<PAGE>
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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 MARCH 31, 1998
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
incorporation or organization) Identification No.)
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 [_]
The number of shares of the Registrant's common stock, no par value per
share, outstanding at May 4, 1998 was 11,623,400.
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<PAGE>
GULF ISLAND FABRICATION, INC.
I N D E X
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets at March 31, 1998
and December 31, 1997 1
Consolidated Statements of Income for the
Three Months Ended March 31, 1998 and 1997 2
Consolidated Statement of Changes in
Shareholders' Equity for the Three Months
Ended March 31, 1998 3
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1998 and 1997 4
Notes to Consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 10-11
SIGNATURES 11
EXHIBIT INDEX E-1
<PAGE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
1998 1997
--------- ------------
(in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 1,961 $ 6,879
Contracts receivable, net 34,460 21,204
Retainage 4,223 1,556
Costs and estimated earnings in excess of billings
on uncompleted contracts 3,411 903
Prepaid expenses 858 914
Inventory 1,076 968
Recoverable income taxes -- 321
------- -------
Total current assets 45,989 32,745
Property, plant and equipment, net 38,201 34,505
Excess of cost over fair value of net assets
acquired less accumulated amortizations of
$73,175 at March 31, 1998 4,044 --
Other assets 445 428
------- -------
Total assets $88,679 $67,678
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,623 $ 3,368
Billings in excess of costs and estimated
earnings on uncompleted contracts 11,646 5,925
Accrued employee costs 3,559 3,068
Accrued expenses 1,852 2,829
Income taxes payable 2,248 --
------- -------
Total current liabilities 28,928 15,190
Deferred income taxes 2,033 1,878
Notes payable 2,700 --
------- -------
Total liabilities 33,661 17,068
Shareholders' equity:
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, 11,623,400 and 11,600,000 shares
issued and outstanding at March 31, 1998 and
December 31, 1997, respectively 4,150 4,133
Additional paid-in capital 35,023 34,865
Retained earnings 15,845 11,612
------- -------
Total shareholders' equity 55,018 50,610
------- -------
$88,679 $67,678
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
-1-
<PAGE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended March 31,
-------------------------------------
1998 1997
(in thousands, except per share data)
-------------------------------------
Revenue $ 46,914 $ 30,224
Cost of revenue 38,603 25,359
-------- --------
Gross profit 8,311 4,865
General and administrative expenses 1,614 1,002
-------- --------
6,697 3,863
Other expenses (income):
Interest expense 42 255
Interest income (67) (19)
-------- --------
(25) 236
-------- --------
Income before income taxes 6,722 3,627
Income taxes 2,489 -
-------- --------
Net income $ 4,233 $ 3,627
======== ========
Pro forma data:
Income before income taxes $ 6,722 $ 3,627
Income taxes 2,489 -
Pro forma income taxes
related to operations of S Corporation - 1,379
-------- --------
Pro forma net income $ 4,233 $ 2,248
======== ========
Pro forma per share data:
Pro forma basic earnings per share $ 0.36 $ 0.29
======== ========
Pro forma diluted earnings per share $ 0.36 $ 0.29
======== ========
Pro forma weighted-average shares 11,612 7,854
Effect of dilutive securities:
employee stock options 105 -
-------- --------
Pro forma adjusted weighted-average shares 11,717 7,854
======== ========
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
ADDITIONAL TOTAL
COMMON STOCK PAID-IN RETAINED SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ------- -------- ------
(IN THOUSANDS)
Balance at January 1, 1998 11,600 $ 4,133 $ 34,865 $ 11,612 $ 50,610
Exercise of stock options 23 17 158 - 175
Net income - - - 4,233 4,233
------ ------- -------- -------- --------
Balance at March 31, 1998 11,623 $ 4,150 $ 35,023 $ 15,845 $ 55,018
====== ======= ======== ======== ========
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,233 $ 3,627
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 920 647
Amortization 73 -
Deferred income taxes (46) -
Changes in operating assets and liabilities:
Contracts receivable (5,352) (6,138)
Retainage (1,422) 1,359
Costs and estimated earnings in excess of billings
on uncompleted contracts (1,348) (247)
Other assets 73 524
Accounts payable and accrued expenses 822 4,612
Income taxes payable 2,502 -
Billings in excess of costs and estimated earnings
on uncompleted contracts 3,276 (1,336)
-------- --------
Net cash provided by operating activities 3,731 3,048
Cash flows from investing activities:
Capital expenditures, net (3,002) (5,664)
Payment for purchase of Dolphin Services, net of cash acquired - (5,803)
