Gulf Island Revenue Jumps 37%, Net Income Dips Amid Englobal Acquisition

TL;DR

**Gulf Island's revenue surge is overshadowed by a net income plunge and a pending merger, making it a risky bet until the IES deal details are clear.**

AI Summary

Gulf Island Fabrication, Inc. reported a significant increase in revenue for the three months ended September 30, 2025, reaching $51.54 million, up from $37.64 million in the prior year, representing a 37% increase. However, net income for the quarter decreased to $1.56 million, compared to $2.32 million in the same period of 2024, a 32.8% decline. For the nine months ended September 30, 2025, revenue increased to $129.35 million from $121.78 million, while net income saw a substantial drop to $4.81 million from $10.45 million in 2024, a 53.9% decrease. Key business changes include the acquisition of ENGlobal Corporation's Automation Business on May 12, 2025, and its Engineering and Government Businesses on June 16, 2025, for a purchase price of $3.5 million. The company also announced a pending merger with IES Holdings, Inc. (IES) via IES Merger Sub, LLC, as per an agreement dated November 7, 2025. Risks include the potential impact of the pending merger on business operations and the suspension of the share repurchase program. The strategic outlook is focused on integrating the acquired Englobal businesses and completing the merger with IES.

Why It Matters

This filing reveals a company in transition, with significant revenue growth driven by acquisitions but a notable decline in net income, which could signal integration challenges or margin pressures. The pending merger with IES Holdings, Inc. introduces a major strategic shift, potentially offering investors a new growth trajectory or, conversely, diluting existing shareholder value depending on the merger terms. For employees, the acquisition of Englobal's businesses and the subsequent merger with IES could lead to restructuring or new opportunities. Customers might see expanded service offerings due to the Englobal acquisition, but also potential changes in service delivery post-merger. Competitively, this move could strengthen Gulf Island's position in complex steel fabrication and specialty services, especially in the industrial, energy, and government sectors, by consolidating market share and capabilities.

Risk Assessment

Risk Level: high — The risk level is high due to the significant 53.9% decrease in net income for the nine months ended September 30, 2025, to $4.81 million from $10.45 million in 2024, despite a revenue increase. Additionally, the pending merger with IES Holdings, Inc. introduces substantial integration and execution risks, as well as uncertainty regarding the future strategic direction and financial performance of the combined entity.

Analyst Insight

Investors should hold off on new positions until the IES merger details are fully disclosed and the financial implications are clearer. Current shareholders should closely monitor the merger terms and the company's ability to integrate the Englobal businesses to assess potential dilution or value creation.

Financial Highlights

debt To Equity

N/A

revenue

$51.54M

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$1.56M

eps

N/A

gross Margin

N/A

cash Position

$23.21M

revenue Growth

+37%

Revenue Breakdown

Key Numbers

• $51.54M — Q3 2025 Revenue (Increased 37% from $37.64M in Q3 2024)
• $1.56M — Q3 2025 Net Income (Decreased 32.8% from $2.32M in Q3 2024)
• $129.35M — Nine-Month 2025 Revenue (Increased from $121.78M in nine-month 2024)
• $4.81M — Nine-Month 2025 Net Income (Decreased 53.9% from $10.45M in nine-month 2024)
• $3.5M — Englobal Acquisition Purchase Price (Credit bid for Automation, Engineering, and Government Businesses)
• 15,998,611 — Common Stock Outstanding (As of October 31, 2025)
• $23.21M — Cash and Cash Equivalents (As of September 30, 2025, down from $27.28M at Dec 31, 2024)
• $18.07M — Accounts Payable (As of September 30, 2025, up from $5.80M at Dec 31, 2024)

Key Players & Entities

• GULF ISLAND FABRICATION INC (company) — registrant
• ENGlobal Corporation (company) — acquired company
• IES Holdings, Inc. (company) — merger partner
• IES Merger Sub, LLC (company) — subsidiary for merger
• U.S. Securities and Exchange Commission (regulator) — filing oversight
• $51.54 million (dollar_amount) — revenue for Q3 2025
• $1.56 million (dollar_amount) — net income for Q3 2025
• $129.35 million (dollar_amount) — revenue for nine months ended Sep 30, 2025
• $4.81 million (dollar_amount) — net income for nine months ended Sep 30, 2025
• $3.5 million (dollar_amount) — purchase price for Englobal Acquisition

