Q4 2024 Gulf Island Fabrication Inc Earnings Call
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Operator: Good afternoon, ladies and gentlemen, and welcome to Gulf Islands Conference to discuss the fourth quarter and full year 2024. All participants will be in a listen-only mode for the duration of the call. This call is being recorded.
Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the Gulf Island Conference to discuss the fourth quarter and full year 2020 for ourselves all participants will be in a listen only mode for the duration of the call. This call is being recorded at this time I'd like to turn the floor over to MS. Cindi Cook for opening remarks and introductions Sandy.
Cindi Cook: At this time, I'd like to turn the floor over to Ms. Cindi Cook for opening remarks and introductions.
Cindi Cook: Cindi, please go ahead. Thank you and good afternoon. I would like to welcome everyone to our fourth quarter and full year 2024 teleconference. Our results were released this afternoon and a copy of the press release is available on our website at gulfisland.com. A replay of today's call will be available on our website after 7 p.m. this evening. Please keep in mind that the press release and certain comments on this call include forward-looking statements, and actual results may differ materially. We would like to refer everyone to the cautionary language included in our press release and to the risk factors described in our most recent Form 10-K and subsequent SEC filing.
Please go ahead.
Speaker Change: Thank you and good afternoon, I would like to welcome everyone to our fourth quarter and full year 2020 for telecom per hour.
Speaker Change: Our results were released this afternoon and a copy of the press release is available on our website at Gulf Island Dotcom.
Speaker Change: A replay of today's call will be available on our website. After seven P. M. This evening.
Speaker Change: Please keep in mind that the press release and certain comments on this call include forward looking statements and actual results may differ materially.
Speaker Change: We would like to refer everyone to the cautionary language included in our press release and to the risk factors described in our most recent Form 10-K and subsequent SEC filings.
Cindi Cook: Please also note that management may reference EBITDA, adjusted EBITDA, adjusted revenue, new project awards, and backlog on this call, which are financial measures not recognized under U.S. GAAP.
Speaker Change: Please also note that management may reference EBITDA, adjusted EBITDA and adjusted revenue New Project Awards and backlog on this call, which are financial measures not recognized under U S. GAAP.
Cindi Cook: As required by SEC rules and regulations, to the extent used, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our press release.
Speaker Change: As required by FCC rules and regulations to be extent used these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our press release.
Cindi Cook: Today we have Mr. Richard Heo, President and CEO, and Mr. Wes Stockton, Executive Vice President and CFO. Thank you, Cindi. Good afternoon, everyone, and welcome to our fourth quarter and four-year results conference call.
Richard: Today, we have Mr. Richard <unk>, President and CEO and Mr. Wes Stockton Executive Vice President and CFO Mr. Huh.
Speaker Change: Thank you Cindy.
Speaker Change: Everyone and welcome to our fourth quarter and full year results conference call.
Richard Heo: I'm happy to be here with you this afternoon, and I hope that each of you and your families are continuing to stay healthy and safe. During today's call, I'll provide key takeaways from the quarter, a review of in-market trends, and an update on the progress we have made on our strategic initiatives.
Speaker Change: I'm happy to be here with you this afternoon and I hope that each of you and your families are continuing to stay healthy and safe.
Speaker Change: During today's call I'll provide key takeaways from the quarter.
Speaker Change: A review of end market trends and an update on the progress we have made on our strategic initiatives.
Richard Heo: West will then discuss our fourth quarter results in greater detail and provide some commentary on our outlook for 2025.
West: West will then discuss our fourth quarter results in greater detail and provide some commentary on our outlook for 2025.
Richard Heo: We'll then open up the call for questions and end with some closing remarks. As I look back on 2024, I'm extremely proud of everything we've accomplished during the year and the progress we made towards our strategic goals. Through our focus on our small-scale fabrication business and the expansion of our services capabilities, we've developed a business that is more durable and predictable through the cycle, and we demonstrated our ability to generate strong financial results without any meaningful benefit from large project awards. During 2024, we generated revenue of $159 million and nearly $13 million of adjusted EBITDA from our small fab and services business.
Speaker Change: Well then open up the call for questions and end with some closing remarks.
Speaker Change: As I look back on 2024, I'm extremely proud of everything we've accomplished during the year and the progress we made towards our strategic goals.
Speaker Change: Through our focus on a small scale fabrication business and the expansion of our services capabilities. We have developed a business that is more durable and predictable through the cycle and we demonstrated our ability to generate strong financial results without any meaningful benefit from large project awards.