Payment for purchase of Southport, net of cash acquired (5,922) -
Other - 253
-------- --------
Net cash used in investing activities (8,924) (11,214)
Cash flows from financing activities:
Cost associated with initial public offering - (143)
Borrowings against notes payable 5,000 10,048
Principal payments on notes payable (4,900) (45)
Proceeds from exercise of stock options 175 -
Dividends - (2,641)
-------- --------
Net cash provided by financing activities 275 7,219
-------- --------
Net decrease in cash (4,918) (947)
Cash at beginning of period 6,879 1,357
-------- --------
Cash at end of period $ 1,961 $ 410
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
GULF ISLAND FABRICATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1997
NOTE 1--ORGANIZATION AND SIGNIFICANT ACCOUNTING PRINCIPLES
Gulf Island Fabrication, Inc. ("Gulf Island"), located in Houma, Louisiana,
is engaged in the fabrication and refurbishment of offshore oil and gas
platforms for oil and gas industry companies. Gulf Island`s principal markets
are concentrated in the offshore regions of the Gulf of Mexico. The consolidated
financial statements include the accounts of Gulf Island and its wholly owned
subsidiaries (collectively "the Company"). All significant intercompany
balances and transactions have been eliminated in consolidation.
Effective January 1, 1998, the Company acquired all of the outstanding
shares of Southport, Inc. and its wholly owned subsidiary Southport
International, Inc. (collectively "Southport"). Southport specializes in the
fabrication of living quarters for offshore platforms. The purchase price was
$6.0 million cash, plus contingent payments of up to an additional $5.0 million
based on Southport's net income over a four-year period ending December 31,
2001. The purchase price plus $130,000 of direct expenses exceeded the fair
value of the assets acquired of $12.3 million and liabilities assumed of $10.3
million with the acquisition being accounted for under the purchase method of
accounting. Goodwill of $4.1 million is being amortized over 15 years on a
straight-line basis. Accordingly, the operations of Southport are included in
the Company's consolidated operations from January 1, 1998.
The information presented at March 31, 1998 and for the three months ended
March 31, 1998 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 at March 31, 1998 and the results of its operations and its cash flows
for the three months ended March 31, 1998 and 1997. The results of operations
for the three months ended March 31, 1998 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998.
In the opinion of management, the financial statements included herein have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 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. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Registrant Company's
annual report on Form 10-K for the year ended December 31, 1997.
Certain items included in the financial statements for the periods ended
December 31, 1997 and March 31, 1997 have been reclassified to conform to the
March 31, 1998 financial statement presentation.
-5-
<PAGE>
GULF ISLAND FABRICATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE 2 - ACQUISITION OF SOUTHPORT, INC.
The following unaudited pro forma information presents a summary of
consolidated results of operations of the Company and Southport as if the
acquisition had occurred on January 1, 1997. Pro forma adjustments include (1)
adjustments for the increase in interest expense as a result of the acquisition,
(2) additional depreciation on property, plant and equipment, (3) adjustments to
record the amortization of cost in excess of fair value of net assets acquired,
(4) the elimination of certain general and administrative expenses, and (4) the
related tax effects. The effects of the termination of the S Corporation status
(Note 3) are included.
Quarter ended
March 31, 1997
(in thousands, except per share data)
-------------------------------------
Revenue............................................ $34,353
Pro forma net income............................... 2,439
Pro forma basic and diluted net income per share... 0.31
NOTE 3 - PRO FORMA PER SHARE DATA
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. The pro forma income statement presentation reflects
income taxes related to operations as an S Corporation as if the Company had
been subject to federal and state income taxes since January 1, 1997 using an
assumed effective tax rate of approximately 38%. Further, the pro forma
weighted-average share calculations for 1997 include the assumed issuance of
additional shares sufficient to pay the distributions made to shareholders in
connection with the Company's Initial Public Offering, to the extent such
distributions exceeded net income for the year ended December 31, 1996.
NOTE 4 - 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 prior to the stock split
have been restated to reflect the stock split.