FAQ

Risk Factors

• Merger Uncertainty [high — financial]: The pending merger with IES Holdings, Inc. introduces significant uncertainty regarding business operations, integration challenges, and potential disruptions. The agreement was dated November 7, 2025, and the outcome could impact future strategic direction and financial performance.
• Integration of Englobal Businesses [medium — operational]: The company is focused on integrating the recently acquired ENGlobal Corporation's Automation, Engineering, and Government Businesses. Successful integration is critical for realizing the expected synergies and avoiding operational disruptions. The acquisition cost was $3.5 million.
• Suspension of Share Repurchase Program [medium — financial]: The suspension of the share repurchase program indicates a potential shift in capital allocation strategy, possibly due to the pending merger or other financial considerations. This could affect shareholder returns and stock valuation.
• Decreasing Net Income [high — financial]: Despite a 37% increase in Q3 2025 revenue to $51.54 million, net income declined by 32.8% to $1.56 million. For the nine months, net income dropped 53.9% to $4.81 million from $10.45 million in 2024, signaling margin pressures or increased costs.
• Increased Accounts Payable [medium — financial]: Accounts payable increased significantly to $18.07 million as of September 30, 2025, from $5.80 million at December 31, 2024. This could indicate extended payment terms or increased short-term liabilities.

Industry Context

Gulf Island Fabrication operates in the industrial, energy, and government sectors, fabricating complex steel structures and providing specialty services. The energy sector, particularly with the growth in LNG and offshore projects, presents opportunities. However, the industry is capital-intensive and subject to cyclical demand influenced by commodity prices and global economic conditions.

Regulatory Implications

The company is subject to standard industry regulations related to fabrication, environmental compliance, and safety. The pending merger with IES may also trigger antitrust reviews under the HSR Act, requiring regulatory filings and approvals.

What Investors Should Do

1. Monitor Merger Progress
2. Analyze Margin Trends
3. Evaluate Englobal Integration
4. Assess Cash Flow and Liquidity

Key Dates

• 2025-05-12: Acquisition of ENGlobal Corporation's Automation Business — Expands the company's automation capabilities and integrates into the Fabrication Division.
• 2025-06-16: Acquisition of ENGlobal Corporation's Engineering and Government Businesses — Further expands the company's service offerings and integrates into the Services Division.
• 2025-11-07: Merger Agreement with IES Holdings, Inc. — Announces a significant strategic transaction that will result in Gulf Island becoming a wholly owned subsidiary of IES, impacting future operations and ownership structure.

Glossary

Pending Transaction

The merger of IES Merger Sub with and into Gulf Island Fabrication, Inc., with Gulf Island surviving as a wholly owned subsidiary of IES. (This is the primary strategic event discussed, with significant implications for the company's future.)

Englobal Acquisition

The acquisition of ENGlobal Corporation's Automation, Engineering, and Government Businesses by Gulf Island Fabrication, Inc. (This acquisition is a key operational change impacting the company's divisions and revenue streams.)

Modules

Fabricated structures containing steel, piping, valves, and other equipment used in industrial systems like refining and LNG. (Represents a key product type for the Fabrication Division.)

Jacket

A component of offshore platforms providing structural support from the seabed to above water, anchoring the topside structure. (Indicates the type of complex projects the company undertakes in the offshore sector.)

Services Division

One of Gulf Island's reportable segments, providing specialty services including engineering, project management, repair, and maintenance. (This division's performance, especially after the Englobal acquisition, is crucial to the company's results.)

Fabrication Division

One of Gulf Island's reportable segments, focused on fabricating complex steel structures and modules. (This division is a core part of the company's business and likely contributes significantly to revenue.)

Year-Over-Year Comparison

Compared to the prior year, Gulf Island Fabrication has seen a substantial 37% increase in Q3 revenue to $51.54 million, driven by its Services division and acquisitions. However, this top-line growth has not translated to the bottom line, with net income declining by 32.8% in Q3 and a more significant 53.9% drop for the nine-month period. New risks have emerged, primarily related to the pending merger with IES Holdings and the integration of recently acquired ENGlobal businesses, alongside the suspension of the share repurchase program.

