UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended October 1, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from ____ to ____
Commission File Number 1-5109
TODD SHIPYARDS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 91-1506719
(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
1801- 16th AVENUE SW, SEATTLE, WASHINGTON 98134-1089
(Street address of principal executive offices - Zip Code)
Registrant's telephone number: (206) 623-1635
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. [X]
There were 9,706,480 shares of the corporation's $.01 par value common stock
outstanding at October 1, 2000.
PART I - FINANCIAL INFORMATION
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Statements contained in this Report which are not historical facts or
information are "forward-looking statements." Words such as "believe,"
"expect," "intend," "will," "should," and other expressions that indicate
future events and trends identify such forward-looking statements. These
forward-looking statements involve risks and uncertainties which could cause
the outcome to be materially different than stated. Such risks and
uncertainties include both general economic risks and uncertainties and
matters discussed in the Company's annual report on Form 10-K which relate
directly to the Company's operations and properties. The Company cautions
that any forward-looking statement reflects only the belief of the Company or
its management at the time the statement was made. Although the Company
believes such forward-looking statements are based upon reasonable
assumptions, such assumptions may ultimately prove to be inaccurate or
incomplete. The Company undertakes no obligation to update any forward-
looking statement to reflect events or circumstances after the date on which
the statement was made.
ITEM 1. FINANCIAL STATEMENTS
TODD SHIPYARDS CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(in thousands of dollars, except per share data)
Quarter Ended Six Months Ended
10/01/00 10/03/99 10/01/00 10/03/99
Revenues $28,681 $33,136 $62,082 $62,883
Operating expenses:
Cost of revenue 19,137 25,174 42,424 47,154
Administrative and
manufacturing overhead
expense 7,330 6,687 15,086 14,188
Contract reserve (62) (785) (109) (1,778)
Total operating expenses 26,405 31,076 57,401 59,564
Operating income 2,276 2,060 4,681 3,319
Investment and other income 970 658 1,445 1,110
Gain (loss) on sale of available for
sale security (4) - (4) 126
Income before income taxes 3,242 2,718 6,122 4,555
Income tax expense 640 40 1,200 80
Net income $2,602 $ 2,678 $ 4,922 $4,475
Net income per Common Share:
Basic $ 0.27 $ 0.28 $ 0.51 $ 0.46
Diluted $ 0.27 $ 0.27 $ 0.50 $ 0.45
Weighted average shares outstanding:
(thousands)
Basic 9,711 9,727 9,706 9,811
Diluted 9,797 9,810 9,796 9,894
Retained earnings at
beginning of period $53,038 $44,383 $50,718 $42,586
Income for the period 2,602 2,678 4,922 4,475
Retained earnings at
end of period $55,640 $47,061 $55,640 $47,061
The accompanying notes are an integral part of this statement.
TODD SHIPYARDS CORPORATION
CONSOLIDATED BALANCE SHEETS
Periods Ended October 1, 2000 and April 2, 2000
(in thousands of dollars)
10/01/00 04/02/00
ASSETS: (Unaudited)(Audited)
Cash and cash equivalents $ 6,712 $ 5,513
Securities available for sale 49,723 47,105
Accounts receivable, less allowance for
losses of $100 at October 1, 2000
and April 2, 2000:
U.S. Government 12,207 8,149
Other 4,469 4,850
Costs and estimated profits in excess
of billings on incomplete contracts 5,391 12,536
Inventory 1,747 1,853
Other current assets 569 625
Total current assets 80,818 80,631
Property, plant and equipment, net 16,889 17,356
Restricted cash 2,543 2,543
Deferred pension asset 28,757 27,482
Other long term assets 4,162 4,135
Total assets $133,169 $132,147
LIABILITIES:
Accounts payable and accruals $ 3,348 $ 7,227
Accrued payroll and related liabilities 4,139 4,852
Accrual for loss on contract - 109
Billings in excess of costs and estimated
profits on incomplete contracts 2,505 1,840
Taxes other than income taxes 857 1,319
Income taxes payable 1,525 1,730
Total current liabilities 12,374 17,077
Environmental and other reserves 19,130 19,303
Accrued post retirement health benefits 19,282 19,582
Total liabilities 50,786 55,962
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value - authorized
19,500,000 shares, issued 11,956,033 shares
at October 1, 2000 and April 2, 2000,
and outstanding 9,706,480 at October 1, 2000
and 9,701,480 at April 2, 2000 120 120
Additional paid-in capital 38,166 38,145
Retained earnings 55,640 50,718
Accumulated other comprehensive income (loss) (7) (1,291)
Treasury stock (11,132) (11,114)
Notes receivable from officers for common stock (404) (393)
Total stockholders' equity 82,383 76,185
Total liabilities and stockholders' equity $133,169 $132,147
The accompanying notes are an integral part of this statement.
