Gulf Island Fabrication — Investor Presentation (November 2022)
40 slides from Gulf Island Fabrication's investor presentation, Nov 9, 2022
Slide 1: Investor Presentation November 2022
Exhibit 99.1 INVESTOR PRESENTATION November 2022
Slide 2: Cautionary Statements & Non-GAAP Measures
Cautionary Statements & Non-GAAP Measures Cautionary Statements This presentation, including any oral statements made in connection therewith, contains forward-looking statements in which we discuss our potential future performance. Forward-looking statements, within the meaning of the safe harbor p
Slide 3: Company Overview
rea GULF ISLAND BUILDING ON TRUST COMPANY OVERVIEW
Slide 4: About Us
About Us ~$104 million ~$80 million ~$38 million of total revenue for nine market capitalization cash balance months ended Sept. 30, 2022 at Nov. 4, 2022 at Sept. 30, 2022 Significant progress on Strategic Transformation has positioned Gulf Island to pursue Profitable Growth Growing Services busines
Slide 5: About Us: Operating Locations and Labor Force
About Us Strategic Operating Locations Experienced Labor Force Shipyard 25 Fabrication 202 Broussard, LA The Woodlands, TX Harvey, LA Houma, LA Services 654 Ingleside, TX • Gulf Island’s primary operating and fabrication facilities in Houma support both • Non-union, skilled labor force capable of fa
Slide 6: Segment Overview
Segment Overview Operates Through Two Business Segments Revenue Mix Fabrication Oil & Gas 33% Oil & Gas LNG SERVICES FABRICATION Services 67% Industrial Renewables Current mix reflects strength of Services business and low volume of large fabrication revenue. Anticipate relative mix to be more evenl
Slide 7: Services Division
Services Division Maintenance & Municipal Welding Scaffolding Coatings Specialty Decommissioning & Civil Enclosures Welding Traditional Blasting/Painting Torquing/Tensioning Pump Stations Spark Containment Fitting SafeDeck Insulation Hydrotesting Levee Reinforcement Pressurized Enclosures Rigging Fi
Slide 8: Services Past Projects
Services Past Projects Maintenance & Offshore Hookup Coatings Scaffold Decommissioning Launcher Skid installation in Hookup of a Tension Leg Platform Coating project on offshore Scaffolding installation on an connection with a subsea tie- at an offshore location. Facilities platform. Offshore inshor
Slide 9: Fabrication Division
Fabrication Division Offshore O&G Offshore Wind Rolled Goods, Docks Modules, Skids & Subsea Structures Structures Structures & Terminals Piping Systems Jacket Foundations Jacket Foundations Piles / Monopiles PLETS/PLEMS Equipment Modules / Skids Decks Electrical Substations Large OD Pipe Inline Sled
Slide 10: Fabrication Past Projects
Fabrication Past Projects Ethane Cracker Offshore Wind Onshore Gas Breasting Dolphin Modules Turbine Foundations Processing Module 2,900-ton Secondary Quench Five 400-ton Jacket Foundations 1,000-ton Air Cooler module for Six Mooring Jackets & four Exchanger (SQE) module and with Piles and five 360-
Slide 11: Corporate Sustainability
Corporate Sustainability Safety A strong safety culture is a critical element of Gulf Island’s success, and the Company is committed to the safety and health of its employees and subcontractors. Gulf Island is a vital part of the local community, and the Company is committed to Community giving back
Slide 12: Safety
Safety 5-Year Safety Trend 1.40 0.09 0.08 1.20 0.07 1.00 0.06 0.80 0.05 0.60 0.04 0.03 0.40 0.02 0.20 0.01 0.00 0.00 2018 2019 2020 2021 2022 YTD - 10/16/2022 Total Recordable Incident Rate (TRIR) Lost Time Incedent Rate (LTIR) • Average Total Recordable Incident Rate of 0.47 for the last 3 years •
Slide 13: Supporting the Community
Supporting the Community Gulf Island Emergency Relief Fund • Hurricane Ida – Over 7,750 hot meals served to the Company’s workforce • Hurricane Laura – Over 3,000 hot meals served to the community Philanthropy and Community Involvement • Relay for Life in Terrebonne Parish • Junior Achievement in Ho
