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What changed in GULF ISLAND FABRICATION INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GULF ISLAND FABRICATION INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+252 added−261 removedSource: 10-K (2025-03-05) vs 10-K (2024-03-08)

Top changes in GULF ISLAND FABRICATION INC's 2024 10-K

252 paragraphs added · 261 removed · 208 edited across 4 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

93 edited+13 added−25 removed108 unchanged
Biggest changeIf we are later determined to have been ineligible to receive the PPP Loan or loan forgiveness, we may be subject to significant penalties, including significant civil, criminal and administrative penalties, and we could be required to repay the PPP Loan in its entirety, which could negatively impact our liquidity, and have an adverse impact on our reputation.
Biggest changeIf we are later determined to have been ineligible to receive the PPP Loan or PPP Loan forgiveness, we may be subject to significant penalties, including significant civil, criminal and administrative penalties, and we could be required to repay the loan in its entirety, which could negatively impact our financial condition, and have an adverse impact on our reputation. 18 We may not be able to obtain letters of credit or surety bonds if and when needed on favorable terms, if at all, and we may not have sufficient liquidity to satisfy any indemnification obligations owed to a surety should the surety have to make payments under the performance bonds to the beneficiary thereof.
Our business, prospects, financial condition, operating results, cash flows, liquidity and stock price may be affected materially and adversely, in whole or in part, by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition, operating results, liquidity and cash flows to vary materially from historical results or those anticipated, projected or assumed in our forward-looking statements.
Our business, prospects, financial condition, operating results, cash flows, liquidity and stock price may be affected materially and adversely, in whole or in part, by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition, operating results, cash flows and liquidity to vary materially from historical results or those anticipated, projected or assumed in our forward-looking statements.
The revenue, costs and profit realized on a contract will often vary from the estimated amounts on which such contract was originally estimated due to the following: • unanticipated changes in, or failure to properly estimate the costs of, engineering, materials, components, equipment, labor or subcontractors; • failure to properly estimate the impact of engineering delays or errors on the construction of a project, including productivity, schedule and rework; • difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers, or failures by such third-parties to perform, resulting in project delays and additional costs; • late delivery of materials by vendors or the inability of subcontractors to deliver contracted services on schedule or at the agreed upon price; • increased costs due to poor project execution or productivity and/or weather conditions; • unanticipated costs or claims, including costs for project modifications, delays, errors or changes in specifications or designs, regulatory changes or contract termination; • unrecoverable costs associated with customer changes in scope and schedule; • payment of liquidated damages due to a failure to meet contractual delivery dates; • changes in labor conditions, including the availability, wage and productivity of labor; • termination, temporary suspension or significant reduction in scope of our projects by our customers; • unanticipated technical problems with the structures, equipment or systems we supply; • unforeseen costs or delays related to equipment that is not operable or does not adequately function; and • under-utilization of our facilities and an idle labor force.
The revenue, costs and profit realized on a contract will often vary from the estimated amounts on which such contract was originally estimated due to the following: • unanticipated changes in, or failure to properly estimate the costs of, engineering, materials, components, equipment, labor or subcontractors; • increased costs due to poor project execution or productivity and/or weather conditions; • failure to properly estimate the impact of engineering delays or errors on the construction of a project, including productivity, schedule and rework; • difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers, or failures by such third-parties to perform, resulting in project delays and additional costs; • late delivery of materials by vendors or the inability of subcontractors to deliver contracted services on schedule or at the agreed upon price; • unanticipated costs or claims, including costs for project modifications, delays, errors or changes in specifications or designs, regulatory changes or contract termination; • unrecoverable costs associated with customer changes in scope and schedule; • payment of liquidated damages due to a failure to meet contractual delivery dates; • changes in labor conditions, including the availability, wage and productivity of labor; • termination, temporary suspension or significant reduction in scope of our projects by our customers; • unanticipated technical problems with the structures, equipment or systems we supply; • unforeseen costs or delays related to equipment that is not operable or does not adequately function; and • under-utilization of our facilities and an idle labor force.
Further, our employees may engage in certain activities that are covered by the provisions of the Jones Act or USL&H, including services conducted on offshore platforms, services performed on barges owned or chartered by us, and fabrication activities that are performed at our Houma Facilities.
Further, our employees may engage in certain activities that are covered by the provisions of the Jones Act or USL&H, including services conducted on offshore platforms, activities performed on barges owned or chartered by us, and certain fabrication activities performed at our Houma Facilities.
Depending on the size of the project, the delay, suspension, termination, increase or decrease in scope of any project could significantly impact our backlog and change the expected amount and timing of revenue recognized.
Depending on the size of the project, the delay, suspension, termination, or increase or decrease in scope of any project could significantly impact our backlog and change the expected amount and timing of revenue recognized.
If our safety assurance program fails, our employees, subcontractors and others may become injured, disabled or lose their lives, and our projects may be delayed, causing exposure to litigation or investigations by regulators. Unsafe conditions at project work sites also have the potential to increase employee turnover, increase project costs and increase our operating costs.
If our safety assurance program fails, our employees, subcontractors and others may become injured, disabled or lose their lives, and our projects may be delayed, causing exposure to litigation or investigations by regulators. 16 Unsafe conditions at project work sites also have the potential to increase employee turnover, increase project costs and increase our operating costs.
Systems and information technology interruption or failure and data security breaches could adversely impact our ability to operate or expose us to significant financial losses and reputational harm. We rely heavily on computer information, communications technology and related systems in order to properly operate our business. From time to time, we experience occasional system interruptions and delays.
Systems and information technology interruption or failure and data security breaches could adversely impact our ability to operate or expose us to significant financial losses and reputational harm. We rely on computer information, communications technology and related systems in order to properly operate our business. From time to time, we experience occasional system interruptions and delays.
We cannot determine to what extent future operations and results of operations may be affected by new legislation, new regulations or changes in existing regulations. 21 Actions of activist shareholders could create uncertainty about our future strategic direction, be costly and divert the attention of our management and board.
We cannot determine to what extent future operations and results of operations may be affected by new legislation, new regulations or changes in existing regulations. Actions of activist shareholders could create uncertainty about our future strategic direction, be costly and divert the attention of our management and board.
See Note 2 for further discussion of our reserves for potential credit losses. 17 Furthermore, some of our customers may be highly leveraged and subject to their own operating and regulatory risks, which increases the risk that they may default on their obligations to us.
See Note 2 for further discussion of our reserves for potential credit losses. Furthermore, some of our customers may be highly leveraged and subject to their own operating and regulatory risks, which increases the risk that they may default on their obligations to us.
See Notes 1 and 2 and “Critical Accounting Policies” in Item 7 for further discussion of our contracting and revenue recognition. Disruptions at the regional bank in which we deposit our funds could have an adverse impact on our business and financial condition.
See Notes 1 and 2 and “Critical Accounting Policies” in Item 7 for further discussion of our contracting and revenue recognition. 19 Disruptions at the regional bank in which we deposit our funds could have an adverse impact on our business and financial condition.
This could limit our ability to bid on new project opportunities, thereby limiting our potential growth and profitability. We may not be able to generate sufficient cash flow to meet our obligations. Our ability to fund operations depends on our ability to generate future cash flows from operations.
Further, this could limit our ability to bid on new project opportunities, thereby limiting our potential growth and profitability. We may not be able to generate sufficient cash flow to meet our obligations. Our ability to fund operations depends on our ability to generate future cash flows from operations.
Additionally, as it relates to our fabrication business, during periods of increased market demand, new fabrication service capacity may enter the market, which could place additional pressure on the pricing of our fabrication projects.
Additionally, as it relates to our fabrication business, during periods of increased market demand, new fabrication capacity may enter the market, which could place additional pressure on the pricing of our fabrication projects.
We have not always been successful in fully recovering our project and overhead costs or realizing a profit, even when industry conditions are favorable, due in part to the competitive environment for new project awards. While we have recently experienced an increase in bidding activity for fabrication projects and demand for our services remains high, this trend may not continue.
We have not always been successful in fully recovering our project and overhead costs or realizing a profit, even when industry conditions are favorable, due in part to the competitive environment for new project awards. While we have recently experienced an increase in bidding activity for fabrication projects and demand for our services remains strong, this trend may not continue.
Litigation arising from any such occurrences may result in our being named as a defendant in lawsuits asserting large claims. We may be exposed to future losses through our use of deductibles and self-insured retentions for our exposures related to property and equipment damage, builder’s risk, third-party liability and workers’ compensation and USL&H claims.
Litigation arising from any such occurrences may result in our being named as a defendant in lawsuits asserting large claims. We may be exposed to future losses through our use of deductibles and retentions for our exposures related to property and equipment damage, builder’s risk, third-party liability and workers’ compensation and USL&H claims.
Responding to challenges from activist shareholders, such as proxy contests, media campaigns or other public or private means, could be costly and time consuming and could have an adverse effect on our reputation and divert the attention and resources of management and our board, which could have an adverse effect on our business and operational results.
Responding to challenges from activist shareholders, such as proxy contests, media campaigns or other public or private means, could be costly and time consuming and could have an adverse effect on our reputation and divert the attention and resources of management and our Board, which could have an adverse effect on our business and operating results.
The impact of severe weather conditions or natural disasters has included and may continue to include the disruption of our workforce; curtailment of services; weather-related damage to our facilities and equipment for which we are generally self-insured, including impacts from infrastructure challenges in the surrounding areas, resulting in suspension of operations; inability to deliver equipment, personnel and products to project sites in accordance with contract schedules; and loss of productivity.
The impact of severe weather conditions or natural disasters has included and may continue to include the disruption of our workforce; curtailment of services; weather-related damage to our facilities and equipment for which we are generally uninsured, including impacts from infrastructure challenges in the surrounding areas, resulting in suspension of operations; inability to deliver equipment, personnel and products to project sites in accordance with contract schedules; and loss of productivity.
In addition, technological innovations have lowered transportation costs, increasing the competitiveness of foreign competitors when exporting structures from foreign locations to the GOM and Gulf Coast, which may hinder our ability to successfully secure new awards for projects destined for the GOM and Gulf Coast from foreign locations.
In addition, technological innovations have lowered transportation costs, increasing the competitiveness of foreign competitors when exporting structures from foreign locations to the GOA and Gulf Coast, which may hinder our ability to successfully secure new awards for projects destined for the GOA and Gulf Coast from foreign locations.
The occurrence of a significant incident, series of events, or unforeseen liability for which we are self-insured or not fully insured, or for which insurance recovery is significantly delayed, could have a material adverse effect on our results of operations or financial condition.
The occurrence of a significant incident, series of events, or unforeseen liability for which we are uninsured or not fully insured, or for which insurance recovery is significantly delayed, could have a material adverse effect on our results of operations or financial condition.
It is difficult to predict whether or when we will be awarded new contracts due to complex bidding and selection processes, changes in existing or forecast market conditions, governmental regulations, permitting and environmental matters.
It is difficult to predict whether or when we will be awarded new contracts due to complex bidding and selection processes, changes in existing or forecasted market conditions, governmental regulations, permitting and environmental matters.
With the recent increased demand for construction and services labor, the supply of skilled labor has become increasingly limited resulting in higher costs of labor, including increases in wage rates and the costs of recruiting or training to attract and retain qualified personnel, which could have a materially adverse impact on our business, financial condition and results of operations.
With the recent increased demand for construction and services labor, the supply of skilled labor has become increasingly limited resulting in higher costs of labor, including increases in wage rates and the costs of recruiting and training to attract and retain qualified personnel, which could have a material adverse impact on our business, financial condition and results of operations.
See “Competition” in Item 1 for further discussion of the competitive nature of our industry. A small number of customers may represent a significant portion of our revenue. We derive a significant amount of our revenue from a small number of customers in any given year.
See “Competition” in Item 1 for further discussion of the competitive nature of our industry. A small number of customers typically represent a significant portion of our revenue. We derive a significant amount of our revenue from a small number of customers in any given year.
See Note 2 and “Overview” in Item 7 for further discussion of the impacts of adverse weather conditions to our operations and the risk factor above titled “We could be exposed to potentially significant liability and costs due to limits on our insurance coverage and losses for which we do not have third-party insurance coverage .” The nature of the industries that we serve subjects us to compliance with regulatory and environmental laws.
