Gulf Island Fabrication Inc. (GIFI, Financial) filed Quarterly Report for the period ended 2009-03-31.
Gulf Island Fabrication Inc. together with its subsidiaries 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. Gulf Island Fabrication Inc. has a market cap of $161.1 million; its shares were traded at around $11.28 with a P/E ratio of 5.5 and P/S ratio of 0.4. The dividend yield of Gulf Island Fabrication Inc. stocks is 3.5%. Gulf Island Fabrication Inc. had an annual average earning growth of 6.5% over the past 10 years.
From our $315.0 backlog at March 31, 2009, we expect to recognize revenues of approximately $107.0 million during the remainder of 2009. This amount does not include any change orders, scope growth or new contracts that may be awarded during the remainder of the year. The remaining $208.0 million of backlog is expected to be recognized in 2010 and thereafter, and includes $148.9 million (and 1.6 million man-hours) specific to ATPs MinDOC II project and $59.1 million of backlog for all other projects. As noted above, our customer has announced that the MinDOC II project will be postponed and will be utilized at another of their locations sometime in the future.
At March 31, 2009, we recorded revenue totaling $1.3 million related to certain change orders, somewhat equally split on two separate projects, which have been approved as to scope but not price. Although we believe the collection of these change orders is probable based on past experience, we are in the process of negotiating resolution of these change orders with the customers and recovery of the revenue is dependent upon these negotiations. If we collect an amount different than the $1.3 million of revenue that has been recorded, that difference will be recognized as income or loss. We expect to resolve these matters in the second quarter of 2009. At December 31, 2008, we had $6.9 million of change orders related to re-measure issues primarily involving one customer. These issues have been settled and resulted in the recognition of an additional $400,000 of revenue.
At March 31, 2009, our cash and cash equivalents totaled $21.7 million. Working capital was $72.1 million at March 31, 2009. The ratio of current assets to current liabilities was 2.21 to 1 at March 31, 2009. Net cash provided by operating activities was $12.6 million for the three-months ended March 31, 2009, compared to $8.2 million used in operating activities for the three-months ended March 31, 2008. The increase in cash provided by operations for the period ended March 31, 2009, compared to the decrease in cash used in operating activities for the period ended March 31, 2008, is primarily related to the reduction in production activity. As production volumes decrease, amounts expended for material and labor costs (accounts payable) as well as amounts billed to customers (contracts receivable) decrease. Cash utilization decreases, accompanied by the collection of outstanding contracts receivables, resulting in an increase in our cash position. Also contributing to the increase cash provided by operating activities is the net decrease in costs and estimated earnings in excess of billings and billings in excess of cost and estimated earnings on uncompleted contracts. These decreases are the result of us working off the backlog without any significant new projects being added to the backlog.
Net cash used in investing activities for the three-months ended March 31, 2009, was $3.3 million, which related to capital expenditures of $3.8 million for equipment and improvements to our production facilities and $0.5 million of proceeds on the sale of equipment. Net cash used in financing activities for the three-month period ended March 31, 2009, was $1.4 million, consisting of cash used to pay dividends on common stock.
Capital expenditures for the remaining nine months of 2009 are estimated to be approximately $14.0 million, which includes approximately $1.2 million to complete phase II of the graving dock, $8.5 million to complete construction of a dry dock, $350,000 to complete the installation of a panel line and the remainder for the purchase of machinery and equipment and additional yard and facility expansion improvements. The expenditures for the dry dock and the panel line are to facilitate our expansion into additional marine construction areas such as towboats, barges and offshore supply vessels.
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Gulf Island Fabrication Inc. together with its subsidiaries 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. Gulf Island Fabrication Inc. has a market cap of $161.1 million; its shares were traded at around $11.28 with a P/E ratio of 5.5 and P/S ratio of 0.4. The dividend yield of Gulf Island Fabrication Inc. stocks is 3.5%. Gulf Island Fabrication Inc. had an annual average earning growth of 6.5% over the past 10 years.
Highlight of Business Operations:
Of our $315.0 million backlog at March 31, 2009, $165.5 million, or 52.5%, represented projects destined for deepwater locations compared to $200.8 million, or 55.8%, of projects destined for deepwater locations of the $360.2 million backlog at December 31, 2008. Included in the backlog are $1.1 million, or 0.3%, and $1.5 million, or 0.4%, at March 31, 2009 and December 31, 2008, respectively, related to projects destined for foreign locations.From our $315.0 backlog at March 31, 2009, we expect to recognize revenues of approximately $107.0 million during the remainder of 2009. This amount does not include any change orders, scope growth or new contracts that may be awarded during the remainder of the year. The remaining $208.0 million of backlog is expected to be recognized in 2010 and thereafter, and includes $148.9 million (and 1.6 million man-hours) specific to ATPs MinDOC II project and $59.1 million of backlog for all other projects. As noted above, our customer has announced that the MinDOC II project will be postponed and will be utilized at another of their locations sometime in the future.
At March 31, 2009, we recorded revenue totaling $1.3 million related to certain change orders, somewhat equally split on two separate projects, which have been approved as to scope but not price. Although we believe the collection of these change orders is probable based on past experience, we are in the process of negotiating resolution of these change orders with the customers and recovery of the revenue is dependent upon these negotiations. If we collect an amount different than the $1.3 million of revenue that has been recorded, that difference will be recognized as income or loss. We expect to resolve these matters in the second quarter of 2009. At December 31, 2008, we had $6.9 million of change orders related to re-measure issues primarily involving one customer. These issues have been settled and resulted in the recognition of an additional $400,000 of revenue.
At March 31, 2009, our cash and cash equivalents totaled $21.7 million. Working capital was $72.1 million at March 31, 2009. The ratio of current assets to current liabilities was 2.21 to 1 at March 31, 2009. Net cash provided by operating activities was $12.6 million for the three-months ended March 31, 2009, compared to $8.2 million used in operating activities for the three-months ended March 31, 2008. The increase in cash provided by operations for the period ended March 31, 2009, compared to the decrease in cash used in operating activities for the period ended March 31, 2008, is primarily related to the reduction in production activity. As production volumes decrease, amounts expended for material and labor costs (accounts payable) as well as amounts billed to customers (contracts receivable) decrease. Cash utilization decreases, accompanied by the collection of outstanding contracts receivables, resulting in an increase in our cash position. Also contributing to the increase cash provided by operating activities is the net decrease in costs and estimated earnings in excess of billings and billings in excess of cost and estimated earnings on uncompleted contracts. These decreases are the result of us working off the backlog without any significant new projects being added to the backlog.
Net cash used in investing activities for the three-months ended March 31, 2009, was $3.3 million, which related to capital expenditures of $3.8 million for equipment and improvements to our production facilities and $0.5 million of proceeds on the sale of equipment. Net cash used in financing activities for the three-month period ended March 31, 2009, was $1.4 million, consisting of cash used to pay dividends on common stock.
Capital expenditures for the remaining nine months of 2009 are estimated to be approximately $14.0 million, which includes approximately $1.2 million to complete phase II of the graving dock, $8.5 million to complete construction of a dry dock, $350,000 to complete the installation of a panel line and the remainder for the purchase of machinery and equipment and additional yard and facility expansion improvements. The expenditures for the dry dock and the panel line are to facilitate our expansion into additional marine construction areas such as towboats, barges and offshore supply vessels.
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