Q2 2019 Earnings Call
Good morning, and welcome ladies and gentlemen to the Gulf Island fabrication Inc. second quarter 2019 earnings Conference call.
All participants will be in a listen only mode for the duration of the presentation.
This call is being recorded at this time I would like to turn the conference over to Mr. Cook for opening remarks and introduction Cindy. Please go ahead.
Thank you Cassidy.
Thank you and good morning, I would like to welcome everyone to Gulf Island, <unk> second quarter 2019 teleconference.
Our results were released yesterday afternoon, and a copy of the press release is available on our website at Gulf Island Dot Com.
A replay of today's call will be available on our website later today.
Please keep in mind that the press release and certain comments on this call include forward looking statements.
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 2018 Form 10-K and subsequent SEC filings.
Today, we have Mr., Kirk Meche, President CEO and director.
And Mr., Wes Stockton Executive Vice President and Chief Financial Officer Mr. mesh.
Thank you Sandy and good morning to all of our listeners results for the quarter reflect revenue growth on a sequential and year over year basis continued improvements in the utilization of our facilities and positive cash flow.
During the quarter, we significantly added to our backlog with the exercise of options for two cats vessels and a third research vessel from Oregon State.
Last week, we were also awarded a 70 vehicle ferry from the Texas Department of transportation with delivery in 2021.
This award is not included in our quarter end backlog.
We expect continued improvements from a utilization standpoint in future quarters as newly awarded an existing contracts ramp up within our facilities.
Unfortunately during the quarter, we did experience additional cost increases on our harbor took projects and a separate project within our shipyard division, which negatively impacted our shipyard of consolidated quarterly results.
As it relates to our harbor Cogs in overall, Tim talk program during the quarter, we completed and delivered the third and fourth harbor tugs and on schedule to complete the fifth talking that in the third quarter.
The sixth and seventh tugs will be delivered in the fourth quarter.
With the eighth tug could be completed shortly thereafter.
The final two thirds are scheduled for completion in the latter part of 2020.
The forecast cost increase on these vessels during the quarter was the result of lower than expected productivity from the use of a higher percentage of contract labor in our Jennings facility and the fact that our initiatives to improve productivity did not take full effect on the vessels that were already under construction at the time initiatives were implemented.
One of the key initiatives was changes in personnel.
Since the initial charges on the tuck in to some fourth quarter 2018, we have replaced our facilities yard operations and project management and enhanced our frontline supervision.
We are also beginning to source, what we believed to be more efficient contract labor.
We believe these personnel changes and improvements will have a positive impact on remaining vessels and specifically on a later vessels, which will reap the full benefit of the changes, including the lessons learned from the completion of previous vessels.
With respect to the other project in our shipyard Division, we were impacted by deficient subcontracted production engineering that resulted in construction labor rework and schedule extension.
With production engineering at approximately 90% complete.
Future impacts sort of project from engineering should be significantly reduced and the project is scheduled to be completed by the year end.
The remaining backlog within our shipyard division performed well with a higher margin backlog mix.
With respect to our fabrication division, we made progress on the construction of projects in our backlog and continue continue to pursue significant modular fabrication opportunities primarily in the petrochemical and LNG end market.
Although the timing of the potential wars has continued to be delayed we have not yet lost any key opportunities that we're pursuing.
With respect to our services division once again produced a solid quarter, providing support for the offshore sector, along with <unk> municipal type work.
With respect to our pending litigation the trial date for our previously completed jacket change order dispute is still scheduled for January 2020 with mediation scheduled for later this summer.
As it relates to our MPSV dispute.
A hearing on the customer's motion to take possession of the vessel was held at the customer's request was denied.
Accordingly, we retain possession of the vessels and continue to work through the legal process.
With that I will turn the call over to Wes who will provide additional details of our results and segment breakdown Wes.
Thanks, Kirk and good morning, everyone I would now like provide some additional details on our results for the quarter.
Consolidated revenue for the second quarter 2019 was 80.5 million with a net loss of 5.2 million or diluted loss per share of 34 cents.
This compares to revenue for the first quarter, 2019, 67.6 million and net loss of $3 million or diluted loss per share of 20 cents. This also compares to revenue for the second quarter 2018, and 54 million.
Net income of 549004 diluted income per share of four cents.
