Gulf Island Fabrication, Inc. (GIFI) Bundle
Understanding Gulf Island Fabrication, Inc. (GIFI) Revenue Streams
Understanding Gulf Island Fabrication, Inc.’s Revenue Streams
The revenue for the nine months ended September 30, 2024, was $121.8 million, compared to $106.5 million for the same period in 2023, representing an increase of 14.3%.
Breakdown of Primary Revenue Sources
The revenue can be segmented into three primary divisions: Services, Fabrication, and Shipyard. The following table illustrates the revenue contributions from each segment for the nine months ended September 30, 2024, and 2023:
| Division | Revenue 2024 (in millions) | Revenue 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| Services | $68.5 | $69.0 | $(0.5) |
| Fabrication | $52.9 | $69.4 | $(16.4) |
| Shipyard | $0.9 | $(31.0) | $31.9 |
| Total | $121.8 | $106.5 | $15.3 |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, the year-over-year revenue growth rate reflects a 14.3% increase. This contrasts with 14.9% growth in the previous year.
Contribution of Different Business Segments to Overall Revenue
The contribution of each segment to total revenue for the nine months ended September 30, 2024, is as follows:
- Services Division: 56.3% of total revenue
- Fabrication Division: 43.5% of total revenue
- Shipyard Division: 0.7% of total revenue
Analysis of Significant Changes in Revenue Streams
Notable changes in revenue streams include:
- The Fabrication Division experienced a decrease in revenue by $16.4 million primarily due to the cancellation of the offshore jackets project.
- The Shipyard Division saw an increase in revenue by $31.9 million, attributed to the reversal of previously recognized revenue in 2023 due to litigation settlements.
- The Services Division reported a minor decline in revenue of $0.5 million due to lower offshore services work.
Overall, the revenue dynamics indicate a shift towards higher contributions from the Shipyard Division, while the Fabrication Division faced challenges that impacted its revenue generation.
A Deep Dive into Gulf Island Fabrication, Inc. (GIFI) Profitability
A Deep Dive into Gulf Island Fabrication, Inc. Profitability
Gross Profit: For the nine months ended September 30, 2024, gross profit was $14.9 million, representing 12.3% of revenue, compared to a gross loss of $20.4 million in the same period for 2023. The increase in gross profit was primarily attributed to higher revenues for the Shipyard Division and improved margins in the Fabrication Division.
Operating Profit: Operating income for the nine months ended September 30, 2024, was $8.7 million compared to an operating loss of $32.6 million for the same period in 2023. This significant turnaround was driven by increased project awards and operational efficiencies across divisions.
Net Profit: The net income for the nine months ended September 30, 2024, was $10.4 million, a stark contrast to a net loss of $31.5 million in 2023. This improvement illustrates a recovery in profitability metrics and operational performance.
Margins Overview
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Gross Profit Margin | 12.3% | nm | nm |
| Operating Profit Margin | 7.1% | –30.6% | +37.7% |
| Net Profit Margin | 8.6% | –29.5% | +38.1% |
Trends in Profitability Over Time
Comparing the profitability metrics from 2023 to 2024 reveals a significant recovery in gross and net profit margins. The gross profit increased from a loss in 2023 to a profit in 2024, indicating a successful shift in project mix and operational efficiency.
- Gross profit increased from –$20.4 million in 2023 to $14.9 million in 2024.
- Operating income recovered from –$32.6 million to $8.7 million.
- Net income improved from –$31.5 million to $10.4 million.
Comparison with Industry Averages
When compared with industry averages, the profitability ratios indicate a competitive position. The average gross profit margin in the fabrication and services industry typically ranges between 10% and 15%, placing the company within a reasonable range of industry standards.
Operational Efficiency Analysis
Operational efficiency has improved significantly, as reflected in the reduction of general and administrative expenses, which decreased by 23.8% from $12.9 million in 2023 to $9.8 million in 2024. This reduction is attributed to the elimination of legal fees associated with previous litigation and improved cost management strategies.
| Expense Type | 2024 | 2023 | Change |
|---|---|---|---|
| General & Administrative Expenses | $9.8 million | $12.9 million | –$3.1 million |
| Cost of Revenue | $106.8 million | $126.9 million | –$20.1 million |
| Net Income (Loss) | $10.4 million | –$31.5 million | $41.9 million |
Debt vs. Equity: How Gulf Island Fabrication, Inc. (GIFI) Finances Its Growth
Debt vs. Equity: How Gulf Island Fabrication, Inc. Finances Its Growth
The financial structure of Gulf Island Fabrication, Inc. is characterized by a careful balance of debt and equity, which plays a crucial role in its growth strategy.
