Gulf Island Fabrication Inc (GIFI) 2019 Q4 法說會逐字稿

Good afternoon, and welcome, ladies and gentlemen, to the Gulf Island Fabrication Fourth Quarter 2019 Earnings Conference Call. (Operator Instructions)

This call is being recorded. At this time, I would like to turn the conference over to Ms. Cindi Cook for opening remarks and introductions. Cindi, please go ahead.

Thank you, and good afternoon. I would like to welcome everyone to Gulf Island's Fourth Quarter 2019 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 7:00 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 2018 Form 10-K and subsequent SEC filings.

Please, also, note that management may reference EBITDA, adjusted EBITDA and backlog on this call, which are financial measures not recognized under U.S. GAAP.

As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our press release.

Today, we have Mr. Richard Heo, President and CEO; and Mr. Wes Stockton, Executive Vice President and Chief Financial Officer. Mr. Heo?

Thank you, Cindi. Good afternoon, everyone. I'm pleased to be here with you this afternoon. It has been approximately 100 days, since I joined the company, and I'm excited about the potential opportunities ahead.

Before addressing the quarter, let me first discuss why I joined Gulf Island. Previously, I've been both a customer and a consultant to the company before assuming the role of Chief Executive Officer. As a customer, I had the opportunity to work with Gulf Island for the construction of a large grassroots petrochemical complex in Lake Charles, Louisiana and experience the quality of work and their ability to safely deliver on their commitments.

Gulf Island was instrumental in helping us derisk this large project by assembling heater modules in their Houma, Louisiana fabrication yard and using its water access to barge the modules to the project site.

This off-site activity provided by Gulf Island enabled us to decrease the craft manpower demand on our predominantly stick built project by over 300 people. The construction is particular petrochemical complex was one of only a few projects under construction at the time that was on budget and on schedule, and it was widely viewed as a success.

This previous experience, combined with my experience as a consultant prior to joining Gulf Island, gives me a strong appreciation for the company's legacy strengths, the desire of its employees to be successful and the quality of the company's assets in Louisiana. However, our Gulf Island has a history of safely delivering quality products and services. In recent years, the company has been challenged to do so profitably. Growing our business and returning to profitability will be my central focus as we reposition the company for future success.

Since joining Gulf Island, I have spent significant time with our customers and employees, reviewing current projects and prospects and identifying opportunities to enhance our people, processes and procedures. As a result, today, we are announcing several initial initiatives to improve our execution capabilities, positioning in our end markets and path to profitability.

First, we will be more disciplined in pursuing and evaluating prospects. We cannot and will not bid every opportunity that we see in the market. Our resources will be focused on profitable opportunities in which we offer a competitive and strong value proposition to our customers.

I can tell you, we have already no-bid prospects that we don't believe are real or projects that have too much underlying risk for the contract price.

For those projects we choose to pursue, we are placing increased rigor around the development of our bid estimates, including a full assessment of the execution plan and the associated risks and opportunities inherent in the projects as well as the appropriate pricing of such risks. For example, we are pushing back on terms and conditions that do not reflect our acceptable level of risk. In many of these circumstances, we are receiving commercial considerations.

To improve our project execution, we are also making fundamental changes to our management and functional leadership. This includes replacing and repositioning personnel where necessary to ensure that the most capable people are in the right functional roles as well as holding leadership accountable for project execution. For example, in the fourth quarter, we assigned project execution responsibility for the vessels being built in our Fabrication Division to our Shipyard Division to better align the supervision and construction of these vessels with the capability and expertise of our Shipyard Division.

We are also focusing our efforts on improving our project management teams to provide better cost and schedule control processes and commercial management of our projects, underlying this increased discipline, rigor around bid estimates and personnel changes will be consistent and improved processes and procedures.

A second area of focus is to maximize our resource utilization and centralized key project resources. As a result, we are closing our Jennings facility within our Shipyard Division, which will consolidate in Houma, our newbuild marine vessel construction activities and combine our shipyard management and supervision team in one single location.

In addition, the first quarter we combined our Fabrication Division and Services Division to form a new and fully integrated segment, the Fabrication and Services Division will enable us to further leverage the best practices and the experience of the combined new division.

These facility and division consolidations will help us maximize the utilization of our resources, reduce cost and improve our focus on project execution by placing our best resources in one location to ensure we are executing our projects optimally. With strengthened processes, procedures and talent as well as a more focused footprint in Houma, Louisiana, we will be much better positioned to concentrate our efforts on our chosen end markets.

