Gulf Island Fabrication, Inc. (GIFI) Earnings Call Transcript & Summary

Hello. And welcome to the Gulf Island Fabrication, Inc. 2020 Annual Meeting of Shareholders. Please note that today's meeting is being recorded. [Operator Instructions] You can submit a written question at any time by clicking on the message icon at the top of your screen. Please note that your registered name will be announced along with your questions during the Q&A session following the formal portion of the meeting. Guests will not be able to submit questions. [Operator Instructions] It is now my pleasure to turn today's meeting over to Jack Laborde, Chairman of the Board of Directors. Sir, the floor is yours.

Good morning. And welcome to the virtual webcast of the 2020 Annual Meeting of Shareholders of Gulf Island Fabrication, Inc. I'm Jack Laborde, Chairman of the Board of Directors of Gulf Island Fabrication. Now I'll be presiding over this meeting. As you may know, this is our first ever virtual annual meeting. We do not expect technical difficulties today. However, in the event we lose audio or webcast connection, and we aren't able to provide any updates, please wait 10 minutes for our resolution. If not resolved, check our website under Investors for updates. Thank you to everyone who has joined our webcast today. The COVID-19 pandemic has impacted almost every aspect of daily life, and, like everyone else, we have had to make adjustments accordingly. On behalf of the Board, I want to say that we hope your families are staying safe and healthy. Our deepest sympathies go to all those who have been affected directly or indirectly by the pandemic. We also would like to thank those people on the front lines of the fight against the pandemic, including health care workers and essential service providers. The agenda for the meeting is on the right side of the webcast screen. In addition, the rules and procedures of conduct of meeting have been made available on the company's website. By following these rules and procedures, everyone will have an opportunity to participate, and we will be able to handle the business of the meeting efficiently and fairly. The question-and-answer session will be led by Richard Heo, the company's Chief Executive Officer and a member of the Board, after the formal business of the meeting has been concluded. Shareholders were asked to submit questions prior to the meeting. In addition, shareholders may submit questions electronically during the meeting by clicking on the messages icon at the top middle of the webcast screen above and typing your question in the box located at the bottom of the next screen. Those questions will be visible to other meeting participants -- will not be visible to other meeting participants. And according with the rules and procedures of conduct of meeting, the question-and-answer session will be limited to 15 minutes. Up to 1 minute will be allocated for Mr. Heo to read each question. We will answer as many questions as time allows. In order to give as many shareholders as possible the opportunity to ask questions, we ask that you please limit yourself to 1 question or topic. If multiple questions are submitted on the same topic, we will summarize and respond collectively. Thank you for your cooperation with the rules and procedures. In addition to me, Richard Heo, also -- I'm sorry, Richard. All of our fellow directors and our director nominee are attending today's meeting through this webcast. Also Mr. Brian Rotolo of the accounting firm of Ernst & Young, our independent registered public accountants, is attending today's meeting through the webcast. Mr. Rotolo will be available to respond to appropriate questions during the question-and-answer session. Finally, the Board has appointed Jones Walker as the Inspector of Election. The oath of inspector of election will be filed with the minutes of the meeting. In addition, Jones Walker will record the minutes of the meeting. Ms. Alexandra Layfield of Jones Walker is attending today's meeting. Notice of this meeting and the accompanying proxy statement and proxy card as well as a notice of change of location for our switch to a virtual meeting format were mailed on or about April 15 to all shareholders of record as of the record date. Copies of notices, proxy statement, proxy card are available on the company's website, and a complete list of the shareholders of record as of the record date is available for your inspection by clicking proxy materials on the left side of the web screen and following the instructions on the company's website, where you will be redirected. These materials, along with the affidavit of mailing, will be filed with the minutes of the meeting. The inspector of election has advised me that we have a sufficient number of shares logged into the webcast, are represented by proxy to constitute a quorum to conduct the business of the meeting. I, therefore, call this meeting to order. Polls are open. If you have not already voted your shares or wish to change your vote, click the proxy voting site button on the left side of the webcast screen. The polls will remain open until I declare them closed, following the presentation of business at this meeting. It's now 9:06 am local time. Under the company's bylaws, the only matters, including director nominees, properly before the meeting of consideration, are those set forth in the company's proxy statement. The shareholders are to vote on 5 matters of business, which are listed on the agenda available on the right side of the webcast screen and described in detail in the proxy statement. As a reminder about voting procedures, if you have already submitted a proxy by mail or online, you do not need to vote again unless you wish to change your previously provided voting instructions. If you have not voted, or you would like to change your previously provided voting instructions, you may vote by clicking on the proxy vote site button at the left of the webcast screen. If you beneficially own shares in the name of their brokers or other nominees, you must have registered prior to the meeting in order to vote or otherwise participate in the meeting. We will now turn to the matters to be voted on. The first item of business on the agenda is to vote on our proposal to elect Mr. Robert Averick as a Class II Director to generally serve for either a 1-year or a 3-year term expiring at either 2021 or 2023 Annual Meeting of Shareholders, depending on the results of the vote of the second proposal relating to declassification of the Board. We will dispense with formal motions regarding the nominee for elections to the Board of Directors. The Board of Directors nominee is duly nominated and presented. The company has not received notice of any other nominees. And as a result, no other persons have been properly nominated for election at this meeting. I hereby declare the nominations closed. Board of Directors recommends you vote for the election of Mr. Averick. The second item of business on the agenda is to vote on a proposal to approve an amendment to the company's amended and restated articles of incorporation to declassify the Board of Directors. We will dispense with formal motions regarding this proposal, and this proposal is duly introduced and presented. The Board of Directors recommends that you vote for the approval of this proposal. The third item of business on the agenda is to vote on a proposal to approve on an advisory basis the compensation of our company's named executive officers. We will dispense with formal motions regarding this proposal, and this proposal is duly introduced and presented. The Board of Directors recommends that you vote for the approval of this proposal. The fourth item of business on the agenda is to vote on a proposal to approve the company's amended and restated 2015 stock incentive plan. We will dispense with formal motions regarding proposal, and this proposal is duly introduced and presented. The Board of Directors recommends that you vote for the approval of this proposal. The fifth item of business on the agenda is to vote on a proposal to ratify the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the year ending December 31, 2020. We will dispense with formal motions regarding this proposal, and this proposal is duly introduced and presented. Board of Directors recommends that you vote for the ratification of this proposal. This concludes the presentation of matters to be voted on. As a reminder, there will be a question-and-answer session after the formal business as the meeting has concluded. I now request that all shareholders who have not voted and wish to do so by clicking proxy voting site at the left of the webcast screen. I will now pause for a few minutes to allow any final voting to take place. [Voting]

