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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 June 30, 2004

 

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

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

583 THOMPSON ROAD,

HOUMA, LOUISIANA

   70363
(Address of principal executive offices)   (Zip Code)

 

(985) 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  ¨

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

 

The number of shares of the Registrant’s common stock, no par value per share, outstanding at July 21, 2004 was 12,118,601.

 

Table of Contents

GULF ISLAND FABRICATION, INC.

 

I N D E X

 

         Page

PART I

   FINANCIAL INFORMATION     
Item 1.   Financial Statements     
    Consolidated Balance Sheets at June 30, 2004 (unaudited) and December 31, 2003    3
    Consolidated Statements of Income for the Three and Six Months Ended June 30, 2004 and 2003 (unaudited)    4
    Consolidated Statement of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2004 (unaudited)    5
    Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003 (unaudited)    6
    Notes to Consolidated Financial Statements    7-8
    Report of Independent Registered Public Accounting Firm    9
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations    10-11
Item 3.   Quantitative and Qualitative Disclosures About Market Risk    12
Item 4.   Controls and Procedures    12

PART II

   OTHER INFORMATION     
Item 1.   Legal Proceedings    13
Item 5.   Other Information    13
Item 6.   Exhibits and Reports on Form 8-K    13

SIGNATURES

   15

EXHIBIT INDEX

   E-1

 

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Table of Contents

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

GULF ISLAND FABRICATION, INC.

CONSOLIDATED BALANCE SHEETS

 

     (Unaudited)     (Note 1)
     June 30,
2004
    

December 31,

2003

     (in thousands)

ASSETS

               

Current assets:

               

Cash and cash equivalents

    $ 12,229     $ 8,012

Short-term investments

      19,100       14,038

Contracts receivable, net

      42,448       42,443

Contract retainage

      2,198       7,062

Costs and estimated earnings in excess of billings on uncompleted contracts

      3,938       5,806

Prepaid expenses

      766       1,349

Inventory

      3,308       2,697

Recoverable income taxes

      346       —  
    
 

Total current assets

      84,333       81,407

Property, plant and equipment, net

      62,222       58,259

Other assets

      648       650
    
 

Total assets

    $ 147,203     $ 140,316
    
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

               

Current liabilities:

               

Accounts payable

    $ 6,583     $ 8,937

Billings in excess of costs and estimated earnings on uncompleted contracts

      4,478       6,003

Accrued employee costs

      3,813       3,906

Accrued expenses

      925       957

Income taxes payable

      —         893
    
 

Total current liabilities

      15,799       20,696

Deferred income taxes

      8,631       8,029
    
 

Total liabilities

      24,430       28,725

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, 12,114,601 and 11,801,618 shares issued and outstanding at June 30, 2004 and December 31, 2003, respectively

      4,745       4,340

Additional paid-in capital

      41,877       37,310

Retained earnings

      76,201       69,941

Other comprehensive loss

      (50 )     —  
    
 

Total shareholders’ equity

      122,773       111,591
    
 

Total liabilities and shareholders’ equity

    $ 147,203     $ 140,316
    
 

 

The accompanying notes are an integral part of these statements.

 

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Table of Contents

GULF ISLAND FABRICATION, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
  
     2004
     2003
     2004
     2003
  

Revenue

    $ 41,443     $ 44,603     $ 92,237     $ 84,176  

Cost of revenue

      34,941       39,959       78,405       73,558  
    
 
 
 

Gross profit

      6,502       4,644       13,832       10,618  

General and administrative expenses

      1,256       1,156       2,566       2,334  
    
 
 
 

Operating income

      5,246       3,488       11,266       8,284  

Other income (expense):

                                 

Interest expense

      (20 )     (14 )     (27 )     (23 )

Interest income

      138       49       187       131  

Other

      29       1       47       4  
    
 
 
 
       147       36       207       112  
    
 
 
 

Income before income taxes

      5,393       3,524       11,473       8,396  

Income taxes

      1,887       1,203       4,015       2,855  
    
 
 
 

Net income

    $ 3,506     $ 2,321     $ 7,458     $ 5,541  
    
 
 
 

Per share data:

                                 

Basic earnings per share

    $ 0.29     $ 0.20     $ 0.62     $ 0.47  
    
 
 
 

Diluted earnings per share

    $ 0.29     $ 0.20     $ 0.62     $ 0.47  
    
 
 
 

Weighted-average shares

      12,064       11,778       11,966       11,768  

Effect of dilutive securities: employee stock options

      131       122       144       128  
    
 
 
 

Adjusted weighted-average shares

      12,195       11,900       12,110       11,896  
    
 
 
 

Cash dividend declared per common share

    $ 0.05     $ —       $ 0.10     $ —    
    
 
 
 

 

The accompanying notes are an integral part of these statements.

 

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Table of Contents

GULF ISLAND FABRICATION, INC.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

 

     Common Stock
    Additional
Paid-In
Capital
    Retained
Earnings
     Other
Comprehensive
Income (Loss)
     Total
Shareholders’
Equity
  
     Shares
    Amount
          
     (in thousands, except share data)  

Balance at January 1, 2004

    11,801,618    $ 4,340    $ 37,310    $ 69,941     $  —       $ 111,591  

Exercise of stock options

    312,983      405      3,640      —         —         4,045  

Income tax benefit from exercise of stock options

    —        —        927      —         —         927  

Net income

    —        —        —        7,458       —         7,458  

Unrealized (loss) on available-for-sale securities

    —        —        —        —         (50 )     (50 )
                                       

Comprehensive income

                                         7,408  
                                       

Dividends on common stock

    —        —        —        (1,198 )     —         (1,198 )
    
  
  
  
 
 

Balance at June 30, 2004

    12,114,601    $ 4,745    $ 41,877    $ 76,201     $ (50 )   $ 122,773  
    
  
  
  
 
 

 

The accompanying notes are an integral part of these statements.

 

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Table of Contents

GULF ISLAND FABRICATION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

    

Six Months Ended

June 30,

  
     2004
     2003
  
     (in thousands)  

Cash flows from operating activities:

                 

Net income

    $ 7,458     $ 5,541  

Adjustments to reconcile net income to net cash provided by operating activities:

                 

Depreciation

      2,971       2,534  

Deferred income taxes

      602       614  

Tax benefit from exercise of stock options

      927       65  

Changes in operating assets and liabilities:

                 

Contracts receivable

      (5 )     (12,015 )

Contract retainage

      4,864       93  

Costs and estimated earnings in excess of billings on uncompleted contracts

      1,868       (709 )

Prepaid expenses, inventory and other assets

      (26 )     (281 )

Accounts payable

      (2,354 )     492  

Billings in excess of costs and estimated earnings on uncompleted contracts

      (1,525 )     3,232  

Accrued employee costs