Speaker Change: During 2024, we generated revenue of $159 million and nearly $13 million of adjusted EBITDA from our small fab and services business Importantly, we were able to convert this to roughly $13 million of free cash flow, which allowed us to further strengthen our financial position and in.
Richard Heo: Importantly, we were able to convert this to roughly $13 million of free cash flow, which allowed us to further strengthen our financial position, and end the year with just over $67 million in cash and short-term investment. As we look to 2025, we continue to be encouraged by the bid activity for our fabrication offerings and remain focused on expanding our presence in markets outside of oil and gas, such as infrastructure, government, and high-tech manufacturing. Our success with our NASA project during 2024 demonstrates our potential opportunity in markets outside of our traditional oil and gas markets. These in-markets place a premium on quality and schedule certainty, areas where we have a proven record of delivering.
Speaker Change: Of the year with just over $67 million in cash and short term investments.
Speaker Change: As we looked at 2025, we continue to be encouraged by the bid activity for our fabrication offerings and remain focused on expanding our presence in markets outside of oil and gas such as infrastructure government and high Tech manufacturing.
Speaker Change: Our success with our NASA project during 'twenty 'twenty four demonstrates our potential opportunity in markets outside of our traditional oil and gas markets. These end markets place a premium on quality and schedule certainty areas, where we have a proven record of delivering.
Richard Heo: We're also starting to see initial bidding activity in nuclear and data centers and hope to demonstrate to those customers our ability to lower their total cost of install. As it relates to our large fab opportunities, we have been encouraged by the recent pick-up and dialogue with customers whose projects have been installed due to measures put in place by the prior administration. The lifting of the ban on LNG projects has led to resumption of activity in this market. However, we're still in very early stages and the timing of any large project awards is always difficult to predict, but we have been encouraged by the uptick in activity.
Speaker Change: We're also starting to see initial bidding activity and nuclear and data centers and hope to demonstrate to those customers our ability to lower their total cost of install.
Speaker Change: As it relates to our large fab opportunities we've been encouraged by the recent pickup in dialogue with customers as projects have been installed did the measures put in place by the prior administration.
Speaker Change: The lifting of the ban on LNG projects has led to the resumption of activity in this market.
Speaker Change: However, we're still in very early stages and the timing of any large project awards is always difficult to predict but we have been encouraged by the uptick in activity.
Richard Heo: Importantly, the favorable structural drivers for the fabrication markets remain in place, as there continues to be limited fabrication capacity in the market for the anticipated project opportunities in our backyard for the next two to three years. As a result of the anticipated pickup and construction activity in the Gulf Coast region, we're starting to have conversations with customers regarding capacity reservations. We don't anticipate many of these large fabrication projects being awarded until the back half of the year at the earliest, as these contracts take time to negotiate.
Speaker Change: Importantly, the favorable structural drivers for the fabrication market remain in place as there continues to be limited fabrication capacity in the market for the anticipated project opportunities in our backyard for the next two to three years.
Speaker Change: As a result of the anticipated pickup in construction activity in the Gulf Coast region, we're starting to have conversations with customers regarding capacity reservations.
Speaker Change: We don't anticipate many of these large fabrication projects being awarded until the back half of the year at the earliest as these contracts take time to negotiate that said, we will remain disciplined and we will continue to build on the foundation of small scale fabrication, while we wait for the right large project opportunity.
Richard Heo: That said, we will remain disciplined and we will continue to build on the foundation of small-scale fabrication while we wait for the right large project opportunity. Looking at our services business, the project delays that have been impacting our services activity, mostly within our SPARC safety offering, appear to be subsiding. Additionally, our recently launched Cleaning and Environmental Services business, or CES, is beginning to see increased volume as decommissioning activity gains momentum. We believe our investments in this business were well-timed and are excited by the opportunities in this market. While we are encouraged by the improved activity for SPARC safety and CES, we are projecting lower activity levels in our core services business in 2025, as our customers are forecasting lower capital spending levels in the Gulf of America.
Speaker Change: Looking at our services business the project delays that have been impacting our services activity, mostly within our spark safety offering appeared to be subsiding. Additionally, our recently launched cleaning and environmental services business or C. S is beginning to see increased volume as decommissioning activity gains momentum.
Speaker Change: Yeah.
Speaker Change: We believe our investments in this business were well timed and are excited by the opportunities in this market.