It is now 9:10 a.m., local time. I declare the polls are now closed. You can no longer vote on any of the proposals. I will now present the preliminary voting results provided by the inspector of election. The nominee for election to the Board of Directors, Mr. Robert Averick, has been duly elected. The amendment to the company's amended and restated articles of incorporation to declassify the Board has been approved. And therefore, Mr. Averick will serve until the 2021 Annual Meeting of Shareholders and until a successor is duly elected and qualified. The nonbinding proposal on the compensation of the company's named executive officers has been approved. Company's amended and restated 2015 stock incentive plan has been approved, and the appointment of Ernst & Young as our independent auditor for 2020 has been ratified. This now concludes the formal business of our meeting. The Board of Directors reserves all rights with respect to the validity of the election. Within 4 business days, the company will publicly file with the SEC a report on Form 8-K reporting the results of today's meeting. Before moving on to our questions-and-answer session, I want to express my personal thanks and the thanks of the Board of Directors to Greg Cotter and Christopher Harding, whose terms are expiring at the end of this meeting, for their service to the company. Their guidance and counsel were sincerely appreciated. Finally, as previously announced, my tenure as a Director and as Chairman will expire at the end of this meeting. It has been my privilege to serve as a Director of the company since 1997, and I'm thankful for being able to work for many years with colleagues, whom I admire and respect. I'm proud to have been part of Gulf Island's history, and I have every confidence in Mike Flick, my successor as Chairman of the Board, and the company's management as they lead the company into the future. The company will remain focused on executing its plan, controlling costs and, most importantly, doing it safely, honestly and with a total commitment to integrity. With that, I hereby declare the meeting adjourned, and I'd turn it over to Mr. Richard Heo, the company's Chief Executive Officer and member of the Board of Directors, to lead a question-and-answer session.

Thank you, Jack. From the Board and the entire Gulf Island family, we want you to know how much we appreciate your leadership and tireless dedication to the company for the last 23 years. You're going to be missed by all the employees of Gulf Island. To honor you and your father, who co-founded the company, we have named the road leading into our fabrication yard in Houma, Louisiana, Laborde Court. It will stand as a memory of you and your family's significant contribution to Gulf Island. Thank you. I'd also like to acknowledge 2 other Board members, Greg Cotter and Chris Harding, who will be joining you in retirement. Greg is our longest-standing Board member and has been there from the company's start 35 years ago. I will miss the knowledge and the stories of the company that Greg has shared with me in my short tenure. Chris, who also happens to be a pilot, has served the company for the last 13 years and brought important technical expertise that benefited the company. I hope you will get to enjoy more time in the air doing what you love. I'd like to thank -- I would like to wish all 3 of you the best in your future. There were no questions submitted via e-mail or submitted during the webcast. If you have any questions, please feel free to direct them to us via e-mail. On behalf of the Board of Directors, I'd like to thank you for your attendance and participation today as well as for your continued support of Gulf Island Fabrication, Inc. This concludes today's webcast. Thank you.

Ladies and gentlemen, this does conclude the meeting. You may now disconnect.