Conrad Industries Reports Fourth Quarter 2002 Results and Announces Opening of New Facility.Business Editors MORGAN CITY Morgan City, city (1990 pop. 14,531), St. Mary parish, S La., a fishing port on the Atchafalaya River (connected to the Intracoastal Waterway); inc. 1860 as Brasher, renamed 1876. The city is headquarters for offshore petroleum drilling and has oil and gas wells. , La.--(BUSINESS WIRE)--Feb. 19, 2003 Conrad Industries, Inc. (Nasdaq:CNRD) reported a net loss of $499,000 and loss per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of $0.07 for the three months ended December December: see month. 31, 2002 compared to a net loss of $151,000 and loss per diluted share of $0.02 for the fourth quarter of 2001. For the twelve months ended December 31, 2002, the Company reported a net loss of $4,000 and earnings per diluted share were $0.00 before a cumulative effect of a change in accounting principle compared to net income of $1.0 million and earnings per diluted share of $0.14 for the same period of 2001. Effective January January: see month. 1, 2002, the Company adopted Statement of Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). No. 142, ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142"), "Goodwill and Other Intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. Assets," which resulted in a $4.5 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill, which was recorded as a cumulative effect of change in accounting principle for the six months ended June June: see month. 30, 2002. The recording of this non-cash charge for the impairment of goodwill resulted in a net loss of $4.5 million ($0.62 diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) for the twelve months ended December 31, 2002. Net income for the twelve months ended December 31, 2002 was impacted by the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $350,000 of deferred acquisition costs ($220,500 after tax or $0.03 per diluted share) as the result of the termination of the proposed Swiftships acquisition. Net income for the twelve months ended December 31, 2001 was affected by a non-recurring executive compensation expense of $2.6 million ($1.6 million after tax or $0.23 per diluted share) which resulted from agreements entered into by the Company with its former President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and former CFO See Chief Financial Officer. . Revenues for the three months ended December 31, 2002 were $10.6 million compared to $9.9 million for the fourth quarter of 2001. Revenues for the twelve months ended December 31, 2002 were $41.0 million compared to $46.9 million for the same period of the prior year. The Company's backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , excluding unexercised options, was $36.2 million at December 31, 2002, compared to $10.4 million at December 31, 2001. Gross profit was $457,000 (4.3% of revenue) for the three months ended December 31, 2002 compared to gross profit of $1.4 million (13.8% of revenue) for the fourth quarter of 2001. Gross profit was $5.4 million (13.1% of revenue) for the twelve months ended December 31, 2002, compared to gross profit of $9.9 million (21.1% of revenue) for the twelve months of 2001. Vessel construction segment revenue for the fourth quarter of 2002 was $8.5 million with a gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. of 2.3% compared to vessel construction revenue and gross profit margin in the fourth quarter of 2001 of $7.9 million and 16.7%, respectively. Vessel construction segment revenue decreased 8.3% and gross profit decreased $2.9 million for 2002 compared to 2001. Vessel construction production hours for 2002 decreased by 21.6% compared to 2001. The decrease in production hours is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to decreased offshore oil and gas activity. Kenneth G. "Jerry Jer·ry n. pl. Jer·ries Chiefly British Slang A German, especially a German soldier. [Alteration of German. " Myers Myers can refer to: People
 n),n the construction or making of a restoration. of the hull structures have made prior learning curve assumptions less achievable. The first vessel of the project has now been delivered, the second vessel will be delivered before the end of the first quarter and the final two vessels will be delivered before the end of the second quarter of 2003. "We continue to see strong bid activity in the vessel construction segment of our business. During the fourth quarter of 2002, the Company achieved a record backlog. In addition, we are currently in discussions and negotiations with various customers for new vessel construction projects and remain cautiously optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that some of these projects will be added to our backlog in the near future. The record backlog has enabled the Company to be selective in an extremely competitive environment." Repair segment revenue for the twelve months ended December 31, 2002 decreased 23.2% and gross profit decreased 53.4% as compared to repair segment revenue and gross profit in 2001. Repair segment revenue and gross profit for the fourth quarter of 2002 increased 1.6% and 316.1%, respectively, compared to the fourth quarter of 2001. The repair segment had a 28.5% and 11.9% decrease in production hours compared to the twelve and three months ended December 31, 2001, respectively. Mr. Myers added, "The repair segment continues to be difficult due to the continued decreased activity in the offshore oil and gas markets. There continues to be little to no visibility at this time into the repair market. However, we are hopeful that repair production hours for 2003 will improve to more historical levels. "We are pleased to announce that the development of the 52 acres of property in Amelia Amelia despite financial woes, remains faithful to Booth. [Br. Lit.: Amelia] See : Faithfulness Amelia takes interest in Paul. [Br. Lit. as a repair and conversion facility is now complete. The Company has moved its two largest drydocks to the facility and has begun work on its first deep draft vessel. The new facility allows the Company to handle vessels with deeper drafts than the Company has historically been able to service and therefore opens up a market niche from which the Company has historically been limited from participating. We have already received several inquiries relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the opening of this facility and are excited about the opportunities this investment provides Conrad." Conrad Industries, Inc., established in 1948 and headquartered in Morgan City, Louisiana Morgan City (previously known as Brashear) is a city in St. Mary Parish, Louisiana, United States. [1] [2] The population was 12,703 at the 2000 census. Morgan City is home to the Louisiana Shrimp and Petroleum Festival. 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 four shipyards located in southern Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and Texas.All statements in this press release other than statements of historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which are subject to a number of risks, uncertainties and assumptions. These include Conrad's reliance on cyclical industries Cyclical Industry A term describing an industry that is sensitive to the business cycle and price changes. Many cyclical industries produce durable goods such as raw materials and heavy equipment. , principal customers and government contracts, its ability to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... contracts on projects for which it has bid, and its ability to perform contracts at costs consistent with estimated costs used in bidding the contracts. 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.
