On this page of StockholderLetter.com we present the latest annual shareholder letter from GULF ISLAND FABRICATION INC — ticker symbol GIFI. Reading current and past GIFI letters to shareholders can bring important insights into the investment thesis.

 •  4/10/2025 Letter Continued (Full PDF)
 •  4/14/2023 GIFI Stockholder Letter
 •  4/11/2024 GIFI Stockholder Letter
 •  More "Metals Fabrication & Products" Category Stockholder Letters
 •  GIFI Benford's Law Stock Score = 85

GIFI Shareholder/Stockholder Letter Transcript:

2024 ANNUAL REPORT


To our Shareholders:
I am extremely proud of everything we accomplished during 2024, including our continued progress
towards our strategic goals and another year of strong safety performance. We remain dedicated to keeping
our employees safe, while delivering quality solutions to our customers and returns for our shareholders.
This has been a hallmark of Gulf Island for the past 40 years, and we plan to continue building on the trust
that we have earned from our customers and shareholders.
Continued focus on our key strategic priorities
Through an emphasis on our small-scale fabrication business and the expansion of our services capabilities,
we believe we have developed a business that is more durable through cycles. During 2024, we
demonstrated our ability to generate solid financial results without the benefit of a large project award, with
consolidated revenue of $159.2 million and net income of $14.7 million. Our financial results reflect a
continued focus on strengthening project execution and maintaining our bidding discipline. We are entering
2025 with a sound financial position, which positions us to continue executing on our key strategic pillars
and pursue our disciplined capital allocation strategy.
As we begin 2025, we continue to be encouraged by the bid activity for our fabrication offerings and plan
to remain focused on expanding our presence in markets outside of oil and gas, with an emphasis on
infrastructure, government, high-tech manufacturing and nuclear. These end markets place a premium on
quality and schedule certainty, areas where we have a proven record of delivering. Importantly, we believe
there will be limited fabrication capacity for the anticipated projects in our region, which we expect will
benefit our Fabrication business. However, we plan to remain disciplined and continue building on the
foundation of small-scale fabrication work and end market diversification, while waiting for attractive large
project opportunities.
We also remain encouraged by the expanded opportunities in our services business, including our Spark
Safety offering and our recently launched cleaning and environmental services business. Our cleaning and
environmental services offering is beginning to see increased volume as de-commissioning activity gains
momentum, and we believe that our investment in this offering was well-timed and are excited by the
opportunities in this market.
For 2025, we plan to focus our capital allocation priorities on continuing to make investments in our core
business, including hiring key personnel to help us drive organic growth in our existing services and
penetrate new end markets. We also plan to continue our pursuit of strategic opportunities with third-parties
where our growth objectives can be amplified. While our primary capital allocation objective is profitable
organic and inorganic growth, we may consider capital return opportunities if we are not able to find
sufficient growth investments that satisfy our risk/return hurdles.

Strong commitment to safety and quality
Safety and quality remain core values for Gulf Island and are critical elements of our success. Our number
one priority is keeping our people safe with a goal of ensuring that every employee makes it home safely
at the end of every day. We track work-related safety statistics using Total Recordable Incident Rate (TRIR)
and Lost Time Incident Rate (LTIR) metrics. For 2024, our TRIR was 0.27, and since 2019, we have had
only one LTIR incident in over 10.0 million work hours. We were able to accomplish these safety results,
despite continued industry challenges associated with high labor turnover, by making safety a cornerstone
of everything that we do. While these results are better than industry standards, we will continue to prioritize
the safety of our employees.
We continue to take actions to drive efficiencies and enhance the quality of our project execution. During
2024, we made capital investments in automated equipment and increased our facility capacity for certain
of our operations, including painting and steel fabrication. We believe these investments will enable us to
more safely and efficiently deliver quality project execution at the lowest cost to our customers.
Emphasizing environmental responsibility
In addition to an emphasis on our people and customers, we are continuing our efforts to minimize the
environmental impact of our operations and protect and preserve the natural environment where we work
and live. During 2024, we went a step further with the launch of our cleaning and environmental services
business line, which expanded our services offerings to better support decommissioning activity in the Gulf
of America. The Government Accountability Office recently disclosed that as of June 2023, more than
2,700 wells and 500 platforms are    past due    for dismantling and decommissioning in the Gulf of America.
In addition, a May 2023 study by Nature Energy estimated there are roughly 14,000 non-producing wells
that will also need to be dismantled and decommissioned in the future. We have already experienced interest
from our customers for our new cleaning and environmental services offering and expect decommissioning
activity in the Gulf of America to continue to ramp up during 2025. This is just another example of Gulf
Island doing the right things in the communities where we live and work, while also serving the interests
of our customers.
Concluding remarks
We made tremendous progress during 2024, and believe we are entering 2025 in a strong position to
continue executing on our key strategic pillars, which prioritize continuing to grow our small-scale
Fabrication business, growing and diversifying our Services business, and further strengthening our project
execution. I would like to thank all of our team members across the organization for their hard work and
dedication to our strategic goals, and our shareholders for their continued support of Gulf Island.
Richard W. Heo
CEO, President and Chairman of the Board

4/10/2025 Letter Continued (Full PDF)

 

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