See Note 2 and “Other Impacts to Operations” in Item 7 for further discussion of the impacts of adverse weather conditions to our operations and the risk factor above titled “We could be exposed to potentially significant liability and costs due to limits on our insurance coverage and losses for which we do not have third-party insurance coverage .” 20 The nature of the industries that we serve subjects us to compliance with regulatory and environmental laws.
The timing and amount of any share repurchases will be at the discretion of management and will depend on a variety of factors, including capital availability, our financial results, cash requirements, business, market, industry and global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by management.
The timing and amount of any share repurchases under the Share Repurchase Program will be at the discretion of management and will depend on a variety of factors, including capital availability, our financial results, cash requirements, business, market, industry and global economic conditions, changes in laws, contractual restrictions and other factors deemed relevant by management.
If funding were not appropriated for that purpose, some or all of these waterways could become impassable by barges or other vessels required to transport many of our products. 22
If funding were not appropriated for that purpose, some or all of these waterways could become impassable by barges or other vessels required to transport many of our products. 21
While the prices of oil and gas have somewhat stabilized recently, the duration of such stability is uncertain and difficult to predict. If the price of oil and gas significantly declined or the returns on capital investments by our customers are insufficient, our operations could be impacted due to nonpayment or nonperformance by our customers.
While the prices of oil and gas have somewhat stabilized, the duration of such stability is uncertain and difficult to predict. If the price of oil and gas significantly declines or the returns on capital investments by our customers are insufficient, our operations could be impacted due to nonpayment or nonperformance by our customers.
Furthermore, during periods of declining pricing for our fabrication projects and services, we may not be able to reduce our costs accordingly, which could impact our ability to compete. Operational Risks Our business depends on the award of new contracts and the timing and execution of those awards.
Furthermore, during periods of declining pricing for our services and fabrication projects, we may not be able to reduce our costs accordingly, which could impact our ability to compete. Operational Risks Our business depends on the award of new contracts and the timing and execution of such contracts.
Our business continues to be significantly dependent on the level of capital expenditures by oil and gas producers, processors and their contractors, as well as alternative energy companies, operating in the GOM and along the Gulf Coast. The level of capital expenditures by these companies can be impacted by oil and gas and associated commodity prices.
Our business continues to be dependent on the level of capital expenditures by oil and gas producers, processors and their contractors, as well as alternative energy companies, operating in the GOA and along the Gulf Coast. The level of capital expenditures by these companies can be impacted by oil and gas and associated commodity prices.
Our employees and subcontractors work on projects that are inherently dangerous. If we fail to maintain safe work sites, we can be exposed to significant financial losses and reputational harm. We work on projects with large, mechanized equipment, moving vehicles, and dangerous processes, which can place our employees and subcontractors in challenging environments.
If we fail to maintain safe work sites, we can be exposed to significant financial losses and reputational harm. We work on projects with large, mechanized equipment, moving vehicles, and dangerous processes, which can place our employees and subcontractors in challenging environments.
If such amounts and cash flows from operating activities are not sufficient to fund our working capital requirements, capital expenditures, contract commitments and obligations, and/or acquisition opportunities, we would be required to reduce our capital expenditures and/or forego certain contracts and/or acquisition opportunities, or we would be required to fund such needs through debt or equity issuances or through other financing alternatives, including the sale of assets.
If such amounts and cash flows from operating activities are not sufficient to fund our working capital requirements, capital expenditures, contract commitments and obligations, and/or strategic opportunities, we would be required to reduce our capital expenditures and/or forego certain contracts and/or strategic opportunities, or we would be required to fund such needs through debt or equity issuances or through other financing alternatives, including credit arrangements or the sale of assets.
Further, due to the higher demand for our services, if we cannot employ the necessary skilled labor to execute our backlog, we have had, and may have to continue, to increase our use of contract labor, which may have a higher cost and lower levels of productivity.
Further, due to the higher demand for our services, if we cannot employ the necessary skilled labor to execute our backlog, we have had, and may in the future have, to increase our use of contract labor, which may have a higher cost and lower levels of productivity.
Even during periods of relatively high oil and gas prices, our customers may cancel or curtail capital expenditure programs for exploration and production and repair and maintenance of their offshore assets due to uncertainty regarding oil and gas prices and other priorities for cash flows, including investment in energy transition projects.
Even during periods of relatively high oil and gas prices, our customers may cancel or curtail capital expenditure programs for exploration and production and repair and maintenance of their offshore assets due to uncertainty regarding the continued relative stability of oil and gas prices and other priorities for cash flows, including investment in energy transition projects.
Financial Risks We may need additional capital in the future for working capital, capital expenditures, contract commitments and/or acquisitions, and we may not be able to obtain or raise such capital (whether debt or equity) or do so on favorable terms, which would impair our ability to operate our business or execute our strategy.
Financial Risks We may need additional capital in the future for working capital, capital expenditures, contract commitments and obligations, and/or strategic opportunities, and we may not be able to obtain or raise such capital (whether debt or equity) or do so on favorable terms, which would impair our ability to operate our business or execute our strategy.
The Share Repurchase Program expires on December 15, 2024, does not obligate us to repurchase any shares and may be modified, increased, suspended or terminated at any time at the discretion of the Board. A suspension or termination of our share repurchases could have a negative effect on the price of our common stock.
The Share Repurchase Program does not obligate us to repurchase any shares and may be modified, increased, suspended or terminated at any time at the discretion of the Board. A suspension or termination of our share repurchases could have a negative effect on the price of our common stock.
In the case of our Fabrication Division, while we have seen an increase in bidding activities, we can provide no assurances that the higher level of bidding activity will continue during 2024 and beyond or that we will be successful in securing any large project awards.
In the case of our Fabrication Division, while we have seen an increase in bidding activities for large project opportunities, we can provide no assurances that the higher level of bidding activity will continue during 2025 and beyond or that we will be successful in securing any large project awards.
A reduction in our workforce could also impact our results of operations if customers are hesitant to award new contracts based upon our staffing levels or if we are unable to adequately increase our labor force and staff projects that are awarded following our workforce reductions over recent years.
A reduction in our workforce could also impact our results of operations if customers are hesitant to award new contracts based upon our staffing levels or if we are unable to adequately increase our labor force and staff projects that are awarded following a workforce reduction.
The impacts on our business of the volatility of oil and gas prices and other factors that have influenced our customers’ capital spending have included, or may continue to include, among other things, reduced bidding activity; suspension or termination of backlog; deterioration of customer financial condition; and unanticipated project costs and schedule delays due to supply chain disruptions, labor and material price increases, lower labor productivity, increased employee and contractor absenteeism and turnover, craft labor hiring challenges, increased safety incidents, lack of performance by subcontractors and suppliers, and contract disputes.
The impacts on our business of the volatility of oil and gas prices and other factors that have influenced our customers’ capital spending have included, or may continue to include, among other things, reduced bidding activity; suspension or termination of backlog; deterioration of customer financial condition; and unanticipated project costs and schedule delays due to supply chain disruptions, labor and material price increases, lower labor productivity, increased employee and contractor absenteeism and turnover, craft labor hiring challenges, increased safety incidents, lack of performance by subcontractors and suppliers, and contract disputes. 10 We service industries that are highly competitive among service providers.
As of December 31, 2023, based on our review of public filings with the SEC, we believe over one-third of our stock is held by a combination of institutional investors, pooled investment funds, and certain other investors with a history of shareholder activism.
As of December 31, 2024, based on our review of public filings with the SEC, we believe over one-quarter of our stock is held by a combination of institutional investors, pooled investment funds and certain other investors with a history of shareholder activism.
In addition to commodity prices, the levels of our customers’ capital expenditures are influenced by, among other things: • availability and cost of capital; • the cost of exploring for, producing and delivering oil and gas and the sufficiency of any returns on capital investments; • the sale and expiration dates of offshore leases in the U.S. and overseas; • the discovery rate, size and location of new oil and gas reserves; • demand for energy, including hydrocarbon production, which is affected by worldwide economic activity and uncertainty and population growth, as well as geopolitical conflicts; • the ability of the Organization of the Petroleum Exporting Countries (“OPEC”) to set and maintain production levels for oil and the level of production by non-OPEC countries; • political events and conditions, including socio-political unrest, any government shutdown, instability or hostilities, and trade and monetary sanctions in response to such developments; • demand for, availability of and technological viability of, alternative sources of energy; • technological advances affecting energy exploration, production, transportation and consumption; • weather conditions, natural disasters, and global or regional public health crises and other catastrophic events; and • uncertainty regarding the U.S. energy policy, including local, state and federal laws and regulations that would negatively impact or restrict the oil and gas industry.
In addition to commodity prices, the levels of our customers’ capital expenditures are influenced by, among other things: • availability and cost of capital; • the cost of exploring for, producing and delivering oil and gas, and the sufficiency of any returns on capital investments; • the sale and expiration dates of offshore leases in the U.S. and overseas; • the discovery rate, size and location of new oil and gas reserves; • demand for energy, including hydrocarbon production, which is affected by worldwide economic activity and uncertainty and population growth, as well as geopolitical conflicts; • the ability of the Organization of the Petroleum Exporting Countries (“OPEC”) to set and maintain production levels for oil and the level of production by non-OPEC countries; • political events and conditions, including socio-political unrest, any government shutdown, instability or hostilities, and trade and monetary sanctions in response to such developments; • demand for, availability of and technological viability of, alternative sources of energy; • technological advances affecting energy exploration, production, transportation and consumption; and • weather conditions, natural disasters, and global or regional public health crises and other catastrophic events.
In addition, as we seek fabrication opportunities related to energy transition initiatives, including in support of our customers who are making energy transitions away from fossil fuels, opportunities related to offshore wind developments and potential future onshore support structures to provide electricity from renewable and green sources, we expect to face increased competition.
In addition, as we seek fabrication opportunities related to other industries (such as energy transition initiatives, including in support of our customers who are making energy transitions away from fossil fuels, opportunities related to offshore wind developments and potential future onshore support structures to provide electricity from renewable and green sources) we may face increased competition.
In addition, the seasonality of oil and gas industry activity in the GOM also affects our operations. Our offshore oil and gas customers often schedule the completion of their projects during the summer months in order to take advantage of more favorable weather during such months.
In addition, the seasonality of oil and gas industry activity in the Gulf Coast region also affects our operations. Our offshore oil and gas customers often schedule the completion of their projects during the summer months in order to take advantage of more favorable weather during such months.
See Note 4 and “Liquidity and Capital Resources” in Item 7 for further discussion of the Note Agreement and Mortgage Agreement. 16 If adequate capital is not available, or not available on beneficial terms, we may not be able to make future investments, take advantage of acquisitions or other investment opportunities, or respond to competitive challenges.
See Note 4 and “Liquidity and Capital Resources” in Item 7 for discussion of the Note Agreement and Mortgage Agreement. If adequate capital is not available, or not available on beneficial terms, we may not be able to make future investments, take advantage of strategic opportunities, or respond to competitive challenges.
In addition, some institutional investors may be discouraged from investing in the industries that we service. In recent years, activist shareholders have placed increasing pressure on publicly-traded companies to effect changes to corporate governance practices, executive compensation practices or social and environmental practices, or to undertake certain corporate actions or reorganizations.
In addition, some institutional investors may be discouraged from investing in the industries that we service. Activist shareholders continue to place increasing pressure on publicly-traded companies to effect changes to corporate governance practices, executive compensation practices or social and environmental practices, or to undertake certain corporate actions or reorganizations.
Although oil and gas prices have recovered from the historic lows seen in 2020, due in part to geopolitical conflicts, there are no assurances that the increase in prices will be sustained or that our business will continue to benefit from such increase in prices.
Although oil and gas prices have recovered, due in part to geopolitical conflicts, from their historic lows, there are no assurances that current prices will be sustained or that our business will continue to benefit from the relative increase in prices.
These factors could cause our revenue and margins to be depressed and limit our future growth opportunities. See Note 1 and “Overview” in Item 7 for further discussion of the impacts of oil and gas price volatility.
These factors could cause our revenue and margins to be depressed and limit our future growth opportunities. See Note 1 and “Impacts of Oil and Gas Price Volatility and Macroeconomic Conditions on Operations” in Item 7 for further discussion of the impacts of oil and gas price volatility.
Many of these customers have faced significant challenges since 2008 due to the volatility in the price of oil and gas, including decreased cash flows, reductions in borrowing capacity, the inability to access capital or credit markets, and reductions in liquidity.
Many of these customers have faced significant challenges for over a decade due to the volatility in the price of oil and gas, including decreased cash flows, reductions in borrowing capacity, the inability to access capital or credit markets, and reductions in liquidity.
If an expected new project award is delayed or not received, or project execution is delayed subsequent to an award, we may incur costs to maintain an idle workforce and facilities, or alternatively, we may determine that our long-term interests are best served by reducing our workforce and incurring increased costs associated with termination benefits.
If an expected new project award is delayed or not received, or project execution is delayed subsequent to an award, we may incur costs to maintain an idle workforce and facilities, or alternatively, we may determine that our long-term interests are best served by reducing our workforce and incurring increased costs associated with termination benefits, both of which we have experienced in the past.
In the past few years, the federal government has imposed new or increased tariffs or duties on an array of imported materials and products used in connection with our fabrication business, which raised our costs for these items (or products made with them), and threatened to impose further tariffs, duties and/or trade restrictions on imports.
In the past several years, the federal government has imposed new or increased tariffs or duties on an array of imported materials and products used in connection with our fabrication business, which raised our costs for these items (or products made with them), and the current administration in the U.S. has imposed further tariffs, duties and trade restrictions on imports.
Federal law also authorizes maintenance of these waterways by the U.S. Army Corps of Engineers. These waterways are dredged from time to time to maintain water depth and, while federal funding for dredging has historically been provided, there is no assurance that Congressional appropriations sufficient for adequate dredging and other maintenance of these waterways will be continued.
These waterways are dredged from time to time to maintain water depth and, while federal funding for dredging has historically been provided, there is no assurance that Congressional appropriations sufficient for adequate dredging and other maintenance of these waterways will be continued.
The following information should be read in conjunction with Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 “Financial Statements and Supplementary Data” found elsewhere in this Report, which may include additional factors that could adversely affect our business.
The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and “Financial Statements and Supplementary Data” in Item 8, which may include additional factors that could adversely affect our business. References to “Notes” relate to the Notes to our Consolidated Financial Statements (“Financial Statements”) in Item 8.
Ensuring continuity of supply of such raw materials to our operations is critical to our business. We also rely on the availability of equipment and components for key equipment from our suppliers, which may be impacted by competition demands as well as the availability of input materials in the creation of such equipment and components for key equipment.
We also rely on the availability of equipment and components for key equipment from our suppliers, which may be impacted by competition demands as well as the availability of input materials in the creation of such equipment and components for key equipment.
In addition, any decisions made regarding our deployment or use of any sales proceeds we receive involves risks and uncertainties. As a result, our decisions with respect to such proceeds may not lead to increased long-term shareholder value. See Note 3 for further discussion of our Houma AHFS and the sale of the purchase option.
In addition, any decisions made regarding our deployment or use of any sales proceeds we receive involves risks and uncertainties. As a result, our decisions with respect to such proceeds may not lead to increased long-term shareholder value. See Note 3 and “ Other Impacts to Operations” in Item 7 for further discussion of our assets held for sale.
Failure of suppliers and subcontractors to deliver raw materials, equipment and components and provide services, or perform under their contracts on a timely basis, or at all, has had and may continue to have an adverse impact on our operations.
Failure of suppliers and subcontractors to deliver raw materials, equipment and components and provide services, or perform under their contracts on a timely basis, or at all, or our inability to obtain alternative sources of raw materials, equipment or components on a timely basis or on terms acceptable to us, has had or may in the future have an adverse impact on our operations.
See Note 8 and Item 5 for further discussion of our Share Repurchase Program. Legal, Regulatory and Environmental Risks Any changes in U.S. trade policies and retaliatory responses from other countries may significantly increase the costs or limit supplies of materials and products used in our fabrication projects.
Legal, Regulatory and Environmental Risks Any changes in U.S. trade policies and retaliatory responses from other countries may significantly increase the costs or limit supplies of materials and products used in our fabrication projects.
For our Fabrication Division, our services for such customers are generally project specific, and accordingly, may account for a significant portion of our revenue in one year, but represent a smaller or even immaterial portion of our revenue in subsequent years, or vice-versa. We define significant customers as those that individually comprise 10% or more of our consolidated revenue.
For our Fabrication Division, our services for such customers are generally project specific, and accordingly, may account for a significant portion of our revenue in one year, but represent a smaller or even immaterial portion, if any, of our revenue in subsequent years, or vice-versa.
There are a number of potential negative consequences for the energy sector that may result if oil and gas prices become volatile or decline or if oil and gas companies continue to de-prioritize investments in exploration, development and production, including the continued or worsening of outflow of credit and capital from the energy sector and/or energy focused companies and further efforts by lenders to reduce their exposure to the energy sector, including the imposition of increased lending standards for the energy sector, higher borrowing costs and collateral requirements, or a refusal to extend new credit or amend existing credit facilities in the energy sector.
See risk factor above titled “ Our revenue and profitability continues to be dependent on the offshore oil and gas industry, which is a historically cyclical industry .” There are a number of potential negative consequences for the energy sector that may result if the volatility of oil and gas prices increases, oil and gas prices decline or oil and gas companies continue to de-prioritize investments in exploration, development and production, including the continued or worsening outflow of credit and capital from the energy sector and/or energy focused companies and further efforts by lenders to reduce their exposure to the energy sector, including the imposition of increased lending standards for the energy sector, higher borrowing costs and collateral requirements, or a refusal to extend new credit or amend existing credit facilities in the energy sector.
See the risk factor below titled “ We depend on third parties to provide services and supply raw materials, equipment and components necessary to perform our contractual obligations, and any increase in the price or constraints on the supply of such raw materials, equipment or components could negatively affect our profitability ” for discussion of the availability of equipment and component parts.
See the risk factor below titled “ We depend on third parties to provide services and supply raw materials, equipment and components necessary to perform our contractual obligations, and any increase in the price or constraints on the supply of such raw materials, equipment or components could negatively affect our profitability ” for discussion of the availability of equipment and component parts. 13 Our backlog is subject to change as a result of delay, suspension, termination or an increase or decrease in scope for projects currently in backlog.
The impact of global macroeconomics on our suppliers and subcontractors has resulted in, and may continue to result in, scheduling delays and higher costs, including as a result of inflation, for subcontracted services and raw materials, equipment and components. Further, there continue to be global shipping and logistics challenges, which began during the COVID-19 pandemic.
The impact of global macroeconomics on our suppliers and subcontractors has resulted in, and may continue to result in, scheduling delays and higher costs, including as a result of inflation, for subcontracted services and raw materials, equipment and components.
Additionally, repurchasing our common stock will reduce the amount of cash and cash equivalents we have available to fund working capital, capital expenditures, capital preserving investments, strategic acquisitions or business opportunities, and other general corporate purposes, and there are no guarantees that the share repurchase program will result in increased shareholder value.
The market price of our common stock could decline below the levels at which we repurchased shares and short-term stock price fluctuations could reduce the effectiveness of the program. 17 Additionally, repurchasing our common stock or any other return of capital to our shareholders will reduce the amount of cash and cash equivalents we have available to fund working capital, capital expenditures, capital preserving investments, strategic acquisitions or business opportunities, and other general corporate purposes, and there are no guarantees that the Share Repurchase Program or any other return of capital to shareholders will result in increased shareholder value.
It has been increasingly difficult to obtain letters of credit and bonding capacity and identify potential financing sources, due to, among other things, losses from our operations in recent years, including charges on projects within our Shipyard Division and discontinued operations.
In recent years it has been difficult to obtain letters of credit and bonding capacity, and identify potential financing sources, due to losses resulting from our Shipyard Division operations.
The outcome of litigation is inherently uncertain and adverse developments or outcomes can result in significant monetary damages, penalties, other sanctions or injunctive relief against us, limitations on our property rights, or regulatory interpretations that increase our operating costs. A material adverse outcome in any uninsured litigation could result in our liabilities exceeding our assets.
The outcome of litigation is inherently uncertain and adverse developments or outcomes can result in significant monetary damages, penalties, other sanctions or injunctive relief against us, limitations on our property rights, or regulatory interpretations that increase our operating costs, or when we bring the claim, less recovery than anticipated, if any.
See risk factor above titled “ Our revenue and profitability continues to be dependent on the offshore oil and gas industry, which is a historically cyclical industry. ” Many companies, including us, have reduced their skilled workforce in response to decreases in utilization. However, with the current oil and gas prices, we continue to experience an increase in bidding activity.
See risk factor above titled “ Our revenue and profitability continues to be dependent on the offshore oil and gas industry, which is a historically cyclical industry. ” Many companies, including us, have reduced their skilled workforce in the past in response to decreases in demand for our services.
In recent years we have not made significant investments in new equipment or the refurbishment of owned equipment, and accordingly, future repair or replacement costs could be significantly higher than those recently experienced.
As our equipment ages, the costs associated with maintaining such equipment typically increases, and in some instances, such equipment may require full replacement. In recent years, we have not made significant investments in new equipment or the refurbishment of owned equipment, and accordingly, future repair or replacement costs could be significantly higher than those recently experienced.
This has resulted in losses from our operations in certain periods. If current or future facility and personnel capacity fails to match current or future customer demands for our services, our facilities would continue to be under-utilized, which could result in less profitable operations or ongoing losses from our operations.
If current or future facility and personnel capacity fails to match current or future customer demands for our services, our facilities and resources would continue to be under-utilized, which could result in less profitable operations or losses from our operations. Our employees and subcontractors work on projects that are inherently dangerous.
The existence of the share repurchase program could also cause our stock price to trade higher than it otherwise would and could potentially reduce the market liquidity for our stock. The market price of our common stock could decline below the levels at which we repurchased shares and short-term stock price fluctuations could reduce the effectiveness of the program.
The existence of the Share Repurchase Program could also cause our stock price to trade higher than it otherwise would and could potentially reduce the market liquidity for our stock.
While we believe we are a qualifying business and have met the eligibility requirements of the PPP Loan, and believe we have used the loan proceeds only for expenses which may be paid using proceeds from the PPP Loan, we can provide no assurances that any potential SBA review or audit will verify the amount forgiven, in whole or in part.
While we believe we met the eligibility requirements for the PPP Loan, and used the loan proceeds in accordance with the PPP Loan forgiveness requirements, we can provide no assurances that any potential SBA review or audit will verify the amount forgiven, in whole or in part.
Further, rainy weather, tropical storms, hurricanes and other storms prevalent in the GOM and along the Gulf Coast may also affect our operations. For example, in 2021, we experienced damage to our Houma Facilities due to Hurricane Ida, which made landfall as high-end Category 4 hurricane. Beyond financial and regulatory impacts, climate change poses potential physical risks.
Further, rainy weather, tropical storms, hurricanes and other storms prevalent in the GOA and along the Gulf Coast may also affect our operations. For example, our Houma Facilities have experienced damage from hurricane activity in the past, and during 2024, Hurricane Francine made landfall near our Houma Facilities. Beyond financial and regulatory impacts, climate change poses potential physical risks.
We can provide no assurances that we will be able to maintain our current competitive position or that we will be able to successfully compete with other companies as the green energy transition progresses. In addition, we often compete with companies that have greater resources, which may make them more competitive for certain projects.
We can provide no assurances that we will be able to maintain our current competitive position in the industries we currently serve or that we will be able to successfully compete with companies in other industries (including as the green energy transition progresses).
Foreign governments, including China and Canada, and trading blocs, such as the European Union, responded by imposing or increasing tariffs, duties and/or trade restrictions on U.S. goods. For example, in response to Russia’s invasion of Ukraine, the U.S. and other countries have imposed sanctions and/or other restrictive actions against Russia.
Foreign governments, including China and Canada, and trading blocs, such as the European Union, have responded in the past by imposing or increasing tariffs, duties and/or trade restrictions on U.S. goods.