Slide 14: Business Transformation
Ye} GULF ISLAND BUILDING ON TRUST BUSINESS TRANSFORMATION
Slide 15: Business Transformation
Business Transformation Legacy Gulf Island The New Gulf Island • Complex shipbuilding and fabrication • Specialty services and fabrication business contracts with focus on repeat customers, products and services • Reliant on the cyclical marine and offshore O&G end markets • Improved utilization, co
Slide 16: The New Gulf Island
Transformation Phases Legacy The New Gulf Island Gulf Island PHASE ONE: PHASE TWO: Improve Liquidity Pursue Stable, and Operational Profitable Growth Performance In 2020 Gulf Island outlined a transformational strategy intended to improve the Company’s liquidity and operational performance to positi
Slide 17: Phase One – Improve Financial Strength and Operational Performance
PHASE ONE – Improve Financial Strength and Operational Performance • Sold Shipyard operating assets and long-term contracts (2Q21) • Winding down remaining Shipyard Division operations • Reduce risk profile and (expected 1Q23) • Improved project cash flow strengthen liquidity • Increased mix of T&M
Slide 18: Phase Two – Pursue Stable, Profitable Growth
PHASE TWO – Pursue Stable, Profitable Growth • Grow offshore customer base and broaden services offerings • Expand services offerings to onshore markets • Grow and diversify services • Acquired services business of Dynamic Industries (4Q21) business • Improve recruiting by expanding geographic and i
Slide 19: Shifting End Market and Contract Mix
Shifting End Market and Contract Mix Previous Mix* Target Mix • LNG and Petro-Chem provide near-term growth opportunity for Fabrication as transition to target mix Infrastructure Other 5% Infrastructure 5% Renewables 15% Petro-Chem 25% 10% • Renewable and infrastructure will drive LNG longer-term gr
Slide 20: Shipyard Wind Down
Shipyard Wind Down Two 40-vehicle ferries One 70-vehicle ferry Two multi-purpose supply vessels for North Carolina DOT for Texas DOT for Hornbeck Offshore • One ferry has completed USCG • Ferry has been launched; expected • Contracts in litigation regarding trials and target delivery is Nov. complet
Slide 21: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 20
Slide 22: Key Investment Highlights
Key Investment Highlights • LNG and Petro-Chem offer strong near-term growth for Fabrication Attractive End Markets • Renewables and offshore wind provide longer-term growth for Fabrication • High energy prices and labor constraints driving favorable Services trends • Baseload of stable craft labor
Slide 23: 1. Attractive End Markets - Fabrication
1. Attractive End Markets - Fabrication LNG Offshore Wind Renewable Energy 18 7GW +40% 16 6GW 14 5GW 12 10 4GW Bcf/d 8 3GW 6 2GW 4 1GW 2 0 0GW 2016 2017 2018 2019 2020 2021 2022E 2024E 2023 2024 2025 2026 2027 2028 2029 Source: U.S. Energy Information Administration Source: U.S. Energy Information A
Slide 24: 1. Attractive End Markets - Services
1. Attractive End Markets - Services Offshore Services Onshore Services Other Services • High energy prices driving robust • DSS Acquisition brings stronger onshore • Increased customer base and suite of offshore O&G activity resulting in strong services presence services provides opportunity to cro
Slide 25: 2. Positioned For Growth
2. Positioned For Growth Skilled Labor Force Strategic Location • Experienced and long tenured labor force is an • Located 30 miles from the Gulf of Mexico, important strategic advantage given labor Houma offers a strategic location that provides constraints direct Gulf of Mexico water access • Non-
Slide 26: 2. Positioned For Growth
