Climate Change Data

Environmental Metrics

Social Achievements

• Maintained a stringent safety assurance program to reduce the possibility of costly accidents.
• Instituted and enhanced several incentive programs for its current employees and expanded its training facility.

Climate Goals & Targets

Environmental Challenges

• Low activity levels in the fabrication sector of the oil and gas industry.
• Reduced demand and lower margins on goods and services.
• Intense competition for available projects.
• Low level of backlog of projects.

Mitigation Strategies

• Cost reduction measures are continuously reviewed to meet these conditions.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• Instituted and enhanced several incentive programs and expanded its training facility for its current employees. Received a $1.4 million grant from the State of Louisiana for employee training in welding, scaffolding, blueprint reading, safety, and other areas.

Climate Goals & Targets

Environmental Challenges

• Low activity levels in the oil and gas industry during 2004 created reduced demand and downward pressure on pricing of goods and services.
• Continued consolidation activity by oil and gas exploration and production companies and generally unfavorable trends in exploration and development activity caused low levels of oil and gas development activity.
• Increased demand from China and consolidation of the domestic steel industry put a strain on the worldwide supply of raw materials required to produce steel, leading to increased delivery times and pricing.
• Increased transportation costs when exporting structures from the U.S. to foreign locations may hinder the Company’s ability to successfully bid for projects against foreign competitors.
• Subsidies, import duties and fees, taxes on foreign operators, lower wage rates in foreign countries, fluctuations in the value of the U.S. dollar, and the possible imposition of tariffs on raw materials imported into the United States may hinder competitiveness with foreign contractors.

Mitigation Strategies

• Stepped up marketing efforts in the international arena (resulting in 49% of backlog at Dec 31, 2004 being international contracts).
• Continuously reviewed cost reduction measures.
• Minimized the use of contract labor, but used it when required to meet customer demand.
• Implemented a stringent safety assurance program to reduce the possibility of costly accidents.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Significant jobs have not been added to the backlog for several quarters.
• Pass through cost decreased 4.6% from 41.2% of revenue for the twelve month period ended December 31, 2009 to 36.6% for the twelve month period ended December 31, 2009
• The amount of man-hours worked decreased from 3.8 million for the twelve-month period ended December 31, 2008 to 3.2 million during the twelve-month period ended December 31, 2009, representing a decrease of 15.8%
• Current global economic conditions and a steep decline in oil prices have caused companies to remove projects from the bidding process or reduce the dollar value of projects.
• The downturn in the oil and gas industry that began in late 2008 brought on by the rapid decline in oil and gas prices has adversely impacted and may continue to adversely impact our business.

Mitigation Strategies

• Cost reduction measures have been and continue to be undertaken as appropriate to meet these conditions.
• During 2009, we began to reduce our headcount. These efforts have continued through early 2010, and, as of March 4, 2010, we had approximately 1,375 employees.
• Activity levels in 2009 allowed us to decrease our reliance on contract labor used to supplement our labor force necessary to complete the major projects in progress.
• Cost reduction measures, including a reduction in overhead labor costs, were undertaken since the fourth quarter of 2008 to meet the decline in economic conditions we experienced during 2009.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• hurricanes or flooding

Environmental Metrics

Social Achievements

• Maintains a stringent safety assurance program designed to ensure the safety of our employees and allow us to remain in compliance with all applicable federal and state mandated safety regulations.
• Provides continuous quality safety education and training to both employees and subcontractors.

Climate Goals & Targets

Environmental Challenges

• The downturn in the oil and gas industry has adversely impacted our Shipyards division as many of our marine customers' businesses are impacted by changes in the oil and gas industry.
• Customers are facing significant challenges and a period of consolidation within their industry that may impact our results of operations.
• Customers are facing decreased cash flow, a reduction in borrowing bases and a reduction in our customers’ liquidity and ability to pay or otherwise perform on their obligations to us.
• Competitive pricing common in the fabrication industry may not provide sufficient protection from cost overruns.
• Our decision to explore the sale of our South Texas properties presents risks that could have a material adverse effect on our business, results of operations, financial condition and cash flows.
• Our credit agreement contains operating and financial restrictions that may restrict our business and financing activities.
• Our ability to expand our operations in tandem with customer demand depends on our ability to increase our labor force when necessary with the appropriate skilled construction workers.
• The dangers inherent in our operations and the limits on our insurance coverage could expose us to potentially significant liability costs and materially interfere with the performance of our operations.
• Our industry is highly competitive.
• Our failure to successfully defend against claims made against us by customers or subcontractors, or our failure to successfully recover on claims made by us against customers or subcontractors, could adversely affect our business, financial condition, results of operations and cash flows.
• We may need to raise additional capital in the future for working capital, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which would impair our ability to operate our business or achieve our strategic plan.
• Our method of accounting for revenue using the percentage-of-completion method could result in an earnings charge.
• We are required to make other estimates in the preparation of our consolidated financial statements in addition to the application of percentage-of-completion accounting and actual results could differ materially from those estimates.
• We depend on key personnel.
• The nature of our industry subjects us to compliance with regulatory and environmental laws.
• Our business is highly dependent on our ability to utilize the navigation canals adjacent to our facilities.
• We depend on subcontractor services to perform our contractual obligations.
• We are exposed to risks arising out of recent legislation affecting U.S. public companies.
• We are susceptible to adverse weather conditions in our market areas.
• 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.