In the case of our Fabrication and Services Division, we will continue to provide fabrication and associated services to our traditional offshore markets but are significantly increasing our business development efforts on the fabrication of modules, piping systems and other structures for onshore refining, petrochemical, LNG and industrial facilities.

There is a significant amount of capital projects within a 300-mile radius of Houma, anticipated in the next 3 to 5 years, and we are determined, and we will be well positioned to get our share of this market opportunity.

With respect to our Shipyard Division, we will maintain our focus on opportunities for newbuild marine vessels for government and other customers unrelated to the offshore oil and gas sector.

However, we will do so with an emphasis on improved margins for our new project awards, including increased shipyard repair and maintenance work.

Going forward, we are building a strong foundation that will enable us to execute our existing backlog to completion and fully leverage our dedicated workforce and strategic location in Houma to secure attractive new project awards to drive profitable growth. With an increased level of discipline and emphasis on our processes and people as well as a relentless focus on safety and quality, I'm confident that Gulf Island will get back to our winning ways.

I'll now turn over the call to Wes to discuss our quarterly financial results in greater detail, and then I will address the project impacts for the quarter and the status of such projects.

Thanks, Richard, and good afternoon, everyone.

Let me first provide some summary comments regarding our fourth quarter results as well as our year-end liquidity position. Fourth quarter revenue was $79.4 million, an increase of approximately 5% sequentially and 32% year-over-year.

Despite this growth, we experienced several impacts during the quarter, resulting in a consolidated net loss of $34.3 million. These impacts included project charges of $14 million, primarily attributable to our Fabrication and Shipyard Divisions and noncash asset impairments and other nonrecurring costs of $17.3 million, primarily associated with assets held for sale within our Fabrication Division and lease assets and fixed assets within our Shipyard Division.

From a liquidity perspective, our position remains strong. We ended the year with total cash, investments and availability under our credit facility of almost $100 million. In addition, last week, we received $10 million in connection with the settlement of a change order dispute for a previously completed project. This settlement was reached in February and is not reflected in our fourth quarter 2019 results.

Now let me discuss our detailed fourth quarter results and quarterly comparisons. Consolidated revenue for the fourth quarter of 2019 was $79.4 million, with a net loss of $34.3 million or diluted loss per share of $2.26. This compared to revenue for the third quarter 2019 of $75.8 million, and a net loss of $6.8 million or diluted loss per share of $0.44. This also compared to revenue for the fourth quarter 2018 of $60.2 million and a net loss of $4.7 million or diluted loss per share of $0.31.

The increase in revenue for the quarter relative to the third quarter 2019 reflects an increase for our Shipyard and Services Divisions, offset partially by a decrease for our Fabrication Division. The increase in revenue relative to the same period of 2018, reflects an increase in activity for our Shipyard and Fabrication Division.

With respect to our consolidated operating results, the increased loss compared to both the third quarter 2019, and fourth quarter 2018 was primarily due to the previously referenced project charges and noncash asset impairments and nonrecurring items.

Now let me provide some additional details of our quarterly results by operating segment. Fabrication Division revenue was $15.5 million for the quarter versus $19.5 million for the trailing period, and $10.2 million for the comparable period of 2018.

Our operating loss for the quarter was $18.5 million compared to an operating loss of $848,000 for the trailing period. And operating income of $1.8 million for the same period of 2018. The decrease in revenue relative to the trailing quarter due to lower activity on our riverboat and 2 40-vehicle ferry projects. The increase in revenue relative to the comparable period of 2018 was due to progress on our riverboat vehicle ferry and jacket and deck projects.

With respect to operating results, the loss for the fourth quarter of 2019 was primarily due to the project charges of $8.7 million and noncash impairments of $8.7 million. The project charges relate to our riverboat offshore jacket and deck and 40-vehicle ferry -- vehicle ferry projects.

The impairments relate primarily to our 3 large crawler cranes and 2 plate bending roll machines that are held for sale and our panel line equipment and deck barges that were placed back in service during the fourth quarter of 2019.

The impairments of the assets held for sale were based on our current estimates of fair value and our desire for a shortened future marketing period. The increase in operating loss for the current quarter, relative to the trailing quarter, and the loss relative to income for the same period of 2018 was primarily due to the previously mentioned charges and asset impairments.