TODD SHIPYARDS CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Month Periods Ended October 1, 2000 and October 3, 1999
(in thousands of dollars)
Period Ended
10/01/00 10/03/99
OPERATING ACTIVITIES:
Net income $ 4,922 $ 4,475
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 1,589 1,412
Environmental reserves (173) (294)
Deferred pension asset (1,275) (1,200)
Post retirement health benefits (300) (300)
Decrease (increase) in operating assets:
Costs and estimated profits in excess of
billings on incomplete contracts 7,145 (7,620)
Inventory 106 37
Accounts receivable (3,677) 23,482
Other (net) 29 288
(Decrease) increase in operating liabilities:
Accounts payable and accruals (3,879) 690
Contract reserves (109) (1,777)
Accrued payroll and related liabilities (713) (97)
Billings in excess of costs and estimated
profits on incomplete contracts 665 (2,334)
Income taxes payable (205) (2,360)
Other (net) (462) (492)
Net cash provided by operating activities 3,663 13,910
INVESTING ACTIVITIES:
Purchases of marketable securities (11,850) (26,973)
Sales of marketable securities 486 3,978
Maturities of marketable securities 10,000 2,000
Capital expenditures (1,122) (286)
Other 19 67
Net cash used in investing activities (2,467) (21,214)
FINANCING ACTIVITIES:
Restricted cash - 2,647
Purchase of treasury stock (117) (1,916)
Proceeds from exercise of stock options 120 -
Net cash provided by financing activities 3 731
Net increase (decrease) in cash and cash
equivalents 1,199 (6,573)
Cash and cash equivalents at beginning of period 5,513 12,332
Cash and cash equivalents at end of period 6,712 5,759
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest - 15
Income taxes 1,400 2,440
Noncash investing and financing activities:
Reissue of treasury stock in exchange for
notes receivable $ - $ 383
The accompanying notes are an integral part of this statement.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Todd Shipyards Corporation (the "Company") filed its Consolidated Financial
Statements for the fiscal year ended April 2, 2000 with the Securities and
Exchange Commission on Form 10-K. That report should be read in connection
with this Form 10-Q.
1. BASIS OF PRESENTATION
The Company's policy is to end its fiscal year on the Sunday nearest March 31.
In accordance with this policy, the Company's fiscal year 2000 ended on April
2, 2000, and included 53 weeks. Accordingly, the Company's quarter ended
10/3/99 contained 14 weeks.
The accompanying Consolidated Financial Statements are unaudited but in the
opinion of management reflect all adjustments necessary for a fair
presentation of the Company's financial position and results of operations in
accordance with generally accepted accounting principles applied on a
consistent basis.
2. RECENT ACCOUNTING PRONOUCEMENTS
In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44, Accounting for Certain Transactions Involving Stock Compensation (FIN
44), that clarifies guidance for certain issues related to the application of
APB Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). The
adoption of FIN 44 by the Company on July 1, 2000 had no impact on the
Company's operating or financial position. The Company does not expect that
FIN 44 will impact the way it accounts for its equity instruments in the
future.
3. CONTRACTS
Combatant Maintenance Team ("CMT") Contract
During the first quarter of fiscal year 2001, the Company was awarded on a
sole source basis, a five year, cost-type contract for the repair and
maintenance of six surface combatant class vessels (frigates and destroyers)
stationed in the Puget Sound area by the Department of the Navy. The Navy has
not released a notional value of the maintenance work, though the Company
believes that if all options are exercised, the value may be approximately $60
to $75 million over the five year period. Work on this contract, which will
be performed primarily in the Company's Seattle shipyard, began late in the
Company's first quarter.
Auxiliary Oiler Explosive ("AOE") Contract
In May 1996, the Company was awarded a cost-type contract for phased
maintenance repairs to four Navy AOE class supply ships during a five year
availability schedule. The contract, which has been performed primarily at
the Company's Seattle shipyard, had an original, notional value of $79
million. Since the inception of this contract, the Navy has exercised work
options, which have increased the contract value to approximately $104
million.