Our increase in revenue for the quarter relative to both the trailing period and the same period of 2018 reflects an increase in activity across all our divisions.
With respect to our consolidated operating results the loss for the second quarter 2019 was due to the partial under recovery of our overhead costs associated with the under utilization of our facilities.
Charges of $2.3 million related to the previously referenced projects in our shipyard division and legal and vessel holding costs associated with their MPSV and jacket change order disputes discussed in previous quarters.
Such legal on holding costs totaled approximately 1 million for the quarter.
With respect to the utilization of our facilities, while we realized improvement during the quarter such improvement was not at the levels anticipated as construction activities on our large projects are just beginning to ramp up and should contribute to improve utilization by the end of the year.
The increase in operating loss for the quarter relative to the trailing period was due to the shipyard project charges.
Higher legal fees associated with our customer disputes and a lower margin backlog mix for our services division offset partially by lower incentive compensation costs.
The operating loss for the quarter compared to operating income for the same period of 2018 was due to the prior period benefiting by $6.6 million, primarily from gains on the sale of our Texas, South PR and insurance recoveries associated with our former South Texas properties.
Excluding these gains in the prior period, we realized a reduced loss in the current quarter relative to the prior year.
The decrease loss was due to higher revenue increase recoveries of overhead cost due to improved improved utilization of our facilities.
And lower incentive compensation board of directors and legal costs.
These benefits were offset partially by the shipyard project charges and a lower margin mix for our fabrication services Division.
Brought a little more clarity regarding our quarterly operating results. Let me provide some additional details by operating segment.
For our fabrication Division revenue was 22.4 million for the quarter versus 12.6 million for the trailing quarter and $9.5 million for the comparable period of 2018.
Operating loss for the quarter was $1.2 million compared to an operating loss of $1.5 million for the trailing quarter and operating income of $4.2 million for the same period of 2018.
The significant increase in revenue relative to both the trailing period and comparable period of 2018 was due to progress on our patio will riverboat project and several smaller fabrication projects in backlog.
However, the increase versus the prior period was partially offset by the prior year, including revenue for our module fabrication project that was completed in the second quarter 2018.
With respect to operating results the loss for the second quarter 2019 was largely due to the partial under recovery of overhead costs.
The decrease in operating loss relative to the trailing period was due to higher revenue and the operating loss for the quarter compared to operating income for the second quarter 2018.
Due to the prior period benefiting by 6.6 million from the previously mentioned gains associated with our former South Texas properties.
Excluding these gains in the prior period, we realized a reduced loss in the current quarter relative to the prior year.
The decrease in operating loss was due to higher revenue increased recovery of our overhead costs and lower legal fees associated with our change order dispute as such costs are reflected within our corporate division in 2019.
These benefits were partially offset by lower margin backlog mix for the current quarter.
Our shipyard division revenue was $37.6 million for the quarter versus 36.6 million for the trailing quarter and 23.6 million for the comparable period of 2018.
Operating loss for the quarter was $3.6 million compared to an operating loss of 904000 for the trailing quarter and $3.4 million for the same period of 2018.
The slight increase in revenue relative to the trailing period and significant increase in revenue relative to the comparable period of 2018.
Due to progress in our first two regional class research vessels, and our first towing salvage and rescue ship for the U.S. need.
These increases were offset partially by lower revenue for our harbortouch projects and in the case of the prior period revenue for Uno is the project that was completed during 2018.
With respect to operating results the loss for the second quarter 2019 was due to the partial under recovery of our overhead costs.
Charges of $2.3 million associated with the previously referenced projects and vessel holding costs associated with our MPSV to Steve.
The increase in operating loss for the quarter relative to the trailing period was due to the project charges and higher vessel holding costs.
The increase in operating loss for the quarter relative to the comparable period of 2018 was also due to the project charges offset partially by higher revenue.
Increased recoveries of our overhead costs and a higher margin mix for the balance of our backlog.
For our services Division revenue was $24.1 million for the quarter versus 19.6 million for the trailing quarter and $22.2 million for the comparable period of 2018.
Operating income for the quarter was $1.7 million or 7.2% of revenue compared to operating income of 1.3 million.
For 6.6% of revenue for the trailing quarter.
And $2.8 million or 12.8% of revenue for the same period of 2018.
The increase in revenue relative to both the trailing period and comparable period of 2018 fuzzy due to the timing of New awards and materials referenced representing a greater percentage of revenue.
With respect to operating results operating income for the second quarter 2019 was negatively impacted by the partial under recovery of overhead costs.
The increase in operating income for the quarter relative to the trailing period was due to higher recovery of our overhead costs.
Offset partially by a lower margin project mix.
The decrease in operating income for the quarter relative to the comparable period of 2018 was due to lower margin project mix and reduced recoveries of overhead costs offset partially by lower general and administrative expense.
For our corporate division operating loss for the quarter was $2.3 million compared to an operating loss of $2.1 million for the trailing quarter and $2.9 million for the same period of 2018.
The increase in operating loss for the quarter relative to the trailing period was due to higher legal costs associated with our customer disputes.
Offset partially by lower incentive compensation costs.
The decrease in operating loss for the quarter relative to the comparable period of 2018.
It was due to lower incentive compensation and board of directors costs, offset partially by higher legal fees due to changes in the classification of certain legal costs between our corporate and operating segments.
And increased professional fees and other costs associated with the evaluation of strategic alternatives and initiatives to diversify enhance our business.
Now let me provide a few comments regarding our income taxes backlog and liquidity as of quarter end.
Consistent with previous quarters, our tax expense for all periods reflects only state income taxes as we have not recorded any federal income tax benefit for our losses due to GAAP limitations on recognizing deferred tax assets.
As a reminder, although we have not recorded a tax benefit we will receive a cash tax benefit on future taxable income.
With respect to backlog.
At June Thirtyth 2019, our backlog totaled approximately $476 million.
Representing an increase of $142 million from March 2019, and an increase of 120 million from year end 2018.
Our quarter end backlog by operating segment was $410 million for our shipyard Division 54 million for our fabrication division and $13 million for services Division.
And as mentioned by Kirk our backlog excludes the Texas very project awarded last week and excludes customer options on contracts for the U.S. Navy, which if exercised would increase our backlog by additional $333 million.
With respect to our liquidity, we ended the quarter with cash and short term investments of $76 million, an increase of $5.7 million from March 2019, and a decrease of 3.2 million from year end 2018.
The increase in cash compared to the first quarter 2019 was due to a decrease in working capital during the quarter, primarily associated with advance payments on projects in our shipyard Division.
We anticipate ongoing quarterly variability in our project working capital requirements, including any potential increase in working capital during the third quarter.
With respect to our overall liquidity and as discussed on our previous call in May we amended our $40 million credit facility to extend its maturity to June 2021, and at quarter end, we had $10.7 million of outstanding letters of credit and no borrowings on the facility, providing 29.3 million of availability for additional letters of credit or borrowings.
As a result of the after mentioned we continue to have a very healthy liquidity position with total cash investments and availability availability under our credit facility of approximately 105 million at June Thirtyth 2019.
Just as a reminder, this current liquidity liquidity excludes any potential proceeds from the sale of machinery and equipment.
Totaling $18.7 million that remains held for sale at quarter end and is being actively marketed for sale.
So with that ill now turn the call over for her.
Final comments.
With the addition of the old issue and maybe tests options, we have our highest quarter end backlog since 2012.
We're also encouraged by the level of bidding activity during the quarter as it relates to opportunities for our fabrication division.
Why war timing is always uncertain and there are no guarantees that we will be successful in our pursuit based on the status of our proposals and customer feedback I remain increasingly optimistic.
However, we were always aware of their risk versus reward equation as it relates to taking on new work and we will not assume any undue risk just to add new awards to our backlog.
Lastly, while we were confident our strategic plan and the growth opportunities available to the company.
As stated last quarter, our special Committee has initiated a process to conduct a thorough evaluation of all options reasonably available to the company to enhance shareholder value.
This process is ongoing and we do not intend to publicly discuss nor disclose further developments of the review unless and until our board has approved a specific course of action or we have otherwise determinant further disclosure is appropriate.
Castle, you May now open the line for questions.
Thank you.
The question and answer session will be conducted electronically. If you would like to ask a question. Please do so by pressing the star keys, followed by the <unk> one on your Touchtone telephone. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. We will proceed in the order that you seen nice well tickets meaty questions as time permits.
[noise].
So first question comes from Martin Malloy with Johnson Rice and company.
Good morning.
Good morning, Marty.
[noise] last two quarters you've been.
Pretty close to becoming EBITDA positive and with the the revenues increasing utilization increasing in the backlog providing visibility on.
On further revenue increases.
Can you help us maybe understand what you're thinking about in terms of when you might turn EBITDA positive here is it possible during the second half of this year.
Yeah, Marty this is Wes I'm, absolutely that's what our expectation is at this point is that by the back half of the year in the fourth quarter in particular that we would be EBITDA positive.
Yes.
And then just with respect to the the Oregon State University vessels in the U.S. Navy vessels could you maybe comment about where you are in terms of engineering and maybe how.
Confident you are that youve.
Got sufficient you've had sufficient time to.
To make sure the engineering is.
Complete before you begin the the vessels construction sure Marty This is Kirk so as we said in our previous calls you know we did have a delay in the startup of the first Oh issue vessel.
And it was due to two factors one was the vessel increased in size to the mounted equipment that went into the facilities.
Into was you know the mountain engineering, that's going into it. So you know again I think that from an organ state University standpoint. The engineering is far ahead of the production aspect of it.
Again, we slowed production down in the <unk> in the first quarter of this year and we're just starting to ramp up.
As it results as the results of the engineering that is ongoing as we speak as it relates to tax the same process, we're going through we're performing engineering as we speak our construction should begin to ramp up during this third quarter of this year.
Again, the timeframe when the protest was actually being done engineering was continuing to own them pass program.
Again, so I thought that was you know in some respect it gave engineering a little more time to proceed as opposed to just trying to get started on production standpoint, again I know it pushed our utilization of the facilities down with moving those man hours into the third and fourth quarter and as Wes said earlier. That's why we think we were more confident as we get in the latter part of the year and our our start continue to increase that utilization will be taken care of.
Great. Thank you.
Thank you Marty.
Your next question comes from JP Davids of global value investment Corp.
Hey, good morning, and thank you for taking my question.
You've done a very nice job increasing your backlog however.
Low margins and problems with executing on existing projects has been a persistent impediment to profitability and as Marty mentioned it looks like you are just about to turn EBITDA positive, which is a good thing, but I'm, hoping that you might elaborate on the margins in your backlog relative to the margins that you realized this quarter and Kirk I know you briefly alluded to that by saying yet higher margin backlog mix.
As well as elaborate on what's being done to improve execution.
Okay.
Okay. Thanks for the question.
When you think about the margins for the quarter, we have talked in the past about lower margin backlog, but for the quarter in particular, the project charges, obviously or where the challenge absent those were.
It really is more of a volume issue.
Volume issue for US right now in terms of.
Getting to that EBITDA positive.
I hate to use the old.
But for apps and comment, but but absent the charges in the quarter, we've been very close.
To EBITDA neutral.
So even with the lower margin work JP.
As the volume starts to kick in.
When you should find ourselves as long as we execute the way we think we can.
Finding ourselves in that positive EBITDA land in the third and four is there potentially a third quarter and in particular the fourth quarter.
And JP I'll address the productivity issues as I said in my opening statement.
We have made.
A mass mass majority of the changes we've made have been in Jennings location.
All the way from the facilities operator, all the way down to frontline supervision.
The changes we made were really just getting.
Implemented on the vessels that had.
Or that were 50% and below in terms of completion some of the vessels were too far long in terms of some of the changes we made to have a significant impact on the vessels.
So I think that's what you're seeing here, we got new management in there that were able to implement the new plans.
We begin to see some stabilization within those projects.
Again, the challenge quite frankly is the contract labor situation in that facilities. There's a lot of pressure from the lake Charles locations with the petrochemical boom that's happening.
So we're going through a different process in terms of valuation subcontracted labor when it gets into facilities. All those have been implemented and we expect to see those changes result in a positive.
Directionally as we process boats five through 10.
You've talked about under utilization of your facilities.
Since really it seems like the oil and gas downturn.
You now have the largest backlog you've had since 2012, I think backlog needs to be viewed through the lens of margin included in that backlog, but do you feel that you have the volume and the margin in your backlog right now to increase facility utilization and become EBITDA positive on a consistent basis.
Yes, the short answer to that is yes. The longer answer is as you think about each division in the shipyard division, where the lion's share of our backlog reside we were EBITDA positive in the first quarter and again absent the project impact would have been so in the second quarter. So from a shipyard perspective, even though we haven't seen the full ramp up that we had been anticipating just because of the timing of the.
When construction activities commenced we're continuing to see improvement there the bigger challenges on the fabrication side right now and although we have added to our backlog.
We are dependent on the degree on some of this new new work that we're chasing and we've seen some slippage in terms of timing, but over the I think the answer to your question is we do believe there is a point here, where we can we can continuously be.
EBITDA positive and at some point in the.
Near term once we sell some of this fab work that we're chasing or if we're successful and winning some of this fab work. We're chasing then get to full utilization on our facilities as a whole and JP one follow on comment on that I guess for all the listeners.
We announced that we had gotten the Texas fairy.
And we had said in previous calls that we're going to get our margins up I am happy to report the margin on that project in particular is higher than what we've seen traditionally in the shipyard were world. So we as Wes said we're pursuing.
Projects that have a little bit higher margins again, no guarantee at the end of the day when we find them do final negotiations that those margins will hold.
But we are processing additional shipyard work in particular.
At higher margins than we have in the past.
Okay, you've talked about the petrochemical or LNG Renaissance along the Gulf coast for the better part of the past year and I'd agree that theres, a notably higher level of activity.
When should we expect to see awards and what might the economic characteristics of some of those awards should look like.
Well the awards and what we've been bidding and again Theres no guarantee that.
When we process, our bids and submit them to our customers customers are giving us potential start dates and we're at we're at their mercy quite frankly in terms of when the project actually gets kicked off.
But the ones we've been chasing let's say the kick off should happen first part of next year Project Awards were hoping to have project awards within the third or fourth quarter. This year.
Again, but no guarantees as you know they continue to do negotiations and refresh on pricing and whatnot.
Okay and one final question I realize that you've said you're not going to comment publicly on your strategic alternatives process, but.
Does this process have an indefinite life or at some point will this be concluded and you will say definitively we decided to do something or we decided to not do anything.
Well I can't speak on behalf of Special Committee, but I think that we are all in tune as to.
We're going to see what's out there see with processes needed.
Or the air force or what opportunities, but I don't think its a.
Lifelong type.
Exercise, we're going to come to some definitive conclusions.
Before year end.
As my hope.
Okay. Thank you for your time.
Okay JP. Thank you for the question.
And again, if you would like to ask a question. Please press Star key followed one key though is star one. Our next question comes from John Deysher of Pinnacle.
Good morning, everyone.
Good morning, John It sounds like you're making good progress Kirk I was just curious.
I want to make sure I have a handle on the total.
A map of the nonrecurring charges, you called out 2.3 million shipyard and another $1 million of legal and holding which comps of 3.3 is that the total of the nonrecurring charges embedded in the quarter.
Yes. This is Wes.
About half I would tell you about half of that legal and holding costs at this point.
I wouldn't necessarily deem as nonrecurring I don't think its permanent but we may see some of that.
Okay and have seen some of that over the last 18 months.
But about half of that is what I call truly nonrecurring.
And then the 2.3 million of charges, yes that that is the the totality of the nonrecurring project charges.
Okay and that 2.3 shipyards.
With respect to two projects one of which was the tugs you highlighted what was the other project that was problematic.
Yes, thats the ice breaker tug.
That we anticipate will be completed by the end of the year.
Okay.
All right. Good so that's and the changes that you've made your confident that.
These issues crop up in the future.
Well.
John if theres no guarantee but certainly we believe that we've taken the right steps to mitigate any future risk.
The contract labor issue as it exists today, we really can't control that other than trying to make sure. We got the proper folks in place when we hire contract labor.
But from a management standpoint, I am very confident in the management staff that we have currently within that facilities.
Theres a lot of years of experience dealing with this type of processes.
Again, we've seen most of the changes they've made have a positive impact in particular in the last the latter part of the quarter.
For this quarter and I expect those changes continue on as we've processed the projects and as West said.
We've delivered.
Four vessels the fifth vessel will be delivered.
At the end of this law, so we'll be halfway through the process by the end of this month.
Okay got you and.
Back to the million dollars of legal and holding cost. When you said one half is nonrecurring I presume thats, the holding costs related to the Mpsvs.
There is an element of that it's a combination of the two when we do have some holding costs that just are ongoing but we did have some incremental incremental holding cost this quarter in support of our litigation activities.