For our Shipyard Division, revenue was $45.6 million for the quarter versus $39.4 million for the trailing period and $29.7 million for the comparable period of 2018. Operating loss for the quarter was $13.5 million compared to an operating loss of $3.3 million for the trailing period and $6.6 million for the same period of 2018.

The increase in revenue relative to both the trailing quarter and the comparable period of 2018 was due to progress on our 3 research vessel projects and 3 towing, salvage and rescue ship projects, offset partially by lower revenue for our harbor tug and icebreaker tug projects. With respect to operating results, the loss of the fourth quarter 2019 was due to project charges of $5.1 million and noncash impairments of $7.6 million.

The project charges relate to our harbor tug, research vessel, towing, salvage and rescue ships and icebreaker tug projects. The impairments relate primarily to lease assets and fixed assets associated with our Lake Charles facility and Jennings facility, the latter of which is expected to be closed in the third quarter 2020 upon completion of the harbor tugs projects.

The leased assets and nonmovable assets in the Jennings facility were fully impaired and our fixed assets in Lake Charles, which primarily relate to dry docks and cranes were partially impaired by some current estimates of their fair value. The increase in operating loss for the current quarter, relative to both the trailing quarter and the same period of 2018 was primarily due to the previously mentioned project charges and asset impairments.

For our Services Division, revenue was $20.5 million for the quarter versus $17.5 million for the trailing period, and $21.5 million for the comparable period of 2018. Operating income for the quarter was $719,000 compared to an operating loss of $407,000 for the trailing period, and operating income of $2.1 million for the same period of 2018. The increase in revenue relative to the trailing quarter was due to higher fabricated products and offshore services activity, while the decrease relative to the comparable period of 2018 was due to lower offshore services revenue, offset partially by higher onshore maintenance activity.

With respect to operating results, income for the fourth quarter 2019 was impacted by a project charge of $231,000 for a completed subsea components project and noncash impairments of $282,000. Operating income for the current quarter relative to a loss for the trailing quarter was due to the prior period, including a project charge of $1.5 million related to the previously mentioned completed subsea components project.

The decrease in operating income in the current quarter compared to the same period of 2018 was due to the current period project charge, asset impairments and a lower margin mix of work.

For our corporate division, operating loss for the quarter was $3.1 million compared to an operating loss of $2.3 million for the trailing period and $1.9 million for the same period of 2018. The increase in operating loss relative to the trailing period was due to higher legal fees associated with customer disputes and nonrecurring costs associated with the retirement of our former CEO.

The higher operating loss for the current quarter compared to the same period of 2018 was due to initiatives to enhance our business, higher legal fees associated with customer disputes, as the costs were reflected within our operating divisions in 2018 and the nonrecurring costs, offset partially by lower incentive plan and Board of Directors' compensation costs.

Now let me provide a few comments regarding our year-end backlog and liquidity. With respect to backlog, at December 2019, our backlog totaled approximately $437 million, representing a decrease of $25 million from September 2019 and an increase of $81 million from year-end 2018, with a year-over-year increase due to project awards for our Shipyard Division, attributable to our third research vessel projects and second and third towing, salvage and rescue ship projects that were awarded earlier in 2019. Our year-end backlog by operating segment was $374 million for our Shipyard Division, $50 million for our Fabrication Division and $13 million for our Services Division. This backlog excludes customer options on contracts for the U.S. Navy, which if exercised, would increase our backlog by an additional $333 million. With respect to liquidity, we ended the year with cash and short-term investments of $69.6 million and in February of this year, we amended our credit facility to adjust our financial covenants and maintain our facility maturity date of June 2021.

At December 31, 2019, we were in compliance with all of our amended financial covenants and had a $10.2 million of outstanding letters of credit with no borrowings on our credit facility, providing $29.8 million of availability for additional letters of credit or borrowings. This current liquidity excludes any additional proceeds from the sale of assets totaling $9 million that remained held for sale at year-end, of which $1.1 million was sold in February 2020. In addition, as previously mentioned, this liquidity excludes $10 million that was received in February 2020, from the settlement of our change order dispute.

As we look ahead to 2020, I would like to provide our expectations, regarding working capital and capital investment requirements. At December 31, 2019, our working capital, excluding cash and assets held for sale, approximated negative $13 million, primarily due to our contract liability position on projects associated with advanced billings and our crude contract losses. This compares to $5.7 million of positive working capital on the same basis at December 31, 2018.

During 2020, we anticipate ongoing quarterly variability in our working capital requirements, including getting back to working capital levels that approximate our working capital as of the beginning of 2019.