Key Financial Figures

• $2.4 million — editor of Englobal. Alliance Loan A $2.4 million senior secured loan of Alliance due fro
• $1.5 million — lliance Payment. Alliance Payment A $1.5 million cash payment to Alliance in exchange fo
• $3.5 million — d for loan amounts to Englobal of up to $3.5 million in the aggregate. DIP Loan Advances
• $10.0 million — ry of our services. LC Facility Our $10.0 million letter of credit facility with Whitney
• $20.0 m — 3, pursuant to which we will pay Zurich $20.0 million, plus interest at a fixed rate of

Filing Documents

• gifi-20250930.htm (10-Q) — 3077KB
• gifi-ex31_1.htm (EX-31.1) — 13KB
• gifi-ex31_2.htm (EX-31.2) — 13KB
• gifi-ex32.htm (EX-32) — 14KB
• img22302287_0.jpg (GRAPHIC) — 104KB
• 0001193125-25-277728.txt ( ) — 11199KB
• gifi-20250930.xsd (EX-101.SCH) — 1016KB
• gifi-20250930_htm.xml (XML) — 2446KB

Financial Statements

Financial Statements 1 Consolidated Balance Sheets at September 30, 2025 (unaudited) and December 31, 2024 1 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 2 Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 3 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited) 4

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 42 Item 4.

Controls and Procedures

Controls and Procedures 42 PART II OTHER INFORMATION 42 Item 1.

Legal Proceedings

Legal Proceedings 42 Item 1A.

Risk Factors

Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45 Item 5. Other Information 45 Item 6. Exhibits 46

Signatures

Signatures 47 i GLOSSARY OF TERMS As used in this report filed on Form 10-Q for the quarter ended September 30, 2025 ("this Report"), the following abbreviations and terms have the meanings listed below. In addition, the terms "Gulf Island," "the Company," "we," "us" and "our" refer to Gulf Island Fabrication, Inc. and its consolidated subsidiaries, unless the context clearly indicates otherwise. Certain terms defined below may be redefined separately within this Report when we believe providing a definition in connection with the use of the term will assist users of this Report. Unless and as otherwise stated, any references in this Report to any agreement means such agreement and all schedules, exhibits and attachments in each case as amended, restated, supplemented or otherwise modified to the date of filing this Report. 2024 Annual Report Our annual report for the year ended December 31, 2024, filed with the SEC on Form 10-K on March 5, 2025. 2024 Financial Statements Our Financial Statements for the year ended December 31, 2024 and related notes, included in our 2024 Annual Report. Acquisition Date Collectively, the effective dates for the acquisition of the Automation Business of May 12, 2025 and the Engineering Business and Government Business of June 16, 2025. Alliance Alliance 2000, Ltd., a creditor of Englobal. Alliance Loan A $2.4 million senior secured loan of Alliance due from Englobal, which was assumed by us effective April 10, 2025, in connection with the Alliance Payment. Alliance Payment A $1.5 million cash payment to Alliance in exchange for the Alliance Loan. Asset Purchase Agreement Agreement entered into effective April 15, 2025, as amended May 19, 2025, pursuant to which we acquired the Englobal Business. ASU Accounting Standards Update. Automation Business Certain assets of Englobal's automation business, acquired pursuant to the Asset Purchase Agreement. Balance Sheet Our Consolidated Balance S