Planned Incremental Availability ("PIA")
In January 1999, the Company was awarded a five year cost-type contract for
phased maintenance on three CVN class aircraft carriers by the Department of
the Navy. The notional value for this five year contract is approximately
$100 million. Work on this contract is currently being performed at the Puget
Sound Naval Shipyard, located in Bremerton, Washington.
Preservation Contract
During the second quarter of fiscal year 2000, the Company was awarded a ferry
overhaul contract with an estimated price of approximately $29 million. The
contract calls for the overhaul of the Washington State Ferry, MV Yakima.
Since the contract was awarded, its scope of work has been reduced slightly
and its value is currently estimated to be approximately $28 million.
Work on the MV Yakima commenced during the third quarter of fiscal year 2000
and is approximately 82% complete at October 1, 2000. The project, which will
eventually replace or renovate the majority of the vessel's interior
structures, including the replacement of steel plating, passenger area
furniture, galley, fixtures, windows, and the removal of hazardous materials,
is expected to be completed during the fourth quarter of fiscal year 2001.
The Company's current estimates to complete the project are within the
established production budgets and the current completion schedule is
projected to be earlier than contractually required. The Company may be
awarded financial incentives if certain contractual delivery dates are met,
however the Company has not recognized these incentives in its current
contract revenue.
Power Barge Contract
In the second quarter of fiscal year 1999, the Company commenced work on a new
construction contract with an estimated price of approximately $20.0 million.
During the first quarter of fiscal year 2000, the Power Barge was delivered to
its owner. To maintain production schedule deadlines and perform customer
directed change orders, the Company experienced significant contract cost
growth in both labor hours and material. However, agreement was not reached
between the Company and the owner regarding the potential increase in the
contract price, if any, to compensate for all of these changes.
Subsequent to delivery, the Company and the vessel owner have negotiated
several change orders, however since agreement cannot be reached on the
remaining un-negotiated change orders, in accordance with the terms of the
contract, the Company and the vessel owner are settling the remaining change
orders through a formal arbitration process. Arbitration hearings, which
began during the fourth quarter of fiscal year 2000, concluded during the
second quarter of fiscal year 2001. With the completion of the formal
hearings, the Company anticipates a ruling sometime during the fourth quarter
of its fiscal year 2001. The Company's claim excluding legal fees is
approximately $3.8 million.
Since the Company cannot reasonably predict the outcome of the arbitration
with its customer, it has not recognized any revenue resulting from possible
recoveries in its current contract revenue. In addition, the Company cannot
reasonably estimate the costs associated with pursuing full recovery from the
vessel owner at this time. Therefore, these costs will continue to be
recognized as they are incurred in future accounting periods.
4. INCOME TAXES
The Company recognized $0.6 million in income tax expense during the quarter
ended October 1, 2000, after applying available business tax credits. During
the first six month period then ended, the Company recognized $1.2 million in
income tax expense. During the same periods last fiscal year, the Company
recognized $40,000 and $80,000, respectively.
5. ENVIRONMENTAL MATTERS
As discussed in the Company's Form 10-K for the fiscal year ended April 2,
2000, the Company faces significant potential liabilities in connection with
the alleged presence of hazardous waste materials at certain of its closed
shipyards, at its Seattle shipyard and at several sites used by the Company
for disposal of alleged hazardous waste. The Company has been named as a
defendant in civil actions by parties alleging damages from past exposure to
toxic substances at Company facilities.
Harbor Island Site
The Company and several other parties have been named as potential responsible
parties by the Environmental Protection Agency ("EPA") pursuant to the
Comprehensive Environmental, Response, Compensation, and Liability Act in
connection with the documented release of hazardous substances, pollutants,
and contaminants at the Harbor Island Superfund Site upon which the Seattle
Shipyard is located.
Other Environmental Matters
The Company is also currently involved, together with other companies in some
cases, in other Superfund and Non-Superfund remediation sites and
environmental legal issues. In certain instances, the Company's liability and
proportionate share of costs have not been determined due to uncertainties as
to the nature and extent of site conditions and the Company's involvement.
Based on the Company's previous experience, its allocated share of multi-
participant remediation sites has often been minimal, in certain instances
less than 1 percent.