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
-6-
<PAGE>
GULF ISLAND FABRICATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
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 have a material adverse effect on
the financial position or results of operations of the Company. 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.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
On January 1, 1998, the Company acquired all the outstanding stock of
Southport, Inc. and its wholly owned subsidiary Southport International, Inc.
(collectively, "Southport"). As used hereinafter, unless the context requires
otherwise, the term "Company" refers to the Company and Southport on a
consolidated basis, and the term "Southport" refers to Southport only. The
Statement of Income included in the unaudited financial statements presents the
consolidated results of operations of the Company and Southport for the three
months ended March 31, 1998, compared to the results of operations of the
Company for the three months ended March 31, 1997, without giving effect to the
Southport acquisition.
The Company's revenue for the three month period ended March 31, 1998 was
$46.9 million, an increase of 55.2%, compared to $30.2 million in revenue for
the three month period ended March 31, 1997. Revenue increased as a result of
the Southport acquisition and the high activity levels in the oil and gas
industry during the first quarter of 1998, 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 month period ended March 31, 1998, compared to the same period in
1997.
The increased volume and strong pricing enabled the Company to generate a
gross profit of $8.3 million (17.7% of revenue) for the three month period ended
March 31, 1998, compared to the $4.9 million (16.1% of revenue) of gross profit
for the three month period ended March 31, 1997.
The Company's general and administrative expenses were $1.6 million for the
three month period ended March 31, 1998, compared to $1.0 million for the three
month period ended March 31, 1997. This increase of $612,000 for the three
month period was caused by additional general and administrative costs
associated with the Southport acquisition, additional costs associated with
increased production levels and public company reporting requirements.
The Company had net interest income of $25,000 for the three months ended
March 31, 1998 compared to net interest expense of $236,000 for the three months
ended March 31, 1997. Interest expense decreased by $213,000 to $42,000 for the
three months ended March 31, 1998 compared to $255,000 for the same period in
1997. As a result of a greater net cash provided by operations, a lesser amount
of capital expenditures, no dividend payments, and the use of the proceeds of
the Initial Public Offering, the weighted-average borrowings for the three
months ended March 31, 1998 were substantially lower in comparison to the
corresponding three months of 1997.
The Company converted from S Corporation to C Corporation status on April
4, 1997. Pro forma income taxes and pro forma net income give effect to federal
and state income taxes as if the Company had been taxed as a C Corporation
during the first quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
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 $3.7 million for the three months ended March
31, 1998 with working capital remaining stable at $17.1
-8-
<PAGE>
million. Net cash used in investing activities for the three months ended March
31, 1998 was $8.9 million, of which $5.9 million related to the purchase of
Southport and $3.0 million related to capital expenditures made during the
quarter. Approximately 50% of 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. The
remaining 50% was for the purchase of one new Manitowoc crane to replace one
previously rented.
Net cash provided by financing activities was $275,000 for the three months
ended March 31, 1998, consisting of $175,000 from the proceeds of exercised
stock options with the remaining from borrowings and payments on 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 1 1/2%. 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 its subsidiary, Dolphin Services, Inc. As additional security the Company
has caused Dolphin Services, Inc. to guarantee the Company's obligations under
the Revolver. At March 31, 1998 the Company had $2.7 of outstanding borrowings
under the credit facility.
Capital expenditures for the remaining nine months of 1998 are estimated to
be approximately $11.4 million, including the purchase of four additional new
Manitowoc crawler cranes, 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 future acquisitions that may require
additional equity or debt financing.
-9-
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) An annual meeting of the Registrants's stockholders was held on
April 30, 1998.
(c) The following matters were voted upon with the results as indicated
below:
1) Election of the following nominees for directors.
Stephen G. Benton, Jr.
Number of Votes Cast For - 10,775,607
Number of Votes Cast Against or Withheld - 22,487
Number of Abstentions - None
Number of Broker Non-Votes - None
Thomas E. Fairley
Number of Votes Cast For - 10,775,607
Number of Votes Cast Against or Withheld - 22,487
Number of Abstentions - None
Number of Broker Non-Votes - None
Hugh J. Kelly
Number of Votes Cast For - 10,775,607
Number of Votes Cast Against or Withheld - 22,487
Number of Abstentions - None
Number of Broker Non-Votes - None
2) Ratification of appointment of Ernst & Young as independent
auditors.
