Conrad Industries Enters into Letter of Intent with Swiftships.

Business Editors

MORGAN CITY, La.--(BUSINESS WIRE)--Aug. 12, 2002

Conrad Industries, Inc. (Nasdaq:CNRD) announced that it has executed a letter of intent for the purchase of the assets of Swiftships Shipbuilders, LLC and Swiftships Technologies, LLC for approximately $12.5 million in cash. The Swiftships companies would also be eligible to receive an additional amount based on the performance of the assets during a three-year period after the closing. The Swiftships companies would use the proceeds of the asset sale to pay creditors. The letter of intent is non-binding with respect to the proposed acquisition, which is subject to the execution and closing of a definitive agreement.

The letter of intent contains a binding exclusivity agreement whereby the Swiftships parties have agreed that before October 31, 2002 they will negotiate exclusively with Conrad and not solicit any competing acquisition proposal or enter into any agreement with respect to a competing acquisition proposal. In addition, if prior to the end of the exclusivity period or within 180 days thereafter, any of the Swiftships parties accepts or enters into any agreement with respect to any competing acquisition proposal, the Swiftships parties must pay Conrad a fee of $1 million payable at the time the transaction contemplated by the competing acquisition proposal is consummated.

In connection with the letter of intent, Conrad has entered into a loan agreement pursuant to which it has agreed to lend on a secured basis up to $500,000 from time to time to Swiftships Shipbuilders, LLC prior to the execution of a definitive asset purchase agreement and up to an additional $500,000 thereafter, for purposes approved by Conrad. The loan is due on the earlier of September 30, 2002 or the closing of a definitive asset purchase agreement.

Swiftships designs, builds, overhauls and repairs aluminum crew/supply boats, aluminum patrol boats and other marine vessels at two shipyards in Morgan City, Louisiana and employs approximately 130 people. During their over 30-year history, Swiftships and its predecessors have designed and constructed over 530 vessels ranging in size from 30 feet to 225 feet in length for domestic and foreign, commercial and government customers.

Conrad President and CEO Kenneth G. "Jerry" Myers stated, "We believe Swiftships' aluminum crew/supply boats set the design and operational standards in the Gulf of Mexico against which others are measured. With Swiftships' experienced and dedicated workforce along with its designs and marketing expertise, Conrad will be able to significantly enhance and expand our products, services and customer base. Conrad will also gain entrance into the international commercial and government markets as Swiftships has successfully marketed and delivered products to over 75 countries over the past 30 years. The acquisition affords Conrad the opportunity for sustained growth in a different market segment than we currently operate. We are looking forward to working with the Swift companies to complete the acquisition process."

Conrad Industries, Inc., established in 1948 and headquartered in Morgan City, Louisiana designs, builds and overhauls tugboats, ferries, liftboats, barges, offshore support vessels and other steel and aluminum products for both the commercial and government markets. The company provides both repair and new construction services at its three shipyards located in southern Louisiana and Texas.

All statements in this press release other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions. These include the risks that a definitive agreement may not be executed and that conditions to closing the agreement may not be met, that Conrad may be unable to obtain financing on acceptable terms, that the acquisition if consummated may not produce the financial results Conrad anticipates, and the credit risk associated with the loan. Actual results may differ materially from those expected or projected. These and other risks are discussed in more detail in Conrad Industries, Inc.'s filings with the Securities and Exchange Commission. The Company undertakes no duty to update forward-looking statements.