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 September 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 October 15, 2004 was 12,149,041.
GULF ISLAN D FABRICATION, INC.
I N D E X
| Page | ||||||
| PART I FINANCIAL INFORMATION |
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| Item 1. | Financial Statements | 3 | ||||
| Consolidated Balance Sheets at September 30, 2004 (unaudited) and December 31, 2003 |
3 | |||||
| 4 | ||||||
| 5 | ||||||
| 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 |
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| Item 1. | Legal Proceedings | 13 | ||||
| Item 5. | Other Information | 13 | ||||
| Item 6. | Exhibits | 13 | ||||
| 14 | ||||||
| E-1 | ||||||
- 2 -
CONSOLIDATED BALANCE SHEETS
| (Unaudited) | (Note 1) | ||||||
| September 30, 2004 |
December 31, 2003 | ||||||
| (in thousands) | |||||||
| ASSETS | |||||||
| Current assets: |
|||||||
| Cash and cash equivalents |
$ | 26,452 | $ | 8,012 | |||
| Short-term investments |
18,642 | 14,038 | |||||
| Contracts receivable, net |
28,170 | 42,443 | |||||
| Contract retainage |
1,752 | 7,062 | |||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
5,373 | 5,806 | |||||
| Prepaid expenses |
1,324 | 1,349 | |||||
| Inventory |
3,702 | 2,697 | |||||
| Recoverable income taxes |
501 | — | |||||
| Total current assets |
85,916 | 81,407 | |||||
| Property, plant and equipment, net |
60,845 | 58,259 | |||||
| Other assets |
645 | 650 | |||||
| Total assets |
$ | 147,406 | $ | 140,316 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: |
|||||||
| Accounts payable |
$ | 5,179 | $ | 8,937 | |||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
4,843 | 6,003 | |||||
| Accrued employee costs |
3,161 | 3,906 | |||||
| Accrued expenses |
1,109 | 957 | |||||
| Income taxes payable |
— | 893 | |||||
| Total current liabilities |
14,292 | 20,696 | |||||
| Deferred income taxes |
8,753 | 8,029 | |||||
| Total liabilities |
23,045 | 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, 12,149,041 and 11,801,618 shares issued and outstanding at September 30, 2004 and December 31, 2003, respectively |
4,777 | 4,340 | |||||
| Additional paid-in capital |
42,301 | 37,310 | |||||
| Retained earnings |
77,322 | 69,941 | |||||
| Accumulated other comprehensive loss |
(39 | ) | — | ||||
| Total shareholders’ equity |
124,361 | 111,591 | |||||
| Total liabilities and shareholders’ equity |
$ | 147,406 | $ | 140,316 | |||
The accompanying notes are an integral part of these statements.
- 3 -
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
( in thousands, except per share data)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenue |
$ | 35,753 | $ | 63,329 | $ | 127,990 | $ | 147,505 | ||||||||
| Cost of revenue |
32,060 | 56,072 | 110,465 | 129,630 | ||||||||||||
| Gross profit |
3,693 | 7,257 | 17,525 | 17,875 | ||||||||||||
| General and administrative expenses |
1,197 | 1,234 | 3,763 | 3,568 | ||||||||||||
| Operating income |
2,496 | 6,023 | 13,762 | 14,307 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(9 | ) | (7 | ) | (36 | ) | (30 | ) | ||||||||
| Interest income |
168 | 39 | 355 | 170 | ||||||||||||
| Other |
4 | 15 | 51 | 19 | ||||||||||||
| 163 | 47 | 370 | 159 | |||||||||||||
| Income before income taxes |
2,659 | 6,070 | 14,132 | 14,466 | ||||||||||||
| Income taxes |
931 | 2,037 | 4,946 | 4,892 | ||||||||||||
| Net income |
$ | 1,728 | $ | 4,033 | $ | 9,186 | $ | 9,574 | ||||||||
| Per share data: |
||||||||||||||||
| Basic earnings per share |
$ | 0.14 | $ | 0.34 | $ | 0.76 | $ | 0.81 | ||||||||
| Diluted earnings per share |
$ | 0.14 | $ | 0.34 | $ | 0.76 | $ | 0.81 | ||||||||
| Weighted-average shares |
12,136 | 11,787 | 12,022 | 11,774 | ||||||||||||
| Effect of dilutive securities: employee stock options |
121 | 100 | 137 | 119 | ||||||||||||
| Adjusted weighted-average shares |
12,257 | 11,887 | 12,159 | 11,893 | ||||||||||||
| Cash dividend declared per common share |
$ | 0.05 | $ | — | $ | 0.15 | $ | — | ||||||||
The accompanying notes are an integral part of these statements.
- 4 -
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
| Common Stock |
Additional Capital |
Retained Earnings |
Accumulated 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 |
347,423 | 437 | 3,930 | — | — | 4,367 | ||||||||||||||
| Income tax benefit from exercise of stock options |
— | — | 1,061 | — | — | 1,061 | ||||||||||||||
| Net income |
— | — | — | 9,186 | — | 9,186 | ||||||||||||||
| Unrealized (loss) on available-for-sale securities, net of tax |
— | — | — | — | (39 | ) | (39 | ) | ||||||||||||
| Comprehensive income |
9,147 | |||||||||||||||||||
| Dividends on common stock |
— | — | — | (1,805 | ) | — | (1,805 | ) | ||||||||||||
| Balance at September 30, 2004 |
12,149,041 | $ | 4,777 | $ | 42,301 | $ | 77,322 | $ | (39 | ) | $ | 124,361 | ||||||||
The accompanying notes are an integral part of these statements.
- 5 -
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
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| (in thousands) | ||||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 9,186 | $ | 9,574 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation |
4,496 | 3,887 | ||||||
| Deferred income taxes |
724 | 565 | ||||||
| Tax benefit from exercise of stock options |
1,061 | 71 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Contracts receivable |
14,273 | (15,597 | ) | |||||
| Contract retainage |
5,310 | (1,548 | ) | |||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
433 | (3,207 | ) | |||||
| Prepaid expenses, inventory and other assets |
(980 | ) | (417 | ) | ||||
| Accounts payable |
(3,758 | ) | 6,077 | |||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
(1,160 | ) | ||||||