Number of Votes Cast For - 10,787,294
Number of Votes Cast Against or Withheld - 4,200
Number of Abstentions - 6,600
Number of Broker Non-Votes - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.1 Financial Data Schedule
27.2 Financial Data Schedule Prior periods restated to conform to
FASB No. 128
99.1 Press release issued by the Company on November 25, 1997
announcing the completion of the secondary offering.
99.2 Press release issued by the Company on January 28, 1998
announcing its 1997 fourth quarter earnings.
99.3 Press release issued by the Company on April 30, 1998 announcing
its 1998 first quarter earnings.
(b) On January 16, 1998 the Registrant filed a Form 8-K dated January 1,
1998 (reporting on Items 7 and 2) regarding the acquisition of
Southport, Inc.
On February 11, 1998 the Registrant filed a Form 8-K/A-1 dated January
1, 1998 (reporting on Items 7 and 2), regarding the acquisition of
Southport, Inc. amending the Form 8-K to include:
Audited Consolidated Balance Sheet at December 31, 1996, related
Consolidated Statement of Income and Retained Earnings and
Consolidated Statement of Cash Flows for the year ended
December 31, 1996.
Unaudited Consolidated Balance Sheet at September 30, 1997,
related Consolidated Statement of Retained Earnings and
Consolidated Statement of Cash Flows for the nine months ended
September 30, 1997.
Unaudited Pro Forma Condensed Combined Balance Sheet at
September 30, 1997, related Unaudited Pro Forma Condensed
Combined Statement of Income and Unaudited Pro Forma Condensed
Combined Statement of Cash Flows for the nine months ended
September 30, 1997.
Unaudited Pro Forma Condensed Combined Statement of Income for
the year ended December 31, 1996.
-10-
<PAGE>
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.
/s/ JOSEPH P. GALLAGHER, III
By:_____________________________
Joseph P. Gallagher, III
Vice President - Finance,
Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer
and Duly Authorized Officer)
DATE: MAY 12, 1998
-11-
<PAGE>
GULF ISLAND FABRICATION, INC.
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
27.1 Financial Data Schedule.
27.2 Financial Data Schedule--Prior periods restated to conform to
FASB No. 128.
99.1 Press release issued by the Company on November 25, 1997
announcing the completion of the secondary offering.
99.2 Press release issued by the Company on January 28, 1998
announcing its 1997 fourth quarter earnings.
99.3 Press release issued by the Company on April 30, 1998
announcing its 1998 first quarter earnings.
E-1
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
financial statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,961
<SECURITIES> 0
<RECEIVABLES> 38,683
<ALLOWANCES> 0
<INVENTORY> 1,076
<CURRENT-ASSETS> 45,989
<PP&E> 56,760
<DEPRECIATION> 18,559
<TOTAL-ASSETS> 88,679
<CURRENT-LIABILITIES> 28,928
<BONDS> 0
0
0
<COMMON> 4,150
<OTHER-SE> 50,868
<TOTAL-LIABILITY-AND-EQUITY> 88,679
<SALES> 46,914
<TOTAL-REVENUES> 46,914
<CGS> 38,603
<TOTAL-COSTS> 40,217
<OTHER-EXPENSES> (67)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42
<INCOME-PRETAX> 6,722
<INCOME-TAX> 2,489
<INCOME-CONTINUING> 4,233
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,233
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
financial statements and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JAN-01-1997
<PERIOD-END> JUN-30-1997 SEP-30-1997
<CASH> 4,302 4,774
<SECURITIES> 0 0
<RECEIVABLES> 24,604 23,859
<ALLOWANCES> 68 82
<INVENTORY> 1,396 1,221
<CURRENT-ASSETS> 35,253 34,893
<PP&E> 42,711 48,015
<DEPRECIATION> 15,717 16,482
<TOTAL-ASSETS> 62,675 66,854
<CURRENT-LIABILITIES> 17,599 18,006
<BONDS> 0 0
0 0
0 0
<COMMON> 4,133 4,133
<OTHER-SE> 39,799 43,497
<TOTAL-LIABILITY-AND-EQUITY> 62,675 66,854
<SALES> 65,247 101,556
<TOTAL-REVENUES> 65,247 101,556
<CGS> 53,958 83,282
<TOTAL-COSTS> 56,104 86,544
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 275 212
<INCOME-PRETAX> 8,868 14,800
<INCOME-TAX> 3,120 5,354
<INCOME-CONTINUING> 5,748 9,446
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5,748 9,446
<EPS-PRIMARY> 0.57 0.89
<EPS-DILUTED> 0.57 0.89
</TABLE>
<PAGE>
EXHIBIT 99.1
NEWS RELEASE
For further information contact:
Kerry J. Chauvin Joseph P. Gallagher, III
Chief Executive Officer Chief Financial Officer
(504)872-2100 (504)872-2100
- -------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
TUESDAY, NOVEMBER 25, 1997
GULF ISLAND FABRICATION, INC.
