UNIFAB INTERNATIONAL INC, S-1/A, 1997-07-25

UNIFAB INTERNATIONAL INC
S-1/A, 1997-07-25
SHIP & BOAT BUILDING & REPAIRING

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 25, 1997.

REGISTRATION NO. 333-31609

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
UNIFAB INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
LOUISIANA 3441 72-1382998
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification No.)
</TABLE>

5007 PORT ROAD
NEW IBERIA, LOUISIANA 70562
(318) 367-8291
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

DAILEY J. BERARD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
UNIFAB INTERNATIONAL, INC.
5007 PORT ROAD
NEW IBERIA, LOUISIANA 70562
(318) 367-8291
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:

<TABLE>
<S> <C>
CARL C. HANEMANN THOMAS P. MASON
JONES, WALKER, WAECHTER, POITEVENT, ANDREWS & KURTH L.L.P.
CARRERE & DENEGRE, L.L.P. 4200 TEXAS COMMERCE TOWER
201 ST. CHARLES AVENUE 600 TRAVIS, SUITE 4200
NEW ORLEANS, LOUISIANA 70170 HOUSTON, TEXAS 77002
(504) 582-8000 (713) 220-4200
</TABLE>

---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
---------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE.

================================================================================
<PAGE> 2

EXPLANATORY NOTE

This Amendment No. 1 to the Registration Statement is being filed solely to
include a signed report of Ernst & Young LLP as independent auditors with
respect to the balance sheet of UNIFAB International, Inc. For this purpose, the
only changes from the Registration Statement filed on July 18, 1997 are those to
pages F-12 (the signed report) and F-14 (amending Note 2 and deleting Note 3) of
the prospectus and Exhibit 23.1 (Consent of Independent Accountants).

<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JULY 18, 1997

2,815,000 SHARES

[LOGO] UNIFAB INTERNATIONAL, INC.

COMMON STOCK

Of the 2,815,000 shares of common stock, $0.01 par value per share (the
"Common Stock"), of UNIFAB International, Inc. (the "Company") offered hereby,
1,100,000 shares are being sold by the Company and 1,715,000 shares are being
sold by McDermott Incorporated ("McDermott" or the "Selling Shareholder"). See
"Principal and Selling Shareholders." Prior to this offering (the "Offering"),
there has been no public market for the Common Stock. It is currently estimated
that the initial public offering price per share will be between $ and
$ . See "Underwriting" for information relating to the factors to be
considered in determining the initial public offering price.

Application has been made to list the Common Stock on the Nasdaq National
Market under the symbol "UFAB."

SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
==============================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) SHAREHOLDER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share................. $ $ $ $
- --------------------------------------------------------------------------------------------------------------
Total(3).................. $ $ $ $
==============================================================================================================
</TABLE>

(1) The Company and the Selling Shareholder have agreed separately to indemnify
the several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses payable by the Company estimated at $ .

(3) The Company has granted to the several Underwriters an option for 30 days to
purchase up to an additional 422,250 shares of Common Stock at the Price to
Public, less Underwriting Discount, solely to cover over-allotments, if any.
If such option is exercised in full, the Price to Public, Underwriting
Discount, Proceeds to Company and Proceeds to Selling Shareholder will be
$ , $ , $ and $ , respectively. See
"Underwriting."

---------------------

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, and subject to
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the shares of Common Stock will be made on or about
, 1997.

---------------------

MORGAN KEEGAN & COMPANY, INC. STEPHENS INC.

The date of this Prospectus is , 1997.
<PAGE> 4

[PHOTOGRAPHS TO APPEAR HERE:

No. 1: Aerial view of the Company's facilities

Nos. 2-4: Photographs of Structures Fabricated by the Company]

---------------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT AND OTHER STABILIZING TRANSACTIONS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and the notes thereto included elsewhere in
this Prospectus. UNIFAB International, Inc. (the "Company") was recently formed
to serve, upon completion of the Offering, as the parent corporation of
Universal Fabricators Incorporated ("Universal Fabricators"), 51% of the
outstanding common stock of which is currently owned by Universal Partners, Inc.
("Universal Partners") and 49% of such stock is owned by McDermott Incorporated
("McDermott"). Immediately prior to the completion of the Offering, Universal
Partners will merge into the Company (the "Merger"), and McDermott will exchange
its shares of common stock of Universal Fabricators for shares of the Company's
Common Stock (the "Share Exchange"), all of which will be sold in the Offering.
Unless otherwise indicated, the information in this Prospectus assumes that the
Underwriters' over-allotment option will not be exercised and that the Merger
and the Share Exchange each have been completed. As used herein, unless the
context requires otherwise, references to the "Company" include Universal
Fabricators and its predecessor. Certain technical terms are defined in the
"Glossary of Certain Technical Terms" appearing immediately before the Index to
Financial Statements.

THE COMPANY

GENERAL. UNIFAB International, Inc. is an industry leader in the custom
fabrication of decks and modules of drilling and production equipment weighing
up to 3,500 tons for offshore oil and gas platforms and has special expertise in
the fabrication of decks with complex piping requirements. Decks and modules
fabricated by the Company can be installed on fixed and floating platforms
regardless of water depth. The Company also fabricates jackets for fixed
platforms; pilings and other rolled tubular steel sections; compressor and
generator packages; platform living quarters; subsea templates; bridges for
connecting offshore platforms; wellhead protectors; and modules for the onshore
petrochemical and refining industries. In addition, the Company refurbishes and
retrofits existing jackets and decks and performs offshore piping hook-up and
platform maintenance services. Structures fabricated by the Company are
installed in oil and gas producing waters around the world, primarily the U.S.
Gulf of Mexico (the "Gulf of Mexico") and offshore West Africa.

The Company, founded in 1980, has been profitable for each of the last five
years largely as a result of management's ability to control costs, provide high
quality, reliable services, and expand successfully into international markets.
The Company's revenue increased 139% from $27.9 million in its fiscal year ended
March 31, 1995 to $66.7 million in the fiscal year ended March 31, 1997. During
the same period, both the Company's workforce and direct labor hours worked
increased by approximately 105%.

Demand for the Company's services is primarily a function of worldwide
offshore oil and gas activity. Over the past four years, improvements in
production techniques and seismic and drilling technology, together with
relatively stable oil and gas prices, have resulted in accelerated drilling
activity in the Gulf of Mexico and continued strong activity levels worldwide.
The number of active offshore drilling rigs worldwide is at its highest point
since 1986, with the average number of active offshore rigs in the Gulf of
Mexico, in particular, having increased from approximately 80 for the year ended
December 31, 1992 to more than 155 for the year ended December 31, 1996.

Due to the time required to drill an exploratory offshore well, formulate a
development plan and design offshore platforms, the fabrication and installation
of such platforms usually lag exploratory drilling by one to three years. As a
result, high levels of drilling activity worldwide, particularly in the Gulf of
Mexico, have only recently impacted the demand for the Company's custom
fabrication services. The Company believes its strong presence in both overseas
markets and the Gulf of Mexico market, coupled with continued strong oil and gas
activity in these markets, has enabled it to selectively obtain high margin
fabrication work and benefit from increased pricing levels.

Port of Iberia Commission has proposed the reopening and dredging of a by-pass
along one of these waterways that would provide access from the Company's
facilities to the Gulf of Mexico for structures weighing up to 6,000 tons.
Although the Louisiana Legislature has allocated funding to complete the initial
portion of this project, no assurance can be given as to whether such project
will be completed or whether the increased channel depths will be maintained. If
the Louisiana Legislature does not provide this funding, the Company could pay
to have this bypass reopened and dredged, which expense may be economically
justifiable in connection with the large revenue amounts typically derived from
fabrication of large structures.

1992 EXPANSION TRANSACTION. The Company's predecessor, Universal Partners,
was organized in 1980 by its founder, Dailey J. Berard. In 1992, in order to
expand its capabilities at the Port of Iberia and meet increasing demand for its
services, Universal Partners entered into an agreement with McDermott, a
subsidiary of McDermott International, Inc. Universal Partners contributed as a
going concern to the then newly-formed Universal Fabricators approximately 50
acres of leased land, its buildings and fabrication equipment, and $2.4 million
in cash. McDermott contributed an inactive fabrication yard directly across a
canal from the land leased by Universal Partners, which included approximately
85 acres of land, 200,000 square feet of covered fabrication space and various
equipment. This transaction (the "Expansion Transaction") substantially enlarged
the Company's yard space and increased covered fabrication area from 25,000
square feet to approximately 225,000 square feet. Both before and after the
Expansion Transaction, the day-to-day operations of the Company have been
conducted by Dailey J. Berard and the other members of the Company's management
team.

In the Expansion Transaction, McDermott received 49% of the outstanding
stock of Universal Fabricators. McDermott will sell all of its shares of Common
Stock as part of the Offering in connection with a previously announced strategy
of returning to core businesses by disposing of certain assets, including
certain financial investments. The Company will use a portion of the proceeds of
the Offering to secure McDermott's release of its rights under certain
agreements entered into in connection with the Expansion Transaction.

GROWTH AND PROFITABILITY STRATEGY

The Company's growth and profitability strategy is to capitalize on the
positive trends and current opportunities in heavy marine fabrication for the
oil and gas industry. Key elements of the Company's strategy are to:

- PURSUE EXPANDING MARKETS. The Company intends to continue to pursue
high-margin fabrication work in both domestic and international offshore
oil and gas producing areas where demand for its services has
substantially increased over the last five years. In fiscal 1997, the
Company derived 36% of its revenue from projects designed for
installation in the Gulf of Mexico and believes that an increasing
portion of its capacity will be used to satisfy demand for such projects.
In addition, a series of large oil and gas projects are being developed
for offshore Nigeria, Mexico, Brazil and Venezuela. The Company believes
that these projects, as well as projects in the Gulf of Mexico, will
provide it with significant opportunities to obtain high-margin
fabrication work in both the current fiscal year and thereafter.

- EXPAND FACILITIES. The Company intends to use a portion of the proceeds
of the Offering to construct a new slip and bulkhead and develop the
adjacent yard space that will enable the Company to construct and load
out projects weighing up to 6,000 tons. In addition, the Company intends
to acquire and install a new four-inch rolling mill which will enable the
Company to satisfy all of its rolled good requirements in-house,
including larger diameter pipe not currently rolled by the Company. The
Company believes that the enhanced capabilities provided by the new
facilities will provide the Company with opportunities to satisfy its
customers' increasing needs for structures usable in deep waters
throughout the world.

backlog in order to maximize its ability to pursue higher margin
projects. The Company believes that, as a low-cost fabricator, it is well
positioned to benefit from this strategy.

- IMPROVE WORKFORCE EFFICIENCY. The Company believes that its success has
been founded on its well motivated workforce, efficient management and
low overhead costs. To take advantage of the increased demand for its
services, the Company will continue to emphasize its low cost structure
and will seek to increase the productivity of its workforce by using a
portion of the proceeds of the Offering to purchase additional automated,
labor-saving equipment and to expand and upgrade its existing buildings
and equipment. The Company also intends to expand its investment in
employee education and training in order to upgrade employee skill levels
and productive capacity.

- INCREASE EMPLOYEE POOL. In fiscal 1997, the Company added approximately
95 full-time production employees to its workforce. The Company estimates
that its current facility could accommodate a workforce of more than
double its current size of approximately 425 employees. The Company
intends to continue its efforts to increase its skilled workforce in
order to increase the Company's production capacity. To address the
current shortage of skilled workers in south Louisiana, the Company has
been cooperating with local and regional associations and government
authorities to foster the training of skilled workers. The Company
believes that there is a large number of trainable employees residing in
reasonable proximity to its facility. The Company further believes that
companies whose products and services are complementary to those of the
Company are available for acquisition and that its capital structure
after the Offering will enable it to pursue such acquisition
opportunities as a means of expanding its skilled workforce.

The Company is incorporated under the laws of the State of Louisiana, its
principal executive offices are located at 5007 Port Road, New Iberia, Louisiana
70562, its mailing address is P.O. Box 11308, New Iberia, Louisiana 70560 and
its telephone number is (318) 367-8291.
3
<PAGE> 8

THE OFFERING

Common Stock offered:
By the Company........... 1,100,000
By the Selling
Shareholder............ 1,715,000
---------
Total.................... 2,815,000

Common Stock to be
outstanding after the
Offering................. 4,600,000 shares(1)

Use of Proceeds............ To fund (i) approximately $7.0 million of capital
expenditures for certain new equipment, slips,
bulkheads and load out systems and for the upgrade
and purchase of yard space, land, buildings and
equipment and (ii) a $6.3 million payment to
McDermott for the surrender of its rights under the
Shareholders' Agreement and the Put/Call Agreement.
See "The Company" and "Certain Transactions." The
balance of the proceeds will be used to provide
working capital and for general corporate purposes.
See "Use of Proceeds."

The Company will not receive any proceeds from the
sale of Common Stock by the Selling Shareholder.

Nasdaq National Market
Symbol................... UFAB
- ---------------

(1) Excludes 133,500 shares issuable upon exercise of outstanding options. See
"Management -- Compensation Pursuant to Plans -- Long-Term Incentive Plan."

RISK FACTORS

An investment in the Common Stock offered hereby involves a high degree of
risk. In particular, prospective investors should be aware of the effect on the
Company of the risks presented by the factors listed under "Risk Factors."
4
<PAGE> 9

SUMMARY FINANCIAL AND OPERATING DATA

The following table sets forth summary historical financial and operating
data as of the dates and for the periods indicated. The historical financial
data for each year in the three-year period ended March 31, 1997, and as of
March 31, 1997, are derived from the audited financial statements of Universal
Fabricators. Immediately prior to completion of the Offering, Universal
Fabricators will become a wholly owned subsidiary of UNIFAB International, Inc.,
which will have no other significant operations or assets. The following data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-------------------------------------------------------
1993(1) 1994 1995 1996 1997
---------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue.............................. $ 25,369 $ 29,926 $ 27,883 $ 51,807 $ 66,724
Cost of revenue...................... 21,239 27,211 23,174 40,362 58,589
---------- -------- -------- -------- --------
Gross profit......................... 4,130 2,715 4,709 11,445 8,135
General and administrative expense... 1,207 1,228 1,326 1,419 1,637
---------- -------- -------- -------- --------
Operating income..................... 2,923 1,487 3,383 10,026 6,498
Other income (expense), net.......... 84 21 38 315 82
---------- -------- -------- -------- --------
Income before income taxes........... 3,007 1,508 3,421 10,341 6,580
Income tax expense................... 1,112 555 1,286 3,888 2,555
---------- -------- -------- -------- --------
Net income........................... $ 1,895 $ 953 $ 2,135 $ 6,453 $ 4,025
========== ======== ======== ======== ========
Pro forma net income per share
(unaudited)(2).................... $ 0.54 $ 0.27 $ 0.61 $ 1.84 $ 1.15
========== ======== ======== ======== ========
Pro forma weighted average common
shares (unaudited)(2)............. 3,500 3,500 3,500 3,500 3,500
Other Financial Data:
Depreciation and amortization........ $ 125 $ 381 $ 424 $ 390 $ 471
Capital expenditures................. $ 6 $ 110 $ 179 $ 402 $ 821
EBITDA(3)............................ $ 3,048 $ 1,868 $ 3,807 $ 10,416 $ 6,969
EBITDA margin(4)..................... 14.4% 6.2% 13.7% 20.1% 10.4%
Operating Data:
Direct labor hours worked............ 520,000(5) 484,000 436,000 656,000 902,000
Number of employees.................. 230 215 210 330 425
Backlog (at end of period)........... $ 6,976 $ 8,917 $ 31,994 $ 42,311 $ 30,221
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Industry Data:
U.S. Gulf of Mexico:
Rig utilization rates(6)............................ 49.3% 76.5% 76.2% 76.2% 88.0%
Blocks leased(7).................................... 204 336 560 835 1,508
Drilling rigs under contract(8)..................... 79 116 133 135 158
Offshore platforms installed(9)..................... 53 81 127 89 114
Worldwide:
Rig utilization rates(6)............................ 76.0% 81.9% 81.1% 83.9% 89.5%
Drilling rigs under contract(9)..................... 519 545 536 541 572
Offshore platforms installed(6)..................... 192 219 252 187 230
</TABLE>

5
<PAGE> 10

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
-------------------------------
PRO FORMA
PRO FORMA(2) AS ADJUSTED(10)
------------ ---------------
(IN THOUSANDS)
<S> <C> <C>
Balance Sheet Data:
Working capital........................................... $ 4,571 $
Property, plant and equipment, net........................ 5,341
Total assets.............................................. 26,155
Debt...................................................... --
Shareholders' equity...................................... 8,580
</TABLE>

- ---------------

(1) The income statement data, other financial data and operating data include
the results of Universal Partners for the period from April 1, 1992 through
November 30, 1992 and Universal Fabricators for the period from December 1,
1992 through March 31, 1993.

(2) The unaudited pro forma data give effect to the completion of the merger of
Universal Partners into UNIFAB International, Inc. and the exchange by
McDermott of its shares of Universal Fabricators for shares of UNIFAB
International, Inc. See "The Company."

(3) The Company calculates EBITDA (earnings before interest expense, income
taxes, depreciation and amortization) as operating income plus depreciation
and amortization. EBITDA should not be considered as an alternative to net
income, or any other measure of operating performance in accordance with
generally accepted accounting principles. EBITDA is widely used by
financial analysts as a measure of financial performance. The Company's
measurement of EBITDA may not be comparable to similarly titled measures
reported by other companies.

(4) EBITDA margin is calculated by dividing EBITDA by revenue.

(5) Reflects the number of direct labor hours worked for the year ended
December 31, 1992.

(6) Represents the average utilization rate for drilling rigs located in the
U.S. Gulf of Mexico and worldwide, respectively, during the period
indicated. Data obtained from Offshore Data Services.

(7) Represents the number of 5,000 acre tracts leased by the Minerals
Management Service (United States Department of the Interior) ("MMS") to
oil and gas companies in the U.S. Gulf of Mexico. Data obtained from the
MMS.

(8) Represents the average number of drilling rigs under contract in the U.S.
Gulf of Mexico and throughout the world, respectively, for the period
presented. Data obtained from Offshore Data Services.

(9) Represents the number of fixed development drilling and production
platforms installed in the U.S. Gulf of Mexico and worldwide, respectively,
in the period presented. Data obtained from Offshore Data Services.

(10) Assumes the public offering of 1,100,000 shares of Common Stock by the
Company at an assumed price of $ per share resulting in net
proceeds of $ million (after deducting the underwriting discount and
expenses of the Offering) and the application thereof as described herein.
See "Use of Proceeds."
6
<PAGE> 11

THE COMPANY

UNIFAB International, Inc., was formed as a Louisiana corporation in July
1997 to serve as the parent corporation for Universal Fabricators, a Delaware
corporation established in 1992. Universal Fabricators' predecessor, Universal
Partners, was organized as a Louisiana corporation in 1980 by its founder,
Dailey J. Berard.