Our ability to successfully obtain debt financing or credit facilities or raise equity capital in the future will depend in part upon prevailing capital market conditions, as well as conditions in our business and our operating results, and those factors may affect our efforts to obtain additional capital on terms that are satisfactory to us.
Our ability to successfully raise capital (through debt or equity issuances) or obtain credit facilities in the future will depend in part upon prevailing capital market conditions, as well as our financial condition and operating results, and whether such additional capital is on terms that are satisfactory to us. We continue to be dependent on the oil and gas industry.
There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur or that we will not incur charges resulting from any such agreements or settlements.
In recognition of these considerations, we may enter into agreements or other arrangements to settle litigation and resolve such challenges. There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur or that we will not incur charges resulting from any such agreements or settlements.
Our project execution and operations are heavily dependent on the use of owned and leased equipment. Accordingly, equipment that is not operable or that does not adequately function could negatively impact our project execution and operations. As our equipment ages, the costs associated with maintaining such equipment typically increases, and in some instances, such equipment may require full replacement.
Our project execution and operations may be negatively affected if our equipment is not operable or does not adequately function. Our project execution and operations are heavily dependent on the use of owned and leased equipment. Accordingly, equipment that is not operable or that does not adequately function could negatively impact our project execution and operations.
Any trading conflicts and related escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our costs, cause disruptions or shortages in our supply chains and/or negatively impact the U.S., regional or local economies. 20 We are susceptible to adverse weather conditions in our market areas.
Any trading conflicts and related escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our costs, cause disruptions or shortages in our supply chains and/or negatively impact the U.S., regional or local economies. For example, in response to Russia’s invasion of Ukraine, the U.S. and other countries imposed sanctions and/or other restrictive actions against Russia.
We are exposed to the credit risks of our customers, including nonpayment and nonperformance by our customers. The oil and gas industry continues to face significant challenges due to the prolonged period of depressed and/or volatile oil and gas prices from 2014 to 2018 and subsequent volatility in oil and gas prices.
We are exposed to the credit risks of our customers, including nonpayment and nonperformance by our customers. The oil and gas industry continues to face significant challenges due to the volatility in the price of oil and gas, which has persisted over a decade.
For 2023, we had two customers that accounted for 53% of our consolidated revenue (excluding the negative revenue charge associated with the resolution of our MPSV Litigation for our Shipyard Division), and for 2022, we had two customers that accounted for 48% of our consolidated revenue.
For 2024, two customers accounted for 51% of our consolidated revenue (one of which was also a significant customer in 2023), and for 2023, two customers accounted for 53% of our consolidated revenue (excluding the negative revenue charge associated with the resolution of our MPSV Litigation for our Shipyard Division).
Our success also depends on our ability to attract, retain and motivate highly-skilled personnel in various areas, including construction supervision, project management, procurement, project controls and finance. The loss of one or more key personnel or our inability to attract, retain and motivate necessary personnel could impact our operations.
Our success is dependent upon the abilities of our executives, management and other key employees who have significant and relevant industry experience. Our success also depends on our ability to attract, retain and motivate highly-skilled personnel in various areas, including construction supervision, project management, procurement, project controls and finance.
For our Services Division, our services for such customers are generally subject to master services agreements, and accordingly, such customers tend to be consistent each year; however, the amount of revenue may vary between years because the level of services that we may provide depends on, among other things, the amount of that customer’s capital expenditure budget, our labor availability and our ability to meet the customer’s schedule requirements.
Accordingly, the amount of revenue with a customer may vary between years depending on our successful renewal of the master services agreements and, among other things, the amount of that customer’s capital expenditure budget, our labor availability and our ability to meet the customer’s schedule requirements.
Additionally, our competitors in these expanded lines of business may possess greater operational knowledge, resources and experience than we do.
Additionally, our competitors in these expanded lines of business may possess greater operational knowledge, resources and experience than we do. These diversification initiatives may not increase shareholder value and could result in a reduction in shareholder value depending upon our required capital investment and success.
We cannot guarantee that our share repurchase program will enhance shareholder value, and share repurchases could affect the price of our common stock. In December 2023, our Board of Directors (“Board”) authorized the repurchase of up to $5.0 million of our outstanding common stock from time to time through a share repurchase program (“Share Repurchase Program”).
Our Board of Directors (“Board”) has authorized the repurchase of up to $5.0 million of our outstanding common stock from time to time through a share repurchase program (“Share Repurchase Program”), effective through December 31, 2025, and we currently have remaining authorization to purchase up to $3.7 million of our outstanding common stock under the Share Repurchase Program.
See Note 2 for discussion of our ongoing customer disputes. Regardless of the merit of particular claims, defending against litigation or responding to investigations can be expensive, time-consuming, disruptive to our operations and distracting to management. In recognition of these considerations, we may enter into agreements or other arrangements to settle litigation and resolve such challenges.
A material adverse outcome in any uninsured litigation could result in our liabilities exceeding our assets. See Notes 2 and 7 for discussion of our customer disputes. Regardless of the merit of particular claims, defending against or pursuing litigation or responding to investigations can be expensive, time-consuming, disruptive to our operations and distracting to management.
During 2023, delays and shortages of raw materials, equipment and components negatively affected our completion of the Ferry Projects, which prolonged the wind down of our Shipyard Division operations and resulted in further losses on the projects. Delays and shortages of raw materials, equipment and components could continue in 2024, which may have an impact on other projects.
Delays and shortages of raw materials, equipment and components could continue in 2025, which may have an impact on other projects.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings See Note 7 of our Financial Statements in Item 8 for discussion of our legal proceedings, including the resolution of our MPSV Litigation, which is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not applicable. 23 PART II
Biggest changeItem 3. Legal Proceedings See Note 7 of our Financial Statements in Item 8 for discussion of our legal proceedings, including the resolution of our MPSV Litigation on October 4, 2023, which is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not applicable. 22 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCurrent Program (1) Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) October 1 to 31, 2023 — $ — — $ — November 1 to 30, 2023 — $ — — $ — December 1 to 31, 2023 29,578 $ 4.34 29,578 $ 4,872 Total 29,578 $ 4.34 29,578 (1) On December 1, 2023, our Board of Directors (“Board”) approved a share repurchase program (“Share Repurchase Program”) authorizing the repurchase of up to $5.0 million of our outstanding common stock, effective from December 15, 2023 through December 15, 2024.
Biggest changeCurrent Program (1) Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) October 1 to 31, 2024 52,375 $ 5.49 52,375 $ 3,705 November 1 to 30, 2024 6,795 $ 5.51 6,795 $ 3,668 December 1 to 31, 2024 — $ — — $ 3,668 Total 59,170 $ 5.49 59,170 (1) On December 1, 2023, our Board of Directors (“Board”) approved a share repurchase program (“Share Repurchase Program”) authorizing the repurchase of up to $5.0 million of our outstanding common stock, effective from December 15, 2023 through December 15, 2024.
The Share Repurchase Program does not obligate us to repurchase any shares of common stock and may be modified, increased or suspended or terminated at the discretion of our Board. See Note 8 for further discussion of our Share Repurchase Program. (2) Average price paid per share includes costs associated with the repurchases. Item 6. R eserved 24
The Share Repurchase Program does not obligate us to repurchase any shares of common stock and may be modified, increased or suspended or terminated at the discretion of our Board. See Note 8 for further discussion of our Share Repurchase Program. (2) Average price paid per share includes costs associated with the repurchases. Item 6. R eserved 23
The timing and amount of any share repurchases is at the discretion of management and may be made from time to time through transactions in the open market, in privately negotiated transactions or by other means in accordance with applicable laws.
The timing and amount of any share repurchases under the Share Repurchase Program is at the discretion of management and may be made from time to time through transactions in the open market, in privately negotiated transactions or by other means in accordance with applicable laws.
Market for Registrant’s Common Equity, Related Sha reholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market, under the symbol “GIFI.” At February 23, 2024, there were 52 registered holders of our common stock, which does not include beneficial holders (also known as “street holders”) whose shares are held by banks, brokers, and other financial institutions.
Market for Registrant’s Common Equity, Related S hareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the Nasdaq Global Select Market, under the symbol “GIFI.” As of February 18, 2025, there were 48 registered holders of our common stock, which does not include beneficial holders (also known as “street holders”) whose shares are held by banks, brokers, and other financial institutions.
Issuer Purchases of Equity Securities The following table summarizes our purchases of common stock during the three months ended December 31, 2023.
Issuer Purchases of Equity Securities The following table summarizes our purchases of common stock during the fourth quarter 2024.
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Dividends The Company has not paid a dividend since 2017. The Board regularly considers options to return capital to shareholders.
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Any determination to declare or pay dividends will be made by the Board and will depend on various factors affecting the business at the time such decision is made, including the Company’s financial condition, results of operations, capital requirements, strategic opportunities, restrictive covenants and such other matters the Board may consider relevant at that time.
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On October 31, 2024, our Board extended the Share Repurchase Program to December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Note 4 for further discussion of the Note Agreement and Note 7 for further discussion of the resolution of our MPSV Litigation. 2022 Activity • Net loss adjusted for depreciation and amortization of $5.1 million, non-cash asset impairments of $0.5 million, gain on insurance recoveries of $1.2 million, and stock-based compensation expense of $2.3 million; • Increase in contract assets of $0.1 million related to the timing of billings on projects, primarily due to increased unbilled positions on various projects for our Fabrication Division and our forty-vehicle ferry projects for our Shipyard Division, offset partially by decreased unbilled positions on our seventy-vehicle ferry project; • Increase in contract liabilities of $1.5 million, primarily due to an increase in advance billings on various projects for our Fabrication Division and seventy-vehicle ferry project for our Shipyard Division, offset partially by a decrease in accrued contract losses and the unwind of advance payments on our forty-vehicle ferry projects for our Shipyard Division; • Increase in contract receivables and retainage of $13.4 million related to the timing of billings and collections on projects, primarily due to increased receivable positions on various projects for our Services Division and Fabrication Division; • Decrease in prepaid expenses, inventory and other assets of $2.2 million, primarily due to prepaid expenses and the associated timing of certain prepayments; • Decrease in accounts payable, accrued expenses and other current liabilities of $1.6 million due to the timing of payments, primarily due to decreased accounts payable positions on various projects for our Fabrication Division and our seventy-vehicle ferry project for our Shipyard Division, offset partially by increased accounts payable positions on various projects for our Services Division; and • Change in noncurrent assets and liabilities, net of $0.9 million. 40 Investing Activities – Cash used in investing activities for 2023 and 2022 was $0.5 million and $8.9 million, respectively.
Biggest changeSee Note 2 for further discussion of the Hurricane Ida insurance receivables; • Decrease in accounts payable, accrued expenses and other current liabilities of $4.0 million related to the timing of payments, primarily due to lower accounts payable positions on various projects for our Services Division and Fabrication Division; and • Change in noncurrent assets and liabilities, net of $0.7 million. 2023 Activity • Net loss adjusted for depreciation and amortization of $5.5 million, a gain from net changes in allowance for doubtful accounts and credit losses of $0.4 million, gains on insurance recoveries of $0.6 million and stock-based compensation expense of $2.0 million; • Increase in contract receivables and retainage of $7.1 million related to the timing of billings and collections on projects, primarily due to higher receivable positions on various projects for our Fabrication Division and Services Division, offset partially by a lower receivable position on our seventy-vehicle ferry project for our Shipyard Division; • Decrease in contract assets of $2.1 million related to the timing of billings on projects, primarily due to lower unbilled positions on our forty-vehicle ferry projects for our Shipyard Division; • Decrease in contract liabilities of $2.7 million, primarily due to lower advance billings on our cancelled offshore jackets project for our Fabrication Division and accrued contract losses on our forty-vehicle ferry projects for our Shipyard Division, offset partially by higher advance billings on various other projects for our Fabrication Division; • Increase in prepaid expenses, inventory and other assets of $0.1 million, primarily due to prepaid expenses and the associated timing of certain prepayments; • Increase in accounts payable, accrued expenses and other current liabilities of $1.2 million related to the timing of payments, primarily due higher accounts payable positions on various projects for our Fabrication Division and higher accrued expenses, offset partially by lower accounts payable positions on our forty-vehicle ferry projects for our Shipyard Division; and • Change in noncurrent assets and liabilities, net of $31.8 million, primarily due to the write-off of a $12.5 million noncurrent net contract asset, and recording of a $20.0 million liability, associated with the resolution of our previous MPSV Litigation.