Mitigation Strategies

• We continue to respond to decreases in capital spending by our customers by reducing our own discretionary spending.
• Wage adjustments along with employee benefit reductions and overall cost reductions in all of our facilities have been implemented along with continued examination of all potential cost reductions associated with our business divisions.
• We have reduced the level of our workforce based on booked work in all of our facilities and will continue to do so, as necessary.
• We reduced our capital expenditures and continue to evaluate opportunities to dispose of assets that are either underperforming or not expected to provide sufficient long-term value.
• We have increased our focus on fabrication projects outside of the oil and gas sector, including certain large petrochemical plant module work, alternative energy fabrication projects, and other projects that are less susceptible to fluctuations in oil and gas prices.
• We will continue to conserve our cash due to the uncertainty of both the severity and duration of the current oil and gas market downturn.
• We will, however, continue to explore opportunities for mergers or acquisitions that may exist.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• The cyclical nature of the oil and gas industry impacting capital expenditures.
• Highly competitive markets with companies possessing greater resources.
• Significant challenges and consolidation within the oil and gas and marine industries.
• Depressed oil and gas prices affecting customer ability to pay.
• Adverse weather conditions impacting operations.
• Backlog subject to change due to delays, suspensions, terminations, or scope changes.
• Potential need for debt financing or equity capital.
• Operating and financial restrictions and covenants in the Credit Agreement.
• Inability to generate sufficient cash flow.
• Risks associated with monetizing underutilized assets and rationalizing facilities.
• Difficulties defending against or recovering claims.
• Inherently dangerous projects posing safety risks.
• Limits on insurance coverage.
• Potential for unsuccessful strategic repositioning.
• Inability to employ sufficient skilled personnel.
• Dependence on third parties for services and raw materials.
• Changes in U.S. trade policies impacting material costs.
• Compliance with regulatory and environmental laws.
• Dependence on navigation canals.
• Potential adverse effects of government shutdowns.
• Risks of systems and information technology interruptions and data security breaches.
• Limited control over joint ventures and strategic alliances.
• Potential actions of activist shareholders.

Mitigation Strategies

• Cost reduction efforts and sale of underutilized assets to improve liquidity.
• Diversification into onshore fabrication, marine vessels for non-oil and gas customers, and offshore wind developments.
• Rationalization and integration of facilities and operations (including closure of Jennings Yard).
• Enhancement of proposal, estimating, and operations resources, processes, and procedures.
• Review of alternative strategies for the company.
• Improved cash flow position on projects in backlog.
• Settlement of $10 million related to disputed change orders.

Supply Chain Management

Responsible Procurement

• Negotiation of escalation clauses in contracts for steel pricing adjustments.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Safety
• Environmental
• Workforce Development
• Diversity and Inclusion

Environmental Achievements

• Implemented a program to replace facility lighting with LED bulbs, reducing energy consumption.
• Certified environmental management system to ISO 14001:2015.

Social Achievements

• Achieved a 0.38 total recordable incident rate (on 1.7 million hours worked) compared to 0.61 in 2021 (on 1.0 million hours worked).
• Awarded grants from the Louisiana Workforce Commission Incumbent Worker Training program and Texas Workforce Commission Skills Development program, training 284 and 91 employees respectively.
• Incorporated employee feedback into training programs and employee benefit program offerings.
• At December 31, 2022, approximately 51% of our workforce were women or minorities.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Competitive labor market resulting in higher labor costs and high turnover for junior-level craft professionals.
• Supply chain disruptions and inflationary pressures increasing material costs.
• Competitive pricing environment for large fabrication projects.
• Customer-directed suspension of offshore jackets project.

Mitigation Strategies

• Maintaining discipline in labor force growth objectives and increased emphasis on training and development.
• Negotiating escalation clauses in customer contracts for steel pricing adjustments.
• Maintaining a disciplined approach in bidding on large projects.
• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procuring steel from both domestic and foreign mills.
• Negotiating escalation clauses in contracts for steel pricing adjustments.
• Negotiating and purchasing equipment from manufacturers at fixed prices.

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes, flooding

Transition Risks

• Regulatory changes impacting oil and gas industry
• Increased competition in green energy transition

Opportunities

• Fabrication opportunities related to energy transition initiatives

Reporting Standards

Frameworks Used: Null

Certifications: ISO 14001:2015, ISO 9001-2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Welding enclosures

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Environmental Responsibility

Environmental Achievements

• Maintained ISO 14001:2015 certification for environmental management.
• Continued efforts in managing and monitoring air emissions, water discharges, energy consumption and greenhouse gases.

Social Achievements

• Average TRIR of 0.52 since 2019 and only one LTIR incident in over 8.5 million hours worked.
• 54% of workforce were women or minorities at December 31, 2023.
• Annual employee benefits surveys conducted to improve programs.
• Annual leadership workshops on communication skills, mental health awareness, and sexual harassment prevention.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions, inflationary pressures, economic slowdowns, natural disasters, public health crises, geopolitical conflicts, and volatility in oil and gas prices.
• Competitive pricing and cost overruns on projects.
• Reliance on significant customers.
• Labor constraints.
• Adverse weather conditions.
• Cybersecurity threats.

Mitigation Strategies

• Negotiating escalation clauses in contracts for steel pricing adjustments.
• Negotiating fixed prices for equipment from manufacturers.
• Using subcontractors when necessary.
• Improving project execution through enhanced resources, processes, and procedures.
• Disciplined approach to pursuing and bidding project opportunities.
• Increasing the mix of T&M contracts.
• Diversifying customer base and services offerings.
• Rationalizing and integrating facilities and operations.
• Cyber insurance policy.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes, flooding

Transition Risks

• Regulatory changes, market shifts to renewable energy

Opportunities

• Fabrication of structures for renewable energy projects

Reporting Standards

Frameworks Used: Null

Certifications: ISO 14001:2015, ISO 9001-2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed