• Full-Year 2024 Revenue: $159 million.
• Full-Year 2024 Adjusted EBITDA: Nearly $13 million.
• Full-Year 2024 Free Cash Flow: Approximately $13 million.
• Cash and Short-Term Investments (End of 2024): Just over $67 million.
• Fourth-Quarter 2024 Revenue: $37.4 million.
• Fourth-Quarter 2024 Adjusted EBITDA: $3.7 million.
• Fourth-Quarter 2024 Services Revenue: $18.8 million, a 23% decrease from Q4 2023.
• Fourth-Quarter 2024 Services EBITDA: $1.4 million, or 7.4% of revenue.
• Fourth-Quarter 2024 Fabrication Revenue: $18.7 million, a 4.9% decrease from Q4 2023.
• Fourth-Quarter 2024 Fabrication Adjusted EBITDA: $4.6 million.
• Corporate Division EBITDA (Q4 2024): Loss of $2.3 million.
• Debt Obligation (End of 2024): $19 million.
• Share Repurchase Program Authorization Remaining: Approximately $3.7 million.
• 2025 Capital Expenditure Expectation: $2 million to $3 million.

• Warning! GuruFocus has detected 4 Warning Signs with GIFI.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Gulf Island Fabrication Inc (NASDAQ:GIFI) generated $159 million in revenue and nearly $13 million in adjusted EBITDA from its small Fab and Services business in 2024.
• The company ended 2024 with over $67 million in cash and short-term investments, highlighting a strong financial position.
• GIFI is expanding its presence in markets outside of oil and gas, such as infrastructure, government, and high-tech manufacturing, with successful projects like the NASA project.
• The company is seeing increased bidding activity in nuclear and data centers, indicating potential growth opportunities.
• GIFI's Cleaning and Environmental Services Business is gaining momentum, benefiting from increased decommissioning activity.

Negative Points

• Consolidated revenue for the fourth quarter of 2024 was down from the same period last year, primarily due to lower Services revenue.
• Adjusted consolidated EBITDA for the fourth quarter of 2024 decreased compared to the same period last year.
• The Services division experienced a 23% revenue decrease in the fourth quarter of 2024 compared to the prior year, due to lower new project awards and delayed Spark Safety projects.
• The Fabrication division's revenue decreased by 4.9% in the fourth quarter of 2024 compared to the prior year, impacted by the absence of favorable change orders from the previous year.
• GIFI anticipates lower consolidated EBITDA for 2025 compared to 2024, due to uncertainty in large project awards and expected lower capital spending by Services customers.

Q & A Highlights

Q: Can you provide more details on the opportunities in the Fabrication segment, particularly regarding nuclear and data centers, and the impact of LNG activity along the Gulf Coast? A: Richard Heo, President and CEO, explained that there are significant opportunities in LNG projects in Texas and Louisiana, which were previously on hold. Conversations with key customers are ongoing, and momentum is expected in the latter half of the year. For data centers and nuclear projects, the market is competitive, but Gulf Island is leveraging its capabilities to add value. The company is optimistic about the Fabrication side, with a well-equipped facility in Houma, Louisiana, ready to capitalize on market growth.

Q: With a strong balance sheet and over $4 per share in cash, what is the status of acquisition opportunities? A: Richard Heo noted that while the company is actively seeking strategic acquisitions, the challenge lies in the bid-ask spread between what Gulf Island is willing to pay and what sellers expect. Despite this, acquisitions remain a primary objective to drive growth.

Q: What are the expectations for large-scale fabrication projects and their impact on 2025 results? A: Richard Heo mentioned that while there is an uptick in bidding activity for large-scale fabrication, the timing of project awards remains uncertain. The company expects momentum in the back-half of the year but anticipates lower capital spending by Services customers in 2025, which may result in consolidated EBITDA being less than 2024's adjusted EBITDA of $12.8 million.

Q: How is the Services division performing, particularly the Spark Safety and CES business lines? A: Westley Stockton, CFO, reported that Services revenue decreased by 23% in Q4 2024 compared to the previous year, primarily due to lower new project awards and delayed Spark Safety projects. However, project delays are subsiding, and the CES business line is seeing increased volume as decommissioning activity gains momentum.

Q: Can you elaborate on the company's capital allocation strategy for 2025? A: Richard Heo stated that Gulf Island plans to continue investing in organic growth by adding service lines and hiring key personnel. The company is also committed to pursuing acquisition opportunities and evaluating capital return options if sufficient growth investments are not found. The strong liquidity position provides flexibility for these initiatives.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.