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Gulf Island Fabrication (GIFI)
Q3 2013 Earnings Call
October 28, 2013 10:00 am ET
Deborah Kern-Knoblock - Secretary
Jeff Favret - Chief Financial Officer
Kirk J. Meche - Chief Executive Officer, President, Treasurer and Director
Kenneth Blake Hancock - Howard Weil Incorporated, Research Division
Robert F. Norfleet - BB&T Capital Markets, Research Division
Randy Bhatia - Capital One Securities, Inc., Research Division
Bradford Alan Evans - Heartland Group, Inc. - Heartland Value Plus Fund
Previous Statements by GIFI
» Gulf Island Fabrication, Inc. (GIFI) Management Discusses Q2 2013 Results - Earnings Call Transcript
» Gulf Island Fabrication Management Discusses Q1 2013 Results - Earnings Call Transcript
» Gulf Island Fabrication Inc. Q3 2009 Earnings Call Transcript
I would like to welcome everyone to Gulf Island Fabrication's 2013 Third Quarter Teleconference. Please keep in mind that any statements made in this conference that are not statements of historical fact are considered forward-looking statements. These statements are subject to factors that could cause actual results to differ materially from the results predicted in the forward-looking statements. These factors include the timing and extent of changes in the prices of crude oil and natural gas, the timing of new projects and the company's ability to obtain them, and other details that are described under Cautionary Statements Concerning Forward-looking Information and elsewhere in the company's 10-K filed March 13, 2013. The 10-K was included as part of the company's 2012 annual report filed with the Securities and Exchange Commission earlier this year. The company assumes no obligation to update these forward-looking statements.
Today, we have Mr. Kirk Meche, President and CEO; and Mr. Jeffrey Favret, our CFO. Jeffrey?
Thank you, Deborah. Good morning, everyone. I'll discuss highlights from the quarter, provide specifics on our financial performance and then we'll open up the call for your questions. Some of you may recall that we announced in March of this year that we intended to move our corporate offices to the Houston marketplace. I'm happy to let you know that earlier in October, we completed that move, and we are now in our Houston Energy Corridor office.
Now, I'll turn to our financial performance for the quarter. Revenue for the 3 months ended September 30, 2013 was $168.2 million and $141.8 million for the comparable period 2012. Gross profit was $9.1 million or 5.4% of revenue for the 3-month period ended September 30, 2013 compared to a gross loss of $13.4 million for the same period 2012.
Operating income was $5.3 million for the quarter ended September 30, 2013, compared to an operating loss of $15.4 million for the comparable period 2012. And net income for the 3-month ended September 30, 2013, was $3.3 million or $0.23 per share compared to a net loss of $13.4 million for the 3-month ended September 30, 2012.
The increase in revenue of 18.6% for the third quarter 2013 compared to the third quarter of 2012 was primarily due to continuation of work related to change orders received in the prior quarter related to a haul and topside project for our large deep-water customer. The increase in gross profit for the 3-month ended September 30, 2013 compared to the third quarter 2012 was primarily due to a combination of revenue recognized during the third quarter 2013 for a change order related to haul and topside projects for a large deep-water customer, and losses of $9.5 million recognized during the third quarter 2012 associated with the separate topside project for a different large deep-water customer.
The following represents selected balance sheet information for September 30, 2013 compared to December 31, 2012. Cash and cash equivalents were $21.8 million compared to $24.9 million. Working capital was $80.1 million versus $81.3 million. Net property, plant and equipment was $223 million compared to $229.2 million and total assets were $426.2 million and $403.5 million, respectively.
CapEx for the first 9 months of 2013 was $12.5 million, approximately $11 million of capital expenditures are planned for the remaining 3 months of 2013, including $3.6 million of maintenance CapEx, another $3.6 million for rolling equipment to replace aging rolling equipment at our Texas facility, and $1.7 million net for a replacement aircraft.
We declared and paid dividends of $0.10 per share during each of the quarters ended September 30, 2013 and 2012. Revenue backlog was $342.5 million with the labor backlog of 3.0 million hours remaining to work at September 30, 2013, compared to a revenue backlog of $537 million and labor backlog of 4.4 million hours remaining to work at December 31, 2012.
During the third quarter 2013, topside modules for a large deep-water project, in accordance with the contractual terms, were transported to an integration site for lifting and setting procedures. Shortly thereafter, we entered into discussions with the customer concerning a reduction in scope to the project, whereby remaining completion and integration work would be performed at the current project site by another integration contractor.
As a result of those ongoing discussions, we reduced our estimate of revenue and labor backlog by $25.5 million and 271,000 labor hours, respectively. Additional backlog information for September 30, 2013 compared to December 31, 2012 was as follows. Revenue backlog for deep-water projects was $222.1 million or 64.9%, compared to $393.3 million or 73.2%. Of the backlog at September 30, 2013, we expect to recognize revenue of approximately $126 million during the remaining 3 months of 2013, not including change orders, scope growth or new contracts that may be awarded. Approximately $173 million of backlog is expected to be recognized as revenue in 2014 and approximately $44 million of backlog is expected to be recognized thereafter.