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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 period ended June 30, 2001
OR
[ ] 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 000-24263
CONRAD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-1416999
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1501 Front Street
P.O. Box 790
Morgan City, Louisiana 70381
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (985) 384-3060
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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. Yes [X] No [_]
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
As of August 10, 2001, 7,071,056 shares of the registrant's Common Stock
were outstanding.
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FORM 10-Q
CONRAD INDUSTRIES, INC. AND SUBSIDIARIES
Table of Contents
Page
----
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets June 30, 2001 and December 31, 2000...... 3
Consolidated Statements of Operations Three and Six Months Ended June
30, 2001 and 2000................................................... 4
Consolidated Statements of Cash Flows Six Months Ended June 30, 2001
and 2000............................................................ 5
Notes to the Consolidated Financial Statements....................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk...... 18
Part II. Other Information
Item 1. Legal Proceedings............................................... 18
Item 4. Submissions of Matters to a Vote of Security Holders............ 18
Item 6. Exhibits and Reports on Form 8-K................................ 19
Signature................................................................. 20
FORWARD-LOOKING-STATEMENTS
This Form 10-Q includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements contained herein other than statements of
historical fact are forward-looking statements. When used in this Form 10-Q,
the words "anticipate", "believe", "estimate" and "expect" and similar
expressions are intended to identify forward-looking statements. Such
statements reflect the Company's current views with respect to future events
and are subject to certain risks, uncertainties and assumptions, including the
Company's reliance on cyclical industries, the Company's reliance on principal
customers and government contracts, the Company's ability to perform contracts
at costs consistent with estimated costs utilized in bidding for the projects
covered by such contracts, variations in quarterly revenues and earnings
resulting from the percentage of completion accounting method, the possible
termination of contracts included in the Company's backlog at the option of
customers, operating risks, competition for marine vessel contracts, the
Company's ability to retain key management personnel and to continue to attract
and retain skilled workers, state and federal regulations, the availability and
cost of capital, and general industry and economic conditions. These and other
risks and assumptions are discussed in more detail in the Company's Form 10-K.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, believed, estimated or expected. The Company does not intend
to update these forward-looking statements. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable,
no assurance can be given that such expectations will prove correct.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONRAD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
June
30, December 31,
2001 2000
------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.............................. $ 1,311 $ 3,513
Accounts receivable, net............................... 3,875 1,622
Costs and estimated earnings in excess of billings on
uncompleted contracts................................. 5,415 4,663
Inventories............................................ 207 240
Other current assets................................... 1,675 1,801
------- -------
Total current assets................................. 12,483 11,839
PROPERTY, PLANT AND EQUIPMENT, net....................... 23,874 22,675
COST IN EXCESS OF NET ASSETS ACQUIRED.................... 12,995 13,388
OTHER ASSETS............................................. 400 62
------- -------
TOTAL ASSETS............................................. $49,752 $47,964
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable....................................... $ 2,263 $ 1,390
Accrued employee costs................................. 1,044 504
Accrued expenses....................................... 733 1,441
Current maturities of long-term debt................... 4,008 2,508
Billings in excess of costs and estimated earnings on
uncompleted contracts................................. 787 1,889
------- -------
Total current liabilities............................ 8,835 7,732
LONG-TERM DEBT, less current maturities.................. 1,044 2,298
DEFERRED INCOME TAXES.................................... 3,261 3,249
------- -------
Total liabilities.................................... 13,140 13,279
------- -------
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDERS' EQUITY:
Common stock, $0.01 par value, 20,000,000 shares
authorized, 7,091,856 shares issued in 2001 and 2000.. 71 71
Additional paid-in capital............................. 27,868 27,868
Treasury stock at cost, 20,800 shares in 2001 and
2000.................................................. (84) (84)
Retained earnings...................................... 8,757 6,830
------- -------
Total shareholders' equity........................... 36,612 34,685
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............... $49,752 $47,964
======= =======
See notes to unaudited consolidated financial statements.
3
CONRAD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
--------------- ----------------
2001 2000 2001 2000
------- ------ ------- -------
REVENUE.................................... $12,173 $8,611 $24,058 $18,486
COST OF REVENUE............................ 9,245 6,329 18,361 13,679
------- ------ ------- -------
GROSS PROFIT............................... 2,928 2,282 5,697 4,807
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.................................. 1,185 1,206 2,350 2,345
------- ------ ------- -------
INCOME FROM OPERATIONS..................... 1,743 1,076 3,347 2,462
INTEREST EXPENSE........................... (66) (136) (83) (284)
OTHER INCOME, NET.......................... 54 87 83 187
------- ------ ------- -------
INCOME BEFORE INCOME TAXES................. 1,731 1,027 3,347 2,365
PROVISION FOR INCOME TAXES................. 755 451 1,420 1,007
------- ------ ------- -------
NET INCOME................................. $ 976 $ 576 $ 1,927 $ 1,358
======= ====== ======= =======
Net income per common share:
Basic.................................... $ 0.14 $ 0.08 $ 0.27 $ 0.19
======= ====== ======= =======
Diluted.................................. $ 0.14 $ 0.08 $ 0.27 $ 0.19
======= ====== ======= =======
Weighted average common shares outstanding:
Basic.................................... 7,071 7,061 7,071 7,069
======= ====== ======= =======
Diluted.................................. 7,115 7,061 7,107 7,069
======= ====== ======= =======
See notes to unaudited consolidated financial statements.
4
CONRAD INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months
Ended June 30,
2001
----------------
2001 2000
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................... $ 1,927 $ 1,358
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation and amortization............................... 1,138 1,103
Deferred income tax expense................................. 12 117
Changes in assets and liabilities:
Accounts receivable........................................ (2,253) (1,311)
Net change in billings related to cost and estimated
earnings on uncompleted contracts......................... (1,854) 1,551
Inventory and other assets................................. (193) (210)
Accounts payable and accrued expenses...................... 705 1,852
------- -------
Net cash (used in) provided by operating activities....... (518) 4,460
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for plant and equipment................. (1,930) (1,978)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments of debt................................. (1,254) (1,254)
Proceeds from line-of-credit................................. 1,500 --
Purchase of treasury stock................................... -- (84)
------- -------
Net cash provided by (used in) financing activities....... 246 (1,338)
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS.......... (2,202) 1,144
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD................ 3,513 4,252
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD...................... $ 1,311 $ 5,396
======= =======
SUPPLEMENTAL DISCLOSURES CASH FLOW INFORMATION:
Interest paid, net of capitalized interest................... $ 83 $ 284
======= =======
Taxes paid................................................... $ 1,850 $ 1,060
======= =======
See notes to unaudited consolidated financial statements.
5
CONRAD INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements include the
accounts of Conrad Industries, Inc. and its wholly-owned subsidiaries (the
"Company") which are primarily engaged in the construction, conversion and
repair of a variety of marine vessels for commercial and government customers.
The Company was incorporated in March 1998 to serve as the holding company for
Conrad Shipyard, L.L.C. ("Conrad") and Orange Shipbuilding Company, Inc.
("Orange Shipbuilding"). New construction work and some repair work is
performed on a fixed-price basis. The Company performs the majority of repair
work under cost-plus-fee agreements. All significant intercompany transactions
have been eliminated. In the opinion of the management of the Company, the
interim consolidated financial statements included herein have been prepared in
accordance with generally accepted accounting principles and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
disclosures required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (such
adjustments consisting only of a normal recurring nature) considered necessary
for a fair presentation have been included in the interim consolidated
financial statements. These interim consolidated financial statements should be
read in conjunction with the Company's audited 2000 consolidated financial
statements and related notes filed on Form 10-K for the year ended December 31,
2000.
The results of operations for the three-month and six-month periods ended
June 30, 2001 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2001.
2. RECEIVABLES
Receivables consisted of the following at June 30, 2001 and December 31,
2000 (in thousands):
2001 2000
------ ------
U.S. Government:
Amounts billed............................................. $ 245 $ --
Unbilled costs and estimated earnings on uncompleted
contracts................................................. 2,173 1,921
------ ------
2,418 1,921
Commercial:
Amounts billed............................................. 3,630 1,622
Unbilled costs and estimated earnings on uncompleted
contracts................................................. 3,242 2,742
------ ------
Total.................................................... $9,290 $6,285
====== ======
Included above in amounts billed is an allowance for doubtful accounts of
$20,000 at June 30, 2001 and December 31, 2000. During 2001 and 2000 there were
no significant transactions recorded in the allowance for doubtful accounts.
Unbilled costs and estimated earnings on uncompleted contracts were not
billable to customers at the balance sheet dates under terms of the respective
contracts. Of the unbilled costs and estimated earnings at June 30, 2001,
substantially all is expected to be collected within the next twelve months.
Information with respect to uncompleted contracts as of June 30, 2001 and
December 31, 2000 is as follows (in thousands):
2001 2000
-------- --------
Costs incurred on uncompleted contracts.................. $ 19,760 $ 18,577
Estimated earnings....................................... 5,220 5,235
-------- --------
24,980 23,812
Less billings to date.................................... (20,352) (21,038)
-------- --------
$ 4,628 $ 2,774
======== ========
6
The above amounts are included in the accompanying balance sheets under the
following captions (in thousands):
2001 2000
------ -------
Costs and estimated earnings in excess of billings on
uncompleted contracts................................... $5,415 $ 4,663
Billings in excess of cost and estimated earnings on
uncompleted contracts................................... (787) (1,889)
------ -------
Total.................................................. $4,628 $ 2,774
====== =======
3. LONG-TERM DEBT
The Company has a Loan Agreement with a commercial bank, which specifies the
terms of the Term Loan and the Revolving Credit Facility. Interest accrues at
LIBOR plus 2.0% until August 31, 2001, and thereafter at the option of the
Company either at the lender's prime rate minus 0.5% or LIBOR plus 2.0%. The
Loan Agreement is secured by substantially all of the Company's assets,
contains customary restrictive covenants and requires the maintenance of
certain financial ratios, including a current ratio requirement of 1.25 to 1.0
that could limit the Company's use of available capacity under the Revolving
Credit Facility. In addition, the Loan Agreement prohibits the Company from
paying dividends without the consent of the lender and restricts the ability of
the Company to incur additional indebtedness. At June 30, 2001, the Company was
in compliance with these covenants.
The Term Loan has a maturity date of April 2004 and is payable in seventeen
monthly principal payments of $209,000 plus interest.
The Revolving Credit Facility permits the Company to borrow up to $10.0
million for working capital and other general corporate purposes, including the
funding of acquisitions and matures on October 30, 2001. The Company pays a fee
of 0.25% per annum on the unused portion of the facility. As of June 30, 2001,
$1.5 million was outstanding on the Revolving Credit Facility.
4. INCOME PER SHARE
The calculation of basic earnings per share excludes any dilutive effect of
stock options, while diluted earnings per share includes the dilutive effect of
stock options. The number of weighted average shares outstanding for "basic"
income per share was 7,071,056 and 7,060,893 for the three months ended June
30, 2001 and 2000, respectively, and 7,071,056 and 7,069,308 for the six months
ended June 30 2001 and 2000, respectively. The number of weighted average
shares outstanding for "diluted" income per share was 7,114,922 and 7,060,893
for the three months ended June 30, 2001 and 2000, respectively, and 7,106,991
and 7,069,308 for the six months ended June 30, 2001 and 2000, respectively.
5. SEGMENT AND RELATED INFORMATION
The Company classifies its business into two segments:
Vessel Construction
The Company constructs a variety of marine vessels, including large and
small deck barges, single and double hull tank barges, lift boats, push boats,
offshore tug boats and offshore support vessels. The Company also fabricates
components of offshore drilling rigs and floating production, storage and
offloading vessels including sponsons, stability columns, blisters, pencil
columns and other modular components.