In addition, global economic factors that are beyond our control, have and could continue to impact our operations, including, but are not limited to, labor constraints, supply chain disruptions, inflationary pressures, economic slowdowns and recessions, natural disasters, public health crises, and geopolitical conflicts.
In addition, global economic factors that are beyond our control, have and could continue to impact our operations, including, but not limited to, labor constraints, supply chain disruptions, inflationary pressures, economic slowdowns and recessions, natural disasters, public health crises and geopolitical conflicts.
Examples of these opportunities include private construction for the fabrication of structures for data centers and semiconductor manufacturing sites, public construction related to the fabrication of structures to support infrastructure spending, and federal government contracts, such as our contract to support the NASA Artemis Mobile Launcher 2 project. • Fabricate offshore wind foundations, secondary steel components and support structures – We continue to believe that current initiatives, and potential future requirements, to provide electricity from renewable and green sources will result in growth of offshore wind projects.
Examples of these opportunities include private construction for the fabrication of structures for data centers and semiconductor manufacturing sites and public construction related to the fabrication of structures to support infrastructure spending and the federal government, such as our contract to support the NASA Artemis Mobile Launcher 2 project. • Fabricate offshore wind foundations, secondary steel components and support structures – We continue to believe that current initiatives, and potential future requirements, to provide electricity from renewable and green sources will result in growth of offshore wind projects.
Our customers include U.S. and, to a lesser extent, international energy producers; refining, petrochemical, LNG, industrial and power operators; and EPC companies. We currently operate and manage our business through three operating divisions (“Services”, “Fabrication” and “Shipyard”) and one non-operating division (“Corporate”), which represent our reportable segments.
Our customers include U.S. and, to a lesser extent, international energy producers; refining, petrochemical, LNG, industrial and power operators; and EPC companies. We operate and manage our business through three operating divisions (“Services”, “Fabrication” and “Shipyard”) and one non-operating division (“Corporate”), which represent our reportable segments.
The Shipyard Transaction excluded the contracts and related obligations for our seventy-vehicle ferry and two forty-vehicle ferry projects (collectively, “Ferry Projects”) that were under construction as of the transaction date, and excluded the contracts and related obligations for the projects that were subject to our MPSV Litigation, which was resolved on October 4, 2023.
The Shipyard Transaction excluded the contracts and related obligations for our seventy-vehicle ferry and two forty-vehicle ferry projects (collectively, “Ferry Projects”) that were under construction as of the transaction date, and excluded the contracts and related obligations for the projects that were subject to our previous MPSV Litigation, which was resolved on October 4, 2023.
(2) Represents our cash position relative to revenue recognized on projects, with contract assets representing unbilled amounts that reflect future cash inflows on projects, and contract liabilities representing (i) advance billings or payments that reflect future cash expenditures and non-cash earnings on projects and (ii) accrued contract losses that represent future cash expenditures on projects.
(2) Represents our cash position relative to revenue recognized on projects, with contract assets representing unbilled amounts that reflect future cash inflows on projects, and contract liabilities representing (i) advance billings or payments that reflect estimated future cash expenditures and non-cash earnings on projects and (ii) accrued contract losses that represent estimated future cash expenditures on projects.
In general, a performance obligation is a contractual obligation to construct and/or transfer a distinct good or service to a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenue for performance obligations satisfied over time are recognized as the work progresses.
In general, a performance obligation is a contractual obligation to construct and/or transfer a distinct good or service to a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenue for performance obligations satisfied over time is recognized as the work progresses.
Fair Value Measurements Our fair value determinations for financial assets and liabilities are based on the particular facts and circumstances. Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement.
Fair Value Measurements Fair value determinations for financial assets and liabilities are based on the particular facts and circumstances. Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement.
Treasuries with original maturities of four to six months. Our available liquidity is impacted by changes in our working capital and our capital expenditure requirements. Fluctuations in working capital, and its components, are not unusual in our business and are impacted by the size of our projects and the mix of our backlog.
Treasuries with original maturities of approximately four to six months. Our available liquidity is impacted by changes in our working capital and our capital expenditure requirements. Fluctuations in our working capital, and its components, are not unusual in our business and are impacted by the size of our projects and the mix of our backlog.
Due to state income tax laws related to the apportionment of revenue for our projects, judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future.
Due to state income tax laws related to the apportionment of revenue for our projects, judgment is required to estimate the effective tax rate anticipated to apply to tax differences that are expected to reverse in the future.
Ferry Projects – During 2023 and 2022, we experienced construction challenges and cost increases on our Ferry Projects for our Shipyard Division. See Note 2 for further discussion of our Ferry Projects.
Ferry Projects – During 2023, we experienced construction challenges and cost increases on our Ferry Projects for our Shipyard Division. See Note 2 for further discussion of our Ferry Projects.
We are having success with smaller project opportunities and our volume of bidding activity for onshore modules, piping systems and structures continues to be strong. We continue to believe that our strategic location in Houma, Louisiana and track record of quality and on-time completion of onshore modules position us well to compete in the onshore fabrication market.
We are having success with smaller project opportunities and our volume of bidding activity for onshore modules, piping systems and structures continues to be strong. We continue to believe that our strategic location in Houma, Louisiana and previous record of quality and on-time completion of onshore modules position us well to compete in the onshore fabrication market.
While we believe we have the capability to participate in this emerging market, we do not expect meaningful opportunities in the near term. 28 Operating Outlook Our focus remains on securing profitable new project awards and backlog and generating operating income and cash flows, while ensuring the safety and well-being of our workforce.
While we believe we have the capability to participate in this emerging market, we do not expect meaningful opportunities in the near term. 27 Operating Outlook Our focus remains on securing profitable new project awards and backlog and generating operating income and cash flows, while ensuring the safety and well-being of our workforce.
The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on contracts.
The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of revenue recognized in prior periods and the recognition of losses expected to be incurred on contracts.
We recognize the excess tax benefit or tax deficiency resulting from the difference between the deduction we receive for tax purposes and the stock-based compensation expense we recognize for financial reporting purposes created when common stock vests, as an income tax benefit or expense in our Statement of Operations.
We recognize the excess tax benefit or tax deficiency resulting from the difference between the deduction we receive for tax purposes and the stock-based compensation expense we recognize for financial reporting purposes created when common stock vests, as an income tax benefit or expense on our Statement of Operations.
Underpinning this strategy is a focus on the following initiatives, which encompass any ongoing initiatives associated with the first phase of our strategic transformation: • Expand our skilled workforce; • Further improve our resource utilization; • Further strengthen project execution and maintain bidding discipline; • Diversify our offshore services customer base, increase our offshore services offerings and expand our services business to include onshore facilities along the Gulf Coast; • Continue to pursue opportunities in our traditional offshore fabrication markets; and • Reduce our reliance on the offshore oil and gas construction sector, pursue additional growth end markets and increase our T&M versus fixed price revenue mix, including: − Fabricating modules, piping systems and other structures for onshore refining, petrochemical, LNG and industrial facilities in our core Gulf Coast region, − Fabricating structures in support of our customers as they transition away from fossil fuels to green energy end markets, − Fabricating structures that support public and private construction activities outside of energy end markets, and − Fabricating foundations, secondary steel components and support structures for offshore wind developments. 26 Progress on the Current Phase of our Strategic Transformation Efforts to expand our skilled workforce – We are focused on ways to improve retention and enhance and add to our skilled, craft personnel, as we believe a strong workforce will be a key differentiator in pursuing new project awards given the scarcity of available skilled labor.
Underpinning this strategy is a focus on the following initiatives, which encompass any ongoing initiatives associated with the first phase of our strategic transformation: • Expand our skilled workforce; • Further improve our resource utilization; • Further strengthen project execution and maintain bidding discipline; • Diversify our offshore services customer base, increase our offshore services offerings and expand our services business to include onshore facilities along the Gulf Coast; • Continue to pursue opportunities in our traditional offshore fabrication markets; and • Reduce our reliance on the offshore oil and gas construction sector, pursue additional growth end markets and increase our time and materials (“T&M”) versus fixed price revenue mix, including: − Fabricating modules, piping systems and other structures for onshore refining, petrochemical, LNG and industrial facilities in our core Gulf Coast region, − Fabricating structures in support of our customers as they transition away from fossil fuels to green energy end markets, − Fabricating structures that support public and private construction activities outside of energy end markets, and − Fabricating foundations, secondary steel components and support structures for offshore wind developments. 25 Progress on the Current Phase of our Strategic Transformation Efforts to expand our skilled workforce – We are focused on ways to improve retention and enhance and add to our skilled, craft personnel, as we believe a strong workforce will be a key differentiator in pursuing new project awards given the scarcity of available skilled labor.
However, we may be exposed to future losses due to coverage limitations and our use of deductibles and self-insured retentions for our exposures related to property and equipment damage, builder’s risk, third-party liability and workers’ compensation and USL&H claims.
However, we may be exposed to future losses due to coverage limitations and our use of deductibles and retentions for our exposures related to property and equipment damage, builder’s risk, third-party liability and workers’ compensation and USL&H claims.
Our corporate headquarters is located in The Woodlands, Texas and our primary operating facilities are located in Houma, Louisiana (“Houma Facilities”). See Note 9 and “ Description of Operations” in Item 1 for further discussion of our reportable segments. In the second quarter 2021, we sold our Shipyard Division operating assets and certain construction contracts (“Shipyard Transaction”).
Our corporate headquarters is located in The Woodlands, Texas and our primary operating facilities are located in Houma, Louisiana (“Houma Facilities”). See Note 9 and “ Description of Operations” in Item 1 for further discussion of our reportable segments. During 2021, we sold our Shipyard Division operating assets and certain construction contracts (“Shipyard Transaction”).
We can provide no assurances that our financial forecast will be achieved or that we will have sufficient cash and short-term investments to meet planned operating expenses and unforeseen cash requirements.
We can provide no assurances that our financial forecasts will be achieved or that we will have sufficient cash and short-term investments to meet planned operating expenses and unforeseen cash requirements.
References to “nm” relate to percentage references that are not considered meaningful. Certain terms are defined in the “Glossary of Terms” beginning on page ii.
References to “nm” relate to percentage references that are not considered meaningful. Certain terms are defined in the “Glossary of Terms” beginning on page ii of this Report.
Overview We are a leading fabricator of complex steel structures and modules and provider of specialty services, including project management, hookup, commissioning, repair, maintenance, scaffolding, coatings, welding enclosures, civil construction and staffing services to the industrial and energy sectors.
Overview We are a leading fabricator of complex steel structures and modules and provider of specialty services, including project management, hookup, commissioning, repair, maintenance, scaffolding, coatings, welding enclosures, civil construction and cleaning and environmental services to the industrial and energy sectors.
Our evaluation of the sufficiency of our cash and liquidity is primarily based on our financial forecast for 2024 and 2025, which is impacted by our existing backlog and estimates of future new project awards and may be further impacted by the ongoing effects of oil and gas price volatility and macroeconomic conditions, and future losses, if any, due to coverage limitations and our use of deductibles and self-insured retentions for our exposures related to property and equipment damage, builder’s risk, third-party liability and workers’ compensation and USL&H claims.
Our evaluation of the sufficiency of our cash and liquidity is primarily based on our financial forecasts for 2025 and 2026, which are impacted by our existing backlog and estimates of future new project awards and may be further impacted by the ongoing effects of oil and gas price volatility and macroeconomic conditions, and future losses, if any, due to coverage limitations and our use of deductibles and retentions for our exposures related to property and equipment damage, builder’s risk, third-party liability and workers’ compensation and USL&H claims.
Liquidity Outlook We have made significant progress in our efforts to preserve and improve our liquidity, including cost reductions, the sale of under-utilized assets and facilities, improved project cash flow management and the completion of the Shipyard Transaction.