Financial Statements

Financial Statements Our Consolidated Financial Statements, including comparative consolidated Balance Sheets, Statements of Operations, Statements of Changes in Shareholders' Equity and Statements of Cash Flows, as filed in this Report. GAAP Generally Accepted Accounting Principles in the U.S. Government Business Certain assets of Englobal's government business, acquired pursuant to the Asset Purchase Agreement. GOA Gulf of America (previously referred to as the Gulf of Mexico). Gulf Coast Along the coast of the Gulf of America. Houma Facility Our owned fabrication and operations facility located in Houma, Louisiana. Houston Facility Our leased fabrication and operations facility located in Houston, Texas. HSR Act Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. IES IES Holdings, Inc. IES Merger Sub IES Merger Sub, LLC, a Louisiana limited liability company and wholly owned subsidiary of IES, formed for the sole purpose of the Pending Transaction. jacket A component of a fixed platform consisting of a tubular steel braced structure extending from the mudline of the seabed to a point above the water surface. The jacket is anchored with tubular steel piles driven into the seabed. The jacket supports the topside structure located above the water. labor hours Hours worked by employees directly involved in the fabrication of our products or delivery of our services. LC Facility Our $10.0 million letter of credit facility with Whitney Bank maturing on June 30, 2026, as amended. LNG Liquefied Natural Gas. Merger Agreement Agreement and Plan of Merger dated November 7, 2025, by and among IES, the IES Merger Sub and the Company providing for the Pending Transaction. Mortgage Agreement Multiple indebtedness mortgage arrangement with Zurich, to secure our obligations and liabilities under our Note Agreement. The mortgage arrangement encumbers the real estate associated with our Houma Facility and i

FINANCI AL INFORMATION

PART I. FINANCI AL INFORMATION

Financi al Statements

Item 1. Financi al Statements. GULF ISLAND FABRICATION, INC. CONSOLIDATED B ALANCE SHEETS (in thousands) September 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 23,206 $ 27,284 Restricted cash 1,197 1,197 Short-term investments 40,156 38,784 Contract receivables and retainage, net 35,686 22,487 Contract assets 11,679 8,611 Prepaid expenses and other assets 3,602 5,139 Inventory 2,716 1,907 Total current assets 118,242 105,409 Property, plant and equipment, net 21,992 24,051 Goodwill 3,606 2,217 Other intangibles, net 821 557 Other noncurrent assets 2,065 982 Total assets $ 146,726 $ 133,216 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 18,067 $ 5,801 Contract liabilities 981 1,278 Accrued expenses and other liabilities 13,259 13,180 Long-term debt, current 1,117 1,117 Total current liabilities 33,424 21,376 Long-term debt, noncurrent 17,881 17,888 Other noncurrent liabilities 1,117 850 Total liabilities 52,422 40,114 Shareholders' equity: Preferred stock, no par value, 5,000 shares authorized, no shares issued and outstanding — — Common stock, no par value, 30,000 shares authorized, 15,999 shares issued and outstanding at September 30, 2025 and 16,346 at December 31, 2024 11,308 11,669 Additional paid-in capital 104,816 108,065 Accumulated deficit ( 21,820 ) ( 26,632 ) Total shareholders' equity 94,304 93,102 Total liabilities and shareholders' equity $ 146,726 $ 133,216 The accompanying notes are an integral part of these financial statements. - 1 - GULF ISLAND FABRICATION, INC. CONSOLIDATED STATEM ENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue $ 51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 2025 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Gulf Island Fabrication, Inc. (together with its subsidiaries, "Gulf Island," "the Company," "we," "us" and "our") is a leading fabricator of complex steel structures, modules and automation systems, and a provider of specialty services, including engineering, project management, commissioning, repair, maintenance, scaffolding, coatings, welding enclosures, cleaning and environmental, and technical field services to the industrial, energy and government sectors. Our customers include U.S. and, to a lesser extent, international energy producers; refining, petrochemical, LNG, industrial and power operators; EPC companies; and federal, state and local governments. We currently operate and manage our business through two operating divisions ("Services" and "Fabrication") and one non-operating division ("Corporate"), which represent our reportable segments. Our corporate headquarters is located in The Woodlands, Texas and our primary operating facilities are located in Houma, Louisiana ("Houma Facility") and Houston, Texas ("Houston Facility"). See Note 7 for further discussion of our reportable segments. Acquisition During the second quarter 2025, we acquired certain assets of ENGlobal Corporation's ("Englobal") automation business ("Automation Business") effective May 12, 2025, for which the operating results are reflected within our Fabrication Division from the applicable Acquisition Date, and we acquired certain assets of Englobal's engineering business ("Engineering Business") and government business ("Government Business" and together with the Automation Business and Engineering Business, the "Englobal Business") effective June 16, 2025, for which the operating results are reflected within our Services Division from the applicable Acquisition Date. See Notes 3 and 7 for further discussion of the a

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