Repair and Conversions
The Company's conversion projects primarily consist of lengthening the
midbodies of vessels, modifying vessels to permit their use for a different
type of activity and other modifications to increase the capacity or
functionality of a vessel. The Company also derives a significant amount of
revenue from repairs made as a result of periodic inspections required by the
U.S. Coast Guard, the American Bureau of Shipping and other regulatory
agencies.
7
The Company evaluates the performance of its segments based upon gross
profit. Selling, general and administrative expenses, interest expense, other
income, net, and income taxes are not allocated to the segments. Accounting
policies are the same as those described in Note 1, "Summary of Significant
Accounting Policies" in the Company's Form 10-K for the year ended December 31,
2000. Intersegment sales and transfers are not significant.
Selected information as to the operations of the Company by segment is as
follows (in thousands):
Three Months Six Months
Ended June 30, Ended June 30,
--------------- ----------------
2001 2000 2001 2000
------- ------ ------- -------
Revenue:
Vessel construction...................... $ 8,461 $5,114 $16,405 $12,091
Repair and conversions................... 3,712 3,497 7,653 6,395
------- ------ ------- -------
Total revenue.......................... 12,173 8,611 24,058 18,486
------- ------ ------- -------
Cost of revenue:
Vessel construction...................... 6,654 3,900 12,892 9,045
Repair and conversions................... 2,591 2,429 5,469 4,634
------- ------ ------- -------
Total cost of revenue.................. 9,245 6,329 18,361 13,679
------- ------ ------- -------
Gross profit:
Vessel construction...................... 1,807 1,214 3,513 3,046
Repair and conversions................... 1,121 1,068 2,184 1,761
------- ------ ------- -------
Total gross profit....................... 2,928 2,282 5,697 4,807
Selling, general and administrative
expenses.................................. 1,185 1,206 2,350 2,345
------- ------ ------- -------
Income from operations..................... 1,743 1,076 3,347 2,462
Interest expense........................... (66) (136) (83) (284)
Other income, net.......................... 54 87 83 187
------- ------ ------- -------
Income before income taxes................. 1,731 1,027 3,347 2,365
Provision for income taxes................. 755 451 1,420 1,007
------- ------ ------- -------
Net income................................. $ 976 $ 576 $ 1,927 $ 1,358
======= ====== ======= =======
Certain other financial information of the Company by segment is as follows
(in thousands):
Three Months Six Months
Ended Ended June
June 30, 30,
------------- -------------
2001 2000 2001 2000
------ ------ ------ ------
Depreciation and amortization expense:
Vessel construction.............................. $ 204 $ 193 $ 406 $ 388
Repair and conversions........................... 152 120 259 242
Included in selling, general and administrative
expenses........................................ 240 236 473 473
------ ------ ------ ------
Total depreciation and amortization expense.... $ 596 $ 549 $1,138 $1,103
====== ====== ====== ======
8
Three
Months Six Months
Ended June Ended June
30, 30,
----------- -------------
2001 2000 2001 2000
---- ------ ------ ------
Capital expenditures:
Vessel construction................................ $214 $ 166 $ 425 $ 300
Repair and conversions............................. 138 1,545 1,309 1,578
Other.............................................. 140 4 196 100
---- ------ ------ ------
Total capital expenditures....................... $492 $1,715 $1,930 $1,978
==== ====== ====== ======
Total assets of the Company by segment is as follows as of June 30, 2001 and
December 31, 2000 (in thousands):
2001 2000
------- -------
Total assets:
Vessel construction........................................... $30,132 $29,565
Repair and conversions........................................ 13,386 11,759
Other......................................................... 6,234 6,640
------- -------
Total assets................................................ $49,752 $47,964
======= =======
Certain assets and capital expenditures of the Company are allocated to
corporate and are included in the "Other" caption.
Revenues included in the consolidated financial statements of the Company
are derived from customers domiciled in the United States. All assets of the
Company are located in the United States.
6. COMMITMENTS AND CONTINGENCIES
Legal Matters--The Company is a party to various legal proceedings primarily
involving commercial claims and workers' compensation claims. While the outcome
of these claims and legal proceedings cannot be predicted with certainty,
management believes that the outcome of all such proceedings, even if
determined adversely, would not have a material adverse effect on the Company's
consolidated financial statements.
Employment Agreements--The Company has employment agreements with certain of
its executive officers which originally provided for employment of the officers
through March 31, 2001, and provides for annual extensions at the end of its
term, subject to the parties' mutual agreement. These agreements have been
extended for a one-year term through March 31, 2002. The minimum annual total
compensation of these agreements is $766,000.
In August 2001, the Company entered into an employment agreement with
Kenneth G. Myers, Jr. providing for employment as the Company's President and
Chief Executive Officer through December 31, 2004 and annual extensions
thereafter, subject to the parties' mutual agreement. The minimum annual total
compensation under the agreement is $230,000. Pursuant to the agreement, on the
executive's start date of August 27, 2001, he will be granted 5,000 restricted
shares of common stock, vesting on the anniversary of the start date, and
options to purchase 50,000 shares of common stock at the market price on the
start date, vesting over a three-year period.
The Company is in discussions with its current President and Chief Executive
Officer regarding the terms of his future relationship with and/or severance
from the Company.
Letters of Credit and Bonds--In the normal course of its business, the
Company is required to provide letters of credit to secure the payment of
workers' compensation obligations. Additionally, under certain
9
contracts the Company may be required to provide letters of credit and bonds to
secure certain performance and payment obligations of the Company thereunder.
Outstanding letters of credit and bonds relating to these business activities
amounted to $0.2 million and $1.6 million at June 30, 2001 and December 31,
2000.
7. NEW ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
133, Accounting for Derivative Instruments and Hedging Activities as amended by
SFAS No. 138 on January 1, 2001. SFAS No. 133, as amended, establishes
accounting and reporting standards for derivative and hedging activities and
requires, among other things, that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. Management has concluded that the adoption of SFAS No. 133 did
not have a significant impact on the financial position, results of operations,
or cash flows of the Company.
On June 29, 2001, the Financial Accounting Standards Board ("FASB")
concluded its voting process on SFAS No. 141, "Business Combinations," and this
statement was issued in July 2001. SFAS No. 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. Goodwill and certain intangible assets will remain on the balance
sheet and not be amortized. On an annual basis, and when there is reason to
suspect that their values have been diminished or impaired, these assets must
be tested for impairment, and write-downs may be necessary. The Company is
required to implement SFAS No. 141 on July 1, 2001 and does not expect this
statement to have a material effect on the Company's consolidated financial
position or results of operations.
On June 29, 2001, FASB concluded its voting process of SFAS No. 142,
"Goodwill and Other Intangible Assets", and this statement was issued in July
2001. SFAS No. 142 changes the accounting for goodwill from an amortization
method to an impairment-only approach. Amortization of goodwill, including
goodwill recorded in past business combinations, will cease upon adoption of
this statement. Amortization expense of existing goodwill was approximately
$0.2 million and $0.4 million for the three and six months ended June 30, 2001.
The Company is required to implement SFAS No. 142 on January 1, 2002 and it has
not determined the impact that this statement will have on its consolidated
financial position or results of operations.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction with the
Unaudited Consolidated Financial Statements and the Notes to Unaudited
Consolidated Financial Statements included elsewhere in this Form 10-Q as well
as the Company's annual report on Form 10-K for the year ended December 31,
2000.
Overview
The Company was incorporated in March 1998 to serve as the holding company
for Conrad Shipyard, Inc. ("Conrad") and Orange Shipbuilding Company, Inc.
("Orange Shipbuilding"). The Company completed an initial public offering in
June 1998 by issuing 2.1 million shares of common stock. Conrad has operated
since 1948 at its shipyard in Morgan City, Louisiana, and specializes in the
construction, conversion and repair of large and small deck barges, single and
double hull tank barges, lift boats, push boats, tow boats, offshore tug boats
and offshore supply vessels. In December 1997, Conrad acquired Orange
Shipbuilding to increase its capacity to serve Conrad's existing markets and to
expand its product capability into the construction of additional types of
marine vessels, including offshore tug boats, push boats and double hull
barges, and the fabrication of modular components for offshore drilling rigs
and FPSOs. In February 1998, Conrad commenced operations at a conversion and
repair facility in Amelia, Louisiana, thereby expanding its capacity to provide
conversion and repair services for marine vessels. In 2000, Conrad Shipyard,
Inc. was converted into a Louisiana limited liability company named Conrad
Shipyard, L.L.C.
10
The demand for the Company's products and services is dependent upon a
number of factors, including the economic condition of the Company's customers
and markets, the age and state of repair of the vessels operated by the
Company's customers and the relative cost to construct a new vessel as compared
with repairing an older vessel. Demand for the Company's products and services
were adversely impacted beginning in the latter part of 1998 by decreased
activity in the offshore oil and gas industry. During 2000, the Company began
to experience a modest increase in demand for products and services due to the
upturn in activity in the offshore oil and gas industry. Activity by other
commercial and government customers to construct new vessels to replace older
vessels and upgrade the capacity or functionality of existing vessels has
remained steady. In addition, the Orange Acquisition has enabled the Company to
capitalize on the demand for new vessel construction by government customers
such as the U.S. Army, U.S. Navy, U.S. Coast Guard and Corps of Engineers.
The Company is engaged in various types of construction under contracts that
generally range from one month to 36 months in duration. The Company uses the
percentage-of-completion method of accounting and therefore, takes into account
the estimated costs, estimated earnings and revenue to date on fixed-price
contracts not yet completed. The amount of revenue recognized is equal to the
portion of the total contract price that the labor hours incurred to date bears
to the estimated total labor hours, based on current estimates to complete.
This method is used because management considers expended labor hours to be the
best available measure of progress on these contracts. Revenues from cost-plus-
fee contracts are recognized on the basis of cost incurred during the period
plus the fee earned.
Most of the contracts entered into by the Company for new vessel
construction, whether commercial or governmental, are fixed-price contracts
under which the Company retains all cost savings on completed contracts but is
liable for all cost overruns. The Company develops its bids for a fixed price
project by estimating the amount of labor hours and the cost of materials
necessary to complete the project and then bids such projects in order to
achieve a sufficient profit margin to justify the allocation of its resources
to such project. The Company's revenues therefore may fluctuate from period to
period based on, among other things, the aggregate amount of materials used in
projects during a period and whether the customer provides materials and
equipment. The Company generally performs conversion and repair services on the
basis of cost-plus-fee arrangements pursuant to which the customer pays a
negotiated labor rate for labor hours spent on the project as well as the cost
of materials plus a margin on materials purchased.
On March 21, 2000 the Company's Board of Directors authorized management to
repurchase up to 200,000 shares or $1 million of its outstanding common stock.
Management may repurchase shares from time to time in the open market at
prevailing prices, or through privately negotiated transactions depending on
prevailing market conditions. The shares will be held as treasury stock and
will be available for use in connection with the Company's stock option plan
and other compensation programs or for other corporate purposes. Funds for the
program will come from cash, internally generated funds or additional
borrowings. The Company repurchased 20,800 shares at a total cost of
approximately $84,000 through April 2000.
Recent Events
In May 2000 the Company began construction of a new drydock, which is 280'
long and 160' wide with a lifting capacity of 10,000 tons. The drydock was put
into operation during the first part of March 2001 at the Company's Morgan City
shipyard. The cost was $5.7 million. Funds for the construction of the drydock
came from cash and internally generated funds. This dock will allow the Company
to (1) increase repair and conversion capacity; (2) compete for larger repair
and conversion projects; and (3) launch larger new vessel construction projects
more competitively.
On October 23, 2000, the Company purchased 52 acres of land in Amelia,
Louisiana for $1.3 million. The land is strategically located on the
Intracoastal Waterway approximately 30 miles from the Gulf of Mexico. Work is
currently in progress to develop the property as a repair and conversion
facility. The Company
11
anticipates that the first phase of development will cost approximately $4
million and will include clearing land, dredging slip, bulkheading and partial
construction of an infrastructure to support repair and conversion activities.
The property is within one mile of the other existing Amelia facility.
The Company has appointed Kenneth G. "Jerry" Myers, Jr. as President and
Chief Executive Officer, effective August 27, 2001, pursuant to the terms of an
employment agreement described in Note 6 to the Company's financial statements
included herein. Myers has spent the past 21 years with Avondale Industries
serving in various senior management positions. Most recently, he served as
Vice President in charge of managing Avondale's largest shipbuilding program.
While at Avondale, Myers has also held positions including Chief Information
Officer, Vice President--Business Review, in charge of government program
accounting, where he managed over $10 billion in government contracts,
Assistant Vice President responsible for mergers and acquisitions, and
Assistant Controller.
The Company is in discussions with its current President and Chief Executive
Officer regarding the terms of his future relationship with and/or severance
from the Company.
12
Results of Operations
The following table sets forth certain historical data of the Company and
percentage of revenues for the periods presented (in thousands):
Conrad Industries, Inc. Summary Results of Operations
(In thousands)
Three Months Ended June
30, Six Months Ended June 30,
----------------------------- ------------------------------
2001 2000 2001 2000
-------------- ------------- -------------- --------------
Financial Data:
Revenue
Vessel construction.... $ 8,461 69.5% $5,114 59.4% $16,405 68.2% $12,091 65.4%
Repair and
conversions........... 3,712 30.5% 3,497 40.6% 7,653 31.8% 6,395 34.6%
------- ------ ------- -------
Total revenue........ 12,173 100.0% 8,611 100.0% 24,058 100.0% 18,486 100.0%
------- ------ ------- -------
Cost of revenue
Vessel construction.... 6,654 78.6% 3,900 76.3% 12,892 78.6% 9,045 74.8%
Repair and
conversions........... 2,591 69.8% 2,429 69.5% 5,469 71.5% 4,634 72.5%
------- ------ ------- -------
Total cost of
revenue............. 9,245 75.9% 6,329 73.5% 18,361 76.3% 13,679 74.0%
------- ------ ------- -------
Gross profit
Vessel construction.... 1,807 21.4% 1,214 23.7% 3,513 21.4% 3,046 25.2%
Repair and
conversions........... 1,121 30.2% 1,068 30.5% 2,184 28.5% 1,761 27.5%
------- ------ ------- -------
Total gross profit..... 2,928 24.1% 2,282 26.5% 5,697 23.7% 4,807 26.0%
S G & A expenses........ 1,185 9.7% 1,206 14.0% 2,350 9.8% 2,345 12.7%
------- ------ ------- -------
Income from operations.. 1,743 14.3% 1,076 12.5% 3,347 13.9% 2,462 13.3%
Interest expense........ 66 0.5% 136 1.6% 83 0.3% 284 1.5%
Other expenses (income),
net.................... (54) -0.4% (87) -1.0% (83) -0.3% (187) -1.0%
------- ------ ------- -------
Income before income
taxes.................. 1,731 14.2% 1,027 11.9% 3,347 13.9% 2,365 12.8%
Income taxes............ 755 6.2% 451 5.2% 1,420 5.9% 1,007 5.4%
------- ------ ------- -------
Net Income.............. $ 976 8.0% $ 576 6.7% $ 1,927 8.0% $ 1,358 7.3%
======= ====== ======= =======
EBITDA (1).............. $ 2,339 19.2% $1,625 18.9% $ 4,485 18.6% $ 3,565 19.3%
======= ====== ======= =======
Operating Data: Labor
hours.................. 167 131 332 284
- --------
(1) Represents income from operations before deduction of depreciation, and
amortization. EBITDA is not a measure of cash flow, operating results or
liquidity as determined by generally accepted accounting principles. The
Company has included information concerning EBITDA as supplemental
disclosure because management believes that EBITDA provides meaningful
information regarding a company's historical ability to incur and service
debt. EBITDA as defined and measured by the Company may not be comparable
to similarly titled measures reported by other companies. EBITDA should not
be considered in isolation or as an alternative to, or more meaningful
than, net income or cash flow provided by operations as determined in
accordance with generally accepted accounting principles as an indicator of
the Company's profitability or liquidity.
Three Months Ended June 30, 2001 Compared with Three Months Ended June 30,
2000.
During the three months ended June 30, 2001, the Company generated revenue
of $12.2 million, an increase of approximately $3.6 million, or 41.4%, compared
to $8.6 million generated for the three months ended June 30, 2000. The
increase was due to a $3.3 million (65.4%) increase in vessel construction
revenue to $8.5 million for the three months ended June 30, 2001, compared to
$5.1 million for the three months ended June 30, 2000 and an increase of
$215,000 (6.1%) in repair and conversion revenue to $3.7 million for the three
months ended June 30, 2001 compared to $3.5 million for the three months ended
June 30, 2000. The increase in vessel construction revenue was attributable to
the increase in vessel construction production hours which increased by 60.7%
during the three months ended June 30, 2001 compared to the three months ended
June 30, 2000 and to the nature of the jobs during the three months ended June
30, 2001 which required more material and equipment as compared to jobs during
the three months ended June 30, 2000. The increase in repair and conversion
revenue during the three months ended June 30, 2001 compared to the three
months ended June 30, 2000 was primarily attributable to more favorable pricing
for jobs completed or in progress during the three months ended June 30, 2001
as compared to the three months ended June 30, 2000 primarily
13
due to increased offshore oil and gas activity. Repair and conversion hours
were substantially the same during the three months ended June 30, 2001
compared to the three months ended June 30, 2000.
Gross profit increased $646,000, or 28.3% to $2.9 million (24.1% of revenue)
for the three months ended June 30, 2001 as compared to gross profit of $2.3
million (26.5% of revenue) for the three months ended June 30, 2000. Effecting
gross profit for the three months ended June 30, 2001 was an agreement between
Conrad subsidiary Orange Shipbuilding Company, Inc. and the Occupational Safety
and Health Administration in which Orange agreed to pay a fine of $149,850 to
settle alleged violations at its Orange, Texas shipyard. This amount was
expensed in the three month period ended June 30, 2001. Gross profit improved
due to a reduction in estimated medical insurance costs based on actual
experience during the recently completed policy year. Vessel construction gross
profit increased $593,000 or 48.8% to $1.8 million for the three months ended
June 30, 2001 as compared to vessel construction gross profit of $1.2 million
for the three months ended June 30, 2000. Repair and conversion gross profit
increased $53,000 or 5.0% to $1.1 million for the three months ended June 30,
2001 as compared to repair and conversion gross profit of $1.1 million for the
three months ended June 30, 2000. The increase in vessel construction gross
profit was primarily due to the increase in vessel production hours due to
greater demand for vessel construction jobs. The increase in repair and
conversion gross profit was primarily due to the result of more favorable
pricing for jobs completed or in progress during the three months ended June
30, 2001 as compared to the three months ended June 30, 2000.
Repair and conversion gross profit margins were 30.2% for the three months
ended June 30, 2001, compared to gross profit margins of 30.5% for the three
months ended June 30, 2000. Vessel construction gross profit margins decreased
to 21.4% for the three months ended June 30, 2001, compared to gross profit
margins of 23.7% for the three months ended June 30, 2000 primarily due to the
nature of some jobs in 2001 being more material intensive and some jobs in 2001
having lower profit margins due to greater job cost.
Selling, general and administrative expenses decreased $21,000, or 1.7%, to
$1.2 million (9.7% of revenue) for the three months ended June 30, 2001, as
compared to $1.2 million (14.0% of revenue) for the three months ended June 30,
2000. This decrease was primarily due to a decrease in promotional and medical
insurance cost.
Income before income taxes increased $704,000 to $1.7 million for the three
months ended June 30, 2001 as compared to income before income taxes of $1.0
million for the three months ended June 30, 2000, primarily due to the factors
listed above.
The Company had net income of $976,000 for the three months ended June 30,
2001 as compared to net income of $576,000 for the three months ended June 30,
2000. Interest expense decreased $70,000 to $66,000 for the three months ended
June 30, 2001 as compared to interest expense of $136,000 for the three months
ended June 30, 2000 due to lower interest rates and a reduced average
outstanding loan balance.
The Company had income tax expense of $755,000 (43.6% effective tax rate)
for the three months ended June 30, 2001, compared to income taxes of $451,000
(43.9% effective tax rate) for the three months ended June 30, 2000. The
Company's effective tax rate is higher than its statutory tax rate because its
cost in excess of net assets acquired is not amortized for tax purposes.
Six Months Ended June 30, 2001 Compared with Six Months Ended June 30, 2000.
During the six months ended June 30, 2001, the Company generated revenue of
$24.1 million, an increase of approximately $5.6 million, or 30.1%, compared to
$18.5 million generated for the six months ended June 30, 2000. The increase
was due to a $4.3 million (35.7%) increase in vessel construction revenue to
$16.4 million for the six months ended June 30, 2001, compared to $12.1 million
for the six months ended June 30, 2000 and an increase of $1.3 million (19.7%)
in repair and conversion revenue to $7.7 million for the six months ended June
30, 2001 compared to $6.4 million for the six months ended June 30, 2000. The
increase in vessel construction revenue was attributable to the increase in
vessel construction production hours which increased by 32.7% during the six
months ended June 30, 2001 compared to the six months ended June 30, 2000 and
to the nature of the jobs during the six months ended June 30, 2001 which
required more material
14
and equipment as compared to jobs during the six months ended June 30, 2000.
The increase in repair and conversion revenue during the six months ended June
30, 2001 compared to the six months ended June 30, 2000 was primarily
attributable to (1) two conversion jobs in progress during the six months ended
June 30, 2001, which required more material and equipment as compared to
projects completed or in progress during the six months ended June 30, 2000 and
(2) increased demand for repair and conversions due to increased offshore oil
and gas activity. Repair and conversion hours were substantially the same
during the six months ended June 30, 2001 compared to the six months ended June
30, 2000.
Gross profit increased $890,000, or 18.5% to $5.7 million (23.7% of revenue)
for the six months ended June 30, 2001 as compared to gross profit of $4.8
million (26.0% of revenue) for the six months ended June 30, 2000. Effecting
gross profit for the six months ended June 30, 2001 was an agreement between
Conrad subsidiary Orange Shipbuilding Company, Inc. and the Occupational Safety
and Health Administration in which Orange agreed to pay a fine of $149,850 to
settle alleged violations at its Orange, Texas shipyard. This amount was
expensed in the three month period ended June 30, 2001. Gross profit also
improved due to a reduction in estimated medical insurance costs based on
actual experience during the recently completed policy year. Vessel
construction gross profit increased $467,000 or 15.3% to $3.5 million for the
six months ended June 30, 2001 as compared to vessel construction gross profit
of $3.0 million for the six months ended June 30, 2000. Repair and conversion
gross profit increased $423,000 or 24.0% to $2.2 million for the six months
ended June 30, 2001 as compared to repair and conversion gross profit of $1.8
million for the six months ended June 30, 2000. The increase in vessel
construction gross profit was primarily due to the increase in vessel
production hours due to greater demand for vessel construction jobs. The
increase in repair and conversion gross profit was primarily due to more
profitable jobs completed or in progress during the six months ended June 30,
2001 as compared to the six months ended June 30, 2000.
Repair and conversion gross profit margins increased to 28.5% for the six
months ended June 30, 2001, compared to gross profit margins of 27.5% for the
six months ended June 30, 2000. Vessel construction gross profit margins
decreased to 21.4% for the six months ended June 30, 2001, compared to gross
profit margins of 25.2% for the six months ended June 30, 2000 primarily due to
some jobs in 2001 being more material intensive and some jobs in 2001 having
lower profit margins due to greater job cost.
Selling, general and administrative expenses increased $5,000, or 0.2%, to
$2.4 million (9.8% of revenue) for the six months ended June 30, 2001, as
compared to $2.3 million (12.7% of revenue) for the six months ended June 30,
2000.
Income before income taxes increased $982,000 to $3.3 million for the six
months ended June 30, 2001 as compared to income before income taxes of $2.4
million for the six months ended June 30, 2000, primarily due to the factors
listed above.
The Company had net income of $1.9 million for the six months ended June 30,
2001 as compared to net income of $1.4 million for the six months ended June
30, 2000. Interest expense decreased $201,000 to $83,000 for six months ended
June 30, 2001 as compared to interest expense of $284,000 for the six months
ended June 30, 2000 due to capitalization of interest related to the
construction of the drydock, a reduction of average debt and lower interest
rates.
The Company had income tax expense of $1.4 million (42.4% effective tax
rate) for the six months ended June 30, 2001, compared to income taxes of $1.0
million (42.6% effective tax rate) for the six months ended June 30, 2000. The
Company's effective tax rate is higher than its statutory tax rate because its
cost in excess of net assets acquired is not amortized for tax purposes.
Liquidity and Capital Resources
Historically, the Company has funded its business through funds generated
from operations. Net cash used by operations was $518,000 for the six months
ended June 30, 2001 due to decreases in billings related to costs and estimated
earnings on uncompleted contracts and increases in accounts receivable and
other assets offset by
15
an increase in accounts payable and accrued expenses. The Company's working
capital position was $3.6 million at June 30, 2001 compared to $4.1 million at
December 31, 2000. The decrease in the working capital position was primarily
due to $1.9 million in capital expenditures for plant and equipment. The
Company has borrowed in the past to expand its facilities and to fund the
acquisition of Orange Shipbuilding in December 1997. In June, the Company
borrowed $1.5 million on its revolving credit facility, primarily to fund
capital expenditures.
The Company's capital requirements historically have been primarily for
improvements to its facilities and equipment. The Company's net cash used in
investing activities of $1.9 million for the six months ended June 30, 2001 was
for improvements to facilities and equipment of which approximately $1.1
million was for the completion of the construction of a new dry-dock, $700,000
was for improvements to its other facilities and equipment and $123,000 was for
improvements to the 52 acres in Amelia.
In March 2001, the Company completed construction of a new drydock, which is
280' long and 160' wide with a lifting capacity of up to 10,000 tons. The cost
was $5.7 million. Funds for the construction of the drydock came from cash and
internally generated funds. This dock will allow the Company to (1) increase
repair and conversion capacity, (2) compete for larger repair and conversion
projects, and (3) launch larger new vessel construction projects more
competitively.
Net cash provided by financing activities was $246,000 for the six months
ended June 30, 2001 which included borrowings under the credit facility of $1.5
million and debt repayment of $1.3 million. The Company did not repurchase any
of its stock during the six months ended June 30, 2001.
On October 23, 2000 the Company purchased 52 acres of land in Amelia,
Louisiana for $1.3 million. The Company is currently developing the property as
a shipyard and anticipates beginning repair and conversion activities during
the latter part of 2001. The Company anticipates that the first phase of
development will cost approximately $4 million and will include clearing land,
dredging slip, bulkheading and partial construction of an infrastructure to
support repair and conversion activities. During the six months ended June 30,
2001 the Company expended $123,000 for improvements to the property. The
Company plans to fund the remaining $3.9 million relating to this project in
fiscal year 2001 by a combination of internally generated cash and borrowings.
The Company has a Loan Agreement with a commercial bank, which specifies the
terms of the Term Loan and the Revolving Credit Facility. Interest accrues at
LIBOR plus 2.0% until August 31, 2001, and thereafter at the option of the
Company either at the lender's prime rate minus 0.5% or LIBOR plus 2.0%. The
Loan Agreement is secured by substantially all of the Company's assets,
contains customary restrictive covenants and requires the maintenance of
certain financial ratios, including a current ratio requirement of 1.25 to 1.0
that could limit the Company's use of available capacity under the Revolving
Credit Facility. In addition, the Loan Agreement prohibits the Company from
paying dividends without the consent of the lender and restricts the ability of
the Company to incur additional indebtedness. At June 30, 2001, the Company was
in compliance with these covenants.
The Term Loan has a maturity date of April 2004 and is payable in seventeen
monthly principal payments of $209,000 plus interest. At June 30, 2001, the
Term Loan balance outstanding was $3.6 million. At the current amortization
schedule, the Term Loan will be paid in full by the end of fiscal year 2002.
The Revolving Credit Facility permits the Company to borrow up to $10.0
million for working capital and other general corporate purposes, including the
funding of acquisitions, and matures on October 30, 2001. The Company pays a
fee of 0.25% per annum on the unused portion of the facility. As of June 30,
2001, $1.5 million was outstanding on the Revolving Credit Facility. The
Company has extended its Revolving Credit Facility from June 30, 2001 until
October 30, 2001 and is in discussions about extending its Credit Facility on
longer-term basis. Management believes that this facility or a similar source
of borrowing will be available on reasonable terms.
16
The Company's backlog of $10.9 million at June 30, 2001 was attributable to
10 projects, of which $2.0 million was attributable to three government
projects. The Company has signed four contracts totaling $8.0 million since
June 30, 2001, which has increased backlog. The Company is currently in
discussion and negotiations with various customers for vessel construction
projects. These projects include a potential purchase by the U. S. Army of
three additional ST Tugs, which have already been authorized and appropriated
by Congress for approximately $7.5 million. The Company is optimistic that some
of these projects will be added to backlog soon.
For 2001, the Board of Directors has approved $2.0 million in capital
expenditures for the maintenance, repair and upgrade of existing facilities and
approximately $4.0 million for the first phase of development of the 52 acres
of property in Amelia as a repair and conversion facility. In addition, the
Board of Directors approved a $798,000 expansion of the Morgan City facility
which will increase capabilities for pre-fabricated components and modular
constructions techniques.
Management believes that the Company's existing working capital and cash
flows from operations will be adequate to meet its working capital needs for
operations and some capital expenditures through 2001. Management believes that
some of the planned capital expenditures may require additional borrowings and
believes that borrowings should be available on reasonable terms. The Company
may pursue acquisition opportunities it believes are attractive if and when
such opportunities arise. The timing, size or success of any acquisition effort
and the associated potential capital commitments cannot be predicted.
New Accounting Pronouncements
The Company adopted Statement of Financial Accounting Standards ("SFAS" )
No. 133, Accounting for Derivative Instruments and Hedging Activities as
amended by SFAS No. 138 on January 1, 2001. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative and hedging
activities and requires, among other things, that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. Management has concluded that the adoption of
SFAS 133 did not have a significant impact on the financial position, results
of operations, or cash flows of the Company.
On June 29, 2001, the Financial Accounting Standards Board ("FASB")
concluded its voting process on SFAS No. 141 "Business Combinations," and this
statement was issued in July 2001. SFAS No. 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. Goodwill and certain intangible assets will remain on the balance
sheet and not be amortized. On an annual basis, and when there is reason to
suspect that their values have been diminished or impaired, these assets must
be tested for impairment, and write-downs may be necessary. The Company is
required to implement SFAS No. 141 on July 1, 2001 and does not expect this
statement to have a material effect on the Company's consolidated financial
position or results or operations.
On June 29, 2001, FASB concluded its voting process of SFAS No. 142,
"Goodwill and Other Intangible Assets", and this statement was issued in July
2001. SFAS No. 142 changes the accounting for goodwill from an amortization
method to an impairment-only approach. Amortization of goodwill, including
goodwill recorded in past business combinations, will cease upon adoption of
this statement. Amortization expense of existing goodwill was approximately
$0.2 million and $0.4 million for the three and six months ended June 30, 2001.
The Company is required to implement SFAS No. 142 on January 1, 2002 and it has
not determined the impact that this statement will have on its consolidated
financial position or results of operations.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to the risk of changing interest rates. Interest on
$3.6 million of the Company's long-term debt with an interest rate of 5.76% at
June 30, 2001 was variable based on short-term market rates. Thus a general
increase of 1.0% in short-term market interest rates would result in additional
interest cost of $36,000 per year if the Company were to maintain the same debt
level and structure.
17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to various routine legal proceedings primarily
involving commercial claims and workers' compensation claims. While the
outcome of these claims and legal proceedings cannot be predicted with
certainty, management believes that the outcome of such proceedings in the
aggregate, even if determined adversely, would not have a material adverse
effect on the Company's business or financial condition.
Item 4. Submission of Matters to a vote of Security Holders
The Company's 2001 annual meeting of stockholders was held on May 24, 2001.
All director nominees were elected. The voting tabulation was as follows: J.
Parker Conrad: 6,476,470 votes for, 526,307 votes withheld; John P. Conrad,
Jr.: 6,476,470 votes for, 526,307 votes withheld; Richard E. Roberson, Jr.:
6,476,470 votes for, 526,307 votes withheld. The proposal to ratify the
appointment of Deloitte & Touche, LLP as the Company's independent public
accountants for the fiscal year ending December 31, 2001 was approved. The
voting tabulation was as follows: 6,750,624 votes for, 249,452 votes against
and 2,701 abstentions.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 -- Amended and Restated Certificate of Incorporation (filed as Exhibit
3.1 to the Company's Annual Report on Form 10-K for year ended
December 31, 1998 and incorporated by reference herein).
3.2 -- Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company's
Annual Report on Form 10-K for year ended December 31, 1998 and
incorporated by reference herein).
4.1 -- Specimen Common Stock Certificate (filed as Exhibit 4 to the Company's
Registration Statement on Form 8-A and incorporated by reference
herein).
4.2 -- Registration Rights Agreement by and among Conrad Industries, Inc., J.
Parker Conrad, John P. Conrad, Jr., Katherine C. Court, The John P.
Conrad, Jr. Trust, The Daniel T. Conrad Trust, The Glen Alan Conrad
Trust, The Kenneth C. Conrad Trust, The Katherine C. Court Trust, The
James P. Conrad Trust, William H. Hidalgo, and Cecil A. Hernandez
(filed as Exhibit 4.2 to the Company's Annual Report on Form 10-K for
year ended December 31, 1998 and incorporated by reference herein).
4.3 -- Registration Rights Agreement between Conrad Industries, Inc. and
Morgan Keegan & Company, Inc (filed as Exhibit 4.3 to the Company's
Annual Report on Form 10-K for year ended December 31, 1998 and
incorporated by reference herein).
10.1 -- Allonge to Note by Conrad Shipyard, L.L.C. and Whitney National Bank,
Dated July 30, 2001, in the Original Principal Amount of
$10,000,000.00.
(b) Reports on Form 8-K
The Company has not filed any Current Reports on Form 8-K during the
quarter which this report is filed.
18
SIGNATURE
Pursuant to the requirements 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.
Date: August 14, 2001
CONRAD INDUSTRIES, INC.
By:/s/ Cecil A. Hernandez
---------------------------------
Cecil A. Hernandez
Senior Vice President and
Chief Financial Officer
19