In 1992, in order to expand its capabilities at the Port of Iberia and meet
increasing demand for its services, Universal Partners entered into an agreement
with McDermott, pursuant to which (i) Universal Partners contributed as a going
concern to the then newly-founded Universal Fabricators approximately 50 acres
of leased land, its buildings and fabrication equipment, and $2.4 million cash,
and (ii) McDermott contributed an inactive fabrication yard directly across a
canal from the land leased by Universal Partners, which included approximately
85 acres of land, 200,000 square feet of covered fabrication space and various
equipment. In exchange, Universal Partners received 51% and McDermott received
49% of the common stock of Universal Fabricators. The Expansion Transaction
became effective December 1, 1992 and substantially enlarged the Company's yard
space and increased its covered fabrication space from 25,000 square feet to
225,000 square feet. Both before and after the Expansion Transaction, the
day-to-day operations of the Company have been conducted by Dailey J. Berard and
the other members of the Company's management team. Although McDermott
representatives have occupied two of five seats on Universal Fabricators' board
of directors, McDermott has remained essentially a passive investor.

In connection with the Expansion Transaction, Universal Partners and
McDermott entered into several agreements which set forth their respective
rights and obligations with respect to Universal Fabricators and the shares of
common stock of Universal Fabricators owned by each of them, all of which will
be terminated in connection with the Offering:

Shareholders' Agreement: Pursuant to the shareholders' agreement (the
"Shareholders' Agreement") between Universal Partners and McDermott, each
party has a right of first refusal with respect to sales of common stock of
Universal Fabricators by the other. In addition, no transfer of such common
stock is allowed until December 1999, and public offerings of the common
stock are prohibited, unless the parties agree otherwise. The Shareholders'
Agreement also provides for a five-member board of directors, three of whom
are to be elected by Universal Partners and two by McDermott. Most major
transactions and changes in corporate governance must be approved by either
the unanimous vote of the shareholders or a majority vote of the board of
directors, which majority includes at least one director elected by each
party. The Shareholders' Agreement also provides that, unless determined
otherwise by a majority of directors including at least one director
elected by each party, 90% of Universal Fabricators' net income for each
year, less reserves, must be distributed to shareholders as dividends.

Put/Call Agreement: Pursuant to an agreement entered into between
Universal Partners and McDermott (the "Put/Call Agreement"), Universal
Partners has the right to require McDermott to purchase all of its shares
of common stock in Universal Fabricators at a purchase price equal to 51%
of the product of (i) 4.5 and (ii) Universal Fabricators' average net
income for the two years prior to the exercise of the put option. Universal
Partners may exercise its right at any time from April 1, 1998 to June 30,
1998 and from April 1, 1999 to June 30, 1999. McDermott, on the other hand,
from April 1, 1999 to June 30, 1999, has the right to purchase Universal
Partners' shares of common stock in Universal Fabricators at the same
purchase price.

Other Agreements: McDermott and Universal Fabricators also entered
into a lease covering Universal Fabricators' administrative office and five
acres of surrounding land. McDermott is also the guarantor of Universal
Fabricators' revolving line of credit with a commercial lender (the
"Existing Credit Facility") and has guaranteed certain letters of credit
issued under the Existing Credit Facility and by certain other banks in
connection with certain foreign contracts.

Immediately prior to the completion of the Offering, Universal Partners,
after paying all of its liabilities and distributing to its shareholders all the
assets it then owns except the common stock of Universal Fabricators owned by
it, will merge into the Company, and the shareholders of Universal Partners will
receive

7
<PAGE> 12

1,785,000 shares of Common Stock of the Company in connection with the Merger.
Concurrently, McDermott will exchange all of the shares of Universal Fabricators
common stock owned by it for 1,715,000 shares of Common Stock of the Company.

McDermott has agreed that in the Offering it will sell all of the shares of
Common Stock of the Company it receives pursuant to the Share Exchange, and that
upon consummation of the Offering, it will (i) sell to the Company approximately
18 acres of land, including the land and building currently leased by the
Company from McDermott, for $700,000 and (ii) surrender all of its rights under
the Shareholders' Agreement and the Put/Call Agreement for $6.3 million. See
"Certain Transactions" and "Use of Proceeds." In addition, McDermott will no
longer guarantee borrowings under the Existing Credit Facility or provide credit
support for any of the letters of credit issued on behalf of the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

8
<PAGE> 13

RISK FACTORS

Prospective purchasers of the Common Stock should carefully consider the
investment considerations set forth below, as well as the other information
contained in this Prospectus.

CYCLICALITY; DEPENDENCE ON ACTIVITY IN THE OIL AND GAS INDUSTRY

The demand for the Company's services has traditionally been cyclical,
depending on the condition of the oil and gas industry and, in particular, the
level of capital expenditures of oil and gas companies that operate in offshore
oil and gas producing areas throughout the world. These capital expenditures
have been influenced by prevailing oil and natural gas prices; exploration and
production companies' expectations about future demand and prices; the cost of
exploring for, producing and delivering oil and gas; the sale and expiration
dates of offshore leases in the United States and overseas; the discovery rate
of new oil and gas reserves in offshore areas; local and international political
and economic conditions; and the ability of oil and gas companies to access or
generate capital sufficient to fund capital expenditures for offshore
exploration, development and production activities. Historically, oil and
natural gas prices and the level of offshore drilling and exploration activity
have fluctuated substantially, resulting in significant fluctuations in demand
for the Company's services. A significant decline in worldwide demand or
prolonged reduction in oil or natural gas prices in the future would likely
depress offshore drilling and development activity. A substantial reduction of
such activity would reduce demand for the Company's services and could have a
material adverse effect on the Company's financial condition and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- General."

NEED FOR SKILLED WORKERS

The Company's ability to remain productive and profitable depends
substantially on its ability to retain and attract skilled construction workers,
primarily welders, fitters and equipment operators. The Company's ability to
expand its operations depends primarily on its ability to increase its skilled
workforce. The demand for skilled workers in south Louisiana is high and the
supply of skilled workers is extremely limited, and no assurance can be given
that the Company will succeed in increasing the size of its workforce through
acquisitions, training, new hiring programs or otherwise. Although the Company
believes that there are a large number of trainable workers residing in
reasonable proximity to its facilities, there can be no assurances that the
Company will be successful in recruiting and training such workers due to a
variety of factors, including the current skill levels of such workers, the
potential inability or lack of desire by such workers to either commute to the
Company's facilities or relocate to areas closer to the Company's facilities,
and competition for workers from other industries. While the Company believes
that its wage rates are competitive and that its relationship with its skilled
workforce is good, a significant increase in the wages paid by competing
employers could result in a reduction in the Company's skilled workforce,
increases in the wage rates paid by the Company, or both. If either of these
events occur, in the near term, the profits realized by the Company from work in
progress would be reduced or eliminated and, in the long term, the production
capacity and profitability of the Company could be diminished and the growth
potential of the Company could be impaired. As another part of its strategy to
increase its employee pool, the Company plans to pursue acquisitions of
companies whose services are complementary to those of the Company. There can be
no assurance, however, that the Company will be able to identify and acquire
acceptable acquisition candidates on terms favorable to the Company or that the
Company will be able to integrate such acquisitions successfully. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- General" and "Business -- Employees."

FACILITY LIMITATIONS

The Company owns one two-inch rolling mill, which currently supplies
approximately 80% of the rolled goods necessary to complete the Company's
projects. Although the rolling mill has not caused any substantial downtime for
the Company, it is an older piece of equipment that requires constant
maintenance. If the rolling mill were to become inoperable for a material amount
of time, the Company would be forced to purchase rolled goods from other
suppliers. There can be no assurance as to the Company's ability to purchase
such

9
<PAGE> 14

goods in the quantities desired and there can be no assurance that the prices at
which these products may be purchased would not be materially higher than the
internal costs that the Company would otherwise bear in producing such rolled
goods. The loss of the rolling mill for a significant period would have a
material adverse effect on the Company's results of operations. The Company
obtains the remainder of its rolled goods from various regional suppliers. As
demand for fabricated services increases, the Company's ability to obtain the
rolled steel that it needs at acceptable prices decreases. If the Company were
not able to obtain such products or if prices for such goods became
prohibitively expensive, the Company's profitability and results of operations
could be materially adversely affected. See "Business -- Facilities and
Equipment -- Equipment" and "-- Materials."

Due to the limitations of the various access routes from the Company's
facilities at the Port of Iberia to the Gulf of Mexico, the Company is currently
unable to deliver structures weighing over 3,500 tons. One main route to the
Gulf of Mexico, the Freshwater Bayou Channel, provides 12 feet of water depth to
the Gulf of Mexico, but the dimensions of locks on this channel prevent the
transport of structures more than 80 feet in width. There is a by-pass channel
around these locks that, if usable, would permit continuous passage to the Gulf
of Mexico with at least 12 feet of water depth at all points and without any
material width restrictions. This water depth would generally permit the
transportation of structures weighing up to 6,000 tons, which the Company will
be able to fabricate once the new slip and bulkhead is constructed (to be funded
with a portion of the proceeds of this Offering). Due to the silt that has built
up on both sides of the by-pass, however, the by-pass is currently impassable
without extensive dredging. On the basis of amounts spent in the past by
contractors other than the Company in order to facilitate the transportation of
certain structures, it is estimated that the cost of dredging the silt from the
by-pass and opening the by-pass channel would be approximately $400,000 to
$500,000. Recently, the Louisiana Legislature appropriated funds for the initial
dredging of the by-pass, a project that would open the by-pass for at least one
year and possibly longer, depending upon the extent of future traffic through
the by-pass. There can be no assurance, however, that the appropriated funds
will actually be spent or that the by-pass, once opened, will remain usable by
the Company for structures exceeding 3,500 tons. If this project is not
completed by the state, the Company would remain unable to deliver structures
weighing over 3,500 tons unless it determined to incur the additional dredging
costs described above.

BACKLOG

The Company's backlog is based on management's estimate of the remaining
labor, material and subcontracting costs to be incurred with respect to those
projects on which a customer has authorized the Company to begin work or
purchase materials pursuant to written contracts, letters of intent, or other
forms of authorization. Most projects currently included in the Company's
backlog are subject to change and/or termination at the option of the customer,
either of which could substantially change the amount of backlog currently
reported. In the case of a termination, the customer is generally required to
pay the Company for work performed and materials purchased through the date of
termination, and in some cases, pay the Company termination fees; however, due
to the large dollar amounts of backlog estimated for each of a small number of
projects, amounts included in the Company's backlog could decrease substantially
if one or more of these projects were to be terminated by the Company's
customers. Approximately 57% of the Company's backlog at June 30, 1997 was
attributable to two projects. Termination of one or more of these large projects
could have a material adverse effect on the Company's revenue, net income and
cash flow for fiscal 1998. While the Company has restrained the growth of its
backlog in order to improve the prices it obtains for its services, such a
strategy in times of decreasing demand or increasing lead times for purchases of
materials could accelerate a decline in the Company's profitability. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- General" and "Business -- Backlog."

OPERATING RISKS

The Company's fabrication of large steel structures involves certain
operating hazards that can cause personal injury or loss of life, severe damage
to and destruction of property and equipment and suspension of operations. The
failure of such structures during and after installation can result in similar
injuries and

10
<PAGE> 15

damages. The Company also has employees engaged in offshore operations that are
covered by provisions of the Jones Act, the Death on the High Seas Act and
general maritime law, which laws operate to make the liability limits
established by state workers' compensation laws (which cover the Company's other
employees) inapplicable to these employees and, instead, permit them or their
representatives to pursue actions against the Company for damages for
job-related injuries, with generally no limitations on the Company's potential
liability. In addition, due to their proximity to the Gulf of Mexico, the
Company's facilities are subject to the possibility of physical damage caused by
hurricanes or flooding. Although the Company maintains such insurance protection
as it considers economically prudent, there can be no assurance that its
insurance will be sufficient or effective under all circumstances or against all
claims or hazards to which the Company may be subject, nor does the Company
carry insurance for the loss of profits that may result from such hazards. A
successful claim or damage resulting from a hazard for which the Company is not
fully insured could have a material adverse effect on the Company. Moreover, no
assurance can be given that the Company will be able to maintain adequate
insurance in the future at rates that it considers economically prudent. See
"Business -- Insurance."

A majority of the Company's revenue in recent years has resulted from
projects constructed for overseas installation. Although the Company delivers
the structures that it fabricates at its Port of Iberia facility and has
historically received payment only in United States dollars, the Company is
nevertheless subject to delays in collecting receivables from contractors and
oil and gas companies with respect to projects installed overseas. Oil and gas
operations in overseas locations in which the Company's products have been
installed are subject to a number of risks inherent in business operations in
foreign countries, including political, social and economic instability;
nullification, modification or renegotiation of contracts; import-export quotas;
and other forms of public and governmental regulation, all of which are beyond
the control of the Company. Additionally, the ability of the Company to compete
in international markets may be adversely affected by import duties and fees, by
foreign taxes, by foreign governmental regulations that favor or require the
awarding of contracts to local contractors, or by regulations requiring foreign
contractors to employ citizens of, or purchase supplies from, a particular
jurisdiction.

CONTRACT BIDDING RISKS

Due to the nature of the marine construction industry, most of the
Company's projects are performed pursuant to fixed-price contracts, although
some projects are performed on a time and materials basis. Under fixed-price
contracts, the Company receives the price fixed in the contract, subject to
adjustment only for change orders placed by the customer. As a result, with
respect to fixed-price contracts, the Company is responsible for all cost
overruns. Under time and materials arrangements, the Company receives a
specified hourly rate for direct labor hours (which exceeds its direct labor
costs) and a specified percentage mark-up over its cost for materials. As a
result, with respect to time and materials contracts, the Company is protected
against cost overruns but does not benefit directly from cost savings. The
revenue, costs and gross profit realized on a contract will often vary from the
estimated amounts on which such contracts were originally based for various
reasons, including errors in estimates or bidding, changes in the availability
and cost of labor and material and variations in productivity from the original
estimates. These variations and the risks inherent in the marine construction
industry may result in revenue and gross profits different from those originally
estimated and reduced profitability or losses on projects. Depending on the size
of a project, variations from estimated contract performance can have a
significant impact on the Company's operating results for any particular fiscal
quarter or year.

Most of the Company's fixed price contracts also provide for incentive
payments for early delivery of projects and liquidated damages for late
delivery. If the Company were to miss the delivery date specified by any of its
contracts, whether due to problems with its rolling mill, labor shortages,
adverse weather conditions or other causes, and such delay was not excused under
the terms of such contract or by the customer, the Company could be subject to
liquidated damages which could materially adversely affect the Company's
profitability and results of operations.

11
<PAGE> 16

PERCENTAGE-OF-COMPLETION ACCOUNTING

Most of the Company's revenue and income is recognized on a
percentage-of-completion basis based on the ratio which labor and subcontracting
costs incurred bears to the total estimated labor and subcontracting costs
required for completion. Accordingly, expected labor hours, costs and profits
are reviewed monthly as the work progresses, and adjustments proportionate to
the percentage of completion are reflected in revenue for the period when such
estimates are revised. To the extent that these adjustments result in a
reduction or elimination of previously reported profits, the Company would have
to recognize a charge against current earnings, which may be significant
depending on the size of the project or the adjustment. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- General."

SEASONALITY AND WEATHER RISKS

The Company's operations are subject to seasonal variations in weather
conditions and daylight hours. Since most of the Company's construction
activities take place outdoors, the average number of direct labor hours worked
per day generally declines by approximately one and one-half hours in the winter
months as compared to the summer months due to an increase in rainy and cold
conditions and a decrease in daylight hours. Operations may also be affected by
the rainy weather, hurricanes and other storms prevalent along the Gulf Coast
throughout the year. As a result, the Company's revenue and gross profit during
the third and fourth quarters of each fiscal year are subject to being
disproportionately low as compared to the first and second quarters, although,
in recent years, that has not been the case. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- General."

DEPENDENCE ON SIGNIFICANT CUSTOMERS

A large portion of the Company's revenue has historically been generated by
a few customers, although not necessarily the same customers from year to year.
For example, the Company's largest customers (those which individually accounted
for more than 10% of revenue in a given year) collectively accounted for 39.3%
(two customers), 64.5% (two customers) and 60.7% (two customers) of revenue for
fiscal 1995, 1996 and 1997, respectively. At June 30, 1997, 57% of the Company's
backlog was attributable to two projects.

Although the Company's direct customers on many projects are installation
contractors, each project is ultimately fabricated for use by an oil and gas
company. The Company, from time to time, contracts with multiple installation
contractors who may be supplying structures to the same oil and gas company and,
in some instances, contracts directly with the oil and gas companies. Thus,
concentration among the Company's customers may be greater when the customer is
viewed as the oil and gas company rather than the installation contractor. For
example, at June 30, 1997, the Company estimates that approximately 89% of its
backlog was for projects to be built for three oil and gas companies.

Because the level of fabrication that the Company may provide, directly or
indirectly, to any particular oil and gas company depends, among other things,
on the size of that company's capital expenditure budget devoted to platform
construction in a particular year and the Company's ability to meet the
customer's delivery schedule, companies that account for a significant portion
of the Company's revenue in one fiscal year, whether as a direct customer or
through subcontracted projects, may represent an immaterial portion of revenue
in subsequent years. The level of fabrication that the Company may provide as a
subcontractor to an offshore construction company depends, among other things,
on the ability of that company to successfully obtain prime contracts with oil
and gas companies and the ability of the Company to meet the delivery schedule
of the prime contractor. Thus, the prime contractors who account for a
significant portion of revenue in one fiscal year may represent an immaterial
portion of revenue in subsequent years. However, the loss of any significant
customer (whether an oil and gas company with which the Company directly
contracts or a prime contractor for which the Company has provided services on a
subcontract basis) for any reason, including a sustained decline in an oil and
gas company's capital expenditure budget or the prime contractor's inability to
successfully obtain contracts, or other competitive factors, could result in a
substantial loss of revenue and have a material adverse effect on the Company's
operating performance.

12
<PAGE> 17

COMPETITION

Marine construction companies servicing the oil and gas industry compete
intensely for available projects. Contracts for the Company's services are
generally awarded on a competitive bid basis. Price and the contractor's ability
to meet a customer's delivery schedule are the principal factors in determining
which qualified contractor is awarded the job. Customers may also consider,
among other things, the availability and capabilities of equipment, as well as
the reputation, experience and safety record of the contractor. The Company
competes with both large and small companies, and certain of these competitors
have greater financial and other resources than the Company. In addition,
because of subsidies, import duties and fees, taxes imposed on foreign operators
and lower wage rates in foreign countries, along with fluctuations in the value
of the U.S. dollar and other factors, the Company may not be able to remain
competitive with foreign contractors for projects designed for use in
international locations. See "Business -- Competition."

REGULATORY AND ENVIRONMENTAL MATTERS

The Company's operations and properties are subject to and affected by
various types of governmental regulation, including numerous federal, state and
local environmental protection laws and regulations, compliance with which is
becoming increasingly complex, stringent and expensive. These laws may provide
for "strict liability" for damages to natural resources or threats to public
health and safety, rendering a party liable for environmental damage without
regard to its negligence or fault. Sanctions for noncompliance may include
revocation of permits, corrective action orders, administrative or civil
penalties and criminal prosecution. Certain environmental laws provide for
strict, joint and several liability for remediation of spills and other releases
of hazardous substances. In addition, companies may be subject to claims
alleging personal injury or property damage as a result of alleged exposure to
hazardous substances. Such laws and regulations may also expose the Company to
liability for the conduct of or conditions caused by others, or for acts of the
Company that were in compliance with all applicable laws at the time such acts
were performed. In addition, the Company depends on the demand for its services
from the oil and gas industry and is affected by changing taxes, price controls
and other laws and regulations relating to the oil and gas industry generally.
The adoption of laws and regulations curtailing exploration and development
drilling for oil and gas for economic, environmental and other policy reasons
would adversely affect the Company's operations by limiting demand for its
services. The Company cannot determine to what extent future operations and
earnings of the Company may be affected by new legislation, new regulations or
changes in existing regulations. See "Business -- Government and Environmental
Regulation."

DEPENDENCE ON KEY PERSONNEL

The Company's success depends on, among other things, the continued active
participation of Dailey J. Berard, President and Chief Executive Officer of the
Company, and certain of the Company's other officers and key operating
personnel. The loss of the services of any one of these persons could have a
material adverse effect on the Company. See "Management."

SHARES ELIGIBLE FOR FUTURE RESALE

Upon completion of the Offering, the Company will have outstanding
4,600,000 shares of Common Stock (excluding 133,500 shares issuable upon the
exercise of outstanding options). All of the 2,815,000 shares of Common Stock
offered hereby will be eligible for sale in the public market without
restriction upon completion of the Offering. All of the remaining 1,785,000
shares of Common Stock are "restricted securities" as that term is defined in
Rule 144 under the Securities Act of 1933, as amended (the "Securities Act").
The Company, each of the Company's directors and executive officers and certain
shareholders have agreed not to offer, sell or otherwise dispose of any shares
of Common Stock in the public market for 180 days from the date of this
Prospectus without the prior consent of the Underwriters. See "Underwriting."
Subject to this agreement, after the completion of the Offering, the Company's
existing shareholders may sell shares of Common Stock pursuant to Rule 144 under
the Securities Act or otherwise. In addition, each of Messrs. Dailey J. Berard,
Broussard and Segura has been granted certain demand and "piggyback"
registration rights by the Company with respect to all of the shares of Common
Stock owned by him. Although the Company

13
<PAGE> 18

cannot predict the timing or amount of future sales of Common Stock or the
effect that the availability of such shares for sale will have on the market
price prevailing from time to time, sales of substantial amounts of Common Stock
in the public market following this Offering could adversely affect the market
price of the Common Stock. See "Principal and Selling Shareholders" and "Shares
Eligible for Future Resale."

NO PRIOR MARKET; POSSIBLE VOLATILITY OF MARKET PRICE; DILUTION

Prior to the Offering, there has been no public market for the Common
Stock. Although application has been made to list the Common Stock offered
hereby on the Nasdaq National Market, there can be no assurance that a market
for the Common Stock will develop or, if developed, will be sustained. The
initial public offering price of the Common Stock will be determined by
negotiations between the Company, the Selling Shareholder and the Underwriters.
For the factors considered in such negotiations, see "Underwriting." There can
be no assurance that future market prices at which the Common Stock will sell in
the public market after the Offering will not be lower than the initial public
offering price. Following the Offering, the market price of the Common Stock may
fluctuate depending on various factors, including the general economy, stock
market conditions, general trends in the marine construction business,
fluctuations in oil and gas prices, announcements by the Company or its
competitors and variations in the Company's quarterly and annual operating
results. In addition, purchasers of the Common Stock offered hereby will incur
immediate dilution of $ ($ per share) in the pro forma net
tangible book value of their investment. See "Dilution."

DIVIDENDS

The Company currently intends to retain earnings, if any, to meet its
working capital requirements and to finance the future operation and growth of
the Company's business and, therefore, does not plan to pay cash dividends to
holders of its Common Stock in the foreseeable future.

14
<PAGE> 19

USE OF PROCEEDS

The estimated net proceeds to the Company from the sale of the shares of
Common Stock offered hereby, after deducting the underwriting discount and
offering expenses, will be approximately $ million (assuming an initial
offering price of $ per share). The Company intends to use
approximately $7.0 million of its net proceeds to fund capital expenditures
anticipated to be made within 12 months of the completion of the Offering to
improve the Company's facilities and the productivity of its workforce,
including approximately $4.0 million to acquire and install a four-inch rolling
mill, approximately $1.7 million to construct a new slip and bulkhead and to
build a new load out system for use with the new slip, approximately $500,000 to
expand and improve the Company's pipe shop and $800,000 to purchase land
currently leased from McDermott, including the Company's 12,000 square foot main
office building, and an additional 10 acres from Universal Partners. The Company
will use $6.3 million of the net proceeds to secure the release by McDermott of
its rights under the Shareholders' Agreement and the Put/Call Agreement. See
"The Company" and "Certain Transactions." Any remaining proceeds will be used
for working capital and general corporate purposes. Until used, the Company
intends to invest the net proceeds in money market funds, certificates of
deposit or short-term, interest bearing securities.

The Company will not receive any proceeds from the sale of Common Stock by
the Selling Shareholder.

DIVIDEND POLICY

After the Offering, the Company intends to retain earnings, if any, to meet
its working capital requirements and to finance the future operation and growth
of its business and, therefore, does not plan to pay cash dividends to holders
of its Common Stock in the foreseeable future. The Shareholders' Agreement,
which will be terminated in connection with the Offering, requires that, unless
determined otherwise by a majority of directors of Universal Fabricators,
including at least one director elected by each of McDermott and Universal
Partners, 90% of Universal Fabricators' net income for the previous fiscal year,
less reserves, for each fiscal year be distributed to McDermott and Universal
Partners as dividends. For the fiscal years ending March 31, 1995, 1996 and
1997, Universal Fabricators paid dividends of approximately 90% of its net
income, totaling $1.9 million, $5.8 million and $3.6 million, respectively. See
"Risk Factors -- Dividends."

15
<PAGE> 20

DILUTION

After giving effect to the formation and capitalization of UNIFAB
International, Inc., the Merger, the Share Exchange and the $3.6 million
dividend paid by the Company on June 19, 1997, the pro forma net tangible book
value of the Company at March 31, 1997 would have been $8.6 million, or $2.45
per share of Common Stock. On a pro forma basis, net tangible book value per
share of Common Stock represents the amount of the Company's tangible net worth
(total tangible assets less total liabilities) divided by the total number of
shares of Common Stock outstanding. After giving effect to the Offering
(assuming an initial public offering price of $ per share and deducting
the underwriting discount and offering expenses estimated at $ million), the
pro forma net tangible book value of the Company at March 31, 1997 would have
been approximately $ million or $ per share of Common Stock. This
represents an immediate increase in net tangible book value of $ per
share of Common Stock to current holders of Common Stock and an immediate
dilution of approximately $ per share to the new investors purchasing
shares in the Offering.

The following table illustrates this per share dilution to new investors:

<TABLE>
<S> <C> <C>
Initial net public offering price per share................. $
Pro forma net tangible book value per share at March 31,
1997 (without taking into account the Offering)(1)..... $2.45
Increase in pro forma net tangible book value per share
attributable to the sale of Common Stock in the
Offering............................................... $
-----
Adjusted pro forma net tangible book value per share after
giving effect to the Offering(1).......................... $
-----
Dilution in pro forma net tangible book value per share to
the purchasers of Common Stock offered hereby(1).......... $
=====
</TABLE>

The following table summarizes, on a pro forma basis, at March 31, 1997,
the number of shares of Common Stock to be issued by the Company in connection
with the Merger, the Share Exchange and the Offering, the total consideration
received by the Company and the average price per share of Common Stock paid by
existing shareholders and by investors in the Offering (assuming an initial
public offering price of $ per share) before deducting the estimated
underwriting discount and offering expenses.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- --------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing shareholders(1)............... 3,500,000 76% $8,579,831 % $2.45
New investors.......................... 1,100,000 24% % $
--------- ---- ---------- ---- -----
Total........................ 4,600,000 100% 100%
========= ==== ========== ====
</TABLE>

- ---------------

(1) Excludes 133,500 shares issuable upon the exercise of outstanding options.
See "Management -- Compensation Pursuant to Plans -- Long-Term Incentive
Plan."

16
<PAGE> 21

CAPITALIZATION

The following table sets forth the capitalization of the Company at March
31, 1997; on a pro forma basis, as of March 31, 1997, giving effect to the
formation and capitalization of UNIFAB International, Inc., the Merger, the
Share Exchange and the $3.6 million dividend paid by the Company on June 19,
1997; and on a pro forma basis as adjusted to reflect the sale by the Company of
1,100,000 of the shares of Common Stock offered hereby at an assumed initial
public offering price of $ per share and the application of the
estimated net proceeds thereof as described in "Use of Proceeds." The Company
was formed on July 17, 1997 with an initial capitalization of $1,000. The table
set forth below should be read in conjunction with the financial statements and
the notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 1997
------------------------
PRO FORMA
PRO FORMA AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current maturities..................... $ -- $ --
-------- --------
Shareholders' equity:
Preferred Stock, no par value per share, 5,000,000 shares
authorized; none issued or outstanding................. -- --
Common Stock, $0.01 par value per share, 20,000,000 shares
authorized; 3,500,000 million shares issued and
outstanding; 4,600,000 million shares issued and
outstanding as adjusted(1)............................. 35
Additional paid-in capital................................ 8,545
Retained earnings......................................... --
-------- --------
Total shareholders' equity........................ 8,580
-------- --------
Total capitalization........................................ $ 8,580 $
======== ========
</TABLE>

- ---------------

(1) Excludes 133,500 shares issuable upon exercise of outstanding options. See
"Management -- Compensation Pursuant to Plans -- Long-Term Incentive Plan."

17
<PAGE> 22

SELECTED FINANCIAL AND OPERATING DATA

The income statement data for each of the years in the three years ended
March 31, 1997 and the balance sheet data as of March 31, 1995, 1996 and 1997
are derived from the financial statements of Universal Fabricators which have
been audited by Ernst & Young LLP. Immediately prior to completion of the
Offering, Universal Fabricators will become a wholly owned subsidiary of UNIFAB
International, Inc., which will have no other significant operations or assets.
The following information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
financial statements and notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------
1993(1) 1994 1995 1996 1997
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue................................... $25,369 $29,926 $27,883 $51,807 $66,724
Cost of revenue........................... 21,239 27,211 23,174 40,362 58,589
------- ------- ------- ------- -------
Gross profit.............................. 4,130 2,715 4,709 11,445 8,135
General and administrative expense........ 1,207 1,228 1,326 1,419 1,637
------- ------- ------- ------- -------
Operating income.......................... 2,923 1,487 3,383 10,026 6,498
Other income (expense), net............... 84 21 38 315 82
------- ------- ------- ------- -------
Income before income taxes................ 3,007 1,508 3,421 10,341 6,580
Income tax expense........................ 1,112 555 1,286 3,888 2,555
------- ------- ------- ------- -------
Net income................................ $ 1,895 $ 953 $ 2,135 $ 6,453 $ 4,025
======= ======= ======= ======= =======
Pro forma net income per share
(unaudited)(2)......................... $ 0.54 $ 0.27 $ 0.61 $ 1.84 $ 1.15
======= ======= ======= ======= =======
Pro forma weighted average common shares
(unaudited)(2)......................... 3,500 3,500 3,500 3,500 3,500
Other Financial Data:
Depreciation and amortization............. $ 125 $ 381 $ 424 $ 390 $ 471
Capital expenditures...................... $ 6 $ 110 $ 179 $ 402 $ 821
EBITDA(3)................................. $ 3,048 $ 1,868 $ 3,807 $10,416 $ 6,969
EBITDA margin(4).......................... 14.4% 6.2% 13.7% 20.1% 10.4%
Operating Data:
Direct labor hours worked................. 520,000(5) 484,000 436,000 656,000 902,000
Number of employees....................... 230 215 210 330 425
Backlog................................... $ 6,976 $ 8,917 $31,994 $42,311 $30,221
</TABLE>

<TABLE>
<CAPTION>
AS OF MARCH 31,
-----------------------------------------------
1993 1994 1995 1996 1997
------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital............................ $ 3,181 $ 4,337 $ 5,877 $10,333 $ 8,192
Property, plant and equipment, net......... 5,514 5,243 4,986 4,999 5,341
Total assets............................... 13,043 14,318 16,173 23,714 26,154
Debt....................................... -- -- -- -- --
Shareholders' equity....................... 7,222 8,175 9,452 13,984 12,201
</TABLE>

- ---------------

(2) Gives effect to the completion of the merger of Universal Partners into
UNIFAB International, Inc. and the exchange by McDermott of its shares of
Universal Fabricators for shares of UNIFAB International, Inc. See "The
Company."

18
<PAGE> 23

(3) The Company calculates EBITDA (earnings before interest expense, income
taxes, depreciation and amortization) as operating income plus depreciation
and amortization. EBITDA should not be considered as an alternative to net
income or any other measure of operating performance in accordance with
general accounting principles. EBITDA is widely used by financial analysts
as a measure of financial performance. The Company's measurement of EBITDA
may not be comparable to similarly titled measures reported by other
companies.

(4) EBITDA margin is calculated by dividing EBITDA by revenue.

(5) Reflects the number of direct labor hours worked for the year ended December
31, 1992.

19
<PAGE> 24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company's results of operations depend primarily on (i) the level of
oil and gas exploration and development activity of oil and gas companies in the
Gulf of Mexico and offshore West Africa; (ii) the Company's ability to win
contracts through competitive bidding; and (iii) the Company's ability to manage
those contracts to successful completion. The level of exploration and
development activity is related to several factors, including trends of oil and
gas prices, exploration and production companies' expectations of future oil and
gas prices and changes in technology which reduce costs and improve expected
returns on investment. Over the past four years, favorable trends in these
factors have led to increased offshore exploration and development activity.

In addition to higher oil and gas prices, improvements in three-dimensional
seismic, directional drilling, production techniques and other advances in
technology have increased drilling success rates and reduced costs. The number
of active offshore drilling rigs worldwide is at its highest point since 1986,
with the average number of active offshore rigs in the Gulf of Mexico, in
particular, having increased from approximately 80 for the year ended December
31, 1992 to more than 155 for the year ended December 31, 1996. In addition, the
number of leases of exploratory tracts in the Gulf of Mexico sold to oil and gas
companies by the MMS also has been at record levels.

Lease sales and awards of offshore concessions generally serve as
precursors to drilling and exploration activity and, in turn, increased levels
of offshore drilling and exploration activity generally serve as precursors to
increased demand for platform construction. Due to the time required to drill an
exploratory offshore well, formulate a comprehensive development plan and design
offshore platforms, the fabrication and installation of such platforms usually
lag exploratory drilling by one to three years. As a result, the high levels of
drilling activity worldwide, particularly in the Gulf of Mexico, have only
recently impacted the demand for the Company's custom fabrication services, with
revenue increasing 85.8% to $51.8 million in fiscal 1996 and 28.8% to $66.7
million in fiscal 1997, in each case as compared to the prior fiscal year. There
can be no assurance, however, that drilling activity will continue at such
levels or that oil and gas companies will actively explore and develop the
fields recently leased. Whether these trends continue and the resulting increase
in demand for the Company's services actually occurs is dependent in large part
on the factors listed above.

During the fiscal years ended March 31, 1995, 1996 and 1997, 47%, 58% and
64%, respectively, of the Company's revenue was derived from structures
fabricated for installation in international areas, with the remainder designed
for installation in the Gulf of Mexico. The Company believes that its strong
presence in both overseas markets and the Gulf of Mexico market, coupled with
continued strong oil and gas activity in these markets, has enabled it to
selectively obtain high-margin fabrication work and to benefit from increased
pricing levels. The Company further believes that the increased activity level
in the Gulf of Mexico will lead to an increasing percentage of the Company's
revenue coming from projects intended for installation in the Gulf of Mexico.
The Company has historically attempted to manage its backlog in order to benefit
from pricing trends. In periods of rising prices, the Company intentionally
avoids building high levels of backlog in order to maximize its ability to
pursue higher margin projects. The Company believes that, as a low-cost
fabricator, it is well positioned to benefit from this strategy.

Barges loaded with completed structures weighing up to 3,500 tons can
travel through any of several currently available water routes from the
Company's facilities at the Port of Iberia to the Gulf of Mexico. Special
efforts, including dredging, would be needed to permit barges carrying
structures from 3,500 to 6,000 tons to travel from the Port of Iberia facility
to the Gulf of Mexico, which would add costs to the project that the customer
may not be willing to bear. In addition, the Company needs to construct the new
slip and bulkhead which it intends to fund through a portion of the proceeds of
the Offering to accommodate structures of this size. See "Risk
Factors -- Facility Limitations." Although the Company is not able to produce
jackets designed for water depths over 300 feet as they are too heavy or too
wide to be transported from the Company's facilities, the increased activity in
the deepwater areas of the Gulf of Mexico has benefitted the

20
<PAGE> 25

Company's pricing levels as the Company is able to fabricate decks and modules
weighing up to 3,500 tons for installation on platforms regardless of water
depth.

Most of the Company's fabrication work is performed pursuant to fixed-price
contracts, although some projects are performed on a time and materials basis.
Under fixed-price contracts, the Company receives the price fixed in the
contract, subject to adjustment only for change orders placed by the customer.
As a result, with respect to fixed-price contracts, the Company retains all cost
savings but is also responsible for all cost overruns. Under time and materials
arrangements, the Company receives a specified hourly rate for direct labor
hours worked (which exceeds its direct labor costs) and a specified percentage
mark-up over its cost for materials. As a result, under time and materials
contracts, the Company is protected against cost overruns but does not benefit
directly from cost savings. As the Company is typically able to obtain prices
for materials in excess of its costs, the cost and productivity of the Company's
labor force are the key factors affecting the Company's operating profits.
Consequently, it is essential that the Company control its labor costs and the
productivity of its workforce. See "Business -- Customers and Contracting."

The ability of the Company to operate profitably and to expand its
operations depends substantially on its ability to attract skilled production
workers, primarily welders, fitters and equipment operators. The Company was
able to add 95 full-time production employees to its workforce in fiscal 1997.
While the supply of production workers is limited, the demand for their services
has increased as oil and gas development and production activity has increased.
As a result, during 1997 the Company increased the average hourly wages of its
employees, instituted a 401(k) Plan and improved several other benefit packages
available to its employees. The Company has also been very active in the
movement to create a more business-oriented educational system in Louisiana,
which lead to the passage of a recent bill that aims to give industry more input
in the teaching at vocational-technical schools. Although there can be no
assurance that such initiatives will be carried out to successful completion,
management believes that, in the long-term, initiatives like these are the best
methods for increasing the pool of well-trained workers in Louisiana. See
"Business -- Employees."

After the Offering, the Company expects to incur additional ongoing general
and administrative costs as a result of (i) the increased costs of being a
public company, including the hiring of additional personnel such as a Chief
Financial Officer, and (ii) an increase in compensation to several employees to
offset the loss of dividend income these employees historically received from
Universal Partners. It is estimated that the increase will be approximately
$650,000 in the first year after the Offering.

The Company's operations are subject to seasonal variations in weather
conditions and daylight hours. Because most of the Company's construction
activities take place outdoors, the number of direct labor hours worked
generally declines in winter months due to an increase in rainy and cold
conditions and a decrease in daylight hours. Operations may also be affected by
the rainy weather, hurricanes and other storms prevalent along the U.S. Gulf
Coast throughout the year. As a result, the Company's revenue, gross profit and
net income during the fourth quarter of each fiscal year are subject to being
disproportionately low as compared to the first and second quarters, and full
year results may not in all cases be a direct multiple of any particular quarter
or combination of quarters. The Company's results for the last three years do
not dramatically reflect this effect due to (i) the large amount of revenue and
income recognized in the third and fourth quarters of 1996 on one particular
project and (ii) the substantial increase in production volume that began in the
third quarter of 1996. The table below indicates for each quarter of the
Company's last three fiscal years the percentage of annual revenue and net
income earned and the number of direct labor hours worked in each quarter.

<TABLE>
<CAPTION>
1995 1996 1997
------------------------- ------------------------- -------------------------
1ST. 2ND 3RD 4TH 1ST. 2ND 3RD 4TH 1ST. 2ND 3RD 4TH
QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR.
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue................... 27% 29% 22% 22% 17% 26% 27% 30% 28% 27% 22% 23%
Net income................ 31% 31% 25% 13% 6% 15% 32% 47% 27% 28% 21% 24%
Direct hours
(in thousands).......... 127 136 92 81 126 143 194 193 218 242 206 236
</TABLE>

21
<PAGE> 26

Most of the Company's revenue and expenses are recognized on a
percentage-of-completion basis determined by the ratio that labor and
subcontracting costs incurred bear to the total estimated labor and
subcontracting costs required for completion. Accordingly, expected labor and
subcontracting costs are reviewed monthly as the work progresses, and
adjustments proportionate to the percentage of completion are reflected in
revenue for the period when such estimates are revised. To the extent that these
adjustments result in a reduction of previously reported profits, the Company
would have to recognize a charge against current earnings, which may be
significant depending on the size of the project or the adjustment. Bonus
payments under fixed-price contracts are included in revenue when their
realization is reasonably assured. Revenue from time and materials contracts is
recognized on the basis of costs incurred during the period plus the fee earned.

RESULTS OF OPERATIONS

Comparison of the Years Ended March 31, 1997 and 1996

During the year ended March 31, 1997, the Company's revenue was $66.7
million, a 28.8% increase from the $51.8 million generated in the year ended
March 31, 1996. This increase was primarily caused by an increase in direct
labor hours worked and, to a lesser extent, prices realized under fixed-price
contracts. Although direct labor hours worked increased 37.5% in fiscal 1997
over fiscal 1996, this increase did not result in a proportionate increase in
revenue due to the lower productivity of employees newly hired in fiscal 1997
compared to the productivity of the Company's longer term employees.

Cost of revenue was $58.6 million in fiscal 1997 compared to $40.4 million
in fiscal 1996. Cost of revenue consists of costs associated with the
fabrication process, including direct costs (such as direct labor costs and raw
materials) and indirect costs (such as supervisory labor, utilities, welding
supplies and equipment costs) that can be specifically allocated to projects.
These costs increased as a percentage of revenues to 87.8% in 1997 from 77.9% in
fiscal 1996. In fiscal 1996, a major contract obtained on a fixed-price basis
was completed at a materials cost substantially lower than that estimated in
connection with the bid, which the Company had prepared on the basis of the
customer's designs. Had the contract been completed at the materials cost
originally estimated, cost of revenue during fiscal 1996 would have been
increased by approximately $5.5 million.

General and administrative expense was $1.6 million in fiscal 1997 compared
to $1.4 million in fiscal 1996. The Company's general and administrative expense
as a percentage of revenue decreased to 2.5% in 1997 as compared to 2.7% in
fiscal 1996 as the increase in the Company's revenue did not require a
proportionate increase in such expenses.

Interest income decreased to $145,000 in fiscal 1997 from $318,000 in
fiscal 1996, as the weighted average of invested funds was lower in fiscal 1997
as compared to fiscal 1996, due to longer than average delays in collecting some
international receivables in 1997.

Receivables increased in fiscal 1997 primarily because of delays in
collection of receivables from contractors on projects installed in overseas
locations.

Comparison of the Years Ended March 31, 1996 and 1995

During the year ended March 31, 1996, the Company had revenue of $51.8
million as compared to $27.9 million in fiscal 1995, an 85.8% increase. This
increase was primarily due to a 50.5% increase in direct labor hours worked over
1995, and the fact that in connection with a single fixed-price contract
performed in fiscal 1995, the customer, rather than the Company, supplied the
materials.

Cost of revenue was $40.4 million in fiscal 1996 compared to $23.2 million
in 1995. This cost decreased as a percentage of revenue to 77.9% in fiscal 1996
from 83.1% in 1995. This decrease was primarily the result of the Company's
performance during fiscal 1996 on the major contract described above.

General and administrative expense remained relatively constant at $1.4
million in 1996 compared to $1.3 million in fiscal 1995.

22
<PAGE> 27

Interest income was $318,000 in fiscal 1996 compared to $45,000 in fiscal
1995, as the weighted average of invested funds was higher in fiscal 1996
compared to fiscal 1995, due primarily to higher profits in fiscal 1996.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has funded its business activities through funds
generated from its operations. Net cash provided by operations was $3.4 million,
$4.3 million and $2.3 million for the years ended March 31, 1995, 1996 and 1997,
respectively. The Company's capital requirements historically have been for
improvements to its facilities and equipment to increase the productivity of its
labor force. During fiscal 1996 and fiscal 1997, the Company had capital
expenditures of $402,000 and $821,000, respectively.

The Shareholders' Agreement requires that, unless determined otherwise by a
majority of directors of Universal Fabricators, including at least one director
elected by each of McDermott and Universal Partners, 90% of Universal
Fabricators' net income for the previous fiscal year, less reserves, for each
fiscal year be distributed to McDermott and Universal Partners as dividends. For
fiscal 1995, 1996 and 1997, Universal Fabricators paid dividends of
approximately 90% of its net income, totaling $1.9 million, $5.8 million and
$3.6 million, respectively. As a result of this practice, the Company has
limited capital expenditures and restrained potential growth. In connection with
the Offering, the Shareholders' Agreement will be terminated. After the
Offering, the Company intends to retain its earnings, if any, for use as working
capital and to fund capital expenditures. The Company's past capital
expenditures are not indicative of its intended capital expenditures after the
Offering.

The Company has a $10.0 million revolving line of credit with a commercial
lender. The Existing Credit Facility bears interest at a floating rate 50 basis
points above the prime commercial lending rate as quoted from time to time by
The Chase Manhattan National Bank and is secured by the Company's accounts
receivable. At June 30, 1997, the interest rate on the Existing Credit Facility
was approximately 9.0%. The Existing Credit Facility also provides for the
issuance of letters of credit on behalf of the Company (the "Bank Letters of
Credit"). The amount of outstanding Bank Letters of Credit reduces the Company's
borrowing limit on a dollar-for-dollar basis. As of March 31, 1996 and 1997,
there were $2.5 million and $2.0 million, respectively, in Bank Letters of
Credit outstanding and no other borrowings under the Existing Credit Facility.
Outstanding amounts under the Existing Credit Facility, including Bank Letters
of Credit, are currently guaranteed by McDermott. As of March 31, 1997, the
Company also had outstanding letters of credit of approximately $7.9 million
that were obtained on behalf of the Company by McDermott (the "McDermott Letters
of Credit"). Immediately prior to the Offering, the Company expects that
approximately $6.3 million of McDermott Letters of Credit will be outstanding.

Upon completion of the Offering, the Company expects to enter into a new
$20.0 million revolving credit facility with a commercial lender, which will
provide for up to $10.0 million in borrowings for general corporate purposes and
for letters of credit up to $10.0 million (the "New Credit Facility"). McDermott
will not guarantee any amounts outstanding under the New Credit Facility, and
McDermott will be released from its obligations under the Existing Credit
Facility, all Bank Letters of Credit and McDermott Letters of Credit. The
McDermott Letters of Credit will be replaced by letters of credit issued as part
of an additional $6.3 million available to the Company for letters of credit
under the New Credit Facility. This additional $6.3 million is available to the
Company solely to replace the McDermott Letters of Credit and will be reduced
upon the respective expiration dates of the letters of credit issued to replace
the McDermott Letters of Credit, the last of which is scheduled to expire in
January of 2000.

Capital expenditures for the 12 months following the Offering are estimated
to be approximately $7.0 million, which primarily include the purchase and
installation of a four-inch rolling mill, the dredging and construction of a new
slip and loadout facilities for the slip, the purchase of the Company's
administrative office and surrounding land from McDermott, the expansion of the
Company's pipe shop and the purchase of 10 acres of land across the road from
the Company's facility from Universal Partners. See "Use of Proceeds" and
"Certain Transactions." Management believes that the net proceeds of the
Offering, its available funds, cash generated by operating activities and funds
available under the New Credit Facility will be sufficient to fund these capital
expenditures and its working capital needs; however, any expansion of the
Company's operations through future acquisitions may require additional equity
or debt financing.

23
<PAGE> 28

BUSINESS

GENERAL

The Company is an industry leader in the custom fabrication of decks and
modules of drilling and production equipment weighing up to 3,500 tons for
offshore oil and gas platforms and has special expertise in the fabrication of
decks with complex piping requirements. Decks and modules fabricated by the
Company can be installed on fixed and floating platforms regardless of water
depth. The Company also fabricates jackets for fixed platforms; pilings and
other rolled tubular steel sections; compressor and generator packages; platform
living quarters; subsea templates; bridges for connecting offshore platforms;
wellhead protectors; and modules for the onshore petrochemical and refining
industries. In addition, the Company refurbishes and retrofits existing jackets
and decks and performs offshore piping hook-up and platform maintenance
services. Structures fabricated by the Company are installed in oil and gas
producing waters around the world, primarily the Gulf of Mexico and offshore
West Africa.

The Company, founded in 1980, has been profitable for each of the last five
years largely as a result of management's ability to control costs, provide high
quality, reliable services and expand successfully into international markets.
The Company's revenue increased 139% from $27.9 million in its fiscal year ended
March 31, 1995 to $66.7 million in the fiscal year ended March 31, 1997. During
the same period, the Company's workforce and direct labor hours worked increased
by approximately 105%.

The Company's operations are conducted on approximately 140 acres of land
and 225,000 square feet of covered fabrication area at the Port of Iberia,
approximately 20 miles southeast of Lafayette, Louisiana and 30 miles north of
the Gulf of Mexico. Current access routes to the Gulf of Mexico permit the
transporting of jackets for use in waters up to 300 feet deep and decks and
other structures weighing up to 3,500 tons. The Port of Iberia Commission has
proposed the reopening and dredging of a by-pass along one of these waterways
that would provide access from the Company's facilities to the Gulf of Mexico
for structures weighing up to 6,000 tons. Although the Louisiana Legislature has
allocated funding to complete the initial portion of this project, no assurance
can be given as to whether such project will be completed or whether the
increased channel depths will be maintained. If the Louisiana Legislature does
not provide this funding, the Company could pay to have this bypass reopened and
dredged, which expense may be economically justifiable in connection with the
large revenue amounts typically derived from fabrication of large structures.

24
<PAGE> 29

feet of covered fabrication space and various equipment. The Expansion
Transaction substantially enlarged the Company's yard space and increased
covered fabrication area from 25,000 square feet to approximately 225,000 square
feet. Both before and after the Expansion Transaction, the day-to-day operations
of the Company have been conducted by Dailey J. Berard and the other members of
the Company's management team.

GROWTH AND PROFITABILITY STRATEGY

- PURSUE EXPANDING MARKETS. The Company intends to continue to pursue
high-margin fabrication work in both domestic and international offshore
oil and gas producing areas where demand for its services has
substantially increased over the last five years. In fiscal 1997, the
Company derived 36% of its revenue from projects designed for
installation in the Gulf of Mexico and believes that an increasing
portion of its capacity will be used to satisfy demand for such projects.
In addition, a series of large oil and gas projects are being developed
for offshore Nigeria, Mexico, Brazil and Venezuela. The Company believes
that these projects as well as projects in the Gulf of Mexico will
provide it with significant opportunities to obtain high-margin
fabrication work in both the current fiscal year and thereafter.

- EXPAND FACILITIES. The Company intends to use a portion of the proceeds
of the Offering to construct a new slip and bulkhead and develop the
adjacent yard space that will enable the Company to construct and load
out projects weighing up to 6,000 tons. In addition, the Company intends
to acquire and install a four-inch rolling mill which will enable the
Company to satisfy all of its rolled good requirements in-house,
including larger diameter pipe not currently rolled by the Company. The
Company believes that the enhanced capabilities provided by the new
facilities will provide the Company with opportunities to satisfy its
customers' increasing needs for structures usable in deep waters
throughout the world.

- MANAGE BACKLOG. The Company has historically attempted to manage its
backlog in order to benefit from pricing trends. In periods of rising
prices, the Company intentionally avoids building high levels of backlog
in order to maximize its ability to pursue higher margin projects. The
Company believes that, as a low-cost fabricator, it is well positioned to
benefit from this strategy.

25
<PAGE> 30

skilled workers. The Company believes that there is a large number of
trainable employees residing in reasonable proximity to its facility. The
Company further believes that companies whose products and services are
complementary to those of the Company are available for acquisition and
that its capital structure after the Offering will enable it to pursue
such acquisition opportunities as a means of expanding its skilled
workforce.

DESCRIPTION OF OPERATIONS

The Company's primary activity is the fabrication of decks and modules for
offshore oil and gas drilling and production platforms. The Company has
extensive experience in the fabrication of decks and modules with complex piping
requirements and believes that its reputation for efficient, timely and high
quality production of these structures gives it a competitive advantage in
obtaining projects of this type. The decks and modules built by the Company may
weigh up to 3,500 tons and can be installed on platforms regardless of water
depth. The Company also fabricates jackets for fixed production platforms for
use in up to 300 feet of water. Other structures fabricated by the Company
include pilings and other rolled tubular steel sections; modules of drilling and
production equipment; compressor and generator packages; platform living
quarters; subsea templates; bridges for connecting offshore platforms; wellhead
protectors; other structures used in production and development activities; and
modules for the onshore petrochemical and refining industries. The Company can
construct and has in the past constructed platform drilling rigs, posted
drilling rigs and barges.

FABRICATION OF DECKS AND OTHER OFFSHORE PLATFORM COMPONENTS. The Company
fabricates decks and modules for fixed and floating offshore platforms as well
as jackets for fixed offshore platforms. A fixed platform is the traditional
type of platform used for the offshore drilling and production of oil and gas.
Most fixed platforms currently in use are of the traditional jacket-type design.
Recently there has been an increase in the use of floating platforms as a result
of increased drilling and production activities in deeper waters. Floating
platforms are of three basic types: tension-leg platforms, spar platforms and
floating production facilities. See "Glossary of Certain Technical Terms." Fixed
platforms are generally better suited for shallower water depths, whereas
floating platforms, although they can be used in any water depth, are primarily
used in water depths greater than 1,000 feet. Because they are mobile (and can
therefore be reused), floating platforms are sometimes used in water depths that
could accommodate fixed platforms, particularly where the petroleum reservoir
has a relatively short production life.

The Company also fabricates subsea templates which often form a part of a
subsea production system. Subsea production systems, which are systems that
contain primary well control equipment and rest directly on the ocean floor, are
becoming more prevalent in very deep water, in areas subject to severe weather
conditions and in smaller fields with relatively short production lives that are
located near existing infrastructures. These systems are generally connected to
existing surface facilities, which augment subsea hydrocarbon processing and
transportation operations.

The most common type of fixed platform consists of a deck structure located
above the level of the storm waves and supported by a jacket. A jacket is a
tubular steel, braced structure extending from the mudline on the seabed to a
point above the water surface which is in turn supported on tubular steel
pilings driven deep into the seabed. The deck structure is designed to
accommodate multiple functions, including drilling, production, separating,
gathering, piping, compression, well support and crew quartering. Most fixed
platforms built today can accommodate both drilling and production operations.
These combination platforms are generally larger and more costly than
single-purpose structures. However, because directional drilling techniques
permit a number of wells to be drilled from a single platform and because
drilling and production can take place simultaneously, combination platforms are
often more cost effective.

Decks are built as either a single structure or in modular units. The
composition and quantity of petroleum in the well stream generally determine the
design of the production deck on a processing platform. Typical deck production
equipment includes crude oil pumps, gas and oil separators, gas compressors and
electricity generators. Much of this equipment involves the use of complex
piping and electrical components. The equipment, piping and controls associated
with major process subsystems are often joined together in modules which can
then be installed on the deck as a unit either on land or offshore. Platforms
can be joined

26
<PAGE> 31

by bridges to form complexes of platforms to service very large projects and to
improve safety by dividing functions among specialized platforms. Floating
platforms, like fixed platforms, support decks or modules with equipment to
perform oil and gas processing and may support drilling operations as well.

Most of the structural steel used in the Company's operations arrives at
the Company's fabrication yards as standard steel shapes and steel plate. The
standard shapes and plate are cut to appropriate sizes or shapes and, in some
cases, rolled into tubular sections by the Company's rolling mill. These
sections are welded together into structures that become part of decks, modules,
jackets and other platform structures.

While the structural portion of a deck or module is being assembled,
process piping is fabricated in the Company's pipe shop. Piping is made into
spools by fitting and welding together pipe and pipe fittings. To the extent
possible, pipe supports and pipe spools are installed onto the various
structural subassemblies of a deck or module before final assembly. The
completed structural subassemblies are then lifted, positioned and welded
together. Finally, the oil and gas process equipment along with the remaining
pipe supports and pipe spools, valves and electrical and instrumentation
components are installed and connected. The Company has installed both carbon
and alloy steel piping in accordance with accepted industry codes and has also
installed process piping for sour gas service, which requires adherence to more
stringent industry code requirements.

The Company typically performs a wide range of testing and commissioning
activities. Virtually every contract requires as a minimum non-destructive
testing of structural and piping welds, piping hydrostatic pressure testing, and
loop testing of instrumentation and electrical systems. Commissioning of certain
process subsystems is also commonly performed by the Company. A series of
protective coatings is applied to the critical areas of the deck or module to
resist the extremely corrosive conditions in an offshore environment. The
Company generally subcontracts certain parts of the work to qualified
subcontractors, particularly electrical, instrumentation and painting.

The Company generally purchases equipment and pressure vessels to customer
specifications from qualified vendors. However, some or all of the equipment and
pressure vessels may be supplied by the customer. The Company typically procures
most of the piping, pipe fittings, valves, instrumentation and electrical
materials in accordance with the customer's specifications as part of its
contract.

Jackets are generally built in sections so that, to the extent possible,
much of their fabrication is done on the ground. As each section of legs and
bracing is completed it is lifted by a crawler crane and then joined to another
up righted section. When a deck, module or jacket is complete and ready for load
out, it is moved along a skidway and loaded onto a cargo barge. Using
ocean-going tugs, the barge and its cargo are transported to the offshore site
for installation by a marine construction contractor.

REFURBISHMENT. The Company is also active in the market for the
refurbishment of existing jackets and decks. Platform operators occasionally
remove platforms previously installed in the Gulf of Mexico and return the
platforms to a fabricator for refurbishment, which usually consists of general
repairs and maintenance work and, in some cases, modification. Approximately
18.7% of the Company's backlog at June 30, 1997, consisted of refurbishment
work. In addition to structures included in backlog, there are a substantial
number of structures stored by customers on Company premises, pending
instructions from the customer to commence refurbishment. Because refurbishment
is generally not time-critical, the Company is able to use this work as a means
of keeping employees productively occupied between other more time-critical
projects. Refurbishment work is most often conducted on a time and materials
basis.

OFFSHORE SERVICES. The Company also has a number of employees (ranging from
approximately 25 to 50) whom it contracts to send offshore in crews to perform
piping interconnect and general maintenance and repair services on offshore
platforms. Oil and gas companies, which have traditionally performed this type
of work using their own employees, have recently been outsourcing this work and
the Company believes that this trend is likely to continue.

FACILITIES AND EQUIPMENT

FACILITIES. The Company's corporate headquarters and main fabrication yard
are located on the Port of Iberia in New Iberia, Louisiana, approximately 20
miles southeast of Lafayette, Louisiana and 30 miles north

27
<PAGE> 32

of the Gulf of Mexico. This facility includes approximately 105 acres developed
for fabrication, one 12,000 square-foot office building that houses
administrative staff, approximately 225,000 square feet of covered fabrication
area, and approximately 25,000 square feet of warehouse storage area. The yard
also has approximately 8,000 linear feet of water frontage, of which 1,200 feet
is steel bulkhead which permits outloading of heavy structures. The Company
currently leases approximately 55 acres of the Port of Iberia facility,
including the Company's office building and five surrounding acres which are
currently leased from McDermott and will be purchased with proceeds of the
Offering. With a portion of the proceeds of the Offering, the Company also
intends to purchase approximately 13 additional acres from McDermott and 10
acres from Universal Partners.

The structures that the Company fabricates are transported from the
Company's facilities by barge to the Gulf of Mexico by offshore construction
companies. Due to the water depths of these waterways (9 to 11 feet), these
barges are currently unable to transport structures weighing over 3,500 tons.
One main route to the Gulf of Mexico, the Freshwater Bayou Channel, provides 12
feet of water depth to the Gulf of Mexico, but the dimensions of locks on this
channel prevent the transport of structures more than 80 feet in width. There is
a by-pass channel around these locks that, if usable, would permit continuous
passage to the Gulf of Mexico with at least 12 feet of water depth at all points
and without any material width restrictions. This water depth would generally
permit the transportation of structures weighing up to 6,000 tons, which the
Company will be able to fabricate once the new slip and bulkhead is constructed
(to be funded with a portion of the proceeds of this Offering). Due to the silt
that has built up on both sides of the by-pass, the by-pass is currently
impassable without extensive dredging. On the basis of amounts spent in the past
by contractors other than the Company in order to facilitate the transportation
of certain structures, it is estimated that the cost of dredging the silt from
the by-pass and opening the by-pass channel would be $400,000 to $500,000.
Recently, the Louisiana Legislature appropriated funds for the initial dredging
of the by-pass, a project that would open the by-pass for at least one year and
possibly longer, depending upon the extent of future traffic through the
by-pass. There can be no assurance, however, that the funds will actually be
spent or that the by-pass, once opened, will remain usable by the Company for
structures exceeding 3,500 tons. If this project is not completed by the State,
the Company would remain unable to deliver structures weighing over 3,500 tons
unless it determined to incur the additional costs described above.

EQUIPMENT. The Company's main yard houses its two-inch plate roll, a
Wheelabrator grit blast system, a hydraulic press brake, and various other
equipment needed to build offshore structures and fabricate steel components.
The Company also has an automatic plate cutting machine used for cutting steel
in complex geometric sections and various other equipment used in the Company's
fabrication business. The Company also currently uses nine crawler cranes, which
range in tonnage capacity from 50 to 230 tons. Of these cranes, five are owned
by the Company and four are leased. The Company performs routine maintenance on
all of its equipment.

The Company's plate rolling mill allows it to roll approximately 6,000 tons
of pipe per year. The Company's current rolling mill satisfies approximately 80%
of the Company's current needs, with the Company using outside suppliers or
other fabricators for the rest of its rolled goods. The Company intends to use a
portion of the proceeds of the Offering to purchase a four-inch rolling mill
which would enable the Company to do all of its plate rolling at its fabrication
facility. This should enable the Company to coordinate all aspects of platform
construction, which can reduce the risk of cost overruns, delays in project
completion and labor costs. In addition, the four-inch rolling mill may also be
used to roll steel for other fabricators on a subcontracting basis. The
Company's grit blast system can blast steel at a rate approximately ten times
faster than conventional sandblasting. This greatly reduces labor costs and also
decreases the Company's use of conventional sandblasting, which is considered to
be a more hazardous and slower method of preparing steel for painting.

MATERIALS

The principal materials used by the Company in its fabrication
business -- standard steel shapes, steel plate, piping, pipe fittings, valves,
welding gases, fuel oil, gasoline and paint -- are currently available in
adequate supply from many sources. The Company does not depend upon any single
supplier or source.

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<PAGE> 33

Although the Company's rolling mill has not caused any substantial downtime
for the Company, it is an older piece of equipment that requires constant
maintenance. If the rolling mill were to become inoperable for a material amount
of time, the Company would be forced to purchase rolled goods from other
suppliers. There can be no assurance as to the Company's ability to purchase
such goods in the quantities desired and there can be no assurance that prices
at which these products may be purchased would not be materially higher than the
internal costs that the Company would otherwise bear in producing such rolled
goods. Loss of the rolling mill for a significant period of time would have a
material adverse effect on the Company's results of operations. The Company
obtains the remainder of its rolled goods from various regional suppliers. As
demand for fabricated structures increases, the Company's ability to obtain the
rolled steel that it needs at acceptable prices decreases. If the Company were
not able to obtain such products or if prices for such goods became
prohibitively expensive, the Company's profitability and results of operations
could be materially adversely affected.

SAFETY AND QUALITY ASSURANCE

Management is concerned with the safety and health of the Company's
employees and maintains a stringent safety assurance program to reduce the
possibility of costly accidents. The Company's safety department establishes
guidelines to ensure compliance with all applicable state and federal safety
regulations and provides training and safety education through orientations for
new employees and subcontractors, daily crew safety meetings and first aid and
CPR training. The Company also employs several safety engineers. The Company has
a comprehensive drug testing program and conducts periodic employee health
screenings. A safety committee, whose members consist of management
representatives and peer elected field representatives, meets monthly to discuss
safety concerns and suggestions that could prevent future accidents. The Company
has at times contracted with a third-party safety consultant to provide training
and suggestions and a licensed emergency medical technician in its ongoing
commitment to a safe and healthy work environment. The Company believes that its
safety program and commitment to quality are vital to attracting and retaining
customers and employees.

The Company fabricates to the standards of the American Petroleum
Institute, the American Welding Society, the American Society of Mechanical
Engineers and specific customer specifications. The Company uses welding and
fabrication procedures in accordance with the latest technology and industry
requirements. Training programs are conducted to upgrade skilled personnel and
maintain high quality standards. In addition, the Company maintains on-site
facilities for the x-ray of all pipe welds, which process is performed by an
independent contractor. Management believes that these programs generally
enhance the quality of its products and reduce their repair rate.

CUSTOMERS AND CONTRACTING

The Company's customers are primarily major and independent oil and gas
companies and offshore marine construction contractors. The Company's structures
are used primarily offshore West Africa and in the Gulf of Mexico. The Company
does not anticipate that the sale of McDermott's interest in the Company as part
of the Offering will have any significant effect on the demand for its services
or its ability to obtain fabrication work.

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<PAGE> 34

A large portion of the Company's revenue has historically been generated by
a few customers, although not necessarily the same customers from year-to-year.
At June 30, 1997, 57% of the Company's backlog was attributable to two projects.
The following table provides information with respect to customers who accounted
for more than 10% of the Company's revenue for each of the four fiscal years
ending March 31, 1997:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, CUSTOMER % OF REVENUE
- -------------------- -------- ------------
<C> <C> <C>
1997 Bouygues Offshore 35
McDermott-ETPM West, Inc.* 26
1996 Mobil Producing Nigeria Unlimited 53
Shell Offshore Inc. 11
1995 Overseas Bechtel Inc. 29
Shell Offshore Inc. 10
1994 British Gas Tunisia, Ltd. 16
ABB Lumus Crest, Inc. 14
Pennzoil Exploration & Production Co., Inc. 12
</TABLE>

- ---------------

* McDermott-ETPM West, Inc. is a joint venture between an affiliate of McDermott
and a third party. Neither McDermott nor its affiliate exercises day-to-day
control over the joint venture.

Because the level of fabrication that the Company may provide, directly or
indirectly, to any particular oil and gas company depends, among other things,
on the size of that company's capital expenditure budget devoted to platform
construction in a particular year and the Company's ability to meet the
customer's delivery schedule, companies that account for a significant portion
of the Company's revenue in one fiscal year may represent an immaterial portion
of revenue in subsequent years. The level of fabrication that the Company may
provide as a subcontractor to an offshore construction company depends, among
other things, on the ability of that company to successfully obtain prime
contracts with oil and gas companies and the ability of the Company to meet the
delivery schedule of the prime contractor. Thus, the prime contractors who
account for a significant portion of revenue in one fiscal year may represent an
immaterial portion of revenue in subsequent years. However, the loss of any
significant customer (whether an oil and gas company with which the Company
directly contracts or a prime contractor for which the Company has provided
services on a subcontract basis) for any reason, including a sustained decline
in an oil and gas company's capital expenditure budget or the prime contractor's
inability to successfully obtain contracts, or other competitive factors, could
result in a substantial loss of revenue and have a material adverse effect on
the Company's operating performance.

Most of the Company's projects are awarded on a fixed-price basis, and
while customers may consider other factors, including the availability,
capability, reputation and safety record of a contractor, price and the ability
to meet a customer's delivery schedule are the principal factors on which the
Company is awarded contracts. The Company's contracts generally vary in length
from one month to eighteen months depending on the size and complexity of the
project.

Under fixed-price contracts, the Company receives the price fixed in the
contract, subject to adjustment only for change orders placed by the customer.
As a result, with respect to fixed-price contracts, the Company retains all cost
savings but is also responsible for all cost overruns. Under time and materials
arrangements, the Company receives a specified hourly rate for direct labor
hours worked (which exceeds its direct labor costs) and a specified percentage
mark-up over its cost for materials. As a result, under time and materials
contracts,

30
<PAGE> 35

the Company is protected against cost overruns but does not benefit directly
from cost savings. As the Company is typically able to obtain prices for
materials in excess of its costs, the cost and productivity of the Company's
labor force are the key factors affecting the Company's operating profits.
Consequently, it is essential that the Company control its labor costs and the
productivity of its workforce. Each project is reviewed on at least a weekly
basis by the Company's top management to insure that difficulties and cost
overruns can be identified early in the project and corrected. Although no
assurance can be given that the Company will realize profits on its current or
future contracts, the Company believes that the active involvement of its top
management reduces the likelihood of significant cost overruns.

COMPETITION

The offshore platform fabrication industry is highly competitive and
influenced by events largely outside of the control of offshore platform
fabrication companies. Since 1992, there has been a consolidation in the
industry as several marine construction companies have combined with other
companies or ceased operations altogether. As a result of this consolidation,
there are approximately eight remaining domestic competitors for custom
fabrication projects, several of which are substantially larger and have greater
resources and capabilities than the Company. These companies compete intensely
for available projects, which are generally awarded on a competitive bid basis
with customers usually requesting bids on projects one to three months prior to
commencement. For international projects, the Company competes with many of the
same domestic fabricators, as well as with several foreign fabricators, some of
which are substantially larger and have greater financial resources and
capabilities than the Company.

The Company's marketing staff contacts offshore construction contractors
and oil and gas companies to obtain information as to upcoming projects so that
the Company will be well positioned to bid for the projects. Although price and
the contractor's ability to meet a customer's delivery schedule are the
principal factors in determining which qualified fabricator is awarded a
contract for a project, customers also consider, among other things, the
availability of technically capable personnel and facility space, a fabricator's
efficiency, condition of equipment, reputation, safety record and customer
relations. The Company believes that the limited availability of experienced
supervisory and management personnel, as well as skilled laborers, presents the
greatest barrier to entry to new companies trying to enter the fabrication
industry.

The Company believes that its competitive pricing, expertise in fabricating
offshore marine structures and its long-term relationships with international
customers will enable it to continue to compete effectively for projects
destined for international waters. The Company recognizes, however, that foreign
governments often use subsidies and incentives to create jobs where oil and gas
production is being developed. The additional transportation costs that will be
incurred when exporting structures from the U.S. to foreign locations may hinder
the Company's ability to successfully bid for projects against foreign
competitors. Because of subsidies, import duties and fees, taxes on foreign
operators and lower wage rates in foreign countries along with fluctuations in
the value of the U.S. dollar and other factors, the Company may find it
increasingly difficult to remain competitive with foreign contractors for
projects designed for use in international waters.

BACKLOG

As of June 30, 1997, the Company's backlog was approximately $21.1 million,
all of which management expects to be performed by June 30, 1998. Of the
Company's backlog at June 30, 1997, 57% was attributable to two projects.

The Company's backlog is based on management's estimate of the remaining
labor, material and subcontracting costs to be incurred with respect to those
projects as to which a customer has authorized the Company to begin work or
purchase materials pursuant to written contracts, letters of intent or other
forms of authorization. Often, however, original contract prices are based on
incomplete engineering and design specifications. As engineering and design
plans are finalized or changes to existing plans are made, the total contract
price to complete such projects is likely to change. In addition, most projects
currently included in the Company's backlog are subject to termination at the
option of the customer, although the customer in that

31
<PAGE> 36

case is generally required to pay the Company for work performed and materials
purchased through the date of termination and, in some instances, pay the
Company termination fees.

GOVERNMENT AND ENVIRONMENTAL REGULATION

Many aspects of the Company's operations and properties are materially
affected by federal, state and local regulation, as well as certain
international conventions and private industry organizations. The exploration
and development of oil and gas properties located on the outer continental shelf
of the United States is regulated primarily by the MMS. The MMS has promulgated
federal regulations under the Outer Continental Shelf Lands Act requiring the
construction of offshore structures located on the outer continental shelf to
meet stringent engineering and construction specifications. The Company is not
directly affected by regulations applicable to offshore construction operations
as are its customers which install and operate the structures fabricated by the
Company, but the Company is required to construct these structures in accordance
with customer design which must comply with applicable regulations; to the
extent such regulations detrimentally affect customer activities, the operations
of the Company may be adversely affected. Violations of the laws and related
regulations directly affecting the Company's operations can result in
substantial civil and criminal penalties as well as injunctions curtailing
operations. The Company believes that its operations are in compliance with
these and all other laws and related regulations affecting the fabrication of
structures for delivery to the outer continental shelf of the United States and
the laws and related regulations governing other areas of the world. In
addition, the Company depends on the demand for its services from the oil and
gas industry and, therefore, is affected by changing taxes, price controls and
other laws and regulations relating to the oil and gas industry. In addition,
offshore construction and drilling in certain areas have been opposed by
environmental groups and, in certain areas, has been restricted or prohibited.
To the extent laws or regulations are enacted or other governmental actions are
taken that prohibit or restrict offshore construction and drilling or impose
environmental protection requirements that result in increased costs to the oil
and gas industry in general and the offshore construction industry in
particular, the business and prospects of the Company could be adversely
affected, although such restrictions in the areas where the Company's products
are used have not been substantial. The Company cannot determine to what extent
future operations and earnings of the Company may be affected by new
legislation, new regulations or changes in existing laws or regulations.

The Company's operations and properties are subject to a wide variety of
increasingly complex and stringent federal, state and local environmental laws
and regulations, including those governing discharges into the air and water,
the handling and disposal of solid and hazardous wastes, the remediation of soil
and groundwater contaminated by hazardous substances and the health and safety
of employees. These laws may provide for "strict liability" for damages to
natural resources and threats to public health and safety, rendering a party
liable for environmental damage without regard to negligence or fault on the
part of such party. Sanctions for noncompliance may include revocation of
permits, corrective action orders, administrative or civil penalties and
criminal prosecution. Certain environmental laws provide for strict, joint and
several liability for remediation of spills and other releases of hazardous
substances, as well as damage to natural resources. In addition, the Company may
be subject to claims alleging personal injury or property damage as a result of
alleged exposure to hazardous substances. Such laws and regulations may also
expose the Company to liability for the conduct of or conditions caused by
others, or for acts of the Company that were in compliance with all applicable
laws at the time such acts were performed.

The Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, and similar laws provide for responses to and liability for
releases of hazardous substances into the environment. Additionally, the Clean
Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the
Safe Drinking Water Act, the Emergency Planning and Community Right to Know Act,
each as amended, and similar state or local counterparts to these federal laws,
regulate air emissions, water discharges, hazardous substances and wastes, and
require public disclosure related to the use of various hazardous substances.
Compliance with such environmental laws and regulations may require the
acquisition of permits or other authorizations for certain activities and
compliance with various standards or procedural require-

32
<PAGE> 37

ments. The Company believes that its facilities are in substantial compliance
with current regulatory standards.

The Company's operations are also governed by laws and regulations relating
to workplace safety and worker health, primarily the Occupational Safety and
Health Act and regulations promulgated thereunder. In addition, various other
governmental and quasi-governmental agencies require the Company to obtain
certain permits, licenses and certificates with respect to its operations. The
kind of permits, licenses and certificates required in the Company's operations
depend upon a number of factors. The Company believes that it has all material
permits, licenses and certificates necessary to the conduct of its existing
business.

The Company's compliance with these laws and regulations has entailed
certain additional expenses and changes in operating procedures. These expenses
have not been substantial over the past ten years, and the Company believes that
compliance with these laws and regulations will not have a material adverse
effect on the Company's business or financial condition for the foreseeable
future. However, future events, such as changes in existing laws and regulations
or their interpretation, more vigorous enforcement policies of regulatory
agencies, stricter or different interpretations of existing laws and regulations
or adoption of new laws and regulations, may require additional expenditures by
the Company, which expenditures may be material.

The Company also has employees engaged in offshore operations which are
covered by provisions of the Jones Act, the Death on the High Seas Act and
general maritime law, which laws operate to make the liability limits
established under state workers' compensation laws (which are applicable to the
Company's other employees) inapplicable to these employees and, instead, permit
them or their representatives to pursue actions against the Company for damages
or job related injuries, with generally no limitations on the Company's
potential liability.

In addition to government regulation, various private industry
organizations, such as the American Petroleum Institute, the American Society of
Mechanical Engineers and the American Welding Society, promulgate technical
standards that must be adhered to in the fabrication process.

INSURANCE

The Company maintains insurance against property damage caused by fire,
flood, explosion and similar catastrophic events that may result in physical
damage or destruction to the Company's facilities. The Company also maintains
general liability insurance, workers' compensation liability and maritime
employer's liability insurance. All policies are subject to deductibles and
other coverage limitations. Although management believes that the Company's
insurance is adequate, there can be no assurance that the Company will be able
to maintain adequate insurance at rates which management considers commercially
reasonable, nor can there be any assurance such coverage will be adequate to
cover all claims that may arise.

LEGAL PROCEEDINGS

The Company is a party to various routine legal proceedings primarily
involving commercial claims, workers' compensation claims, and claims for
personal injury under the General Maritime Laws of the United States and the
Jones Act. While the outcome of these lawsuits, legal proceedings and claims
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 business or financial condition.

EMPLOYEES

During the fiscal year ended March 31, 1997, the number of Company
employees increased by 95 full-time production employees to 425 at year-end. As
of July 1, 1997, the Company also had approximately 425 employees. The Company
also engages the services of subcontractors. Management estimates that these
subcontractors provide from time to time approximately 50 to 125 workers to
perform certain tasks in connection with the Company's projects. None of the
Company's employees is employed pursuant to a collective bargaining agreement,
and the Company believes that its relationship with its employees is good.

33
<PAGE> 38

The Company's ability to remain productive and profitable depends
substantially on its ability to attract and retain skilled construction workers,
primarily welders, fitters and equipment operators. In addition, the Company's
ability to expand its operations depends primarily on its ability to increase
its workforce. The demand for such workers is high, and the supply is extremely
limited. While the Company believes its relationship with its skilled labor
force is good, a significant increase in the wages paid by competing employers
could result in a reduction in the Company's skilled labor force, increases in
the wage rates paid by the Company, or both. If either of these occurs, in the
near-term, the profits expected by the Company from work in progress could be
reduced or eliminated and, in the long-term, to the extent such wage increases
could not be passed on to the Company's customers, the production capacity of
the Company could be diminished and the growth potential of the Company could be
impaired.

The Company has taken an active role in the movement to create a more
business-oriented educational system in Louisiana. For example, Dailey J.
Berard, the Company's President, Chief Executive Officer and Chairman of the
Board, has recently been appointed by Louisiana Governor Mike Foster to the
Louisiana Workforce Commission, a group consisting of 25 members, 11 of whom are
representatives of business and industry. This Commission, which was established
by recent Louisiana legislation, will oversee the spending of $400 million in
job training funds appropriated by the legislature. The Commission will
coordinate federal worker training programs, exercise authority over policy and
funding decisions for worker training programs, oversee an occupational
information system and create regional employer-oriented workforce boards.
Although there can be no assurance that such initiatives will enable the Company
to meet its hiring needs, management believes that, in the long-term,
initiatives like these are the best methods for increasing the pool of skilled
workers from which it can draw employees.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth, as of the date of this Prospectus, certain
information with respect to the Company's directors and executive officers.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Dailey J. Berard.......................... 68 President, Chief Executive Officer and
Chairman of the Board
Larry L. Clement.......................... 53 Vice President -- Operations
Dennis W. LaFleur......................... 51 Vice President -- International Sales
David J. Berard........................... 51 Vice President -- Domestic Sales
Louis C. Peltier.......................... 67 Vice President -- Power and Equipment
Peter J. Roman............................ 46 Vice President and Chief Financial Officer
Charles E. Broussard...................... 72 Director
Perry Segura.............................. 67 Director
</TABLE>

Dailey J. Berard has served as President, Chief Executive Officer and
Chairman of the Board of the Company since its founding in 1980. He was trained
as a civil engineer and has over 45 years of experience in the oil service
industry, working with several different companies, including Houston-New
Orleans, Inc., Houston Systems Manufacturing Company and Norman Offshore
Pipelines, Inc. Mr. Berard and David J. Berard are brothers.

Larry L. Clement has been employed by the Company since 1980, and has
served as the Company's Vice President -- Operations since 1992. From 1976 to
1980, Mr. Clement served as Yard Superintendent for Houston Systems
Manufacturing Company and has over 25 years of experience in the fabrication
industry.

Dennis W. LaFleur has been employed by the Company since 1981, and has
served as the Company's Vice President -- International Sales since 1995 and as
Vice President - Sales since 1992. From 1977 to

34
<PAGE> 39

1981, he served as Chief Engineer for Houston Systems Manufacturing Company, and
from 1974 to 1977 served as a project engineer for Houston Construction Company.

David J. Berard has been employed by the Company since 1981, and has served
as the Company's Vice President -- Domestic Sales since 1995. Mr. Berard held
various positions with the Company since he joined the Company in 1981,
including Corporate Secretary from 1992 to 1995. From 1978 to 1981, he served as
the district manager for the fabrication yard of Waukesha Pearce Industries, and
from 1973 to 1978 served as the General Superintendent of Fabrication for
Houston Systems Manufacturing Company. Mr. Berard and Dailey J. Berard are
brothers.

Louis C. Peltier has been employed by the Company since 1981, and has
served as the Company's Vice President-Power and Equipment since 1992. Prior to
joining the Company, from 1947 to 1981, Mr. Peltier was employed by Waukesha
Pearce Industries in various positions, including District Manager.

Peter J. Roman was appointed Vice President and Chief Financial Officer on
June 30, 1997. Since June 1984, Mr. Roman has been a certified public accountant
with the international accounting firm of Ernst & Young LLP, most recently as a
senior manager. Mr. Roman graduated from Louisiana State University in 1984 with
a B.S. in Accounting and is a member of the Louisiana State Society of Certified
Public Accountants and the American Institute of Certified Public Accountants.

Charles E. Broussard has been a director of the Company and its
predecessors since 1980. Mr. Broussard is currently the owner of Flying J.
Ranch, Inc., a cattle and rice farm in southern Louisiana. Mr. Broussard has
over 40 years of experience in the real estate and import/export businesses.

Perry Segura has been a director of the Company and its predecessors since
1980. Mr. Segura is an architect in New Iberia, Louisiana and is also active in
real estate development in south Louisiana. Mr. Segura was Vice Chairman of the
Board of Supervisors of Louisiana State University for the 1996-97 year and is
Chairman for the current year. Mr. Segura graduated from Louisiana State
University with a B.S. in Architectural Engineering in 1954.

The Company's Articles of Incorporation ("Articles") and By-laws provides
for the Board of Directors to be divided into three classes of directors with
each class to be as nearly equal in number of directors as possible, with
directors serving staggered three-year terms. The terms of the Class I
directors, Messrs. and , will expire in 1998. The terms of
the Class II directors, Messrs. and , will expire in 1999,
and the term of the Class III director, Mr. Berard, will expire in 2000. Each
director serves until the end of his term or until his successor is elected and
qualified. See "Description of Capital Stock -- Certain Charter and By-law
Provisions."

DIRECTOR COMPENSATION

Each director who is not an employee of the Company is paid an annual
director's fee of $ plus $ for each board or committee meeting
attended. All directors are reimbursed for reasonable out-of-pocket expenses
incurred in attending board and committee meetings. Each director who is not an
employee of the Company, upon consummation of the Offering, will also receive
options to purchase shares of Common Stock with an exercise price
equal to the Price to Public set forth on the cover page of this Prospectus.
These options will be immediately exercisable.

COMMITTEES

The Company's Board of Directors has established an Audit Committee and a
Compensation Committee. The Audit Committee reviews the Company's annual audit
and meets with the Company's independent public accountants to review the
Company's internal controls and financial management practices. The current
members of the Audit Committee are Messrs. , and .

The Compensation Committee recommends to the Board of Directors
compensation for the Company's key employees, administers the Company's stock
incentive plan and performs such other functions as may be

35
<PAGE> 40

prescribed by the Board of Directors. The current members of the Compensation
Committee are Messrs. and .

EXECUTIVE COMPENSATION

The following table summarizes the compensation paid to its Chief Executive
Officer for the year ended March 31, 1997. No other employee of the Company
earned more than $100,000 in fiscal year 1997.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
--------------------------- ---- -------- ------- ---------------
<S> <C> <C> <C> <C>
Dailey J. Berard, President and Chief Executive
Officer....................................... 1997 $125,449 $50,000 $4,100
</TABLE>

- ---------------

(1) Includes amounts credited to Mr. Berard's account under the Company's 401(k)
Plan and the cost of Mr. Berard's membership in the Lafayette Petroleum Club
which the Company pays.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to July 1997, the Company did not have a compensation committee. Mr.
Dailey J. Berard participated in deliberations of the Company's Board of
Directors concerning executive officer compensation.

In connection with the Expansion Transaction, the Company and Mr. Dailey J.
Berard entered into an employment agreement that was negotiated between Mr.
Berard and McDermott. Pursuant to this agreement, Mr. Berard agreed to serve as
President and Chief Executive Officer of the Company so long as he remained a
shareholder of Universal Partners. Mr. Berard receives an annual salary set by
the Board of Directors and a cash bonus, the amount of which is dependent on the
Company's return on capital. This agreement will be terminated upon completion
of the Offering. It is anticipated that Mr. Berard will enter into a new
employment agreement in connection with the Offering.

COMPENSATION PURSUANT TO PLANS

Long-Term Incentive Plan. In July 1997, the Company adopted and its
shareholder approved the Long-Term Incentive Plan (the "1997 Plan") to provide
long-term incentives to its key employees, including officers and directors who
are employees of the Company (the "Eligible Employees"). Under the 1997 Plan,
which is administered by the Compensation Committee of the Board of Directors,
the Company may grant incentive stock options, non-qualified stock options,
restricted stock, stock awards or any combination thereof (the "Incentives") to
Eligible Employees. The Compensation Committee will establish the exercise price
of any stock options granted under the Incentive Plan, provided that the
exercise price may not be less than the fair market value of the Common Stock on
the date of grant. The option exercise price may be paid in cash, in Common
Stock held for at least six months, in a combination of cash and Common Stock,
or through a broker-assisted exercise arrangement approved by the Compensation
Committee.

A total of 460,000 shares of Common Stock are available for issuance under
the 1997 Plan. Incentives with respect to no more than shares of
Common Stock may be granted to any single Eligible Employee in one calendar
year. Proportionate adjustments will be made to the number of shares subject to
the 1997 Plan, including the shares subject to outstanding Incentives, in the
event of any recapitalization, stock dividend, stock split, combination of
shares or other change in the Common Stock. In the event of such adjustments,
the purchase price of any outstanding option will be adjusted as and to the
extent appropriate, in the reasonable discretion of the Compensation Committee,
to provide participants with the same relative rights before and after such
adjustment.

Pursuant to the 1997 Plan, at each annual meeting of the Company's
shareholders at which a director who is not an employee of the Company is in
office or is elected, he or she will receive options to purchase
shares of Common Stock at an exercise price equal to the market price of the
Common Stock on the date of the grant. These options will be immediately
exercisable.

36
<PAGE> 41

All outstanding Incentives will automatically become exercisable and fully
vested and all performance criteria will be deemed to be waived by the Company
upon (i) a reorganization, merger or consolidation of the Company in which the
Company is not the surviving entity, (ii) the sale of all or substantially all
of the assets of the Company, (iii) a liquidation or dissolution of the Company,
(iv) a person or group of persons becoming the beneficial owner of 30% or more
of the Company's voting stock or (v) the replacement of a majority of the Board
in a contested election (a "Significant Transaction"). The Compensation
Committee also has the authority to take several actions regarding outstanding
Incentives upon the occurrence of a Significant Transaction, including requiring
that outstanding options remain exercisable only for a limited time, providing
for mandatory conversion of outstanding options in exchange for either a cash
payment or Common Stock, making equitable adjustments to Incentives or providing
that outstanding options will become options relating to securities to which a
participant would have been entitled in connection with the Significant
Transaction if the options had been exercised.

As of the date of this Prospectus, options to purchase 133,500 shares of
Common Stock have been granted under the 1997 Plan to employees of the Company,
including options to purchase , , , ,
and shares to Messrs. Dailey J. Berard, Clement, LaFleur,
David J. Berard, Peltier and Roman, respectively. All of the options granted as
of the date of this Prospectus under the 1997 Plan have a ten-year term, an
exercise price equal to the initial public offering price per share and will
become exercisable in three years.

LIMITATION OF DIRECTORS' AND OFFICERS' LIABILITY AND INDEMNIFICATION

As permitted by Louisiana Law, the Company's Articles contain certain
provisions eliminating the personal liability of the directors and officers to
the Company and its shareholders for monetary damages for breaches of their
fiduciary duties as directors or officers, except for (i) a breach of a
director's or officer's duty of loyalty to the Company or to its shareholders,
(ii) acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) dividends or stock repurchases or
redemptions that are illegal under Louisiana law and (iv) any transaction from
which he or she receives an improper personal benefit. In addition, the Articles
provide that if Louisiana law is amended to authorize the further elimination or
limitation of the liability of a director, then the liability of the directors
shall be eliminated or limited to the fullest extent permitted by Louisiana law,
as amended. These provisions pertain only to breaches of duty by directors as
directors and not in any other corporate capacity, such as officers, and limit
liability only for breaches of fiduciary duties under Louisiana corporate law
and not for violations of other laws such as the federal securities laws.

As a result of the inclusion of such provisions, shareholders may be unable
to recover monetary damages against directors or officers for actions taken by
them that constitute negligence or gross negligence or that are in violation of
their fiduciary duties, although it may be possible to obtain injunctive or
other equitable relief with respect to such actions. If equitable remedies are
found not to be available to shareholders in any particular case, shareholders
may not have any effective remedy against the challenged conduct. These
provisions may have the effect of reducing the likelihood of derivative
litigation against directors or officers that might have benefitted the Company.

The Company believes that such provisions are necessary to attract and
retain qualified individuals to serve as directors and officers. In addition,
such provisions will allow directors and officers to perform their duties in
good faith without undue concern about personal liability if a court finds their
conduct to have been negligent or grossly negligent. On the other hand, the
potential remedies available to a Company shareholder will be limited, and it is
possible, although unlikely, that directors and officers protected by these
provisions may not demonstrate the same level of diligence or care that they
would otherwise demonstrate.

The Company's Bylaws require the Company to indemnify its directors and
officers against certain expenses and costs, judgments, settlements and fines
incurred in the defense of any claim, including any claim brought by or in the
right of the Company, to which they were made parties by reason of being or
having been directors and officers, subject to certain conditions and
limitations.

37
<PAGE> 42

In addition, each of the Company's directors and executive officers has
entered into an indemnity agreement with the Company, pursuant to which the
Company has agreed under certain circumstances to purchase and maintain
directors' and officers' liability insurance. The agreements also provide that
the Company will indemnify the directors and executive officers against any
costs and expenses, judgments, settlements and fines incurred in connection with
any claim involving a director or executive officer by reason of his position as
a director or executive officer that are in excess of the coverage provided by
such insurance; provided that the director or executive officer meets certain
standards of conduct. A form of indemnity agreement containing such standards of
conduct is included as an exhibit to the Registration Statement of which this
Prospectus forms a part. Under the indemnity agreements, the Company is not
required to purchase and maintain directors' and officers' liability insurance
if it is not reasonably available or, in the reasonable judgment of the Board of
Directors, there is insufficient benefit to the Company from the insurance.

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth, as of August 1, 1997, certain information
regarding beneficial ownership of the Common Stock (assuming the Merger and the
Share Exchange had occurred on such date) by (i) the Selling Shareholder, (ii)
each shareholder known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock, (iii) each director of the Company, (iv) each
of the Company's executive officers, and (v) all of the Company's directors and
executive officers as a group. Unless otherwise indicated, the Company believes
that the shareholders listed below have sole investment and voting power with
respect to their shares based on information furnished to the Company by such
shareholders.

<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
COMMON STOCK
-------------------
NUMBER OF SHARES SHARES TO BE SOLD BEFORE AFTER
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED IN THE OFFERING OFFERING OFFERING
------------------------ ------------------ ----------------- -------- --------
<S> <C> <C> <C> <C>
McDermott Incorporated(1)................... 1,715,000 1,715,000 49.0% --
Dailey J. Berard(1)......................... 414,645 -- 11.8% 9.0%
Charles E. Broussard(2)..................... 406,434 -- 11.6% 8.8%
Perry Segura(3)............................. 435,172 -- 12.4% 9.5%
Larry L. Clement............................ 41,054 -- 1.2% *
Dennis LaFleur.............................. 41,054 -- 1.2% *
David J. Berard............................. 41,054 -- 1.2% *
Louis C. Peltier............................ 41,054 -- 1.2% *
All directors and executive officers as a
group (8 persons)......................... 1,420,467 -- 40.6% 30.9%
</TABLE>

- ---------------

* Less than one percent.

(1) The address of McDermott Incorporated is 1450 Poydras Street, New Orleans,
Louisiana 70112. The address of Mr. Dailey J. Berard is c/o Universal
Fabricators Incorporated, 5007 Port Road, New Iberia, Louisiana 70562.

(2) Includes 151,900 shares owned by a company controlled by Mr. Broussard. His
address is 23604 S. Louisiana Highway 82, Kaplan, Louisiana 70548.

(3) Includes 373,591 shares owned by a company controlled by Mr. Segura. His
address is P.O. Box 13410, New Iberia, Louisiana 70562.

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<PAGE> 43

CERTAIN TRANSACTIONS

Since December 1992, the Company has leased its main administrative offices
and five acres of surrounding land from McDermott for a nominal fee. Upon
completion of the Offering, the Company will purchase the building and the land,
together with approximately 13 additional acres, from McDermott for $700,000,
which management believes is the fair market value of the land and building, if
sold in an arms' length transaction. In addition, the Company will pay $6.3
million to McDermott for the release of its rights under the Shareholders'
Agreement and the Put/Call Agreement. See "Formation of the Company" and "Use of
Proceeds."

The Company has agreed to purchase 10 acres of land adjacent to its
facilities from Universal Partners immediately prior to the Merger for $100,500.
The proceeds of this sale will be distributed to the shareholders of Universal
Partners prior to the Merger. Shareholders of Universal Partners who are also
directors and officers of the Company will receive, in the aggregate,
approximately $80,000 pursuant to this distribution. Based upon an independent
appraisal, the Company believes the purchase price for the land represents its
fair market value, if sold in an arms' length transaction. See "Formation of the
Company" and "Use of Proceeds."

The Company has from time to time provided services as a subcontractor to
McDermott-ETPM West, Inc., an affiliate of McDermott. In fiscal 1997, the
Company generated approximately $16.8 million in revenue from such projects. In
addition, the Company has from time to time purchased rolled goods from J. Ray
McDermott, Inc., also an affiliate of McDermott, and in fiscal 1997, the cost of
such purchases was approximately $330,000. The Company believes that all of
these transactions were performed on an arm's length basis at prices that are
typical for similar transactions between unrelated parties. The Company does not
anticipate that the sale of McDermott's interest in the Company as part of the
Offering will have any significant adverse effect on the Company.

The Company has entered into a registration rights agreement with Messrs.
Dailey J. Berard, Broussard and Segura, pursuant to which Messrs. Berard,
Broussard and Segura have limited rights to require the Company to register
shares of Common Stock owned by them under the Securities Act. Under this
agreement, after the consummation of the Offering, each of Messrs. Berard,
Broussard and Segura will be entitled to one demand registration. If any of the
three makes such a demand, the other two are entitled to include their shares in
such registration. If the Company proposes to register any shares of Common
Stock under the Securities Act in connection with a public offering (after the
completion of the Offering), each of Messrs. Berard, Broussard and Segura may
require the Company to include all or a portion of the shares of Common Stock
held by such shareholder. The Company has agreed to pay all the expenses of
registrations under this agreement, other than underwriting discounts and
commissions. See "Risk Factors -- Sales Eligible for Future Resale; Registration
Rights."

In 1997, Universal Fabricators distributed approximately $375,000 to
Universal Partners to reimburse Universal Partners for the costs of settling an
uninsured worker's compensation claim which arose prior to the Expansion
Transaction. Certain officers and directors of the Company collectively own
approximately 80% of the stock of Universal Partners.

Mr. Dailey J. Berard has deferred the receipt of all bonus payments due him
since the Expansion Transaction. The Company accrues interest on such sums at
the prime rate as quoted by the Chase Manhattan Bank from time to time and, as
of March 31, 1997, the Company owed Mr. Berard approximately $133,000.

39
<PAGE> 44

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, $0.01 par value per share, and 5,000,000 shares of preferred
stock, no par value per share, issuable in series (the "Preferred Stock"). Upon
completion of the Merger and the Share Exchange immediately prior to the
consummation of the Offering, the Company will have 3,500,000 shares of Common
Stock outstanding, which will be held of record by approximately 33 persons, and
no shares of Preferred Stock will be outstanding. Prior to the Offering, there
has been no public market for the Common Stock. Although application has been
made to have the Common Stock listed on the Nasdaq National Market, there can be
no assurance that a market for the Common Stock will develop or, if developed,
will be sustained. See "Risk Factors -- No Prior Market; Possible Volatility of
Market Price; Dilution." The following summary description of the capital stock
of the Company is qualified in its entirety by reference to the Company's
Certificate and By-laws, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share in the election
of directors and on all other matters submitted to a vote of shareholders;
shareholders may not cumulate votes for the election of directors. Subject to
any preferences accorded to the holders of the Preferred Stock, if and when
issued by the Board of Directors, holders of Common Stock are entitled to
dividends at such times and in such amounts as the Board of Directors may
determine. The Company currently does not intend to pay dividends for the
foreseeable future. Upon the dissolution, liquidation or winding up of the
Company, after payment of debts, expenses and the liquidation preference plus
any accrued dividends on any outstanding shares of Preferred Stock, the holders
of Common Stock will be entitled to receive all remaining assets of the Company
ratably in proportion to the number of shares held by them. Holders of Common
Stock have no preemptive, subscription or conversion rights and are not subject
to further calls or assessments, or rights of redemption by the Company. The
outstanding shares of Common Stock are, and the shares of Common Stock being
sold in the Offering will be, validly issued, fully paid and nonassessable.

PREFERRED STOCK

The Company's Board of Directors has the authority, without approval of the
shareholders, to issue shares of Preferred Stock in one or more series and to
fix the number of shares and rights, preferences and limitations of each series.
Among the specific matters with respect to the Preferred Stock that may be
determined by the Board of Directors are the dividend rights, the redemption
price, if any, the terms of a sinking fund, if any, the amount payable in the
event of any voluntary liquidation, dissolution or winding up of the affairs of
the Company, conversion rights, if any, and voting powers, if any.

One of the effects of the existence of authorized but unissued Common Stock
and undesignated Preferred Stock may be to enable the Board of Directors to make
more difficult or to discourage an attempt to obtain control of the Company by
means of a merger, tender offer, proxy contest or otherwise, and thereby to
protect the continuity of the Company's management. If, in the exercise of its
fiduciary obligations, the Board of Directors were to determine that a takeover
proposal was not in the Company's best interest, such shares could be issued by
the Board of Directors without shareholder approval in one or more transactions
that might prevent or make more difficult or costly the completion of the
takeover transaction by diluting the voting or other rights of the proposed
acquiror or insurgent shareholder group, by creating a substantial voting block
in institutional or other hands that might undertake to support the position of
the incumbent Board of Directors, by effecting an acquisition that might
complicate or preclude the takeover, or otherwise. In this regard, the Company's
Articles grant the Board of Directors broad power to establish the rights and
preferences of the authorized and unissued Preferred Stock, one or more series
of which could be issued that would entitle holders (i) to vote separately as a
class on any proposed merger or consolidation, (ii) to cast a proportionately
larger vote together with the Common Stock on any such transaction or for all
purposes, (iii) to elect directors having terms of office or voting rights
greater than those of other directors, (iv) to convert Preferred Stock into a
greater number of shares of Common Stock or other securities, (v) to demand
redemption at a specified price under prescribed circumstances related to a
change of control or (vi) to exercise other rights designated

40
<PAGE> 45

to impede a takeover. The issuance of shares of Preferred Stock pursuant to the
Board of Directors' authority described above may adversely effect the rights of
holders of the Common Stock.

In addition, certain other charter provisions that are described below may
have the effect of, either alone or in combination with each other or with the
existence of authorized but unissued capital stock, of making more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors.

CERTAIN CHARTER AND BY-LAW PROVISIONS

Classified Board of Directors. The Articles and By-laws divide the members
of the Board of Directors who are elected by the holders of the Common Stock
into three classes serving three-year staggered terms.

Advance Notice of Intention to Nominate a Director. The Articles and
By-laws permit a shareholder to nominate a person for election as a director
only if written notice of such shareholder's intent to make a nomination has
been given to the Secretary of the Company not less than 45 days or more than 90
days prior to an annual meeting, unless less than 55 days notice is given of the
meeting, in which case notice by the shareholder must be received on the 10th
day after notice of the meeting was given. This provision also requires that the
shareholder's notice set forth, among other things, a description of all
arrangements or understandings between the nominee and the shareholder pursuant
to which the nomination is to be made or the nominee is to be elected and such
other information regarding the nominee as would be required to be included in a
proxy statement filed pursuant to the proxy rules promulgated under the
Securities Exchange Act of 1934, as amended, had the nominee been nominated by
the Board of Directors of the Company. Any nomination that fails to comply with
these requirements may be disqualified.

Shareholders' Right to Call Special Meeting. The Articles and By-laws
provide that a special shareholders' meeting may be requested by a shareholder
or group of shareholders holding in the aggregate 50% or more of the Company's
total voting power.

Removal of Directors; Filling Vacancies on Board of Directors. The Articles
and By-laws provide that any director elected by holders of the Common Stock may
be removed at any time by a two-thirds vote of the entire Board of Directors,
unless there is a person who is the beneficial owner of more than 50% of the
outstanding shares of Common Stock, in which case the removal may only be for
cause. In addition, any director or the entire Board may be removed at any time
for cause by a vote of the holders of not less than two-thirds of the total
voting power held by all holders of voting stock present or represented at a
special stockholders' meeting called for that purpose. "Cause" is defined for
these purposes as conviction of a felony involving moral turpitude or
adjudication of gross negligence or misconduct in the performance of duties in a
matter of substantial importance to the Company. The Articles and By-laws also
provide that any vacancies on the Board of Directors (including any resulting
from an increase in the authorized number of directors) may be filled only by
the affirmative vote of two-thirds of the remaining directors or by the
shareholders, who have the right to fill the vacancy at any special meeting
called for that purpose prior to such action by the Board.

Adoption and Amendment of By-laws. The Articles provide that By-laws may be
(i) adopted only by a two-thirds vote of the entire Board of Directors and (ii)
amended or repealed by either a two-thirds vote of the entire Board of Directors
or the holders of 80% of the total voting power present or represented at any
shareholders' meeting. Any provisions amended or repealed by the shareholders
may be re-amended or re-adopted by the Board of Directors.

Consideration of Tender Offers and Other Extraordinary Transactions. Under
Louisiana law, the Board of Directors, when considering a tender offer, exchange
offer, merger or consolidation, may consider, among other factors, the social
and economic effects of the proposal on the Company, its subsidiaries and their
respective employees, customers, creditors and communities.

Amendment of Certain Provisions of the Articles; Other Corporate
Action. The Company's Articles require, unless the action has been approved by
two-thirds vote of the entire Board of Directors, the affirmative vote of not
less than 80% of the total voting power of the Company to amend, alter or repeal
the provisions of the Articles relating to (i) the classification, filling of
vacancies and removal of the Board of Directors, (ii) amendments to the By-laws,
(iii) the Company's election not to be governed by certain Louisiana laws

41
<PAGE> 46

relating to business combinations, (iv) limitation of liability and
indemnification of directors and officers, (v) amendments to the Articles and
(vi) the calling of meetings of shareholders. An amendment to the Articles not
affecting any of such provisions may be approved by vote of a majority of the
voting power present or represented at a meeting of shareholders. The Articles
also require the vote of 80% of the total voting power to approve an amendment
or a repeal of any provisions of the Articles in a way that would reduce the
limitation of liability or indemnification of any person or power of the Board
of Directors with respect thereto provided for in the Articles. Unless approved
by a vote of at least two-thirds of the Board of Directors, a merger,
consolidation, sale of all or substantially all of the assets or a voluntarily
dissolution of the Company may be authorized only by the affirmative vote of the
holders of 80% of the total voting power. If approved by two-thirds of the
entire Board of Directors, any such action may be authorized by vote of a
majority of the voting power present or represented at a meeting of
shareholders.

The provisions of the Company's Articles and By-laws summarized in the
preceding paragraphs may have antitakeover effects and may delay, defer or
prevent a tender offer or takeover attempt that a stockholder might consider in
such stockholder's best interest, including those attempts that might result in
the payment of a premium over the market price for the shares of Common Stock
held by such shareholder.

Louisiana Control Share Acquisition Statute. By virtue of a provision of
the By-laws, the Company has elected not to be governed by the Louisiana Control
Share Acquisition Statute. The Company's Board of Directors or shareholders, by
amendment to this provision of the By-laws, could reverse this election.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is
.

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement among the
Selling Shareholder, the Company and the Underwriters named below (the
"Underwriting Agreement"), the Company and the Selling Shareholder have agreed
to sell to each of such Underwriters named below, and each of such Underwriters,
for whom Morgan Keegan & Company, Inc. and Stephens Inc. are acting as
representatives (the "Representatives"), has severally agreed to purchase from
the Company and the Selling Shareholder, the respective number of shares of
Common Stock set forth opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF SHARES
OF
UNDERWRITER COMMON STOCK
----------- ----------------
<S> <C>
Morgan Keegan & Company, Inc. ..............................
Stephens Inc. ..............................................
---------
Total............................................. 2,815,000
=========
</TABLE>

The Underwriting Agreement provides that the Underwriters' obligation to
pay for and accept delivery of the shares of Common Stock offered hereby is
subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all such shares, excluding shares covered by the
over-allotment option, if any are purchased. The Underwriters have informed the
Company that no sales of Common Stock will be confirmed to discretionary
accounts.

The Company has been advised by the Underwriters that they propose
initially to offer the shares of Common Stock in part directly to the public at
the public offering price set forth on the cover page of this Prospectus, and in
part to certain securities dealers at such price less a concession of
$ per share. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of $ per share to certain brokers and
dealers. After the shares of Common Stock are released for sale to the public,
the offering price and other selling terms may from time to time be varied by
the Representatives.

42
<PAGE> 47

The Representatives are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock.

If the Underwriters create a short position in the Common Stock in
connection with the Offering, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus, the Representatives may
reduce that short position by purchasing Common Stock in the open market. The
Representatives may also elect to reduce any short position by exercising all or
part of the over-allotment option described below.

The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of the Common Stock, they may reclaim the
amount of the selling concession from the Underwriters and selling group members
who sold those shares as part of the Offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.

Neither the Company, the Selling Shareholder nor any of the Underwriters
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the Common
Stock. In addition, neither the Company, the Selling Shareholder nor any of the
Underwriters makes any representation that the Representatives will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.

The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of 422,250
additional shares of Common Stock solely to cover overallotments, if any. If the
Underwriters exercise their overallotment option, the Underwriters have
severally agreed, subject to certain conditions, to purchase approximately the
same percentage thereof that the number of shares of Common Stock to be
purchased by each of them, as shown in the table above, bears to the 2,815,000
shares of Common Stock offered hereby.

The Company, all of the Company's directors and executive officers and
certain shareholders, who beneficially own an aggregate of 1,543,629 shares of
Common Stock, have agreed, during the period beginning from the date of this
Prospectus and continuing to and including the date 180 days after the date of
the Prospectus, not to offer, sell, contract to sell or otherwise dispose of any
securities of the Company (other than, with respect to the Company, pursuant to
employee stock option plans existing, or on the conversion or exchange of
convertible or exchangeable securities outstanding, on the date of this
Prospectus or in connection with acquisitions of businesses or assets by the
Company) which are substantially similar to the shares of the Common Stock or
which are convertible or exchangeable into securities which are substantially
similar to the shares of the Common Stock without the prior consent of the
Representatives.

Prior to this Offering, there has been no public market for the Common
Stock. The initial public offering price of the Common Stock will be negotiated
between the Company, the Selling Shareholder and the Representatives. Among the
factors to be considered in determining the initial public offering price of the
Common Stock will be prevailing market and economic conditions, revenues and
earnings of the Company, the state of the Company's business operations, an
assessment of the Company's management and consideration of the above factors in
relation to market valuation of companies in related businesses and other
factors deemed relevant. There can be no assurance, however, that the prices at
which the Common Stock will sell in the public market after the Offering will
not be lower than the initial public offering price.

The Company and the Selling Shareholder have agreed separately to indemnify
the several Underwriters against certain liabilities, including liabilities
under the Securities Act.

43
<PAGE> 48

Pursuant to an agreement between Stephens Inc., one of the Underwriters,
and First Commerce Corporation, Stephens Inc. has agreed to pay to First
National Bank of Lafayette, an affiliate of First Commerce Corporation, a
finder's fee in connection with the Offering in an amount anticipated not to
exceed $85,000.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 4,600,000 shares of
Common Stock outstanding. The 2,815,000 shares of Common Stock sold in the
Offering (plus any additional shares sold upon the Underwriters' exercise of
their over-allotment option) will be freely transferable without restriction
under the Securities Act by persons who are not deemed to be affiliates of the
Company or acting as underwriters, as those terms are defined in the Securities
Act. The remaining 1,785,000 shares of Common Stock held by existing
shareholders were acquired in transactions not requiring registration under the
Securities Act and will be "restricted stock" within the meaning of Rule 144.
Consequently, such shares may not be resold unless they are registered under the
Securities Act or are sold pursuant to an applicable exemption from
registration, such as Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, if at least one year has
elapsed since shares of Common Stock that constitute restricted stock were last
acquired from the Company or an affiliate of the Company, the holder is entitled
to sell within any three-month period a number of shares that does not exceed
the greater of one percent of the total shares of Common Stock then outstanding
or the average weekly trading volume of the Common Stock in the over-the-counter
market during the four calendar weeks preceding the date on which notice of the
sale is filed with the Securities and Exchange Commission. Sales under Rule 144
are subject to certain manner of sale provisions, notice requirements and the
availability of current public information about the Company. If at least two
years have elapsed since the shares were last acquired from the Company or an
affiliate, a person who has not been an affiliate of the Company at any time
during the three months preceding the sale is entitled to sell such shares under
Rule 144(k) without regard to volume limitations, manner of sale provisions,
notice requirements or the availability of current public information concerning
the Company. All of the 1,785,000 shares of restricted stock within the meaning
of Rule 144 held by existing shareholders of the Company will be eligible for
sale following the Offering in reliance on Rule 144, subject to volume
limitations with respect to an aggregate of 1,543,629 shares of Common Stock
held by affiliates and subject to the contractual "lock-up" restrictions
described below.

The Company has granted Messrs. Dailey J. Berard, Broussard and Segura
certain registration rights with respect to the Common Stock held by them and
has agreed, if requested to do so, to include shares of Common Stock held by
them in any registration of security proposed by the Company. The exercise of
such registration rights is subject to the contractual "lock-up" restrictions
described below. See "Certain Transactions."

The Company and each of its directors and its executive officers have
agreed that they will not, with certain limited exceptions, issue, offer for
sale, sell, transfer, grant options to purchase or otherwise dispose of any
shares of Common Stock (other than stock issued or options granted pursuant to
the Company's stock incentive plans) without the prior written consent of the
Representatives for a period of 180 days from the date of this Prospectus.

Prior to the Offering, there has been no public market for the Common
Stock, and there can be no assurance that a significant public market for the
Common Stock will develop or be sustained after the Offering. Any future sale of
substantial amounts of Common Stock in the open market may adversely affect the
market price of the Common Stock offered hereby.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby is being passed
upon for the Company by Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P., New Orleans, Louisiana. Certain legal

44
<PAGE> 49

matters in connection with the shares of Common Stock offered hereby are being
passed upon for the Underwriters by Andrews & Kurth L.L.P., Houston, Texas.

EXPERTS

The financial statements of Universal Fabricators Incorporated as of March
31, 1996 and 1997, and for each of the three years in the period ended March 31,
1997, and the balance sheet of UNIFAB International, Inc. as of July 17, 1997
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.

OTHER INFORMATION

The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 under the Securities Act with respect to the
Common Stock being offered pursuant to this Prospectus. This Prospectus does not
contain all information set forth in the Registration Statement, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. Statements contained herein concerning the provisions of any
documents are not necessarily complete and, in each instance, reference is made
to the copy of such document filed or incorporated by reference as an exhibit to
the Registration Statement. The Registration Statement may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission (http://www.sec.gov). The Company intends to furnish its
shareholders with annual reports containing audited financial statements
certified by independent public accountants.

45
<PAGE> 50

GLOSSARY OF CERTAIN TECHNICAL TERMS

<TABLE>
<S> <C>
COMMISSIONING: Functional testing of equipment and systems without the
introduction of hydrocarbons.

DECK: The component of a platform on which development drilling,
production, separating, gathering, piping, compression, well
support, crew quartering and other functions related to
offshore oil and gas development are conducted.

DIRECT LABOR HOURS: Direct labor hours are hours worked by employees directly
involved in the production of the Company's products. These
hours do not include contractor labor hours and support
personnel hours such as maintenance, warehousing and
drafting.

FIXED PLATFORM: A platform consisting of a rigid jacket which rests on
tubular steel pilings driven into the seabed and which
supports a deck structure above the water surface.

FLOATING PRODUCTION FACILITY: Floating structure (e.g., ship or semi-submersible vessel)
upon which drilling and production equipment is mounted.

GRIT BLAST SYSTEM: System of preparing steel for coating by using steel grit
rather than sand as a blasting medium.

JACKET: A component of a fixed platform consisting of a tubular
steel, braced structure extending from the mudline of the
seabed to a point above the water surface. The jacket is
supported on tubular steel pilings driven into the seabed.

MODULES: Packaged equipment usually consisting of major production,
utility or compression equipment with associated piping and
control system.

OFFSHORE: In unprotected waters outside coastlines.

PILES: Rigid tubular pipes that are driven into the seabed to
support platforms.

PLATFORM: A structure from which offshore oil and gas drilling and
production are conducted.

PLATFORM DRILLING RIG: A drilling rig designed to be mounted atop a fixed platform.

POSTED DRILLING RIG: A drilling rig mounted on steel columns fixed to a barge
that is sunk upon reaching a desired drilling location.

SOUR GAS: Natural gas that contains sulphur compounds in excess of a
specified amount.

SPAR PLATFORM: Vertically floating, large-diameter cylindrical platform
supporting a relatively conventional offshore drilling and
production deck and positioned on site with lateral mooring
systems connected to piling or anchors.

SUBSEA TEMPLATES: Tubular frames which are placed on the seabed and anchored
with piles. Usually a series of oil and gas wells are
drilled through these underwater structures.