ANNOUNCES COMPLETION OF OFFERING BY PRINCIPAL SHAREHOLDERS
HOUMA, LA - GULF ISLAND FABRICATION, INC. (NASDAQ: GIFI) announced the
completion of an offering by its principal shareholders of 2,000,000 shares of
common stock at a public offering price of $22.50 per share. Alden J. Laborde,
81, and Huey J. Wilson, 69, sold the shares for estate planning and asset
diversification purposes. The selling shareholders have also agreed to sell up
to 300,000 additional shares, at the same price, to cover over-allotments, if
any.
The shares were sold by an underwriting group consisting of Morgan Keegan &
Company, Inc., Raymond James & Associates, Inc. and Johnson Rice & Company
L.L.C.
Gulf Island Fabrication, Inc. is headquartered in Houma, and 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 offers offshore interconnect piping hook-up, inshore
marine construction and steel warehousing and sales.
A copy of the prospectus relating to the offering may be obtained from
Morgan Keegan & Company, Inc., 50 N. Front Street, Memphis, Tenn. 38103. These
securities are offered only by means of a written prospectus and this
announcement is neither an offer to sell nor a solicitation of an offer to buy.
<PAGE>
EXHIBIT 99.2
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
WEDNESDAY, JANUARY 28, 1998
GULF ISLAND FABRICATION, INC.
REPORTS FOURTH QUARTER EARNINGS
Houma, LA Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported pro
forma net income of $3.0 million ($.25 diluted EPS) on revenue of $34.8 million
for its fourth quarter ended December 31, 1997, compared to pro forma net income
of $1.1 million ($.14 diluted EPS) on revenues of $18.6 million for the fourth
quarter ended December 31, 1996. Pro forma net income for the twelve months
ended December 31, 1997 was $12.2 million ($1.14 diluted EPS) on revenue of
$136.4 million, compared to pro forma net income of $4.4 million ($.55 diluted
EPS) on revenues of $79.0 million for the twelve months ended December 31, 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 December 31, 1997, the Company had a revenue backlog of $86.3 million and a
labor backlog of 1.3 million manhours remaining to be worked.
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 to be distributed on
October 28, 1997 to shareholders of record on October 21, 1997. All share and
per share data for all periods presented have been restated to reflect the 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. With the acquisition of
Southport, Inc., effective January 1, 1998, the Company will also be able to
provide the fabrication of living quarters for offshore platforms for the oil
and gas industry.