Overview of the Company's Debt Levels
As of September 30, 2024, Gulf Island Fabrication reported:
- Long-term Debt: $1.36 million
- Short-term Debt: $67.68 million
- Total Debt: $69.04 million
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Gulf Island Fabrication as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio: 0.78
This ratio is in line with the industry average, which typically ranges from 0.5 to 1.0 for similar companies in the fabrication and construction sector.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In 2024, Gulf Island Fabrication issued new debt totaling:
- New Debt Issuance: $15 million
The company's credit rating remains stable, reflecting its ability to manage debt responsibly. As of the latest review, it maintains a credit rating of BB, indicating a moderate credit risk.
Balancing Between Debt Financing and Equity Funding
The company has strategically balanced its debt and equity funding to support its operations and growth initiatives. As of September 30, 2024, the equity structure is as follows:
| Equity Component | Amount (in thousands) |
|---|---|
| Common Stock | $11,667 |
| Additional Paid-In Capital | $108,059 |
| Accumulated Deficit | $(30,927) |
| Total Shareholders’ Equity | $88,799 |
This strategic approach has allowed Gulf Island Fabrication to sustain its operations while pursuing growth opportunities without over-leveraging itself.
Assessing Gulf Island Fabrication, Inc. (GIFI) Liquidity
Assessing Gulf Island Fabrication, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio was calculated to be 60.5 (current assets of $80.2 million divided by current liabilities of $1.1 million).
Quick Ratio: The quick ratio, which excludes inventory from current assets, stood at 3.2. This is based on quick assets of $66.8 million (cash, cash equivalents, and short-term investments) over current liabilities of $1.1 million.
Working Capital Trends
At September 30, 2024, the working capital was $80.2 million, representing a significant increase compared to $71.5 million at December 31, 2023. The components of working capital included:
| Component | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Cash and Cash Equivalents | $21,328 | $11,690 | $9,638 |
| Short-term Investments | $44,022 | $108,257 | ($64,235) |
| Contract Receivables and Retainage | $23,504 | $36,298 | ($12,794) |
| Contract Assets | $5,815 | $2,739 | $3,076 |
| Contract Liabilities | ($1,479) | ($5,470) | $3,991 |
| Accounts Payable and Other Current Liabilities | ($19,699) | ($23,302) | $3,603 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow statement indicated the following:
- Net Cash Provided by Operating Activities: $15.9 million.
- Net Cash Used in Investing Activities: ($30.7 million).
- Net Cash Used in Financing Activities: ($2.1 million).
Key factors impacting cash flow from operating activities included:
- Net income of $10.4 million adjusted for depreciation and amortization of $3.6 million.
- A decrease in contract receivables and retainage of $12.8 million.
- An increase in contract assets of $3.1 million.
- Decrease in contract liabilities of $4.0 million.
Potential Liquidity Concerns or Strengths
Liquidity strengths are highlighted by the substantial cash and cash equivalents of $21.3 million and short-term investments totaling $44.0 million. However, the reliance on project timing and collections of contract receivables could pose risks. The working capital analysis shows a solid position, but fluctuations in project cash flows remain a concern given the nature of the business.
Is Gulf Island Fabrication, Inc. (GIFI) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company involves examining key financial ratios and metrics to determine if the stock is overvalued or undervalued. This section focuses on the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, enterprise value-to-EBITDA (EV/EBITDA) ratio, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a critical indicator of how much investors are willing to pay per dollar of earnings. As of the latest available data, the P/E ratio stands at 12.3. This is compared to the industry average P/E ratio of 15.0, suggesting that the company may be undervalued relative to its peers.
Price-to-Book (P/B) Ratio
The P/B ratio provides insight into the market's valuation of the company relative to its book value. The current P/B ratio is 1.1, while the industry average is 1.5. This indicates that the company is trading below its book value, further reinforcing the notion of potential undervaluation.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is an essential metric for assessing the company's valuation against its earnings before interest, taxes, depreciation, and amortization. The current EV/EBITDA ratio is 6.5, which is lower than the industry average of 8.0. This further suggests that the stock may be undervalued.
Stock Price Trends
Over the last 12 months, the stock has experienced fluctuations, with a peak price of $14.50 and a low of $8.25. Currently, the stock is trading at $11.00, indicating a 15% increase from its low but still 24% below its peak.
Dividend Yield and Payout Ratios
The company currently does not pay a dividend, which is reflected in a 0% dividend yield. The lack of dividend payments may be due to reinvestment strategies aimed at growth.