Conrad Industries, Inc.
Selected Balance Sheet Information December 31, December 31,
(In thousands) 2002 2001
----------- -----------
Cash $ 6,427 $ 6,909
Working capital $ 9,447 $ 9,312
Property, plant & equipment, net $ 29,430 $ 25,486
Total assets $ 53,841 $ 52,574
Long term debt, including current
portion $ 13,223 $ 9,007
Shareholders' equity $ 32,215 $ 36,696
Conrad Industries, Inc. Summary
Results of Operations
(In thousands, except per share Three months Twelve months
amounts) ended ended
---------------- ----------------
December 31, December 31,
Statement of Operations Data: 2002 2001 2002 2001
------- ------- ------- -------
Revenue:
Vessel construction $ 8,548 $ 7,853 $30,814 $33,610
Repair and conversions 2,084 2,052 10,209 13,294
------- ------- ------- -------
Total revenue 10,632 9,905 41,023 46,904
------- ------- ------- -------
Cost of revenue:
Vessel construction 8,349 6,544 26,826 26,677
Repair and conversions 1,826 1,990 8,831 10,340
------- ------- ------- -------
Total cost of revenue 10,175 8,534 35,657 37,017
------- ------- ------- -------
Gross profit:
Vessel construction 199 1,309 3,988 6,933
Repair and conversions 258 62 1,378 2,954
------- ------- ------- -------
Total gross profit 457 1,371 5,366 9,887
S G & A expenses 1,198 1,480 4,815 5,077
Terminated acquisition costs (1) - - 350 -
Executive compensation expense - - - 2,613
------- ------- ------- -------
(Loss) income from operations (741) (109) 201 2,197
Interest Expense 21 49 221 193
Other (income) expenses, net (15) (37) (39) (144)
------- ------- ------- -------
(Loss) income before income taxes (747) (121) 19 2,148
(Benefit) provision for income
taxes (248) 30 23 1,115
------- ------- ------- -------
(Loss) income before cumulative
effect of change in accounting
principle (499) (151) (4) 1,033
Cumulative effect of change in
accounting principle (2) - - (4,500) -
------- ------- ------- -------
Net (loss) income $ (499) $ (151) $(4,504) $ 1,033
======= ======= ======= =======
Net income per common share:
Basic earnings (loss) per share:
Income (loss) before cumulative
effect of change in accounting
principle $ (0.07) $ (0.02) $ (0.00) $ 0.14
Cumulative effect of change in
accounting principle (2) $ - $ - (0.62) $ -
------- ------- ------- -------
Basic earnings (loss) per share $ (0.07) $ (0.02) $ (0.62) $ 0.14
======= ======= ======= =======
Diluted income (loss) per share:
Income (loss) before cumulative
effect of change in accounting
principle $ (0.07) $ (0.02) $ (0.00) $ 0.14
Cumulative effect of change in
accounting principle (2) $ - $ - (0.62) $ -
------- ------- ------- -------
Diluted earnings (loss) per share $ (0.07) $ (0.02) $ (0.62) $ 0.14
======= ======= ======= =======
Weighted average common shares
outstanding:
Basic 7,233 7,228 7,230 7,129
Diluted 7,233 7,228 7,230 7,149
EBITDA (3) $ (299) $ 484 $ 2,062 $ 6,070
EBITDA as a percent of revenue -2.8% 4.9% 5.0% 12.9%
Net cash (used by) provided by
operating activities $(3,427) $ 2,670 $ 613 $ 4,098
Operating data: Production labor
hours 124 123 471 623
Depreciation & Amortization:
Vessel construction $ 212 $ 202 $ 840 $ 814
Repair and conversions 143 141 608 551
Included in SG&A 87 250 413 961
------- ------- ------- -------
Total depreciation &
amortization $ 442 $ 593 $ 1,861 $ 2,326
======= ======= ======= =======
(1) Represents non-recurring expenses related to the terminated
proposed acquisition of Swiftships Shipbuilders, LLC and
Swiftships Technologies, LLC.
(2) The Company recorded a $4.5 million non-cash charge for the
impairment of goodwill resulting from the adoption of Statement of
Financial Accounting Standards Board No. 142, "Goodwill and Other
Intangible Assets."
(3) Represents income from operations before deduction of
depreciation, amortization and the non-cash executive compensation
expense. This is a non-GAAP supplemental financial measurement
used by the Company.
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