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AVONDALE INDUSTRIES REPORTS 1991 OPERATING RESULTS

 AVONDALE INDUSTRIES REPORTS 1991 OPERATING RESULTS
 NEW ORLEANS, April 15 /PRNewswire/ -- Avondale Industries, Inc. (NASDAQ-NMS: AVDL), today reported a net loss for the year ended Dec. 31, 1991, of $140.9 million or $9.76 per share, compared with a net loss in 1990 of $25.8 million, or $1.71 per share.
 Net sales for 1991 totaled $776.7 million compared with $752.2 million in 1990.
 Last month, the company announced that it expected to report a significant loss for 1991, primarily because of revised estimates to complete two shipbuilding contracts with the U.S. Navy that are scheduled for final delivery in 1994 and 1995. Avondale said that in the fourth quarter of 1991 it recognized $52.5 million in increased costs related to those contracts, which have an aggregate contract price in excess of $1.3 billion. The company also incurred charges of $57.6 million to reflect the writedown of the value of goodwill. For the fourth quarter, the company reported a net loss of $116.0 million, or $8.03 per share, compared with a net loss of $6.3 million, or $0.44 per share, a year earlier. Net sales for the fourth quarter totaled $176.0 million vs. $197.5 million in the fourth period of 1990.
 Avondale has filed with the Navy requests for equitable adjustments ("REAs") of the two contracts, which cover seven TAO-187 and three LSD-CV class vessels. The year-end charge related to those contracts is net of a substantial amount that is the company's minimum estimate of the probable recovery from the U.S. Navy as a result of the REAs. The charge is also net of the anticipated impact on the two contracts of substantial additional cost reduction actions that Avondale expects to implement in the future. Pending any permanent relief through the REAs, Avondale has sought and received the U.S. Navy's approval of the release of earned retentions on certain completed contracts and a reduction of the level of retentions on certain contracts in progress. The release of those retentions should eliminate Avondale's projected cash shortage through at least the first quarter of 1993.
 The decision to write down the value of goodwill was due to the large reported losses and the reductions in and uncertainties related to future levels of defense spending.
 The net loss reported for 1991 has placed the company in non- compliance with several of its principal debt agreements, including two revolving credit facilities aggregating $90 million, of which $82 million is currently used. The lenders under those credit facilities have declined to permit Avondale to make additional draws, and Avondale is currently renegotiating the terms of those credit agreements to extend the credit facilities through November 1993, reduce the amounts available and secure the facility with substantially all of the company's assets. The company is also seeking a waiver, through at least March 31, 1993, of non-compliance with certain of the terms of its $7.5 million of senior notes. Avondale's viability is materially dependent in the short-term on the successful renegotiation of its senior debt agreements, and in the long-term on the successful resolution of its REAs.
 Albert L. Bossier Jr., chairman and chief executive officer, said: "Avondale is continuing to operate within an extremely difficult environment. The unprecedented downsizing of the nation's military force has had a pervasive effect on all companies associated with the various shipbuilding programs of the U.S. Navy. In addition, the persistent economic recession has presented a very frustrating backdrop to our efforts to diversify by exploiting the company's shipbuilding capacity and proven expertise in modular construction techniques.
 "The REAs we are pursuing with the Navy are intended to seek reimbursement for the portion of our cost overruns resulting from disruption of work caused by contract delays and changes initiated by the Navy. Funding those overruns has been difficult for the company, but we are confident in the validity of our claims, and we expect ultimately to be reimbursed for a substantial portion of those overruns.
 "We are disappointed with the report of another loss for the year. That performance does not properly reflect the hard work and commitment within the entire Avondale organization to respond to the changes in our business. The dedication of our employees encourages us about the company's long-term potential, but we have been unable to avoid a serious strain on our resources over the near term. Some of the resulting decisions have been difficult to make, but we are firm in our intent to lead the company successfully through this challenging period."
 Avondale Industries, Inc., headquartered in metro New Orleans, is one of the nation's leading marine fabricators. In addition to its shipbuilding operations, the company specializes in boat construction and is a major contractor for commercial and Navy ships. Its is also involved in the modular construction of plants and components for a variety of land-based industries.
 AVONDALE INDUSTRIES, INC.
 (In thousands of dollars except per share amounts)
 Qtr. ended 12 mos. ended
 12/31/91 12/31/90 12/31/91 12/31/90
 Revenues $176,005 $197,487 $776,725 $752,152
 Income (loss) before
 ESOP contributions
 & income taxes $(112,260) $ 2,709 $(130,778) $( 9,833)
 Net loss $(115,960) $ (6,341) $(140,878) $(25,833)
 Loss per share of
 common stock $ (8.03) $ (0.44) $ (9.76) $ (1.71)
 Cash dividend per
 share of common
 stock --- $ .23 --- $ .92
 -0- 4/15/92
 /CONTACT: Thomas M. Kitchen of Avondale Industries, 504-436-5237/
 (AVDL) CO: Avondale Industries, Inc. ST: Louisiana IN: MAR SU: ERN


BR-CF -- AT004 -- 8489 04/15/92 08:30 EDT
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Date:Apr 15, 1992
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