Gulf Island Fabrication Inc. (NASDAQ:GIFI) Q4 2017 Earnings Conference Call - Final Transcript
Feb 27, 2018 • 10:00 am ET
Good morning, and welcome, ladies and gentlemen to the Q4 2017 Gulf Island Fabrication Earnings Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Ms. Cindi Cook, for opening remarks and introductions. Cindi, please go ahead.
Thank you, Gina. Good morning. I would like to welcome everyone to Gulf Island Fabrication's 2017 Fourth Quarter Teleconference. Please keep in mind that any statements made in this conference that are not statements of historical facts are considered forward-looking statements. These statements are subject to factors that could cause actual results to differ materially from the results predicted in the forward-looking statements.
These factors include the timing and extent of changes in the prices of crude oil and natural gas, the timing of new projects and the Company's ability to obtain them, and other details that are described under Cautionary Statement concerning forward-looking information and elsewhere in the Company's 10-K filed March 2nd, 2017.
The 10-K was included as part of the Company's 2016 annual report filed with the Securities and Exchange Commission earlier last year. The Company -- assumes no obligation to update these forward-looking statements.
Today, we have Mr. Kirk Meche, President, CEO and Director; Mr. David Schorlemer, our Executive Vice President and Chief Financial Officer; and Mr. Todd Ladd, our Executive Vice President and Chief Operating Officer.
Thank you, Cindi, and good morning to all our listeners. Yesterday afternoon, we announced our fourth quarter results for 2017. 2017 was a challenging year for our Company, and this quarter's results reflect these difficult times.
Underutilization within our divisions, along with an adjustment to one of our complex projects within our Shipyard division, put our financial results in a loss position for the quarter and year-end. I will provide additional color on the shipyard project later in the call.
The backlog numbers continue to improve with awards within our Services division and our Shipyard division. It should be noted that the majority of these projects will not start until the end of the second or early third quarter 2018. Hurricane Harvey made landfill -- landfall to the northeast of our South Texas facilities near Corpus Christi, and with that, we experienced wind damage to majority of the buildings in both yards. We received approximately $6 million in advance payments from our insurance underwriters prior to year-end and expect to resolve all claims by the end of the second quarter of 2018.
During the fourth quarter 2017, we executed a purchase option agreement with Buckeye Pipe Line Company for our Texas South Yard located in Ingleside for a purchase price of $55 million. This purchase option agreement provides an option period for the buyer to perform due diligence, which ends no later than April 25th, 2018, with an additional 30-day period if requested by Buckeye, along with the obligation to pay additional earnest money. Buckeye has contractual right to exercise the purchase agreement any time during this period.
We continue to receive interest on our