In addition, we anticipate capital requirements in 2020 of approximately $10 million to $15 million, of which approximately $8 million to $9 million represents capital investments required by our contracts for the U.S. Navy and the remainder represents what I would characterize as ongoing or maintenance capital expenditures.

The capital investments associated with the Navy contracts related to the construction of vessel erection sites and a warehouse that will also benefit our other construction operations going forward. With respect to expectations regarding EBITDA for 2020, at this time, we do not intend to provide guidance until we work through our current transition. I will now turn the call back over to Richard to discuss our projects.

Thanks, Wes. Let me now provide some context of the project charges we incurred in the quarter. These projects, which were bid at least 1.5 years ago as the company attempted to reposition away from our traditional reliance on the fabrication of structures and marine vessels associated with the offshore oil and gas sector. This repositioning occurred during a competitive market, in which the company bid work at low margins, including breakeven to secure backlog to reduce the underutilization of resources and gain traction in the new markets being pursued.

In addition, certain divisions were transitioning the workforce to the fabrication of new and varied structures. All of this was done during a very competitive labor market, due in part to a significant decrease in the quality and availability of craft labor as many left the industry as a result of the cyclicality of the market and all-time low unemployment.

The cumulative effect of these factors, among others, I will discuss, contributed to the project challenges that the company has recently experienced, including those that manifested in the fourth quarter of 2020.

So with that as a backdrop, with respect to our fabrication division, the impact for our riverboat project totaled $2.1 million for the quarter and was related to increased craft labor due to difficulties encountered in commissioning the vessel and the need to accelerate our schedule.

These issues were largely due to the execution team underestimating the time and the complexity required to finish the vessel. Recognizing these challenges during the fourth quarter, we immediately assigned shipyard supervision with expertise in finishing and commissioning to oversee the completion of the vessel. And I'm happy to report that we received our certification of inspection and the vessel has been turned over to the client as of Monday this week.

The impact for the 2 40-vehicle ferry projects totaled $5.1 million for the quarter, and was related to increased craft labor, subcontracted services and materials costs due to greater-than-anticipated rework, lower-than-anticipated productivity experienced during the fourth quarter, and our expectations of future labor productivity based on the recent experience and experience on similar recently completed projects. Going forward, I have assigned project execution responsibility for the vessels to our Shipyard Division to better align the supervision and construction of these vessels with the capabilities and the expertise of our Shipyard Division.

The impacts for our offshore jacket and deck project totaled $1.5 million for the quarter and was related to increased forecast costs and liquidated damages due to higher cost estimates from our commissioning subcontractors and delays associated with customer-related directives. We are pursuing a change order to extend the schedule for the determination of liquidated damages, as we believe the schedule impacts are the result of customer directives. However, the customer is disputing the change orders, and accordingly, our forecast does not reflect the potential benefits, if any, from any favorable resolution of the change orders.

Now shifting to the Shipyard Division, the impact of the harbor tug projects totaled $1.7 million for the quarter and was related to increased craft labor cost and forecast liquidated damages, due to the higher-than-anticipated cost on the self-performed paint scope that we assumed in the third quarter from an underperforming paint subcontractor and lower productivity on other work scopes compared to previously completed vessels.

Our current forecast for the remaining vessels reflect actual results realized on the seventh vessel, which was completed in February and anticipated potential future productivity impacts due to our announced closure of the Jennings facility. The impact for the research vessel projects totaled $2.5 million for the quarter and was due to the reversal of cumulative gross profits recognized during the fourth quarter of 2019, the impact for the full year, inclusive of profit recognized during the first 3 quarters of 2019 totaled $800,000.

The projects have experienced difficulties with subcontracted production engineering, due in part to vessel size constraints and complexities associated with vessel functionality, which has resulted in incomplete and deficient production engineering and construction delays, disruption and rework. As a result, we made a collective decision with our customer to delay construction activities on the project until production engineering achieves a satisfactory level of completion to limit further impacts on construction.

In addition, we have agreed to a change order that includes the customer taking responsibility for the production engineering. The change order also includes the extensions of the scheduled dates for the projects and provides for increases in contract price to account for the estimated cost impacts of the production engineering and construction delays.

