Gulf Island Fabrication (GIFI)

Risks

• Our revenue and profitability may be impacted by the cyclical nature of the oil and gas industry and other energy-related industries.
• We operate in an industry that is highly competitive.
• A small number of customers may represent a significant portion of our revenue.
• Competitive pricing common in the fabrication industry could negatively impact our operating results.
• Our traditional customer base is facing significant challenges and a period of consolidation within their industry.
• We depend on the award of new contracts and the timing of those awards.
• The nature of our contracting terms for our contracts could adversely affect our operating results.
• 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.
• We may be unable to successfully defend against claims made against us by customers or subcontractors, or recover claims made by us against customers or subcontractors.
• The limits on our insurance coverage could expose us to potentially significant liability and 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 may conduct a portion of our operations through joint ventures and strategic alliances over which we may have limited control, and our partners in such arrangements may not perform.
• We are exposed to the credit risks of our customers, including nonpayment and nonperformance by our customers.
• Our method of accounting for revenue using the percentage-of-completion method could have a negative impact on our results of operations.
• We may need to obtain debt financing or credit facilities or raise equity capital in the future for working capital, capital expenditures, contract commitments and/or acquisitions, and we may not be able to do so or do so on favorable terms, which would impair our ability to operate our business or execute our strategy.
• We may not be able to generate sufficient cash flow to meet our obligations.
• 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.
• Workplace vaccination or weekly testing requirements could impact our workforce, increase our costs and have a material adverse effect on our business and operating results.
• Our success is dependent on key personnel.
• We depend on third parties to provide services to perform our contractual obligations and supply raw materials.
• Our efforts to strategically reposition the Company to diversify our service offerings and customer base may not result in increased shareholder value.
• The financial benefits we expect to receive as a result of the Shipyard Transaction may not be realized.
• We may be unable to successfully integrate the DSS Business and realize the anticipated benefits of the DSS Acquisition.
• 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.
• We are susceptible to adverse weather conditions in our market areas.
• The nature of our industry subjects us to compliance with regulatory and environmental laws.
• Actions of activist shareholders could create uncertainty about our future strategic direction, be costly and divert the attention of our management and board. In addition, some institutional investors may be discouraged from investing in the industries that we service.
• Our business is highly dependent on our ability to utilize the navigation canals adjacent to our facilities.