Speaker Change: While we are encouraged by the improved activity for spark safety and see yes, we are projecting lower activity levels in our core services business in 2025, as our customers are forecasting lower capital spending levels in the Gulf of America.
Richard Heo: This is being driven by lower demand for crude and the resulting lower margins. We're fortunate to have a diversified base of services to maximize our value to our customers, and we'll continue to build on this base as our customers continue to look for integrated offerings.
Speaker Change: This is being driven by lower demand for crude and the resulting lower margins. We are fortunate to have a diversified base of services to maximize our value to our customers and we will continue to build on this base as our customers continue to look for integrated offerings.
Richard Heo: As it relates to our shipyard division, as we have discussed, we substantially completed our remaining operational shipyard obligations at the end of 2023. The warranty periods for our 70-vehicle ferry and one of the 40-vehicle ferries ended in 2024, and the warranty period for our remaining 40-vehicle ferry ends later this month. At the end of last year, we noted that we submitted our final claim to North Carolina Department of Transportation. Our claim was rejected, which was not a surprise, and we have moved forward with legal avenues to recover previously incurred costs associated with the 40 vehicle ferry projects resulting from the customer's design deficiencies on the vessel.
Speaker Change: As it relates to our shipyard division.
Speaker Change: As we have discussed we substantially completed our remaining operational shipyard obligations at the end of 2023, the warranty periods for our 70 vehicle ferry and one of the 40 vehicle ferry ended in 2024 and the warranty period for our remaining 40 vehicle ferry ends later this month.
Speaker Change: At the end of last year, we noted that we submitted our final claim to North Carolina Department of Transportation. Our claim was rejected which was not a surprise and we have moved forward with legal avenues to recover previously incurred costs associated with the 40 vehicle ferry projects, resulting from the customers.
Speaker Change: <unk> deficiencies on the vessels.
Richard Heo: Overall, we're very pleased with our financial results during 2024, which came despite some market headwinds, highlighting the resilience and stable foundation of our small fab and services business. We enter 2025 in a strong position to continue executing on our key strategic pillars and we're focused on continuing to grow our small scale fabrication business, growing and diversifying our services business, and further strengthening our project execution. Importantly, we're in an extremely attractive position to execute on our capital allocation strategy. We have a stable base of business that benefits from strong free cash flow conversion and a balance sheet with nearly $70 million of available liquidity.
Speaker Change: Overall, we're very pleased with our financial results during 'twenty 'twenty, four which came despite some market headwinds highlighting the resilience and stable foundation of our small fab and services business.
Speaker Change: We enter 2025 in a strong position to continue executing on our key strategic pillars, and we're focused on continuing to grow our small scale fabrication business growing and diversifying our services business and further strengthening our project execution.
Speaker Change: Importantly, we are in an extremely attractive position to execute on our capital allocation strategy we have.
Speaker Change: Stable base of business that benefits from strong strong free cash flow conversion and a balance sheet with nearly 70 million of available liquidity.
Richard Heo: This provides us with ample financial flexibility and enables us to balance opportunities for investments in organic growth, strategic acquisitions, and the potential for return of capital to shareholders.
Speaker Change: This provides us with ample financial flexibility and enables us to balance opportunities for investments in organic growth.
Strategic acquisitions, and the potential for return of capital to shareholders.
Richard Heo: specifically the 2025. Our capital allocation priorities will focus on continuing to invest in the business we have done in the past by adding service lines organically, including hiring key personnel to help us drive growth in our existing services and penetrate U.N. markets. We also remain committed to continuing to pursue acquisition opportunities where our growth initiatives can be amplified. We will pursue the best path to deliver shareholder value, which will continue to include capital return opportunities if we are not able to find sufficient growth investments that satisfy our risk return hurdles. Gulf Islands is in a strong position with solid optionality and we're looking forward to building on this foundation.
Speaker Change: Specifically the 2025.
Speaker Change: Our capital allocation priorities will focus on continuing to invest in the business. We have done in the past by adding service lines organically, including hiring key personnel to help us drive growth in our existing services and penetrate new end markets. We also remain committed to continuing to pursue acquisition opportunities.
Speaker Change: Where our growth initiatives can be amplified.
Speaker Change: We will pursue the best path to deliver shareholder value, which will continue to include capital return opportunities. If we are not able to find sufficient growth investments that satisfy our risk return hurdles.
