The LNG barge which we've mentioned previously. The first time doing it, and it has not gone well so far.
Gross profit for the third quarter of 2016 decreased $6.9 million, or 213.2%, and decreased $9.5 million, or 73.6%, for the first nine months of 2016 compared to the same periods of the prior year. Vessel construction gross profit decreased $7.7 million or 227.9%, to $-4.3 million for the third quarter of 2016 compared to $3.4 million for the third quarter of 2015, while vessel construction gross profit decreased $12.4 million or 95.2%, to $633,000 for the first nine months of 2016 compared to $13.1 million for the same period in 2015. Vessel construction gross profit for nine months ended September 30, 2016 reflects a $12.5 million loss on the LNG barge of which we recognized an $8.0 million loss in the third quarter and a $4.5 million loss in the second quarter. We recognized a $4.0 million loss on the LNG barge for the year ended December 31, 2015. The total LNG barge job-to-date loss is $16.5 million. The losses on the LNG barge primarily relate to vessel changes required by regulatory authorities, which increased costs and caused delays, and higher than expected equipment costs, resulting from the vessel being the first of its kind produced in North America. After discussions with our customer, we have adjusted our anticipated delivery date to the second quarter of 2017, and our revised contract terms are reflected in our projected loss on the project. While most of the regulatory review process has been completed, we continue to have regulatory and execution risk associated with completing the vessel.There are 5.1 million shares outstanding, so the LNG barge has cost them $3 per share - ouch. Another way to look at it - they could've spent that money buying back ~15% of the outstanding stock.
Remains to be seen whether they've just paid tuition for something that could be profitable in the future. However, I would not have suspected that the potential downside on the project would be 15% of market cap.
Also, there were significant capital expenditures ($27 million in 2015) to pave the way for projects like the LNG barge.