Gulf Island Fabrication, which has facilities in Houma, Jennings and Lake Charles, announced Monday a net loss of $3 million, or 20 cents per share, for the first quarter and said a special committee has been formed to “explore alternative strategies” focused on enhancing shareholder value.
The Houston-based company makes steel structures and marine vessels used for oil and gas production and transportation, petrochemical and industrial facilities, power generation and alternative energy projects.
The results were better than a year ago, when Gulf Island posted a $5.3 million loss for the first quarter 2018, or 35 cents per share.
"Our results show that we are trending in the right direction, and we anticipate improvement in utilization as construction activities for our backlog and new awards ramp up,” said Kirk Meche, president and chief executive officer of Gulf Island.
Gulf Island had a $334.7 million backlog of work at the end of the first quarter, an increase of $42.7 million from the year before.
The company saw revenue rise from $57.3 million at the end of the first quarter 2018 to $67.6 million. But Meche said the company was impacted because of underutilization of its facilities. Gulf Island has been hurt by the sustained low oil prices, which have put a damper on offshore drilling activity.
Jack Laborde, chairman of Gulf Island’s board, said the company formed the special committee as part of an effort to strengthen its liquidity and improve the utilization of assets.
“While we remain confident in our strategic plan and the growth opportunities available to the company, the board has determined that it is in the best interest of our shareholders to conduct a thorough evaluation of all options reasonably available to the Company to enhance shareholder value,” he said.
The Gulf Island board has hired Johnson Rice & Co., a New Orleans-based investment banker, to serve as its financial adviser; and Jones Walker, a New Orleans law firm, to serve as legal counsel. The company said it has not set a timetable for the special committee’s review and does not intend to discuss what the group finds unless a specific course of action is determined.
Shares of Gulf Island closed at $8.23 Monday, down 15 cents. Five years ago, the stock was trading at more than $20 a share.