Liquidity Outlook We have made significant progress in our efforts to preserve and improve our liquidity, including cost reductions, the sale of under-utilized assets and facilities, improved project cash flow management, and the completion of the Shipyard Transaction and wind down of our Shipyard Division operations.
If, based on future assessments, our goodwill is deemed to be impaired, the impairment would result in a charge to our operating results in the period of impairment. See Note 3 for further discussion of our annual goodwill impairment assessment.
If, based on future assessments, our goodwill is deemed to be impaired, the impairment would result in a charge to our operating results in the period of impairment. See Notes 1 and 3 for further discussion of our annual goodwill impairment assessment.
During 2023, we were awarded multiple contracts for the fabrication of subsea structures, resulting from our previous strategic decision to focus our resources on the subsea fabrication market. We expect subsea fabrication activity to remain strong well into 2024, associated with anticipated subsea developments across the GOM, Guyana and Brazil.
During 2024 and 2023, we were awarded multiple contracts for the fabrication of subsea structures, resulting from our previous strategic decision to focus our resources on the subsea fabrication market. We expect subsea fabrication activity for 2025 to remain strong associated with anticipated subsea developments across the GOA, Guyana and Brazil.
MPSV Litigation – During 2023, we resolved our MPSV Litigation, resulting in a charge of $32.5 million for our Shipyard Division. In addition, we entered into the Settlement Agreement and Note Agreement. See Note 4 for further discussion of our Note Agreement and Note 7 for further discussion of the resolution of our MPSV Litigation and the Settlement Agreement.
MPSV Litigation – During 2023, we resolved our MPSV Litigation and entered into the Settlement Agreement and Note Agreement, resulting in a charge for our Shipyard Division. See Note 4 for further discussion of the Note Agreement and Note 7 for further discussion of the resolution of our MPSV Litigation and the Settlement Agreement.
Other expense for 2023 and 2022 was primarily due to: • Charges of $0.5 million and $0.2 million, respectively, associated with damage previously caused by Hurricane Ida to bulkheads and the MPSVs that were previously in our possession and subject to our MPSV Litigation, offset partially by, • Miscellaneous income items for both periods.
Other expense for 2023 was primarily due to: • Charges of $0.5 million associated with damage previously caused by Hurricane Ida to bulkheads and the MPSVs that were previously in our possession and subject to our previous MPSV Litigation, offset partially by, • Miscellaneous income items.
The gross loss for 2023 was primarily due to: • Charges of $32.5 million related to the aforementioned reversal of revenue resulting from the resolution of our MPSV Litigation, • Project charges of $2.7 million related to forecast cost increases and liquidated damages on our Ferry Projects, • Holding costs of $0.9 million related to the two MPSVs that were previously in our possession and subject to our MPSV Litigation, and • The partial under-recovery of overhead costs due to the under-utilization of our resources due to low work hours as our remaining projects were nearing completion.
Gross loss for 2023 was primarily due to: • A charge of $32.5 million related to the aforementioned reversal of revenue resulting from the resolution of our previous MPSV Litigation, • Project charges of $2.7 million related to forecast cost increases and liquidated damages on our Ferry Projects, • Holding costs of $0.9 million related to the two MPSVs that were previously in our possession and were subject to our previous MPSV Litigation, and • The partial under-utilization of our resources due to low work hours for our Ferry Projects.
Cash used in investing activities for 2023 was primarily due to capital expenditures of $2.9 million, offset partially by proceeds from asset sales of $0.5 million, recoveries from insurance claims of $0.2 million, and net maturities of short-term investments of $1.7 million.
Cash used in investing activities for 2023 was primarily due to capital expenditures of $2.9 million, offset partially by proceeds from the sale of fixed assets of $0.5 million, recoveries from insurance claims of $0.2 million and net maturities of short-term investments of $1.7 million.
See Note 6 for further discussion of our stock-based and other compensation plans. Insurance We maintain insurance coverage for various aspects of our business and operations.
See Notes 1 and 6 for further discussion of our stock-based and other compensation plans. 31 Insurance We maintain insurance coverage for various aspects of our business and operations.
Quantitative and Qualita tive Disclosures About Market Risk Not applicable.
Item 7A. Quantitative and Qualita tive Disclosures About Market Risk Not applicable.
Impacts of Oil and Gas Price Volatility and Macroeconomic Conditions on Operations For over a decade, prices of oil and gas have experienced significant volatility, including depressed prices over extended periods, which negatively impacted our end markets and operating results.
Impacts of Oil and Gas Price Volatility and Macroeconomic Conditions on Operations For over a decade, prices of oil and gas have experienced significant volatility, including depressed prices, which negatively impacted certain of our end markets and operating results, and elevated energy prices, which positively impacted certain of our end markets and operating results.
The wind down of our remaining Shipyard Division operations was substantially completed in the fourth quarter 2023. Final completion of the wind down will occur upon completion of the warranty periods for the Ferry Projects, the last of which is anticipated to occur in the first quarter 2025.
The wind down of our remaining Shipyard Division operations was substantially completed in the fourth quarter 2023 and final completion is anticipated to occur in March 2025 upon expiration of the last warranty period for the Ferry Projects.
While oil and gas prices declined in 2023, prices have somewhat stabilized, but the duration of such stability is uncertain and difficult to predict, particularly in light of geopolitical turmoil and uncertainty.
While oil prices have somewhat stabilized, such stability is uncertain and difficult to predict, particularly in light of geopolitical turmoil and uncertainty.
Other (income) expense, net – Other (income) expense, net for 2023 and 2022 was income of $0.3 million and expense of $0.4 million, respectively.
Other (income) expense, net – Other (income) expense, net for 2024 and 2023 was income of $3.4 million and $2.3 million, respectively.
Our success, including achieving the aforementioned initiatives, will be determined by, among other things: • Our ability to hire, develop, motivate and retain key personnel and craft labor to execute our projects in light of industry-wide labor constraints, and maintain our expected project margins if such constraints result in labor cost increases that cannot be recovered from our customers; • Oil and gas prices and the level of volatility in such prices, including the impact of macroeconomic conditions, geopolitical conflicts and any current or future public health crises; • The level of fabrication opportunities in our traditional offshore markets and the new markets that we are pursuing, including refining, petrochemical, LNG and industrial facilities, green energy and offshore wind developments, and the impact of any climate related regulations, such as the Biden administration’s executive order pausing approvals for LNG exports discussed in Item 1; • The timing of recognition of our backlog as revenue; • Our ability to secure new project awards through competitive bidding and/or alliance and partnering arrangements; • Our ability to execute projects within our cost estimates and successfully manage them through completion; • The final completion of the wind down of our Shipyard Division operations, which is subject to the expiration of the warranty periods for our Ferry Projects; • Consideration of organic and inorganic opportunities for growth, including, but not limited to, mergers, acquisitions, joint ventures, partnerships and other strategic arrangements, transactions and capital allocations; and • The operability and adequacy of our major equipment.
Our success, including achieving the aforementioned initiatives, will be determined by, among other things: • Our ability to hire, develop, motivate and retain key personnel and craft labor to execute our projects in light of industry-wide labor constraints, and maintain our expected project margins if such constraints result in labor cost increases that cannot be recovered from our customers; • Oil and gas prices and the level of volatility in such prices, including the impact of macroeconomic conditions and geopolitical conflicts; • The level of fabrication opportunities in our traditional offshore markets and the new markets that we are pursuing, including refining, petrochemical, LNG and industrial facilities, green energy and offshore wind developments; • Our ability to secure new project awards through competitive bidding and/or alliance and partnering arrangements; • The timing of recognition of our backlog and new project awards as revenue; • The utilization of our facilities and resources resulting from the amount and timing of new project awards and their execution; • Our ability to execute projects within our cost estimates and successfully manage them through completion; • Consideration of organic and inorganic opportunities for growth, including, but not limited to, mergers, acquisitions, joint ventures, partnerships and other strategic arrangements, transactions and capital allocations; and • The operability and adequacy of our major equipment.
Other (income) expense, net – Other (income) expense, net for 2023 and 2022 was income of $2.3 million and $6.9 million, respectively. Other (income) expense, net generally represents recoveries or provisions for bad debts and credit losses, gains or losses associated with the sale or disposition of property and equipment, and income or expense associated with certain nonrecurring items.
Other (income) expense, net generally represents recoveries or provisions for bad debts and credit losses, gains or losses associated with the sale or disposition of property and equipment, and income or expense associated with certain nonrecurring items.
Interest (expense) income, net for both periods included the net impact of interest earned on our cash and short-term investment balances and interest incurred on the unused portion of our LC Facility and on our Insurance Finance Arrangements.
Interest (expense) income, net for both periods includes the net impact of interest earned on our cash and short-term investment balances and interest incurred on the unused portion of our LC Facility. The 2024 period also includes interest incurred on our long-term debt and the 2023 period includes interest incurred on our previous Insurance Finance Arrangements.
See Note 4 for further discussion of the Note Agreement and Note 7 for further discussion of the resolution of our MPSV Litigation and the Settlement Agreement. Gross loss – Gross loss for 2023 and 2022 was $35.9 million and $3.1 million (39.9% of revenue), respectively.
See Note 4 for further discussion of the Note Agreement and Note 7 for further discussion of the resolution of our MPSV Litigation and the Settlement Agreement. Gross profit (loss) – Gross profit for 2024 was $1.6 million and gross loss for 2023 was $35.9 million.
See Note 2 for further discussion of the impacts of Hurricane Ida. 41 We believe that our cash, cash equivalents and short-term investments at December 31, 2023, will be sufficient to enable us to fund our operating expenses, meet our working capital and capital expenditure requirements, and satisfy any debt service obligations or other funding requirements, for 2024 and the foreseeable future.
We believe that our cash, cash equivalents and short-term investments at December 31, 2024, will be sufficient to enable us to fund our operating expenses, meet our working capital and capital expenditure requirements, and satisfy our debt service obligations or other funding requirements, for 2025 and the foreseeable future.
See Note 2 and “Operating Segments” below for further discussion of our project impacts and Note 7 for further discussion of the resolution of our MPSV Litigation. General and administrative expense – General and administrative expense for 2023 and 2022 was $16.3 million and $18.2 million, respectively, representing a decrease of 10.6%.
See Note 2 and “Operating Segments” below for further discussion of the project impacts for our Ferry Projects and Note 7 for further discussion of the resolution of our MPSV Litigation. 33 General and administrative expense – General and administrative expense for 2024 and 2023 was $13.5 million and $16.3 million, respectively, representing a decrease of 16.9%.
Excluding cash, cash equivalents, short-term investments, restricted cash, assets held for sale and current debt, our working capital at December 31, 2023 was $19.3 million, and consisted of net contract assets and contract liabilities of negative $2.7 million; contract receivables and retainage of $36.3 million; inventory, prepaid expenses and other assets of $9.1 million; and accounts payable, accrued expenses and other liabilities of $23.3 million.
Excluding cash, cash equivalents, short-term investments, restricted cash and current debt, our working capital at December 31, 2024 was $17.9 million, and consisted of net contract assets and contract liabilities of $7.3 million; contract receivables and retainage of $22.5 million; prepaid expenses, inventory and other current assets of $7.0 million; and accounts payable, accrued expenses and other current liabilities of $19.0 million.
Other income for 2023 was primarily due to: • Gains of $2.0 million related to the net impact of insurance recoveries and costs associated with damage previously caused by Hurricane Ida to buildings and equipment at our Houma Facilities for our Fabrication Division, • Gains on the sales of equipment and scrap material for our Fabrication Division, and • Miscellaneous income items for our Shipyard Division, offset partially by, • Costs of $0.7 million associated with the consolidation of fabrication activities at our Houma Facilities for our Fabrication Division, and • Charges of $0.5 million associated with damage previously caused by Hurricane Ida to bulkheads and the MPSVs that were previously in our possession and subject to our MPSV Litigation for our Shipyard Division. 34 Other income for 2022 was primarily due to: • Gains of $7.5 million related to the net impact of insurance recoveries and costs associated with damage previously caused by Hurricane Ida to buildings and equipment at our Houma Facilities for our Fabrication Division, and • Miscellaneous income items for our Shipyard Division, offset partially by, • An impairment charge of $0.5 million associated with the underlying right-of-use asset for our corporate office lease, resulting from a sublease arrangement with a third-party for our Corporate Division, and • Charges of $0.2 million associated with damage previously caused by Hurricane Ida to bulkheads and the MPSVs that were previously in our possession and subject to our MPSV Litigation for our Shipyard Division.
