expansion of the main yard
fabrication shop, expansion of the West Yard fabrication area and various
other fabrication equipment purchases and facility expansion. 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
Item 4. Submission of Matters to a Vote of Security Holders
Effective April 4, 1997, prior to the sale of shares by the
Company in connection with its initial public offering,
shareholders holding, in the aggregate, 3,169,600 (90.56%) of the
then outstanding shares of common stock of the Company executed a
written consent to the election by the Company to terminate the
status of the Company as an S-corporation for purposes of Section
1362(d)(1)(D) of the Internal Revenue Code of 1986, as amended.
In connection with the termination of the Company's status as an
S-corporation, shareholders holding all of the Company's 3,500,000
outstanding shares of common stock executed during April 1997 a
consent pursuant to Section 1362(e)(3)(B) of the Internal Revenue
Code of 1986, as amended, electing to cause the books of the
Company to be closed as of April 4, 1997 in order to allocate, for
federal income tax purposes, the taxable income of the Company for
the period January 1, 1997 through April 4, 1997 solely to those
persons who were shareholders during that period.
No shares were held of record by nominees and there were no
broker non-votes with respect to the matters described above.
Item 5. Other Information
On July 24, 1997 the Company announced its second quarter,
1997 earnings and related matters. Such matters are described in
the press release attached hereto as Exhibit 99.1.
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 July 24, 1997
announcing its second quarter, 1997 earnings and
related matters.
(b) The Company filed no reports on Form 8-K during the
quarter for which this report is filed.
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: /s/ Joseph P. Gallagher, III
Joseph P. Gallagher, III
Vice President- Finance
(Principal Financial Officer
and Duly Authorized Officer)
Date: August 14, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,302
<SECURITIES> 0
<RECEIVABLES> 24,604
<ALLOWANCES> 68
<INVENTORY> 1,396
<CURRENT-ASSETS> 35,253
<PP&E> 42,711
<DEPRECIATION> 15,717
<TOTAL-ASSETS> 62,675
<CURRENT-LIABILITIES> 17,599
<BONDS> 0
0
0
<COMMON> 4,133
<OTHER-SE> 39,799
<TOTAL-LIABILITY-AND-EQUITY> 62,675
<SALES> 35,023
<TOTAL-REVENUES> 35,023
<CGS> 28,599
<TOTAL-COSTS> 29,743
<OTHER-EXPENSES> 39
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39
<INCOME-PRETAX> 5,241
<INCOME-TAX> 3,120
<INCOME-CONTINUING> 2,121
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,121
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.57
</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, JULY 24, 1997
GULF ISLAND FABRICATION, INC.
REPORTS SECOND QUARTER AND YEAR-TO-DATE 1997 EARNINGS
Houma, LA - Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today
reported pro forma net income of $3.3 million ($.57 per share) on revenue of
$35.0 million for its second quarter ended June 30, 1997, compared to pro
forma net income of $1.2 million ($.32 per share) on revenues of $21.7
million for the second quarter of 1996. The company completed its initial
public offering on April 9, 1997 in which 2.3 million shares were issued
causing the pro forma weighted average shares outstanding to increase from
3.9 million for the first quarter of 1997 to 5.7 million for the second
quarter of 1997.
Pro forma net income for the first six months of 1997 was $5.5 million
($1.14 per share) on revenue of $65.2 million, compared to pro forma net
income of $1.7 million ($.44 per share) on revenues of $41.2 million for the
first six 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 June 30, 1997, the consolidated
companies had a revenue backlog of $81.7 million and a labor backlog of 1.2
million manhours remaining to work.
Kerry Chauvin, Gulf Island Fabrication, Inc.'s president and chief
executive officer noted, "The enhanced performance for 1997 reflects the
company's productivity through innovative programs and capital improvements.
Ongoing recruiting and training programs have enabled the company to
increase its skilled employment levels. Strong demand for the company's
products resulting from the high activity levels in the oil and gas industry
has enabled the company to improve profit margins."
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.
