Gulf Island Fabrication, Inc.

Good afternoon, ladies and gentlemen, and welcome to Gulf Islands Conference Call to discuss second quarter 2025 results. All participants will be in the listen-only mode for the duration of the call. This call is being recorded. At this time, I would like to turn the floor over to Ms. Cindy Cook for opening remarks and introductions. Cindy, please go ahead.

Thank you, and good afternoon. I would like to welcome everyone to our second quarter 2025 teleconference. Our results were released this afternoon and a copy of the press release is available on our website at gulfisland.com. A replay of today's call will be available on our website after 7 p.m. this evening. Please keep in mind that the press release and certain comments on this call include forward-looking statements and actual results may differ materially. We would like to refer everyone to the cautionary language included in our press release and to the risk factors described in our most recent Form 10-K and subsequent SEC filings. Please also note that management may reference EBITDA, adjusted EBITDA, adjusted revenue, new project awards, and backlog on this call, which are financial measures not recognized under U.S. GAAP. As required by SEC rules and regulations to the extent used, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our press release. Today, we have Mr. Richard Hope, President and CEO, and Mr. Wes Stockton, Executive Vice President and CFO. Mr. Hope.

Thank you, Cindy. Good afternoon, everyone, and welcome to our second quarter results conference call. I'm happy to be here with you this afternoon and hope that each of you and your families are continuing to stay healthy and safe. During today's call, I'll provide key takeaways from the quarter, a review of in-market trends, and an update on the progress we have made on our strategic initiatives, including the progress we have made on our recent and global acquisition. Whilst we'll then discuss our second quarter results in greater detail and provide an update on our outlook for 2025. We'll then open up the call for questions and end with some closing remarks. Over the last several years, we have taken important strategic actions to develop a business that is more stable and durable across market cycles. We focused on reducing risk, growing our services in small-scale fabrication businesses, and further strengthening our project execution. The benefits of these actions were evident during the second quarter. as we were able to generate revenues of 37.5 million and adjusted EBITDA of 1.9 million, despite the ongoing macroeconomic headwinds stemming from the uncertain trade environment and slower maintenance and capital spending by our offshore services customers. While we were not pleased by the results, Our more stable core business allowed us to generate solid operating results, which combined with our strong financial position enabled us to continue to invest in our organic growth initiatives, return capital to our shareholders through our share repurchase program, and complete the InGlobal acquisition. Before getting into our segment results, I'd like to provide an update on our InGlobal acquisition. During the quarter, we acquired certain assets of InGlobal Automation, engineering and government services businesses. The automation business provides engineering, design, fabrication, and integration of industrial automation systems to the oil and gas, renewable energy, and traditional power industries. The engineering business provides various engineering solutions to the oil and gas and renewable energy industries, while the government services business provides engineering and automation solutions to federal, state and local governments and educational institutions, generally in the form of technical field services. The integration is progressing as expected and we see the opportunity for meaningful strategic benefits from the transaction. First, the global acquisition is expected to broaden our product and services offerings with the addition of automation and engineering solutions. Second, the acquired assets will allow us to expand our customer base and diversify into new end markets, including onshore oil and gas, data centers, and government. And third, the acquired businesses will help increase the overall value of our existing offerings by including the ability to strengthen our fabrication offerings with supplemental engineering capabilities and systems integration for turnkey module offerings. We are extremely excited by the opportunities presented by the transaction, and while it is still early, our initial view of the transaction is extremely favorable. The early reception from customers and potential strategic partners has been very positive and global has great people and very strong product offerings, which was evident in their ability to win work on the market. Despite their financial challenges, the market seems excited that a well capitalized complimentary company is now in control of these assets. And we see meaningful opportunities ahead. For example, We have already received requests for quotation for projects as a result of the combined company's capabilities. We have received inquiries for process gids and packaged equipment where the client is requesting a turnkey solution of the fabrication inclusive of systems control installed, and we're seeing opportunities for larger systems integration projects that InGlobal was not capable of executing on their own. While we will have to work through the integration, which we expect will take six to 12 months, and the challenges associated with bringing a business back from bankruptcy, I see strong signs that the acquisition will help us open more doors and give the combined company opportunities to provide more value to our customers. Now, turning back to our legacy business. As we look at our fabrication business, we continue to see extended decision cycles for new project awards in certain end markets due to market uncertainty, even for our small-scale fabrications. However, we've been pleased more recently to see a pickup in dialogue with customers with large projects who paused their activity in the early part of 2025, and we are happy to share that subsequent to quarter end, we received a limited notice to proceed contract of approximately 20 million. This initial award is for the procurement of materials for a structural steel project, and we expect the full contract to be awarded during the third quarter, with a total contract value of approximately $35 million, inclusive of the limited notice to proceed value. If the award timing goes as planned, we would expect to commence fabrication activities in the fourth quarter. With the limited notice to proceed award, we remain optimistic that the longer-term favorable structural drivers for the fabrication market remain in place and we are confident we are well positioned to win as more projects move forward. We continue to see LNG, chemical, and marine and civil as potential areas of opportunity for Gulf Island, and with the acquisition of InGlobal, we will penetrate into new end markets. We're also encouraged by new opportunities driven by a push for more domestic supply. I feel that we're positioned to take advantage of this buildup and believe we'll see additional positive results before the end of the year. Looking at our services business, while oil prices are off the lows, our customers are still targeting lower overall capital spending levels in the Gulf of America in 2025. This coupled with the trade uncertainty has many of our customers holding back spending. Despite the near-term weakness, we will continue to invest in expanding and diversifying our services offering. While slower than anticipated, we remain optimistic regarding the potential for our cleaning environmental services business and spark safety has started to pick back up. Finally, as it relates to capital deployment, we remain committed to our balanced capital allocation framework regardless of the recent market softness. We'll continue to prioritize investing in the business to drive growth in our existing services and penetrate new end markets, balanced with the pursuit of acquisition opportunities such as in global and capital return opportunities. In fact, we see the potential that our transaction within global could open up additional opportunities for strategic acquisitions and partnerships in our core markets. We're fortunate to be operating from a position of strength and remain committed to our strategic framework with an ongoing focus on driving value for our shareholders. I will now turn the call over to Wes to discuss our quarterly results in greater detail.