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Gulf Island Fabrication (GIFI)
Q4 2013 Earnings Call
February 28, 2014 10:00 am ET
Deborah Kern-Knoblock - Corporate Secretary
Kirk J. Meche - Chief Executive Officer, President and Director
Jeffrey M. Favret - Chief Financial Officer and Treasurer
James M. Rollyson - Raymond James & Associates, Inc., Research Division
Martin W. Malloy - Johnson Rice & Company, L.L.C., Research Division
Previous Statements by GIFI
» Gulf Island Fabrication Management Discusses Q3 2013 Results - Earnings Call Transcript
» Gulf Island Fabrication, Inc. (GIFI) Management Discusses Q2 2013 Results - Earnings Call Transcript
» Gulf Island Fabrication Management Discusses Q1 2013 Results - Earnings Call Transcript
I'd like to welcome everyone's to Gulf Island Fabrication's 2013 fourth 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. Mr. Meche?
Kirk J. Meche
Thank you, Deborah. In an effort to provide our listeners with the most useful and comprehensive information available, we'll be handling our calls in a different format from this point on. I will provide updates on existing projects, a general overview of the market and opportunities that exist for our company. The call will then be turned over to Mr. Jeff Favret, our C -- our Vice President of Finance and CFO, for a breakdown of financial information for the fourth quarter of 2013. At the conclusion of Mr. Favret's report, we will open the lines for questions.
I will begin with an update on the projects currently under contract. At our Texas facility, we successful completed and loaded out the first 4 hull ever built in United States on February 8 of this year. The final light ship weight of the hull was 15,300 tons and drafted out at 29.5 feet. On a separate project, work continues on 1,200-foot jacket destined for the Gulf of Mexico and work has commenced on its 4,000-ton topsides. Deliveries for these units are scheduled for late summer 2015. We were recently awarded the piles for this project and expect to commence work on piles later this summer. We have also commenced work on 2 tank barges for the Louisiana customer with delivery set for third quarter of 2014. At our Louisiana facilities, the 7,000-ton topsides for the SPAR hull I referenced earlier was successfully loaded out this past week. We won a process of final tiedown and cleanup of the unit, and it should sail later this week. Work continues on several jackets and topsides for shallow water destinations. Planning, scheduling and related efforts for offshore hookup integration for our large deepwater platform is gearing up and set to commence next month. We continue to work on vessels, including our lowest lift boats scheduled for delivering the latter part of the third quarter of this year, as well as 2 offshore supply vessels scheduled for delivery this summer in a latter part of this year, respectively. [indiscernible] remains active with opportunities forward going forward.
We expect this for deepwater projects to be available until 2013 with a higher level bidding activity in third quarter of 2014. Bidding activity for nontraditional Gulf of Mexico marine and related projects, overseas, shallow water projects and support work associated with deepwater structures are expected to increase from current levels over the next 3 quarters.
As discussed on our most recent earnings call, during the quarter ended September 30, 2013, we began discussions with one of our lowest deepwater customers concerning its request for reductions and scope of the project, whereby remaining completion and integration work would be performed at the lift side by different integration contractor. During the fourth quarter of 2013, we negotiated to close out, out of all of our subcontractors and are in active negotiations regarding the final close-out settlement of the contract with our customer. Based on these discussions, we recognized a loss on the contract for the fourth quarter of $18.2 million. We expect to finalize the close-out of this contract in the first quarter of 2014.
Before proceeding to the financial review, I'm happy to report that our Houston corporate office is fully operational. We believe this provides a distinct advantage by allowing us to be in close proximity to many of our customers.
As Jeff will explain in further detail, 2013 marked a company record in annual revenue. While we were encouraged by the success, we continue to look at ways to control project costs to maximize margins, maintain our focus on quality standards and enhance our fabrication capabilities while providing shareholder value.
I would now like to turn the call over to Mr. Jeff Favret. He will discuss our financial performance for fourth quarter 2013. Jeff?