The actual costs relating to environmental remediation and settlements will
depend upon numerous factors, including the number of parties found liable at
each environmental site, the method of remediation, outcome of negotiations
with regulatory authorities, outcome of litigation, technological developments
and changes in environmental laws and regulations.
Reserves
The Company's financial statements as of October 1, 2000 reflect aggregate
reserves for environmental matters of $19.1 million. The Company is
negotiating with its insurance carriers and certain prior landowners and
operators for past and future remediation costs. The Company has recorded a
non-current asset of $2.4 million to reflect a contractual arrangement with an
insurance company to share costs for certain environmental matters. No
assurance can be given that the Company's reserves are adequate to cover all
potential environmental costs the Company could incur.
6. COMPREHENSIVE INCOME
Comprehensive income was $3.4 million for the quarter ended October 1, 2000,
which consisted of net income of $2.6 million and net unrealized gains on
marketable securities of $0.8 million. For the six month period then ended,
the Company reported comprehensive income of $6.2 million, which consisted of
net income of $4.9 million and net unrealized gains on marketable securities
of $1.3 million.
During the same periods last fiscal year, the Company reported comprehensive
income of $2.8 million and $5.0 million, respectively. Comprehensive income
during these periods consisted of net income of $2.7 million and $4.5 million,
respectively, and net unrealized gains on marketable securities of $0.1
million and $0.5 million, respectively.
7. TREASURY STOCK
During the quarter ended October 1, 2000, an aggregate of 20,000 shares of
treasury stock were reissued pursuant to the exercise of incentive stock
options held by one of the officers of the Company. During the same period,
the Company repurchased an aggregate of 15,000 shares of its Common Stock, for
a consideration of $0.1 million, bringing the number of shares held as
treasury stock to 2,249,553.
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Notes to Consolidated Financial Statements are an integral part of
Management's Discussion and Analysis of Financial Condition and Results of
Operations and should be read in conjunction herewith.
OPERATING RESULTS
All comparisons within the following discussion are with the corresponding
periods in the previous year, unless otherwise stated.
Revenue - The Company's second quarter revenue of $28.7 million reflects a
decrease of $4.4 million (13%) from last year's level of $33.1 million. During
the quarter, the Company's revenue from commercial and government repair and
overhaul activities decreased $3.9 million, while revenues from new
construction activities decreased $0.5 million from the prior fiscal year.
This decrease is primarily attributable to planned breaks in government repair
and overhaul availability schedules.
Revenue for the six month period ending October 1, 2000 was $62.1 million,
which reflects a decrease of $0.8 million (1%) from last year's level of $62.9
million. During the first six months of fiscal year 2001, the Company's
revenue from commercial and government repair and overhaul activities
increased $2.0 million, while revenues from new construction activities
decreased $2.8 million from the comparable prior year period.
Cost of Revenue - Cost of revenue during the second quarter of fiscal year
2001 was $19.1 million, or 67% of revenue. Cost of revenue during the second
quarter of fiscal year 2000 was $25.2 million, or 76% of revenue. Cost of
revenue as a percentage of total revenue during the second quarter of fiscal
year 2001 reflects improved margins on commercial and government repair and
overhaul activities. The higher cost of revenue percentage reported during
the second quarter of fiscal year 2000 reflects the lower margins experienced
in completing the Power Barge contract, as well as the Company's inability to
recognize revenue on un-negotiated change orders.
Cost of revenue during the first six months of fiscal year 2001 was $42.4
million, or 68% of revenue. Cost of revenue during the first six months of
fiscal year 2000 was $47.2 million, or 75% of revenue. This reduction also
reflects the improved margins on repair and overhaul activities and lower
margins experienced last fiscal year in completing the Power Barge contract.
Administrative and manufacturing overhead expense - Overhead costs for
administrative and manufacturing activities were $7.3 million, or 26% of
revenue, for the second quarter of fiscal year 2001 and $6.7 million, or 20%
of revenue, for the second quarter of fiscal 2000. The increase in
administrative and manufacturing overhead expense of $0.6 million (9%) during
the second quarter was primarily attributable to the timing of planned
maintenance projects and environmental related legal expenses, which have
caused administrative and manufacturing overhead expenses to be a higher
percentage of revenue.