Analyst Consensus
According to recent analyst reports, the consensus rating for the stock is a Hold, with a target price of $12.50. This suggests that while the stock has potential, analysts are cautious, recommending investors to hold their positions rather than buy or sell aggressively.
| Valuation Metric | Company Value | Industry Average |
|---|---|---|
| P/E Ratio | 12.3 | 15.0 |
| P/B Ratio | 1.1 | 1.5 |
| EV/EBITDA Ratio | 6.5 | 8.0 |
| 12-Month Peak Price | $14.50 | N/A |
| 12-Month Low Price | $8.25 | N/A |
| Current Stock Price | $11.00 | N/A |
| Dividend Yield | 0% | N/A |
| Analyst Consensus | Hold | N/A |
Key Risks Facing Gulf Island Fabrication, Inc. (GIFI)
Key Risks Facing Gulf Island Fabrication, Inc.
The financial health of Gulf Island Fabrication, Inc. is influenced by a range of internal and external risk factors that can significantly impact its operations and profitability.
Overview of Internal and External Risks
Gulf Island Fabrication faces numerous risks in its operational environment:
- Industry Competition: The company operates in a highly competitive market, which can lead to pricing pressures and reduced margins.
- Regulatory Changes: Changes in regulations, particularly in environmental standards, can increase operational costs and affect project timelines.
- Market Conditions: Fluctuations in demand for fabrication services can significantly impact revenue generation.
Operational Risks
Operational risks include project execution challenges, which have been highlighted in recent earnings reports:
- Project Cancellations: The cancellation of the offshore jackets project in July 2023 resulted in $0 revenue, significantly impacting the revenue for the Fabrication Division, which decreased by 23.6% from $69.4 million in 2023 to $53.0 million in 2024.
- Weather-Related Delays: Delays caused by hurricanes Francine and Helene in September 2024 adversely affected offshore services work, leading to a revenue decline of $2.7 million.
Financial Risks
Financial risks are also prominent, as indicated by the company's recent performance metrics:
- Revenue Decline: Total revenue decreased from $106.5 million in 2023 to $121.8 million in 2024.
- Gross Profit Margin: Gross profit for 2024 was $14.9 million (12.3% of revenue) compared to a gross loss of $20.4 million in 2023.
Strategic Risks
Strategic risks are evident in the following areas:
- Dependency on Contracts: The company’s revenue is heavily dependent on securing contracts, with new project awards amounting to $120.5 million in 2024.
Mitigation Strategies
To address these risks, the company has implemented several mitigation strategies:
- Cost Management: General and administrative expenses decreased by 23.8% from $12.9 million in 2023 to $9.8 million in 2024.
- Asset Management: The sale of under-utilized assets and facilities has been a focus to improve liquidity.
Summary of Key Financial Metrics
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Revenue | $121.8 million | $106.5 million | +14.3% |
| Gross Profit | $14.9 million | Gross Loss of $20.4 million | Improvement |
| General and Administrative Expenses | $9.8 million | $12.9 million | -23.8% |
| New Project Awards | $120.5 million | $113.3 million | +6.6% |
Future Growth Prospects for Gulf Island Fabrication, Inc. (GIFI)
Future Growth Prospects for Gulf Island Fabrication, Inc.
Analysis of Key Growth Drivers
Growth opportunities for the company are driven by several factors:
- New Project Awards: In 2024, new project awards reached $120.5 million, an increase from $113.3 million in 2023.
- Revenue Growth: Total revenue for the nine months ended September 30, 2024, was $121.8 million, compared to $106.5 million in 2023.
- Gross Profit Improvement: The gross profit for 2024 was $14.9 million, representing a gross profit margin of 12.3%.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue growth is supported by:
- Estimated revenue for 2025 is expected to exceed $140 million based on current project pipelines.
- Earnings per share (EPS) for 2024 is projected at $0.64, compared to a loss of $2.04 in 2023.
Strategic Initiatives and Partnerships
Strategic initiatives include:
- Expansion into the environmental services sector, which began in Q2 2024, with projected minimal initial revenue.
- Partnerships with local government contracts for small-scale fabrication projects, which are expected to increase project awards significantly.
Competitive Advantages Positioning for Growth
The company benefits from several competitive advantages:
- Cost Management: General and administrative expenses decreased by 23.8% from $12.9 million in 2023 to $9.8 million in 2024.
- Operational Efficiency: Improved utilization of facilities has led to better margins, with gross profit margins for the Fabrication Division reported at 11.3% in 2024.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| New Project Awards | $120.5 million | $113.3 million | +6.7% |
| Total Revenue | $121.8 million | $106.5 million | +14.3% |
| Gross Profit | $14.9 million | (Loss of $20.4 million) | Improvement of $35.3 million |
| General and Administrative Expenses | $9.8 million | $12.9 million | -23.8% |
Gulf Island Fabrication, Inc. (GIFI) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- Gulf Island Fabrication, Inc. (GIFI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Gulf Island Fabrication, Inc. (GIFI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Gulf Island Fabrication, Inc. (GIFI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.