Gulf Island is in a strong position with solid Optionality and we're looking forward to building on this foundation.
Richard Heo: I would like to thank all of our team members across the organization for their continued hard work and dedication to our strategic goals and our shareholders for their continued support of Gulf Island.
Speaker Change: I would like to thank all of our team members across the organization for their continued hard work and dedication to our strategic goals and our shareholders for their continued support of Gulf Island.
Westley Stockton: I'll now turn the call over to Wes to discuss our quarterly results in greater detail.
Speaker Change: Now I'll turn the call over to Wes to discuss our quarterly results in greater detail.
Westley Stockton: Thanks, Richard, and good afternoon, everyone. I will discuss our consolidated results and then provide some additional details regarding our segment performance, putting in context the factors mentioned by Richard and their impacts on the quarter.
Wes: Thanks, Richard and good afternoon, everyone.
Wes: I will discuss our consolidated results and then provide some additional details regarding our segment performance put in context, the factors mentioned by Richard and their impacts on the quarter.
Westley Stockton: I will then conclude with the discussion of our liquidity and full-year financial outlook. Now turning to our quarter results. Consolidated revenue for the fourth quarter, 2024, was $37.4 million, essentially flat from the third quarter, 2024, but down from $44.6 million for the fourth quarter of last year. The year-over-year decline was driven primarily by lower services revenue. Adjusted Consolidated EBITDA was $3.7 million for the fourth quarter 2024, up from Adjusted Consolidated EBITDA of $2.9 million for the third quarter 2024, but down from $6.6 million for the same period last year. Adjusted Consolidated EBITDA for the current quarter excludes EBITDA of $1.1 million for our shipyard division, and for the prior year quarter excludes the impact of our shipyard division and net gains from insurance recoveries and costs associated with damage previously caused by Hurricane Ida.
Wes: I'll, then conclude with a discussion of our liquidity and full year financial outlook.
Wes: Now turning to our quarter results consolidated revenue for the fourth quarter 2024 was $37 4 million essentially flat from the third quarter 'twenty 'twenty, four but down from $44 6 million for the fourth quarter of last year. The year over year decline was driven primarily by lower services revenue.
Wes: Adjusted consolidated EBITDA was $3 7 million for the fourth quarter 2024 up from adjusted consolidated EBITDA of $2 9 million for the third quarter 2024, but down from $6 6 million for the same period last year.
Wes: <unk> consolidated EBITDA for the current quarter excludes EBITDA of $1 1 million for our shipyard Division.
Wes: And for the prior year quarter excludes the impact of our shipyard division and net gains from insurance recoveries and cost associated with damaged previously caused by Hurricane Ida.
Westley Stockton: Specifically for our services division, revenue for the fourth quarter 2024 was $18.8 million, a decrease of 23% compared to the fourth quarter 2023. The decrease was primarily due to lower new project awards driven by less offshore maintenance activity and delayed timing of spark safety project opportunities. Services EBITDA for the fourth quarter of 2024 was $1.4 million, or 7.4% of revenue, down from $3.2 million, or 13.2% of revenue for the prior year period. The decline was primarily due to lower revenue, a less favorable project margin mix, and ongoing investments associated with the startup of the division's CES business line.
Wes: Specifically for our services Division revenue for the fourth quarter 2024 was $18 8 million a decrease of 23% compared to the fourth quarter 2023.
Wes: The decrease was primarily due to lower New project awards, driven by less offshore maintenance activity and delayed timing of spark safety project opportunities.
Wes: Services EBITDA for the fourth quarter, 2024 was $1 4 million or seven 4% of revenue down from $3 2 million or 13, 2% of revenue for the prior year period.
Wes: The decline was primarily due to lower revenue and less favorable project margin mix and ongoing investments associated with the start up but the division CES business line.
Westley Stockton: For our Fabrication Division, revenue for the 4th quarter 2024 was $18.7 million, a decrease of $1 million or 4.9% compared to the 4th quarter 2023. The prior year period included the benefit of the favorable resolution of customer change orders. Absent this prior benefit, we experienced year-over-year revenue growth in our Fabrication Division due to higher small-scale fabrication activity for the current period. Fabrication adjusted EBITDA for the fourth quarter 2024 was $4.6 million, down from $5.4 million for the prior year period. Adjusted EBITDA for the prior year period excludes the benefit of gains from the net impact of insurance recoveries and cost associated with damage previously caused by Hurricane Ida.
Wes: For our fabrication division revenue for the fourth quarter 2024 was $18 7 million, a decrease of 1 million or four 9% compared to the fourth quarter 2023.
Wes: The prior year period included the benefit of the favorable resolution of customer change orders.
Wes: Absent this prior year benefit we experienced year over year revenue growth in our fabrication division due to higher small scale fabrication activity for the current period.
Wes: Fabrication adjusted EBITDA for the fourth quarter 2024 was $4 6 million down from $5 4 million for the prior year period.
Wes: Adjusted EBITDA for the prior year period excludes the benefit of gains from the net impact of insurance recoveries and cost associated with damaged previously caused by Hurricane Ida.
Westley Stockton: The year-over-year decrease in adjusted EBITDA was due to the previously mentioned change orders, which benefited the prior year period by $3.8 million. Excluding this impact for the prior year, EBITDA for the current quarter improved relative to the prior year quarter due to improved utilization of facilities and resources driven by the increased small-scale fabrication activity, lower overhead costs, and a higher margin project mix.
Wes: The year over year decrease in adjusted EBITDA was due to the previously mentioned change orders, which benefited the prior year period by $3 8 million.
Wes: Excluding this impact for the prior year EBITDA for the current quarter improved relative to the prior year quarter due to improved utilization of facilities and resources driven by the increased small scale fabrication activity lower overhead cost and a higher margin project mix.
Westley Stockton: For our corporate division, EBITDA was a loss of $2.3 million for the fourth quarter compared to a loss of $2 million for the prior year period due to higher incentive plan costs and costs associated with initiatives to diversify and enhance our business. With respect to our liquidity, we ended the fourth quarter with a cash and short-term investments balance of approximately $67 million, consistent with our balance at September 30th, as the benefit of our operating results for the current quarter were partially offset by working capital increases during the period, the first principal payment on our debt obligation, capital expenditures, and the repurchase of 59,000 shares of our common stock under our share repurchase program.
Wes: For our corporate Division EBITDA was a loss of $2 3 million for the fourth quarter compared to a loss of 2 million for the prior year period due.
Wes: Due to higher incentive plan cost and costs associated with initiatives to diversify and enhance our business.
Wes: Okay.
Wes: With respect to our liquidity, we ended the fourth quarter with a cash and short term investments balance of approximately $67 million consistent.
Wes: Consistent with our balance at September 30th has the benefit of our operating results for the current quarter were partially offset by working capital increases during the period. The first principal payment on our debt obligation.
Wes: Capital expenditures and the repurchase of 59000 shares of our common stock under our share repurchase program.
Westley Stockton: As of year-end, we have remaining authorization to purchase approximately $3.7 million of our common stock under the program, which expires in December 2025. For the full year 2024, we generated free cash flow of $12.9 million representing our operating cash flow, less capital expenditures of $5.3 million. Given our NOLs, strong balance sheet, and anticipated lower capital needs for 2025 relative to 2024, we expect a high EBITDA to free cash flow conversion rate for 2025. At December 31st, our debt obligation associated with the resolution of our MPSV litigation was $19 million, down from $20 million at September 30th as a result of our first annual debt payment made in December.
Wes: As of year end, we had remaining authorization to purchase approximately $3 $7 million of our common stock under the program, which expires in December 2025.
Wes: For the full year 2024, we generated free cash flow of $12 9 million, representing our operating cash flow less capital expenditures of $5 3 million.
Wes: Given our Nols strong balance sheet and anticipated lower capital needs for 2025 relative to 2024.
Wes: We expect a high EBITDA to free cash flow conversion rate for 2025.
Wes: At December 31st our debt obligations associated with the resolution of our M. P. S. V litigation was $19 million down from 20 million at September 30th as a result of our first annual debt payment made in December.
Westley Stockton: As a reminder, our annual payments of principal and interest of approximately $1.7 million will be made in December of each year over the remaining 14-year term of the obligation. Our cash balance and the long duration of our debt puts us in a strong liquidity position and provides significant flexibility to pursue our growth objectives and evaluate opportunities to return capital to our shareholders.
Wes: As a reminder, our annual payments of principal and interest of approximately $1 7 million will be made in December of each year over the remaining 14 year term of the obligation.
Wes: Our cash balance and the long duration of our debt puts us in a strong liquidity position and provide significant flexibility to pursue our growth objectives and evaluate opportunities to return capital to our shareholders.