Administrative and manufacturing overhead costs for the first six months of
fiscal year 2001 were $15.1 million, or 24% of revenue. During the same
period last fiscal year, administrative and manufacturing overhead costs were
$14.2 million, or 23% of revenue. The increase in administrative and
manufacturing overhead expense of $0.9 million (6%) was primarily attributable
to the timing of planned maintenance projects and environmental related legal
expenses during the second quarter, which resulted in higher administrative
and manufacturing overhead expenses as a percentage of revenue. The Company
believes that during the second half of fiscal year 2001, lower planned
spending levels should help mitigate administrative and manufacturing overhead
increases experienced during the first half of the fiscal year.
Contract reserve activity - During the second quarter of fiscal year 2001 the
Company utilized $62,000 of previously recorded contract and warranty loss
reserves associated with the Power Barge contract. During the second quarter
of fiscal year 2000, the Company utilized $0.8 million in previously recorded
Jumbo Mark II and Power Barge contract and warranty loss reserves.
During the first six months of fiscal year 2001 the Company utilized $0.1
million of previously recorded contract and warranty loss reserves associated
with the Power Barge contracts. During the first six months of fiscal year
2000, the Company utilized $1.8 million in previously recorded contract and
warranty loss reserves associated with both the Jumbo Mark II and Power Barge
contracts.
Investment and other income - Investment and other income for the second
quarter of fiscal year 2001 was $1.0 million. During the first six months of
fiscal year 2001 the Company recorded $1.4 million in investment and other
income. Investment and other income for fiscal year 2000 second quarter and
for the first six months were $0.7 million and $1.1 million, respectively.
Gain on sale of available-for-sale security - During the second quarter and
first six months of fiscal year 2001, the Company reported a loss from the
sale of an available-for-sale security of $4,000. During the second quarter
and first six months of fiscal year 2000, the Company reported a gain from the
sale of an available-for-sale security of $0 and $0.1 million, respectively.
Income taxes - The Company recognized $0.6 million in income tax expense
during the quarter ended October 1, 2000, after applying available business
tax credits. During the first six month period then ended, the Company
recognized $1.2 million in income tax expense. During the same periods last
fiscal year, the Company recognized $40,000 and $80,000, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Based upon its current cash position described below and anticipated fiscal
year 2001 cash flow, the Company believes it has sufficient liquidity to fund
operations for this fiscal year. Accordingly, shipyard capital expenditures
are expected to be financed out of working capital. A change in the
composition or timing of projected work could cause capital expenditures and
repair and maintenance expenditures to increase.
Working Capital
Working capital for the period ending October 1, 2000 was $68.4 million, which
represents an increase of $4.9 million (8%) from the working capital reported
at the end of fiscal year 2000.
Unbilled Receivables
As of October 1, 2000 unbilled items on completed contracts totaled $1.4
million compared with $1.0 million at the end of the second quarter of fiscal
year 2000 and $1.2 million at the beginning of fiscal year 2001.
Capital Resources
Capital expenditures for the second quarter of fiscal 2001 were $1.0 million
compared to $0.2 million in the second quarter of fiscal year 2000. Capital
expenditures for the first six months of fiscal year 2001 were $1.1 million
compared to $0.3 million during the first six months of fiscal year 2000.
The increase in capital expenditures during the second quarter and first six
months of fiscal year 2001 when compared to fiscal year 2000 is due to
fluctuations in timing of projects. Fiscal year 2001 capital expenditures are
expected to increase moderately over fiscal year 2000 expenditure levels,
which were approximately $1.6 million.
Stock Repurchase
During the quarter and six month period ended October 1, 2000, the Company
repurchased 15,000 shares of its Common Stock. During the second quarter of
fiscal year 2000, the Company repurchased an aggregate of 278,700 shares of
its Common Stock. During the first six months of fiscal year 2000, the
Company repurchased 293,700 shares of its Common Stock. The number of shares
held as treasury stock as of October 1, 2000, is 2,249,553.
RECENT ACCOUNTING PRONOUCEMENTS
In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44, Accounting for Certain Transactions Involving Stock Compensation (FIN
44), that clarifies guidance for certain issues related to the application of
APB Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). The
adoption of FIN 44 by the Company on October 1, 2000 had no impact on the
Company's operating or financial position. The Company does not expect that
FIN 44 will impact the way it accounts for its equity instruments in the
future.
ENVIRONMENTAL MATTERS
On Going Operations - Recurring costs associated with the Company's
environmental compliance program are not material and are expensed as
incurred. Capital expenditures in connection with environmental compliance
are not material to the Company's financial statements.
Past Activities - The Company faces significant potential liabilities in
connection with the alleged presence of hazardous waste materials at some of
its closed shipyards, at its Harbor Island shipyard, and at several sites used
by the Company to dispose of alleged hazardous waste. The Company has been
named as defendant in civil actions by parties alleging damages from past
exposure to toxic substances at Company facilities. The nature of
environmental investigation and clean up activities makes it difficult to
determine the timing and amount of any estimated future cash flows that may be
required for remedial efforts. The Company reviews these matters and accrues
for costs associated with remediation of environmental pollution when it
becomes probable that a liability has been incurred and when the amount of the
Company's liability (or the Company's proportionate share of the amount) can
be reasonably estimated.
Harbor Island Site
As discussed further in the Company's Form 10-K for the year ending April 2,
2000, the Company and several other parties have been named as potential
responsible parties by the Environmental Protection Agency ("EPA") pursuant to
the Comprehensive Environmental, Response, Compensation, and Liability Act in
connection with the documented release of hazardous substances, pollutants,
and contaminants at the Harbor Island Superfund Site upon which the Seattle
Shipyard is located.
The Company's financial statements as of October 1, 2000 reflect aggregate
reserves for environmental matters of $19.1 million. The Company is
negotiating with its insurance carriers and certain prior landowners and
operators for past and future remediation costs. The Company has recorded a
non-current asset of $2.4 million to reflect a contractual arrangement with an
insurance company to share costs for certain environmental matters. No
assurance can be given that the Company's reserves are adequate to cover all
potential environmental costs the Company could incur.
Actual costs to address environmental matters in which the Company is involved
will depend on numerous factors, including the number of parties found liable
at each environmental site, the method of remediation, outcome of negotiations
with regulatory authorities, outcome of litigation, technological
developments, and changes in environmental laws and regulations.
BACKLOG
At October 1, 2000 the Company's firm shipyard backlog consists of
approximately $20 million of repair and overhaul work. The Company's repair
and overhaul work generally is of short duration with little advance notice.
The Company's backlog at October 3, 1999 was approximately $54 million.
Backlog at October 3, 1999 included $29 million for the renovation of the MV
Yakima which had been awarded during the second quarter of fiscal year 2000.
FUTURE SHIPYARD OPERATIONS
The Company's future profitability depends largely on the ability of the
shipyard to maintain an adequate volume of repair and overhaul business. The
Company competes with other northwest and west coast shipyards, some of which
have more advantageous cost structures. The Company's competitors include
non-union shipyards, shipyards with excess capacity and government subsidized
facilities.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders (the "Meeting") was held on
September 11, 2000 in Seattle, Washington.
At the meeting the stockholders elected seven directors, each of whom will
serve until the next Annual Meeting of Shareholders or until his respective
successor shall have been elected and qualified or until his earlier
resignation or removal. The Board of Directors elected at the Meeting and the
votes cast in favor of their election (with the votes cast in favor of their
election out of a total of 9,721,480 entitled to vote) are as follows: Brent
D. Baird (7,807,780); Steven A. Clifford (7,804,783); Patrick W.E. Hodgson
(7,807,880); Joseph D. Lehrer (7,804,883); Philip N. Robinson (7,807,783);
John D. Weil (7,807,543); and Stephen G. Welch (7,807,377).
The shareholders ratified the appointment of Ernst & Young LLP as the
Company's independent public accountants by a vote of 8,455,441 to 8,630 with
9,099 abstaining.
The shareholders approved the amendment to the Todd Incentive Stock
Compensation Plan to authorize 500,000 additional shares of Todd Common Stock
for plan use by a vote of 3,918,306 to 912,654 with 325,936 abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
The Company has filed the following reports on Form 8-K during the second
quarter of its fiscal year ended October 1, 2000:
Form 8-K dated July 31, 2000 submitting the press release issued by the
Company regarding the Company's award of the Combatant Maintenance Team
("CMT") contract by the U.S. Navy.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934 the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
TODD SHIPYARDS CORPORATION
Registrant
By:_______________________________
Scott H. Wiscomb
Chief Financial Officer and Treasurer
October 31, 2000