Does that answer your question.
Sort of what is the holding costs.
Per quarter or per month on the Mpsvs I think you've called that out in the past Rockwell.
Weve not really talked about it per preferred not to call that out.
But in isolation, but.
The cost as.
It's hundreds of thousands low hundreds of thousands per quarter, not not half a million dollars per quarter put it that way.
Okay and that million dollars Ram through gross profit or was that part of SGN.
A little bit of both our legal costs go through DNA and our.
Holding costs go through gross profit.
Roughly what's the breakdown of that.
Did look 50 50.
It's a pretty good pretty pretty close order magnitude.
Okay, all right. Good so the majority of it went through.
Gross profit as did the 2.3 million shipyard.
That's right.
Okay fair enough of them, you mentioned working capital possible working capital increase in the third quarter or how much you think thats.
You want to go up by.
Well I hate to guide to a specific number just because we don't we don't provide that but listen I wouldn't we're the nature of this business is such that we're going to have working capital variability on a quarterly basis and you know I would tell you don't don't get overly exuberant when we generate cash from working capital like we did this quarter and we shouldn't get overly concerned when we consume working capital in the given quarter.
You know, we're not our working capital stands at about four to 5 million this quarter. So it's fairly low.
I think thats.
We talked about the potential to be other run this business over the longer term at breakeven working capital I don't think we're there yet in terms of this backlog mix.
And the competitive.
The nature of how some of this work was bid, but I think we're doing a decent job of managing it but we're going to continue to have some fluidity there.
So if we use some working capital.
On the back half of the year, we may get it back in the first half of the year. So.
I what is that target number again zero at some point not there yet.
But but don't let the.
The quarter in quarter out variability here, a five or 10, even $10 million.
Scare you too much or worry too much.
But I know I Didnt answer your question specifically in your you're trying to get a sense for what that usage would be what we just we typically don't provide that type of guidance.
I understand.
And finally on the legal front do you still have the hornbeck vessels in your care.
What's the status of that I mean, theres been sued into countersued.
How long should we anticipate that this is going to drag on because obviously you've got.
Money tied up in those vessels and.
Well kind of what's your thinking there.
Well.
Again, I can't give you too much of a guidance in that respect we are at the mercy of the courts quite frankly, we have not.
Set the trial date yet.
You know, we always are in discussions with the bonding company.
And are hopeful that there may be some resolution on it going forward, but.
There has been no talks to this point it is coming with the resolution so.
Again, I don't know that I can give you specific guidance on it because quite frankly, I really don't know right now we're in discovery period.
With all these suits have been filed.
I think.
As we progress along maybe we can give you a little more.
Guidance and update but right now.
Theres nothing to provide.
Okay, Thats fair and on the Walker trial, but its been pushed back again to January 2020 from I think this month August of 2019.
This has been ongoing for several years why should we believe that it's actually going to go to trial in 2020.
Well, you're right, but I think the base may be off I think the original trial date was sometimes in the loan.
The second half of the first quarter or second quarter.
But we have discovered mediation as we as we said mediation is set for the end of this month.
But the trial date has been pushed by the judge not US there was a case that they've got in front of us the judge requested.
Total is quite frankly that he was moved in our trial date to the first part of January .
But in the in the emotion that was made with the judge he said that he would not move the date any further now.
Take that for what it's worth but we're we're planning to.
Have the court date, and I think that date is January 13th of next year.
Or mediation.
At the end of this month.
Okay and mediation.
Does that imply that a settlement could be made to by the end of this month or what exactly does that involve.
Well I think I think it's non binding so it's at least attempt to get the parties together to discuss I don't think we can give you any assurance that it will be any.
Agreement made it that mediation.
So we will see it it's an effort on both parties part to to try and get this thing resolved as quickly as possible, but again there is no guarantee that would that would come may be we majors in the agreement disagree and let it had to trial on on January 13 2020.
It's a step into right direction, what's the date for the mediation Kirk.
So at the end of August is August 26.
Great. Thank you very much.
Hi, John .
At this time I would like to turn the conference back over to Miss any Cook.
Additional comments.
Okay. So this is Kirk we thank you for joining us this morning your interest in Gulf Island.
Speak to everyone next quarter. Thank you.
Thank you ladies and gentlemen. This concludes today's teleconference. You may now disconnect.