Westley Stockton: And finally, turning to our outlook and capital requirements for 2025, as Richard discussed, we continue to be encouraged by pickup and bidding activity for large-scale fabrication. Further, the project delays impacting our SPARC safety business line have begun to subside, and the CS business line is beginning to see increased volume as decommissioning activity gains momentum. However, while these trends are encouraging, given the uncertainty and the timing of any potential large project award, and our expectation for lower capital spending by our services customers in the Gulf of America during 2025, we currently expect our full year 2025 consolidated EBITDA to be less than our 2024 adjusted consolidated EBITDA of $12.8 million.
Wes: And finally, turning to our outlook and capital requirements for 2025.
Speaker Change: As Richard discussed we continue to be encouraged by the pickup in bidding activity for large scale fabrication.
Speaker Change: Further the project delays impacting our spark safety business line have begun to subside and the C. S. Business line is beginning to see increased volume is decommissioning activity gains momentum.
Speaker Change: However, while these trends are encouraging given the uncertainty in the timing of any potential large project award and our expectation for lower capital spending by our services customers in the Gulf America. During 2025, we currently expect our full year 2025, consolidated EBITDA to be less than our two.
Speaker Change: 'twenty 'twenty four adjusted consolidated EBITDA of $12 8 million.
Westley Stockton: And with respect to our capital requirements for 2025, we anticipate our capital expenditures to be approximately $2 to $3 million, related primarily to our ongoing maintenance capital needs.
Speaker Change: And with respect to our capital requirements for 2025, we anticipate our capital expenditures to be approximately $2 million to $3 million related primarily to our ongoing maintenance capital needs.
Westley Stockton: This concludes our prepared remarks.
Speaker Change: This concludes our prepared remarks, operator, you may now open the line for questions.
Operator: Operator, you may now open the line for questions. Great, thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star. One moment, please, we'll report for question.
Speaker Change: Great. Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: You May press star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star.
Speaker Change: One moment please poll for questions.
Morgan Malloy: Our first question is from Morgan Malloy from Johnson Rice, please go ahead. Good afternoon. Congratulations on the strong quarter.
Speaker Change: Our first question is from Martin Malloy from Johnson Rice. Please go ahead.
Martin Malloy: Good afternoon, and congratulations on the strong quarter.
Morgan Malloy: Good afternoon, Marty. First question, just wanted to try to get some more detail or information about the opportunity set that you're seeing there for the fabrication segment. I think you mentioned nuclear and data center in your prepared remarks, and with the change in administration, it seems like LNG activity along the Gulf Coast. It's picking up and there seems to be a trend towards modular liquefaction facilities and just trying to get a better idea of what you're seeing out there in terms of the opportunities for you for bidding. You know, we've been talking about on the LNG front, again, significant amount of opportunities.
Hey, good afternoon Marty.
Martin Malloy: First question just wanted to try to get some more detail or or.
Martin Malloy: Information about the opportunity set that you're seeing there for the fabrication segment I think you mentioned nuclear and datacenter in your prepared remarks.
Martin Malloy: With the change in administration seems like LNG activity, along the Gulf Coast.
Martin Malloy: It's picking up and there seems to be a trend towards modular liquefaction.
Martin Malloy: Liquefaction facilities, and just trying to get a better idea of what you're seeing out there in terms of the opportunities for you forbidding.
Martin Malloy: Yeah no.
Martin Malloy: You know we've been talking about on the LNG front.
Martin Malloy: Again significant amount of opportunities just if you look at the projects in Texas, and Louisiana, Ah Theres quite a bit of volume of steel projects that have been put on hold from the prior administration. There that I think you know well move forward and we're already seeing signs of it we're having conversations with customers.
Richard Heo: Just if you look at the projects in Texas and Louisiana, there's quite a bit of volume of steel projects that have been put on hold from the prior administration that I think, you know, will move forward. We're already seeing signs of it. We're having conversations with key customers. As we talked about in our prepared remarks, though, these are large projects and they take a long time to get moving, even with the pause being lifted. So, you know, we anticipate momentum in the back half of the year with regard to these LNG plants, and as we've discussed, you know, we're bidding on a few key projects that I feel we're in a good position for.
Martin Malloy: Customers.
Martin Malloy: As we talked about in our prepared remarks, though these are large projects and they take a long time to get moving even with the pause being lifted so we anticipate our momentum in the back half of the year with regards to these LNG plants and as we've discussed we're bidding on a few key.
Martin Malloy: So I feel we're in a good position for as it relates to the data centers and nuclear projects, we've been bidding datacenter various data center projects on and off but.
Richard Heo: As it relates to the data centers and nuclear projects, we've been bidding various data center projects on and off, but, you know, it's, one, very competitive, that market is, and some of the things that we're bidding are just pretty simple structural steel. So, there's really very little value add, and so we are trying to, you know, use kind of this opportunity to discuss with our potential end users and customers to maybe move up the food chain with regard to the quality of fabrication, you know, things that we're really, our footprint and our capabilities can stand out and it really adds value to the overall end user.
Martin Malloy: But you know it's it's one very competitive that market is and some of the things that we're bidding are just pretty simple structural steel. So there's really very little value add and.
Martin Malloy: And so we are trying to you know use kind of this.
Martin Malloy: Opportunity to discuss with our our potential end users and customers to maybe move up the food chain with regard to the quality of our fabrication you know things that we're really.
Martin Malloy: Our footprint and our capabilities can stand out and it really adds value to the overall end user and then Marty we've seen it really a pick up in activity with regard to nuclear here here in the past couple of quarters and you know the challenge there is that these projects aren't going to happen immediately but where we are.
Richard Heo: And then, Marty, we've seen really a pickup in activity with regard to nuclear here in the past couple of quarters, and, you know, the challenge there is that these projects aren't going to happen immediately, but we're fielding RFQs from various customers on nuclear projects. So, we're really bullish on the fabrication side of the business, you know, as we've discussed. We've got a great facility in Houma, Louisiana, a big yard that shows well. We've put a lot of capital upgrades in the past two years where I think we can, you know, take advantage of the improvements that we've made in the yard and, you know, time this opportunity for in-market growth.
Martin Malloy: Feel the RF queues from various customers on nuclear projects. So we're really bullish on the fabrication side of the business you know as we've discussed we've got a great facility in Houma, Louisiana, a big yard that shows well, we've put a lot of capital upgrades in the past two years, where I think we can take it.
Martin Malloy: Take advantage of.
Martin Malloy: The improvements that we've made in the yard and in time time this opportunity for end market growth.
Morgan Malloy: Okay, great. That was very helpful. And then for my second question, you've got a strong balance sheet over $4 a share in cash. Can you maybe talk about what you're seeing in terms of the pipeline of maybe acquisition opportunities that you're evaluating? Or is it increasing, decreasing in the quality?
Speaker Change: Okay, Great. That's very helpful. And then for my second question, you've got a strong balance sheet over $4 a share in cash can you maybe talk about what you're seeing in terms of the pipeline is.
Speaker Change: Maybe acquisition opportunities that you're evaluating or is it increasing decreasing and the quality.
Richard Heo: Yeah, this is really where it's a little frustrating. We do have the cash and our primary objective is to go do an acquisition that's strategic. And it's just that, you know, the bid ask or the, you know, what we want to pay for and what the sellers want to get for it. It just the spread's been been more than what we've anticipated. We're still looking, and it is a challenge, but it is a very primary objective for us to add growth through acquisition. Great, thank you very much.
Speaker Change: Yes.
Speaker Change: This is really where it's a little frustrating we do have the cash in and our primary objective is to go do an acquisition that's strategic.
Speaker Change: And it's just that the.
Speaker Change: The bid ask or the now what we want to pay for and what what the sellers want to get for it just spreads Ben.
Speaker Change: It's been more than what we you know we've anticipated we're still looking and it is it is a challenge but it is a very a primary objective for us to to add.
Speaker Change: No.
Speaker Change: I'd add growth through acquisition.
Speaker Change: Great. Thank you very much.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Richard Heo: Well, in closing, I want to thank our customers and shareholders for their continued support, as well as recognize our employees who continue to demonstrate a commitment to Gulf Island success. For those on the call, thanks again for your interest in Gulf Island. If we're not able to connect during the quarter, I look forward to speaking with you on our next conference call and updating you on our progress.
Speaker Change: Well in closing I want to thank our customers and shareholders for their continued support as well as recognize our employees who continue to demonstrate our commitment to Gulf Island success for those on the call. Thanks again for your interest in Gulf Island, if we're not able to connect during the quarter I look forward to speaking with you on our next conference call and updating you on a per.
Richard Heo: Be safe.
Speaker Change: <unk> be safe take care.
Richard Heo: Take care.
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