Based on our current forecast, cost to complete the projects, the change order and the collaborative nature of our discussions with the customer, we are not forecasting losses on these projects. However, due to the uncertainties with respect to the timing of the completion of production engineering and the potential impacts on our construction schedules and costs as well as ongoing discussions with the customer, we are unable to reasonably estimate the amount of gross profit, if any, that will ultimately be realized on the projects. Accordingly, during the fourth quarter, we reversed all previously recognized gross profits on the projects, intend to only recognize revenue equal to cost until we are able to reasonably estimate the amount of gross profit, if any.

The impacts for the towing, salvage and rescue ship projects totaled $700,000 and were related to increased craft labor, subcontracted services and material costs, including revised estimates of specific contingency requirements for such items. These projects during the quarter and underlying cost forecast, reflect what I believe to be a realistic approach to evaluating our contract positions and represents our best estimates of the cost to complete these projects.

With that, Dan, please open the line for questions.

(Operator Instructions) And we'll take our first question from Martin Malloy with Johnson Rice.

I just wanted to try to get your sense in terms of outlook here. According to my financial model, you all have not, Gulf Island have not generated positive EBITDA, since 2016. And a lot of the difficulties have -- it's a similar theme. We're underestimating the complexity of projects, increased labor costs and dispute with customers over change orders. Can you give us an outlook in terms of now that you're ramping up on these research vessels and the Navy vessels? When you expect to turn EBITDA positive?

Yes. Marty, obviously, it's a valid question. At this point, given the transition and what we're -- all we're going through, we're not prepared to try that. One thing I will tell you is, in light of the project impacts, about 85% of our backlog as it stands today, is very -- will contribute no future gross profit. So where our contributions to profit will come from is our new project awards, and that's really going to have to be -- that is the focus in terms of executing the backlog to the estimates as we have them today. And then selling profitable new work that's appropriately risk-adjusted that will contribute to us being EBITDA positive at some point.

Do you have anything else you want to add to that, Richard?

No. I think Wes is right. We do have the backlog. But as we discussed today, we -- we're -- we've got a realistic view on the forecast.

And so it's a matter of executing that backlog to our forecast and replenishing the backlog with new prospects that, as we discussed earlier in my talk, that we're going to be very disciplined and rigorous in how we bid these opportunities and add to our backlog.

Okay. And then talking about these new opportunities, you mentioned in the press release, you discussed fabrication of modules, piping systems, other structures for onshore refining petrochemical LNG. It seems like that's a pretty competitive area, and you're seeing lower cost yards internationally, becoming more and more capable. There's more heavy lift vessels out there to move the modules. Why do you think you'd have a competitive advantage in going after this work?

That's a great question, Marty. We are not going to compete with the yards that are offshore, for example, in China, we -- the complexity and the scope and the size is -- we just -- we're -- that's not a target market that we're going to compete after. We're really going to focus on really utilizing our strategic asset, more specifically, the location that the waterway access and the target, the projects that -- and the customers in Texas and Louisiana, that are going to value the strategic location.

So we're looking at things that are potentially time sensitive or some modules that were, for example, pipe rack modules, where -- in there's just a lot of space on the module. So it's not a dense compacted module. And those customers don't want to ship those types of modules overseas. So pipe rack modules is very specific targeted process modules. Those are the ones that we're going to go after. And again, we're not going to be able -- everything to everybody. We're going to be very methodical and focused on how we go after strategic customers, as to strategic projects.

Our next question in the queue comes from Jeff Geygan with Global Value Investment Corp.

Thank you for your comments. And Richard, welcome aboard. You've stepped into a challenging situation.

Thanks, JP.

Question for you. In your press release, you state, you will use a more disciplined approach to pursuing project opportunities with increased vigor around your bidding estimates. How would you describe what will be different in the future versus that process in the past?

So one of -- I mean, simply put, one of the things that we're doing is we've implemented a bid estimate reviews. So a prospect review, and we call it a go-no -- no-go review. So it's a bid review, where we sit and evaluate the prospects from a -- has the prospect been funded? What's the opportunity in terms of the competitive landscape? Do we have a value proposition? What's our winning advantage? And so we're doing the stage-and-gate process where that opportunity will go through multiple iterations in our review. So that's the first part.

And then when the prospect gets further developed, what we're going to do is, develop an execution plan associated with that prospect and review all the risks associated in that execution plan, how -- as how we see the project being executed. And we'll evaluate all the risk and then ask ourselves these tough questions. How are we going to manage the risk? How are we going to address the risk? And is the -- can the risk be properly addressed? Or can it be funded in our contract price?

So that rigor, that discipline, and again, this methodical approach of -- let's -- we understand what we do. It's a tough competitive market, but making sure that our employees understand the execution plan and how we're going to deliver this project to the estimates that we develop and essentially proposed to the client.

All right. That's great. And I believe during your prepared comments, you mentioned that, in fact, you have had conversations with prospective customers. And have had pushback or you've given them pushback. I'm curious how they responded to that?

That's a great question. Gulf Island got a great history. I'll tell you, that my experience with Gulf Island is, that they're really good people, and they don't know how to say no. It's that -- maybe it's that southern hospitality. They always say, yes. And it was really hard for my team members, when we gave -- or which I challenged the team to push back, for my team members to push back. But ultimately when we do, that the customers come back with concessions because what we're pushing back with are realistic. It's subjective. It's rational.

And so if you ask my employees today, the ones that have been involved and not only the bidding process, but the execution process and ask them how well that's going, they'll tell you, 9 out of 10 times, they'll come -- the customers are coming back and discussing with us about the future possibilities.

Great. You have a rich history. I hope you're able to capitalize on it here. Best of luck to you.

Thank you, JP.

Our next question in the queue comes from John Deysher with Pinnacle.

I was just curious, you mentioned process and procedures, which I think are absolutely critical going forward. Where are we with getting those to where you want them to be? Are we pretty far along? Are they in? Are they complete at this point? Where are we?

Well, it's been 100 days. So we are far along in the sense that we have implemented some fundamental processes and procedures. We do have opportunities to further hone in as we look for, again, to improve our people side of the equation and continue to look for opportunities, where we're looking to leverage our assets better, but more importantly, bringing in the functional teams in our organization to adopt the standard process. That's what we're continuing to work toward. And I would say, John, that this is probably a continuous improvement type of concept, where we're going to continue to hone in and adapt to the market and the business.

Okay. You mentioned people, do you feel you have the right people in the right slots at this point in terms of project managers, bidding people? Is that where you want it to be as well?

Yes. So that's a great question. We just recently hired a new Head of HR, that's obviously going to help me in this department. But we do have fundamentally the right backbone. But we have to supplement our team, again, continuously. We got to always look for the best talent. Some of the things that we're looking at beefing up or adding to. And I think we talked about it some in our press release. But it's around -- if we're going to go after this onshore module fabrication, we really are looking to hire some business development professionals, estimators, project managers that have that experience and project controls professionals that ultimately are going to help us to execute these projects. So -- there are some functional roles and relative, we're -- key roles that we're looking for and trying to supplement and add to our team.

Okay. Good to hear. And finally, you're spending money on legal to resolve the disputes and you collected $10 million recently. Was that $10 million related to one of the bigger disputes, the Hornbeck or the Walker? Or are those 2 bigger disputes still outstanding at this point?

John, this is Wes. It's the latter. So we -- you're right, we have been spending quite a bit on legal on that offshore change order. That's the one that was resolved. It's not Hornbeck. So Hornbeck, we still have in front of us, and we're going through the litigation phases now. And that's the only significant litigation we have outstanding at this point.

Given there are no more questions, this concludes today's question-and-answer session. At this time, I would like to turn the conference back over to Richard for any additional comments.

Thank you, Dan. In summary, while our results over the past several years have been disappointing, I believe, the implementation of the previously mentioned initial actions focused on internal discipline and strengthen processes and procedures and talent allocation, will provide improved project execution as we move forward.

This, combined with our strong balance sheet, liquidity, continued capital build cycle in our onshore downstream end markets and marketing the strategic value of our location and assets in Houma, Louisiana. I am confident we'll return the company to profitability. Thank you for your interest in Gulf Island. And I look forward to speaking with you again in connection with our first quarter results.

Well, It sounds like we have one more question.

(Operator Instructions) We'll take our next question from Jonathan Lawrence with Dawson James Securities.

I was just curious, if there's any thought behind a share buyback based upon the cash on the balance sheet.

Good question, Jonathan. As we sit here today, we believe a strong balance sheet and liquidity are really paramount to giving our customers and our stakeholders' confidence as we grow the business and strive to return to profitability. I promise you, I can tell you, it's something that we continue to evaluate as we evaluate our capital structure. But at this point in time, it's not in the cards.

And this concludes the Q&A session. I will now turn it back to Richard for any additional comments.

So. That's it, Dan. I think we're finished.

Thank you. Ladies and gentlemen, this concludes the Gulf Island conference call. You may now disconnect.