<PAGE>
EXHIBIT 99.2(a)
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three months ended December 31, Twelve months ended December 31,
------------------------------ --------------------------------
1997 1996 1997 1996
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Revenue $ 34,799 $ 18,628 $ 136,355 $ 79,004
Cost of revenue 28,751 15,398 112,033 68,673
----------- ---------- ----------- ----------
Gross profit 6,048 3,230 24,322 10,331
General and administrative expenses 1,408 1,094 4,670 2,661
----------- ---------- ----------- ----------
Operating income 4,640 2,136 19,652 7,670
Interest expense (income), net (103) 87 109 384
----------- ---------- ----------- ----------
Income before provision for income taxes 4,743 2,049 19,543 7,286
Provision for income taxes 1,763 - 5,973 -
Cumulative deferred tax provision/(1)/ - - 1,144 -
----------- ---------- ----------- ----------
Net income $ 2,980 $ 2,049 $ 12,426 $ 7,286
=========== ========== =========== ==========
Pro forma data:/(2)/
Income before provision for income taxes $ 4,743 $ 2,049 $ 19,543 $ 7,286
Provision for income taxes 1,763 - 5,973 -
Pro forma provision for income taxes
related to operations as S Corporation - 944 1,379 2,934
----------- ---------- ----------- ----------
Pro forma net income $ 2,980 $ 1,105 $ 12,191 $ 4,352
=========== ========== =========== ==========
Pro forma per share data:
Pro forma basic earnings per share/(3)/ $ 0.26 $ 0.14 $ 1.15 $ 0.55
=========== ========== =========== ==========
Pro forma diluted earnings per share/(3) (4)/ $ 0.25 $ 0.14 $ 1.14 $ 0.55
=========== ========== =========== ==========
Weighted average shares outstanding/(3)/ 11,600,000 7,854,000 10,632,626 7,854,000
Adjusted weighted average shares outstanding/(3) (4)/ 11,739,161 7,854,000 10,699,437 7,854,000
Depreciation and amortization
included in expense above $ 828 $ 458 $ 2,932 $ 1,586
</TABLE>
- -------------------
(1) Cumulative deferred tax provision charged upon election on April 4, 1997 to
convert from S Corporation status to C Corporation Status.
(2) 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.
(3) Includes the shares issued in the Company's initial public offering
completed on April 9, 1997 and retroactively restated for the two-for-one
stock split effective October 28, 1997.
(4) The calculation of diluted earnings per share assumes that all stock options
are exercised and that the assumed proceeds are used to purchase shares at
the average market price for the period.
<PAGE>
EXHIBIT 99.3
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, APRIL 30, 1998
GULF ISLAND FABRICATION, INC.
REPORTS FIRST QUARTER EARNINGS
Houma, LA Gulf Island Fabrication, Inc. (NASDAQ: GIFI) today reported pro
forma net income of $4.2 million ($.36 diluted EPS) on revenue of $46.9 million
for its first quarter ended March 31, 1998, compared to pro forma net income of
$2.2 million ($.29 diluted EPS) on revenue of $30.2 million for the first
quarter ended March 31, 1997. 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 both the periods presented. At March 31, 1998, the Company had a revenue
backlog of $105.5 million and a labor backlog of 1.7 million manhours remaining
to be worked.
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 was distributed on
October 28, 1997 to shareholders of record on October 21, 1997. All share and
per share data for both periods presented have been stated to reflect the 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. With the acquisition of
Southport, Inc., effective January 1, 1998, the Company can provide the
fabrication of living quarters for offshore platforms for the oil and gas
industry.
<PAGE>
EXHIBIT 99.3(a)
GULF ISLAND FABRICATION, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(in thousands, except per share data)
Three Months Ended March 31,
----------------------------
1998 1997
-------- -------
Revenue $ 46,914 $ 30,224
Cost of revenue 38,603 25,359
-------- --------
Gross profit 8,311 4,865
General and administrative expenses 1,614 1,002
-------- --------
Operating income 6,697 3,863
Other expense (income):
Interest expense 42 255
Interest income (67) (19)
-------- --------
(25) 236
-------- --------
Income before income taxes 6,722 3,627
Income taxes 2,489 -
-------- --------
Net income $ 4,233 $ 3,627
======== ========
Pro forma data:/(1)/
Income before income taxes $ 6,722 $ 3,627
Income taxes 2,489 -
Pro forma income taxes
related to operations as S Corporation - 1,379
-------- --------
Pro forma net income $ 4,233 $ 2,248
======== ========
Pro forma per share data:
Pro forma basic earnings per share/(2)/ $ 0.36 $ 0.29
======== ========
Pro forma diluted earnings per share/(2) (3)/ $ 0.36 $ 0.29
======== ========
Weighted-average shares/(2)/ 11,612 7,854
======== ========
Adjusted weighted-average shares/(2) (3)/ 11,717 7,854
======== ========
Depreciation and amortization
included in expense above $ 993 $ 647
======== ========
- -------------------
(1) Pro forma information gives effect to federal and state income taxes as if
the Company had been a C Corporation for tax purposes during both periods
presented.
(2) Includes the initial public offering completed on April 9, 1997 and
retroactively restates the two-for-one stock split effective October 28,
1997.
(3) The calculation of diluted earnings per share assumes that all stock options
are exercised and that the assumed proceeds are used to purchase shares at
the average market price for the period.