Other income for 2023 was primarily due to: • Gains of $2.0 million related to the net impact of insurance recoveries and costs associated with damage previously caused by Hurricane Ida to buildings and equipment at our Houma Facilities for our Fabrication Division, and • Gains on the sales of equipment and scrap material for our Fabrication Division, offset partially by, • Costs of $0.7 million associated with the consolidation of fabrication activities at our Houma Facilities for our Fabrication Division, and • Charges of $0.5 million associated with damage previously caused by Hurricane Ida to bulkheads and the MPSVs that were previously in our possession and subject to our previous MPSV Litigation for our Shipyard Division.
(3) Changes referenced in the “Cash Flow Activity” section below may differ from the changes in this table due to non-cash reclassifications and due to certain changes in balance sheet accounts being reflected within other line items on our Statement of Cash Flows, including allowance for doubtful accounts and credit losses, gains and losses on sales of fixed assets and other assets, and accruals for capital expenditures. 39 Cash Flow Activity (in thousands) Years Ended December 31, 2023 2022 Net cash provided by (used in) operating activities $ 7,197 $ (8,923 ) Net cash used in investing activities $ (503 ) $ (8,870 ) Net cash used in financing activities $ (1,867 ) $ (1,972 ) Operating Activities – Cash provided by operating activities for 2023 was $7.2 million and cash used in operating activities for 2022 was $8.9 million, and was primarily due to the net impacts of the following: 2023 Activity • Net loss adjusted for depreciation and amortization of $5.5 million, gain from net changes in allowance for doubtful accounts and credit losses of $0.4 million, gain on insurance recoveries of $0.6 million and stock-based compensation expense of $2.0 million; • Decrease in contract assets of $2.1 million related to the timing of billings on projects, primarily due to decreased unbilled positions on our forty-vehicle ferry projects for our Shipyard Division; • Decrease in contract liabilities of $2.7 million, primarily due to a decrease in advance billings on our cancelled offshore jackets project for our Fabrication Division and accrued contract losses on our forty-vehicle ferry projects for our Shipyard Division, offset partially by an increase in advance billings on various other projects for our Fabrication Division; • Increase in contract receivables and retainage of $7.1 million related to the timing of billings and collections on projects, primarily due to increased receivable positions on various projects for our Fabrication Division and Services Division, offset partially by a decreased receivable position on our seventy-vehicle ferry project for our Shipyard Division; • Increase in prepaid expenses, inventory and other assets of $0.1 million, primarily due to prepaid expenses and the associated timing of certain prepayments.
(3) Changes referenced in the “Cash Flow Activity” section below may differ from the changes in this table due to non-cash reclassifications and due to certain changes in balance sheet accounts being reflected within other line items on our Statement of Cash Flows, including allowance for doubtful accounts and credit losses, gains and losses on sales of fixed assets and other assets, and accruals for capital expenditures. 38 Cash Flow Activity (in thousands) Years Ended December 31, 2024 2023 Net cash provided by operating activities $ 18,248 $ 7,197 Net cash used in investing activities $ (25,956 ) $ (503 ) Net cash used in financing activities $ (3,462 ) $ (1,867 ) Operating Activities – Cash provided by operating activities for 2024 and 2023 was $18.2 million and $7.2 million, respectively, and was primarily due to the net impacts of the following: 2024 Activity • Net income adjusted for depreciation and amortization of $4.9 million, gains on the sales of our Houma AHFS and fixed assets of $3.9 million and stock-based compensation expense of $1.8 million; • Decrease in contract receivables and retainage of $13.8 million related to the timing of billings and collections on projects, primarily due to lower receivable positions on various projects for our Services Division; • Increase in contract assets of $5.9 million related to the timing of billings on projects, primarily due to higher unbilled positions on various projects for our Fabrication Division; • Decrease in contract liabilities of $4.2 million, primarily due to lower advance billings on various projects for our Fabrication Division; • Decrease in prepaid expenses, inventory and other assets of $1.7 million, primarily due to prepaid expenses and the associated timing of certain prepayments and the collection of insurance receivables associated with Hurricane Ida.
See Note 7 for further discussion of the resolution of our MPSV Litigation. 33 Gross profit (loss) – Gross loss for 2023 was $11.9 million (7.9% of revenue) and gross profit for 2022 was $7.9 million (5.5% of revenue), respectively.
See Note 7 for further discussion of the resolution of our MPSV Litigation. Gross profit (loss) – Gross profit for 2024 was $22.3 million (14.0% of revenue) and gross loss for 2023 was $11.9 million (7.9% of revenue).
Backlog represents the unrecognized revenue for our new project awards and at December 31, 2023, was consistent with the value of remaining performance obligations for our contracts required to be disclosed under Topic 606 and presented in Note 2. In general, a performance obligation is a contractual obligation to construct and/or transfer a distinct good or service to a customer.
Backlog represents the unrecognized revenue value of our new project awards and at December 31, 2024, was consistent with the value of remaining performance obligations for our contracts required to be disclosed under Topic 606 and presented in Note 2.
We are also pursuing opportunities to partner with original equipment manufacturers to provide critical services to our customers along the Gulf Coast and strategic partnership opportunities with engineering companies to provide turnkey solutions. 27 Efforts to continue to pursue opportunities in our traditional offshore fabrication markets – We continue to fabricate structures associated with our traditional offshore markets, including subsea and associated structures.
We are also pursuing opportunities to partner with original equipment manufacturers and other potential partners to provide critical services and value added solutions to our customers in the Gulf of America (“GOA”) and along the Gulf Coast. 26 Efforts to continue to pursue opportunities in our traditional offshore fabrication markets – We continue to fabricate structures associated with our traditional offshore markets, including subsea and associated structures.
We perform our annual impairment assessment during the fourth quarter of each year based upon balances as of October 1. In evaluating goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is greater than its carrying value.
In evaluating goodwill for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is greater than its carrying value.
Further, in the third quarter 2022, we made capital and other investments to expand our offshore services offering to include welding enclosures, which provide a safe environment for welding, cutting and burning without the need to shut down operations.
During 2022, we expanded our offshore services offering to include welding enclosures, which provide a safe environment for welding, cutting and burning without the need to shut down operations.
New project awards and backlog may vary significantly each reporting period based on the timing of our major new contract commitments. 29 Projects in our backlog are generally subject to delay, suspension, termination, or an increase or decrease in scope at the option of the customer; however, the customer is required to pay us for work performed and materials purchased through the date of termination, suspension, or decrease in scope.
Projects in our backlog are generally subject to delay, suspension, termination, or an increase or decrease in scope at the option of the customer; however, the customer is required to pay us for work performed and materials purchased through the date of termination, suspension or decrease in scope.
Cash used in investing activities for 2022 was primarily due to purchases of short-term investments of $9.9 million and capital expenditures of $3.1 million, offset partially by proceeds from the Shipyard Transaction of $0.9 million, proceeds from asset sales of $2.0 million, and recoveries from insurance claims of $1.2 million.
Cash used in investing activities for 2024 was primarily due to net purchases of short-term investments of $30.6 million and capital expenditures of $5.3 million, offset partially by proceeds from the sales of our Houma AHFS and fixed assets of $9.6 million and recoveries from insurance claims of $0.3 million.
Financing Activities – Cash used in financing activities for 2023 and 2022 was $1.9 million and $2.0 million, respectively. Cash used in financing activities for 2023 and 2022 was primarily due to payments on our Insurance Finance Arrangement of $1.3 million and $1.7 million, respectively, and tax payments made on behalf of employees from vested stock withholdings.
Cash used in financing activities for 2023 was primarily due to payments on our previous Insurance Finance Arrangements of $1.3 million, the repurchase of $0.1 million of our common stock under our Share Repurchase Program and tax payments of $0.5 million made on behalf of employees from vested stock withholdings.
Our results may also be adversely affected by (i) costs associated with the retention of certain personnel that may be temporarily under-utilized as we evaluate our resource requirements to support our future operations, (ii) investments in key personnel and process improvement efforts to support our aforementioned initiatives, and (iii) higher costs and availability of craft labor due to industry labor constraints.
In addition, our results may also be adversely affected by (i) costs associated with the retention of certain personnel that may be temporarily under-utilized as we evaluate our resource requirements to support our future operations, (ii) investments in key personnel and process improvement efforts to support our aforementioned initiatives, and (iii) costs associated with investments in organic growth opportunities prior to generating sufficient revenue to fully recover such costs, if at all.
With the significant progress achieved on these objectives, during 2021, we shifted our focus to the current phase of our strategic transformation, which is focused on generating stable, profitable growth.
With the significant progress achieved on these objectives, including the substantial completion of the wind down of our Shipyard Division operations, we have shifted our priorities to the current phase of our strategic transformation, which is focused on generating stable, profitable growth.
The 2023 period also included the repurchase of $0.1 million of our common stock under our Share Repurchase Program. See Note 8 for further discussion of our Share Repurchase Program. Credit Facilities See Note 4 for discussion of our LC Facility, Surety Bonds, Note Agreement, Mortgage Agreement, Restrictive Covenant Agreement and Insurance Finance Arrangements.
See Note 4 for further discussion of our Note Agreement and Insurance Finance Arrangements and Note 8 for further discussion of our Share Repurchase Program. Credit Facilities See Note 4 for discussion of our LC Facility, Surety Bonds, Note Agreement, Mortgage Agreement and Insurance Finance Arrangements.
See Note 2 for further discussion of the impacts of Hurricane Ida. Interest (expense) income, net – Interest (expense) income, net for 2023 and 2022 was income of $1.4 million and $0.1 million, respectively.
See Note 2 for further discussion of the impacts of Hurricane Ida, Note 3 for further discussion of the sale of our Houma AHFS and Note 7 for further discussion of the resolution of our MPSV Litigation. Interest (expense) income, net – Interest (expense) income, net for 2024 and 2023 was income of $2.4 million and $1.4 million, respectively.
The gross loss for 2023 relative to gross profit for 2022 was primarily due to: • The aforementioned charges of $32.5 million for 2023 for our Shipyard Division, • The aforementioned project charges of $2.7 million for 2023 for our Shipyard Division, and • An increase in the under-recovery of overhead costs for our Fabrication Division, offset partially by, • Higher revenue for our Fabrication Division and Services Division, and • A higher margin mix for our Fabrication Division and Services Division.
Gross profit for 2024 relative to gross loss for 2023 was primarily due to: • Charges of $32.5 million for 2023 due to the aforementioned reversal of revenue resulting from the resolution of our previous MPSV Litigation for our Shipyard Division, • Project charges of $2.7 million for 2023 on our Ferry Projects for our Shipyard Division, • Project improvements of $1.1 million for 2024 on our Ferry Projects for our Shipyard Division, • A higher margin project mix for our Fabrication Division, and • Lower overhead costs for our Fabrication Division, offset partially by, • Lower revenue for our Fabrication Division and Services Division, and • A lower margin project mix for our Services Division.
During 2023 and 2022, we recorded gains for our Fabrication Division related to the net impact of insurance recoveries and costs associated with such damage. See Note 2 for further discussion of the impacts of Hurricane Ida. Offshore Jackets Project – During 2022, we were awarded a large contract for the fabrication of offshore jackets for our Fabrication Division.
Hurricane Ida – During 2023, we recorded a gain for our Fabrication Division related to the net impact of insurance recoveries and costs associated with previous damage to our Houma Facilities caused by Hurricane Ida during 2021. See Note 2 for further discussion of the impacts of Hurricane Ida.
See Note 3 and “ Business and Properties” in Item 1 and 2 for further discussion of our Houma AHFS. Efforts to further strengthen project execution and maintain bidding discipline – We have taken, and continue to take, actions to improve our project execution by enhancing our proposal, estimating and operations resources, processes and procedures.
Efforts to further strengthen project execution and maintain bidding discipline – We have taken, and continue to take, actions to improve our project execution by enhancing our proposal, estimating and operations resources, processes and procedures.