2. Positioned For Growth • Strong execution drives Loyal Customer Base customer loyalty • High quality, diversified customer base • DSS Acquisition expanded customer base providing cross-sell opportunities • Services platform provides opportunity for pull-though fabrication work • Many clients embra
Slide 27: 3. Improving Margin Profile
3. Improving Margin Profile • Reduced cost structure and exit of lower margin backlog • Improved operational performance and Volume more disciplined bidding recovery Grow value-add services and • Growing Services platform provides more products Grow Services stable, predictable margins Improve opera
Slide 28: 4. Strong Balance Sheet
4. Strong Balance Sheet Liquidity and cash position Cash balance of ~$38 No bank debt; surety Exited higher-risk, long-term allows Gulf Island to million at Sept. 30, 2022 requirements reduced construction contracts pursue growth Monetized certain under- Shipyard Transaction Shipyard Transaction Exp
Slide 29: 5. Experienced Management Team
5. Experienced Management Team Richard W. Heo Westley S. Stockton PRESIDENT & CEO EXECUTIVE VICE PRESIDENT & CFO Joined Gulf Island in 2019 Joined Gulf Island in 2018 Previous Experience Previous Experience • McDermott International, Inc. – Senior Vice President of • CB&I – Senior Vice President & C
Slide 30: Financial Overview
Ye} GULF ISLAND BUILDING ON TRUST FINANCIAL OVERVIEW
Slide 31: Third Quarter Summary
Third Quarter Summary Revenue of $39.6 EBITDA* of $1.9 million, Cash balance of $37.8 million New project awards of million, up 102% from up from an EBITDA* (as of Sept. 30, 2022) $139.2 million, up the prior year loss of $2.5 million ~$124 million from in the prior year the prior year Revenue incre
Slide 32: Third Quarter Performance - Services
Third Quarter Performance - Services Services Revenue Services Adjusted EBITDA* Services New Project Awards $ in millions $ in millions $ in millions $22.2 $22.6 $2.7 $2.8 $23.1 $22.1 $20.7 $19.4 $13.5 $1.7 $14.1 $1.4 $1.6 $10.3 $9.3 $1.0 $8.8 $8.9 $7.5 $6.4 $0.4 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 1
Slide 33: Third Quarter Performance - Fabrication
Third Quarter Performance - Fabrication Fabrication Revenue Fabrication Adjusted EBITDA* Fabrication New Project Awards $ in millions $ in millions $ in millions $1.5 $1.6 $15.4 $1.3 $116.9 $11.7 $11.2 $0.4 $10.2 $10.8 $0.2 $8.1 $5.6 ($1.0) $9.8 $11.7 $5.7 $6.4 $7.7 $8.3 ($1.8) 1Q21 2Q21 3Q21 4Q21 1
Slide 34: Third Quarter Balance Sheet and Liquidity
Third Quarter Balance Sheet and Liquidity Total Cash Position Total Surety Bonds $ in millions $ in millions $54.6 $291.2 $40.8 $37.8 $110.8 $121.1 4Q21 2Q22 3Q22 4Q20 4Q21 3Q22 Decrease in cash from the end of 2021 due Significant decrease in outstanding surety to an expected working capital increa
Slide 35: Summary
SUMMARY Ye} GULF ISLAND BUILDING ON TRUST 34
Slide 36: Summary
Summary Summary • Progress on business transformation has • Growing Services business will provide created a stronger, more predictable improved visibility and result in a more business positioned for profitable growth stable and diversified business mix with higher margins • Shipyard Transaction si
Slide 37: Appendix
APPENDIX Ye} GULF ISLAND BUILDING ON TRUST 36
Slide 38: Financial Reconciliation
Financial Reconciliation Services Segment EBITDA & Adjusted EBITDA $ in millions 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Operating income $ 0.27 $ 1.29 $ 0.90 $ 1.03 $ 1.19 $ 2.34 $ 2.39 Add: Depreciation and amortization 0.16 0.14 0.14 0.21 0.36 0.39 0.38 EBITDA 0.43 1.43 1.04 1.24 1.55 2.72 2.77 Add: D
Slide 39: Contact Information
Contact Information For questions or additional information please contact: Paul Bartolai, CFA 773.551.1795 [email protected] 38
Slide 40: Gulf Island - Building on Trust
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Gulf Island Fabrication — Investor Presentation (November 2022) on 6ix