Initiatives to Improve Operating Results and Generate Stable, Profitable Growth During 2020, we outlined a strategy to address our operational, market and economic challenges and position the Company to generate stable, profitable growth.
Strategic Transformation During 2020, we embarked on a strategy to address previous operational, market and economic challenges and position the Company to generate stable, profitable growth.
The gross profit for 2023 relative to gross loss for 2022 was primarily due to: • Higher revenue, and • A higher margin mix associated with our small-scale fabrication work, offset partially by, • An increase in the under-recovery of overhead costs due to lower recoveries associated with our offshore jackets project resulting from its cancellation, offset partially by an increase in work hours associated with our small-scale fabrication work.
The increase in gross profit for 2024 relative to 2023 was primarily due to: • A higher margin project mix associated with our small-scale fabrication work, and • Lower overhead costs, including lower property and equipment insurance costs, offset partially by, • Lower revenue.
Fair value is determined based on discounted cash flows, appraised values or third-party indications of value, as appropriate. We had no indicators of impairment during 2023. 31 Income Taxes Income taxes have been provided for using the liability method.
Fair value is determined based on discounted cash flows, appraised values or third-party indications of value, as appropriate. See Note 1 for further discussion of our long-lived assets. Income Taxes Income taxes have been provided for using the liability method.
We recognize revenue from our contracts in accordance with Accounting Standards Update (“ASU”) 2014-09, Topic 606 “Revenue from Contracts with Customers” (“Topic 606”).
Our contracts primarily relate to the fabrication of steel structures and modules, and certain service arrangements. We recognize revenue from our contracts in accordance with Accounting Standards Update (“ASU”) 2014-09, Topic 606 “Revenue from Contracts with Customers” (“Topic 606”).
Off-Balance Sheet Arrangements We are not a party to any contract or other obligation not included on our Balance Sheet that has, or is reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Item 7A.
Accordingly, we may be required to obtain new or additional credit facilities, sell assets or conduct equity or debt offerings at a time when it is not beneficial to do so. 40 Off-Balance Sheet Arrangements We are not a party to any contract or other obligation not included on our Balance Sheet that has, or is reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Corporate Division Years Ended December 31, Favorable (Unfavorable) 2023 2022 Change New project awards (eliminations) $ (1,110 ) $ (672 ) $ (438 ) Revenue (eliminations) $ (1,110 ) $ (672 ) $ (438 ) Gross profit — — — General and administrative expense 8,286 8,442 156 Other (income) expense, net (290 ) 417 707 Operating loss (7,996 ) (8,859 ) 863 General and administrative expense – General and administrative expense for 2023 and 2022 was $8.3 million and $8.4 million, respectively, representing a decrease of 1.8%.
Corporate Division Years Ended December 31, Favorable (Unfavorable) 2024 2023 Change New project awards (eliminations) $ (905 ) $ (1,110 ) $ 205 Revenue (eliminations) $ (905 ) $ (1,110 ) $ 205 Cost of revenue (905 ) (1,110 ) (205 ) Gross profit — — — General and administrative expense 8,754 8,286 (468 ) Other (income) expense, net (309 ) (290 ) 19 Operating loss $ (8,445 ) $ (7,996 ) $ (449 ) General and administrative expense – General and administrative expense for 2024 and 2023 was $8.8 million and $8.3 million, respectively, representing an increase of 5.6%.
The components of our working capital (excluding cash, cash equivalents, short-term investments, restricted cash, assets held for sale and current debt) at December 31, 2023 and 2022, and changes in such amounts during 2023, were as follows (in thousands): December 31, 2023 2022 Change (3) Contract assets $ 2,739 $ 4,839 $ 2,100 Contract liabilities (1) (5,470 ) (8,196 ) (2,726 ) Contracts in progress, net (2) (2,731 ) (3,357 ) (626 ) Contract receivables and retainage, net 36,298 29,427 (6,871 ) Prepaid expenses, inventory and other current assets 9,066 8,074 (992 ) Accounts payable, accrued expenses and other liabilities (23,302 ) (22,593 ) 709 Total $ 19,331 $ 11,551 $ (7,780 ) (1) Contract liabilities at December 31, 2023 and 2022, included accrued contract losses of $0.4 million and $1.6 million, respectively, associated primarily with our Ferry Projects.
The components of our working capital (excluding cash, cash equivalents, short-term investments, restricted cash and current debt) at December 31, 2024 and 2023, and changes in such amounts during 2024, were as follows (in thousands): December 31, 2024 2023 Change (3) Contract assets $ 8,611 $ 2,739 $ (5,872 ) Contract liabilities (1) (1,278 ) (5,470 ) (4,192 ) Contracts in progress, net (2) 7,333 (2,731 ) (10,064 ) Contract receivables and retainage, net 22,487 36,298 13,811 Prepaid expenses, inventory and other current assets 7,046 9,066 2,020 Accounts payable, accrued expenses and other liabilities (18,981 ) (23,302 ) (4,321 ) Total $ 17,885 $ 19,331 $ 1,446 (1) Contract liabilities at December 31, 2023, includes accrued contract losses of $0.4 million, primarily related to our Ferry Projects.
General and administrative expense – General and administrative expense for 2023 and 2022 was $1.9 million and $2.3 million, respectively, representing a decrease of 18.3%. The decrease was primarily due to lower business development costs. Other (income) expense, net – Other (income) expense, net for 2023 and 2022 was income of $2.3 million and $7.5 million, respectively.
General and administrative expense – General and administrative expense for 2024 and 2023 was $2.8 million and $2.9 million, respectively, representing a decrease of 4.9%. The decrease was primarily due to cost savings and the timing of certain costs. Other (income) expense, net – Other (income) expense, net for 2024 was expense of $0.1 million.
No federal income tax benefit was recorded for our losses for either period as a full valuation allowance was recorded against our net deferred tax assets generated during the periods.
No federal income tax expense was recorded for our income for 2024 as it was fully offset by the reversal of valuation allowance on our net deferred tax assets, and no federal income tax benefit was recorded for our loss for 2023 as a full valuation allowance was recorded against our net deferred tax assets generated during the period.
In January 2024, we received insurance proceeds of $2.0 million associated with damage to our Houma Facilities previously caused by Hurricane Ida, which will partially supplement our capital expenditures for 2024. Further investments in our facilities may be required to win and execute potential new project awards, which are not included in these estimates.
We anticipate capital expenditures of $2.0 million to $3.0 million for 2025. Further investments in our facilities and equipment may be required to win and execute potential new project awards, which are not included in these estimates.
Revenue Recognition General – Our revenue is derived from customer contracts and agreements that are awarded on a competitively bid and negotiated basis using a range of contracting options, including fixed-price, unit-rate, T&M and cost-reimbursable, or a combination thereof. Our contracts primarily relate to the fabrication of steel structures and modules, and certain service arrangements.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our Financial Statements. 29 Revenue Recognition General – Our revenue is derived from customer contracts and agreements that are awarded on a competitively bid and negotiated basis using a range of contracting options, including fixed-price, unit-rate, T&M and cost-reimbursable, or a combination thereof.
See Note 2 for further discussion of our project impacts and Note 7 for further discussion of the resolution of our MPSV Litigation. 37 General and administrative expense – General and administrative expense for 2023 and 2022 was $3.2 million and $4.5 million, respectively, representing a decrease of 28.3%.
See Note 7 for further discussion of the resolution of our MPSV Litigation. Other (income) expense, net – Other (income) expense, net for 2024 and 2023 was income of $3.5 million and $2.3 million, respectively.
Revenue for performance obligations that do not meet the criteria for over time recognition are recognized at a point-in-time when a performance obligation is complete and a customer has obtained control of a promised asset. 30 Long-term Contracts Satisfied Over Time – Revenue for our long-term contracts is recognized using the POC method based on contract costs incurred to date compared to total estimated contract costs (an input method).
Revenue for performance obligations that do not meet the criteria for over time recognition is recognized at a point-in-time when a performance obligation is complete and a customer has obtained control of a promised asset.
General and administrative expense relates to legal and advisory fees associated with our MPSV Litigation, which was resolved in the fourth quarter 2023. See Note 7 for further discussion of the resolution of our MPSV Litigation. Other (income) expense, net – Other (income) expense, net for 2023 and 2022 was expense of $0.3 million and less than $0.1 million, respectively.
See Note 7 for further discussion of the resolution of our MPSV Litigation. Other (income) expense, net – Other (income) expense, net for 2024 and 2023 was expense of $0.1 million and $0.3 million, respectively.
General and administrative expense included legal and advisory fees of $3.2 million and $4.5 million for 2023 and 2022, respectively, associated with our MPSV Litigation, which are reflected within our Shipyard Division. See Note 7 for further discussion of the resolution of our MPSV Litigation.
See Note 2 for further discussion of the project impacts for our Ferry Projects and Note 7 for further discussion of the resolution of our MPSV Litigation. General and administrative expense – General and administrative expense for 2023 was $3.2 million and was related to legal and advisory fees associated with our previous MPSV Litigation.
Accordingly, we have recorded a liability for estimated amounts in excess of our deductibles and retentions, and have recorded a corresponding asset related to estimated insurance recoveries, on our Balance Sheet. Further, to the extent we are self-insured, reserves are recorded based upon our estimates, with input from legal and insurance advisors.
To the extent we have insurance coverage, we do not have an offset right for liabilities in excess of any deductibles and retentions. Accordingly, we have recorded a liability for estimated amounts in excess of our deductibles and retentions, and have recorded a corresponding asset related to estimated insurance recoveries, on our Balance Sheet.
Long-Lived Assets Goodwill – Goodwill is not amortized, but instead is reviewed for impairment at least annually at a reporting unit level, absent any indicators of impairment or when other actions require an impairment assessment (such as a change in reporting units). Our Services Division represents our only reporting unit with goodwill.
See Note 1 for further discussion of our revenue recognition policy and Note 2 for further discussion of projects with significant changes in estimated margins during 2024 and 2023 and further discussion of unapproved change orders, claims, incentives and liquidated damages for our projects. 30 Long-Lived Assets Goodwill – Goodwill is not amortized, but instead is reviewed for impairment at least annually at a reporting unit level, absent any indicators of impairment or when other actions require an impairment assessment (such as a change in reporting units).
At December 31, 2023, our working capital was $71.8 million and included $47.9 million of cash, cash equivalents, short-term investments and restricted cash, $5.6 million of assets held for sale and $1.1 million of current debt.
At December 31, 2024, our working capital was $84.0 million and included $67.3 million of cash, cash equivalents, short-term investments and restricted cash and $1.1 million of current debt.
During 2022, we were awarded a large contract for the fabrication of offshore jackets; however, the project was suspended in February 2023 and cancelled in July 2023. See Note 2 and “ New Project Awards and Backlog ” below for further discussion of the project cancellation.
During 2022, we were awarded a large contract for the fabrication of offshore jackets; however, the project was suspended by the customer in the first quarter 2023 and cancelled in the third quarter 2023.
The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We believe that backlog, a non-GAAP financial measure, provides useful information to investors as it represents work that we are obligated to perform under our current contracts.
We believe that backlog, a non-GAAP financial measure, provides useful information to investors as it represents work that we are obligated to perform under our current contracts. New project awards and backlog may vary significantly each reporting period based on the timing of our major new contract commitments.
At December 31, 2023, our cash, cash equivalents, short-term investments and restricted cash totaled $47.9 million, as follows (in thousands): December 31, 2023 Cash and cash equivalents $ 38,176 Short-term investments (1) 8,233 Available cash, cash equivalents and short-term investments 46,409 Restricted cash 1,475 Total cash, cash equivalents, short-term investments and restricted cash $ 47,884 (1) Includes U.S.
At December 31, 2024, our cash, cash equivalents, short-term investments and restricted cash totaled $67.3 million, as follows (in thousands): December 31, 2024 Cash and cash equivalents $ 27,284 Short-term investments (1) 38,784 Available cash, cash equivalents and short-term investments 66,068 Restricted cash 1,197 Total cash, cash equivalents, short-term investments and restricted cash $ 67,265 (1) Includes U.S.

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