TENSION-LEG PLATFORM (TLP): A platform consisting of a deck situated atop four or more
separate column-shaped semi-submersible hulls, which are
positioned on-site by vertical tendons (pipes) that run from
the columns to the sea floor.
</TABLE>

46
<PAGE> 51

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
UNIVERSAL FABRICATORS INCORPORATED
Report of Independent Auditors.............................. F-
Balance Sheets -- March 31, 1996 and 1997................... F-
Statements of Income -- Years Ended March 31, 1995, 1996 and
1997...................................................... F-
Statements of Shareholders' Equity -- Years Ended March 31,
1995, 1996 and 1997....................................... F-
Statements of Cash Flows -- Years Ended March 31, 1995, 1996
and 1997.................................................. F-
Notes to Financial Statements............................... F-

UNIFAB INTERNATIONAL, INC.
Report of Independent Auditors.............................. F-
Balance Sheet -- July 17, 1997.............................. F-
Notes to Balance Sheet...................................... F-

UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF UNIFAB
INTERNATIONAL, INC.
Pro Forma Balance Sheet (Unaudited) -- March 31, 1997....... F-
Pro Forma Statement of Income (Unaudited) -- Year Ended
March 31, 1997............................................ F-
Notes to Pro Forma Financial Statements (Unaudited)......... F-
</TABLE>

F-1
<PAGE> 52

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Universal Fabricators Incorporated

We have audited the accompanying balance sheets of Universal Fabricators
Incorporated as of March 31, 1996 and 1997 and the related statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended March 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Universal Fabricators
Incorporated at March 31, 1996 and 1997, and the results of its operations and
its cash flows for each of the three years in the period ended March 31, 1997 in
conformity with generally accepted accounting principles.

New Orleans, Louisiana
April 17, 1997, except for Note 6, as to which
the date is June 19, 1997 and Note 7,
as to which the date is August 1, 1997

---------------------

THE FOREGOING REPORT IS IN THE FORM THAT WILL BE SIGNED UPON THE COMPLETION OF
THE AGREEMENTS DESCRIBED IN NOTE 7 TO THE FINANCIAL STATEMENTS.

New Orleans, Louisiana
July 17, 1997

F-2
<PAGE> 53

UNIVERSAL FABRICATORS INCORPORATED

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
MARCH 31
--------------------------
1996 1997
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 4,942,775 $ 659,626
Accounts receivable....................................... 9,969,508 19,368,473
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. 3,356,396 239,097
Prepaid expenses.......................................... 263,678 444,045
Other assets.............................................. 182,481 102,062
----------- -----------
Total current assets.............................. 18,714,838 20,813,303
Property, plant and equipment, net.......................... 4,998,858 5,341,122
----------- -----------
Total assets...................................... $23,713,696 $26,154,425
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Bank overdraft............................................ $ 715,576 $ 763,010
Accounts payable.......................................... 2,729,321 6,210,166
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................. 3,373,695 4,317,837
Accrued liabilities....................................... 804,671 813,762
Income tax payable........................................ 758,786 516,462
----------- -----------
Total current liabilities......................... 8,382,049 12,621,237
Deferred income taxes....................................... 1,347,863 1,332,168
Shareholders' equity:
Common stock, $1 par value:
Class A, 510 shares authorized and issued.............. 510 510
Class B, 490 shares authorized and issued.............. 490 490
Additional paid-in capital................................ 6,517,664 6,517,664
Retained earnings......................................... 7,465,120 5,682,356
----------- -----------
Total shareholders' equity........................ 13,983,784 12,201,020
----------- -----------
Total liabilities and shareholders' equity........ $23,713,696 $26,154,425
=========== ===========
</TABLE>

See accompanying notes.

F-3
<PAGE> 54

UNIVERSAL FABRICATORS INCORPORATED

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
-----------------------------------------
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Revenue............................................. $27,882,808 $51,807,144 $66,724,504
Cost of revenue..................................... 23,174,004 40,361,724 58,589,197
----------- ----------- -----------
Gross profit........................................ 4,708,804 11,445,420 8,135,307
General and administrative expense.................. 1,325,689 1,419,668 1,637,563
----------- ----------- -----------
Income from operations.............................. 3,383,115 10,025,752 6,497,744
Other income (expense):
Interest expense.................................. (6,935) (3,092) (63,304)
Interest income................................... 45,059 318,185 145,155
----------- ----------- -----------
Income before income taxes.......................... 3,421,239 10,340,845 6,579,595
Income tax provision................................ 1,286,386 3,888,158 2,554,941
----------- ----------- -----------
Net income.......................................... $ 2,134,853 $ 6,452,687 $ 4,024,654
=========== =========== ===========
</TABLE>

See accompanying notes.

F-4
<PAGE> 55

UNIVERSAL FABRICATORS INCORPORATED

STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance at April 1, 1994.................... 1,000 $1,000 $6,517,664 $ 1,656,770 $ 8,175,434
Dividends paid............................ -- -- -- (857,822) (857,822)
Net income................................ -- -- -- 2,134,853 2,134,853
----- ------ ---------- ----------- -----------
Balance at March 31, 1995................... 1,000 1,000 6,517,664 2,933,801 9,452,465
Dividends paid............................ -- -- -- (1,921,368) (1,921,368)
Net income................................ -- -- -- 6,452,687 6,452,687
----- ------ ---------- ----------- -----------
Balance at March 31, 1996................... 1,000 1,000 6,517,664 7,465,120 13,983,784
Dividends paid............................ -- -- -- (5,807,418) (5,807,418)
Net income................................ -- -- -- 4,024,654 4,024,654
----- ------ ---------- ----------- -----------
Balance at March 31, 1997................... 1,000 $1,000 $6,517,664 $ 5,682,356 $12,201,020
===== ====== ========== =========== ===========
</TABLE>

See accompanying notes.

F-5
<PAGE> 56

UNIVERSAL FABRICATORS INCORPORATED

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31
------------------------------------
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................. $2,134,853 $6,452,687 $4,024,654
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation........................................ 423,949 389,711 471,305
(Gain) loss from sale of equipment.................. 3,028 (8,000) (10,125)
Deferred income taxes............................... 4,620 (72,919) (20,208)
Changes in operating assets and liabilities:
Accounts receivable............................... 209,626 (2,871,872) (9,398,965)
Net costs and estimated earnings in excess of
billings and billings in excess of costs and
estimated earnings on uncompleted contracts.... 1,566,493 (2,530,466) 4,061,441
Prepaid expenses and other assets................. (544,191) 658,534 (95,435)
Bank overdraft.................................... -- 715,576 47,434
Accounts payable and accrued liabilities.......... (406,788) 792,983 3,489,936
Income taxes payable.............................. -- 758,786 (242,324)
---------- ---------- ----------
Net cash provided by operating activities................ 3,391,590 4,285,020 2,327,713
Cash flows from investing activities:
Proceeds from sale of equipment........................ 9,500 8,000 17,175
Purchases of equipment................................. (179,351) (402,405) (820,619)
---------- ---------- ----------
Net cash used in investing activities.................. (169,851) (394,405) (803,444)
Cash flows from financing activities:
Dividends paid......................................... (857,822) (1,921,368) (5,807,418)
Net change in short-term borrowings.................... (531,141) -- --
---------- ---------- ----------
Net cash used in financing activities.................. (1,388,963) (1,921,368) (5,807,418)
---------- ---------- ----------
Net change in cash and cash equivalents................ 1,832,776 1,969,247 (4,283,149)
Cash and cash equivalents at beginning of year......... 1,140,752 2,973,528 4,942,775
---------- ---------- ----------
Cash and cash equivalents at end of year............... $2,973,528 $4,942,775 $ 659,626
========== ========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes........................................... $1,370,700 $3,173,014 $2,817,473
========== ========== ==========
</TABLE>

See accompanying notes.

F-6
<PAGE> 57

UNIVERSAL FABRICATORS INCORPORATED

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1995, 1996 AND 1997

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Universal Fabricators Incorporated (the Company) fabricates and assembles
jackets, decks, topside facilities, quarters buildings, drilling rigs and
equipment for installation and use offshore in the production, processing and
storage of oil and gas. The Company's main fabrication yard is located in the
Port of Iberia in New Iberia, Louisiana. The Company's customers are principally
in the oil and gas industry. Receivables are generally not collateralized.
Credit losses have been insignificant.

The operating cycle of the Company's contracts is typically less than one
year, although some large contracts may exceed one year's duration. Assets and
liabilities have been classified as current and noncurrent under the operating
cycle concept, whereby all contract-related items are regarded as current
regardless of whether cash will be received within a 12-month period. At March
31, 1997, it was anticipated that substantially all contracts in progress, and
receivables associated therewith, would be completed and collected within a
12-month period.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

REVENUE AND COST RECOGNITION

Revenue from fixed-price and modified fixed-price contracts are recognized
on the percentage-of-completion method, measured by the ratio which labor and
subcontract costs incurred to date bear to total estimated labor and subcontract
costs. In the case of long-term contracts extending over one or more fiscal
years, revisions of the cost and profit estimated during the course of the work
are reflected in the accounting period in which the facts which require revision
become known. At the time a loss on a contract becomes known, the entire amount
of the ultimate loss is accrued. Variations from estimated contract performance
could result in a material adjustment to operating results for any fiscal year.
Contract bonus payments under fixed price contracts are included in revenue when
their realization is reasonably assured. Revenue from cost-plus-fee contracts
are recognized on the basis of costs incurred during the period plus the fee
earned.

Contract costs include direct labor, material, subcontract costs and
allocated indirect costs related to contract performance. General and
administrative costs are charged to expense as incurred.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost. Depreciation is provided
principally by the straight-line and declining-balance methods over the
estimated lives of the assets, which range from 19 to 31 years for building and
bulkhead and 3 to 12 years for yard and other equipment.

CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. The carrying amounts
reported in the balance sheets for cash and cash equivalents approximate their
fair value.

F-7
<PAGE> 58

UNIVERSAL FABRICATORS INCORPORATED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Income taxes have been provided using the liability method in accordance
with Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of the Company's financial instruments at March 31,
1997, including cash and cash equivalents and accounts receivable, closely
approximates fair value.

RECLASSIFICATIONS

Certain amounts previously reported have been reclassified to conform with
the presentation at March 31, 1997.

2. CONTRACTS IN PROGRESS

Information pertaining to contracts in progress at March 31 follows:

<TABLE>
<CAPTION>
1996 1997
------------ ------------
<S> <C> <C>
Costs incurred on uncompleted contracts........... $ 22,376,762 $ 37,077,023
Estimated earnings................................ 8,171,189 4,488,532
------------ ------------
30,547,951 41,565,555
Less billings to date............................. (30,565,250) (45,644,295)
------------ ------------
$ (17,299) $ (4,078,740)
============ ============
Included in the accompanying balance sheets under
the following captions:
Costs and estimated earnings in excess of
billings on uncompleted contracts.......... $ 3,356,396 $ 239,097
Billings in excess of costs and estimated
earnings on uncompleted contracts.......... (3,373,695) (4,317,837)
------------ ------------
$ (17,299) $ (4,078,740)
============ ============
</TABLE>

Accounts receivable includes retainages and unbilled receivables,
respectively, of $46,686 and $395,541 at March 31, 1996 and $10,035 and $478,452
at March 31, 1997.

3. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31, 1996
and 1997:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Land.................................................. $ 756,000 $ 756,000
Building and bulkhead, including leasehold
improvements........................................ 3,528,627 3,780,243
Yard equipment........................................ 2,839,118 3,319,830
Other equipment....................................... 448,166 505,545
---------- ----------
7,571,911 8,361,618
Less accumulated depreciation......................... 2,573,053 3,020,496
---------- ----------
$4,998,858 $5,341,122
========== ==========
</TABLE>

F-8
<PAGE> 59

UNIVERSAL FABRICATORS INCORPORATED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Company leases land upon which a portion of its facilities are located
under noncancelable operating leases. The leases expire in fiscal year 2004 and
have two ten-year renewal options. Future minimum payments under the leases are
as follows:

<TABLE>
<S> <C>
1998............................................. $ 174,759
1999............................................. 174,759
2000............................................. 174,759
2001............................................. 174,759
2002............................................. 153,089
2003 and after................................... 194,355
----------
$1,046,480
==========
</TABLE>

Rent expense during the years ended March 31, 1995, 1996 and 1997 was
$948,988, $920,619 and $1,455,679, respectively, which includes rent on
cancelable equipment leases.

4. INCOME TAXES

Significant components of the Company's deferred tax liabilities and assets
as of March 31 were as follows:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Deferred tax liabilities -- excess of financial
statement basis over income tax basis of property,
plant and equipment............................... $1,347,863 $1,332,168
Deferred tax assets................................. 28,949 33,462
---------- ----------
Net deferred tax liabilities........................ $1,318,914 $1,298,706
========== ==========
</TABLE>

The income tax provision is comprised of the following:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Current................................ $1,281,766 $3,961,077 $2,575,149
Deferred............................... 4,620 (72,919) (20,208)
---------- ---------- ----------
$1,286,386 $3,888,158 $2,554,941
========== ========== ==========
</TABLE>

The effective income tax rate varies from the statutory federal income tax
rate due to the provision of state income taxes.

5. CREDIT ARRANGEMENT

At March 31, 1997, the Company had available a $10,000,000 short-term bank
line of credit which expires in September 1997. The Company was contingently
liable under standby letters of credit totaling $9,892,418 at March 31, 1997
related to retainage and performance guarantees on projects.

6. DIVIDENDS

Under the provisions of a shareholders' agreement, unless otherwise
approved by the board of directors, the Company shall distribute to the
shareholders 90% of its net income for the prior fiscal year. The annual
dividend for each fiscal year shall be paid within the first four months
following the end of each fiscal year. The dividend for the fiscal year ended
March 31, 1997 of $3,622,189 was declared and paid on June 19, 1997.

F-9
<PAGE> 60

UNIVERSAL FABRICATORS INCORPORATED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. INITIAL PUBLIC OFFERING AND RELATED MATTERS

On June 19, 1997, the Company's board of directors approved the filing of a
Form S-1 Registration Statement with the Securities and Exchange Commission
covering the proposed sale of common stock to the public.

UNIFAB International, Inc. (International) was formed on July 16, 1997 to
serve as the parent corporation of the Company, 51% of the outstanding common
stock of which is currently owned by Universal Partners, Inc. (Universal
Partners) and 49% of such stock is owned by McDermott Incorporated (McDermott).
Immediately prior to the completion of an initial public offering of 3,237,250
shares (422,250 of which represents Underwriters' overallotment) of
International's $.01 par value common stock (the Offering), it is expected that
Universal Partners will merge into International and McDermott will exchange its
shares of common stock of the Company for shares of International's common stock
(the Share Exchange).

Prior to the Share Exchange, it is expected that Universal Partners will
pay all of its liabilities and distribute to its shareholders all of its assets
except the common stock of the Company owned by it. The shareholders of
Universal Partners will receive 1,785,000 shares of common stock of
International and McDermott will receive 1,715,000 shares of common stock of
International in the Share Exchange.

On , 1997, the shareholders entered into an agreement, subject
to completion of the Offering of International's common stock, which would: (1)
cancel the requirement to distribute 90% of the net income for the prior fiscal
year to shareholders, and (2) cancel an option held by McDermott which allowed
it to acquire the other 51% of the Company's stock. To terminate this option and
to secure McDermott's release of its rights under agreements with the Company
and Universal Partners, the Company agreed to pay $6,300,000 to McDermott.

8. RELATED PARTY TRANSACTIONS

The Company purchased construction materials and subcontract fabrication
work from a shareholder in the amount of $257,165, $38,338 and $329,409 in
fiscal years 1995, 1996 and 1997, respectively, and performed subcontract work
for the shareholder or companies affiliated with the shareholder in the amount
of $144,813, $563,499 and $16,809,922 in fiscal years 1995, 1996 and 1997,
respectively. Included in accounts receivable is $2,028,845 and $2,104,653 from
the shareholder or companies affiliated with the shareholder at March 31, 1996
and 1997, respectively. In addition, the Company rents an office building from
the shareholder for $100 per year.

9. EMPLOYEE BENEFIT PLAN

Effective April 1, 1996, the Company began sponsoring an employees'
incentive savings plan which allows participants to make contributions by salary
reduction pursuant to Section 401(k) of the Internal Revenue Code. Under this
plan, employees with one year of service with the Company are eligible to
contribute up to 25% of their compensation into the plan, subject to a specified
maximum.

The Company contributes an amount equal to 50% of employee contributions up
to 3% of their base compensation. Matching contributions made by the Company
were approximately $136,000 in fiscal year 1997.

F-10
<PAGE> 61

UNIVERSAL FABRICATORS INCORPORATED

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

10. MAJOR CUSTOMERS

The Company is not dependent on any one customer, and the contract revenue
earned from each customer varies from year to year based on the contracts
awarded. Contract revenue earned comprising 10% or more of the Company's total
contract revenue earned are summarized as follows:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ----------- -----------
<S> <C> <C> <C>
Customer A........................... $8,190,972 $ -- $ --
Customer B........................... -- 27,417,331 --
Customer C........................... 2,772,657 5,936,911 --
Customer D........................... -- -- 23,066,101
Customer E........................... -- -- 17,402,106
</TABLE>

11. CONTINGENCIES

The Company is party to legal proceedings arising in the normal course of
business. It is the opinion of management that the outcome of these matters will
not have a material adverse effect on the Company's financial position or
results of operations.

F-11
<PAGE> 62

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
UNIFAB International, Inc.

We have audited the accompanying balance sheet of UNIFAB International,
Inc. as of July 17, 1997. This balance sheet is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of UNIFAB International, Inc. at July
17, 1997, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

New Orleans, Louisiana

July 17, 1997, except for Note 2

as to which the date is July 23, 1997

F-12
<PAGE> 63

UNIFAB INTERNATIONAL, INC.

BALANCE SHEET
JULY 17, 1997

ASSETS

<TABLE>
<S> <C>
Cash........................................................ $1,000
======
SHAREHOLDER'S EQUITY
Preferred stock -- authorized 5,000,000 shares; no shares
outstanding; no par value................................. $ --
Common stock -- authorized 20,000,000 shares; 1,000 shares
outstanding; $.01 par value............................... 10
Additional paid-in capital.................................. 990
------
Total shareholder's equity........................ $1,000
======
</TABLE>

See accompanying notes.

F-13
<PAGE> 64

UNIFAB INTERNATIONAL, INC.

NOTES TO BALANCE SHEET
JULY 17, 1997

1. DESCRIPTION OF BUSINESS

UNIFAB International, Inc. (the Company) was formed on July 16, 1997 to
serve as the parent corporation of Universal Fabricators Incorporated (Universal
Fabricators), 51% of the outstanding common stock of which is currently owned by
Universal Partners, Inc. (Universal Partners) and 49% of such stock is owned by
McDermott Incorporated (McDermott).

Other than the initial capitalization of the Company with $1,000 on July
16, 1997, the Company had no operations or transactions as of July 17, 1997.

2. SHARE EXCHANGE

On July 23, 1997, the board of directors and shareholders of the Company
authorized agreements whereby immediately prior to the completion of an initial
public offering of 3,237,250 shares (422,250 of which represents Underwriters'
overallotment) of the Company's $.01 par value common stock, Universal Partners,
after paying all of its liabilities and distributing to its shareholders all of
its assets except the common stock of Universal Fabricators owned by it, will
merge into the Company and the shareholders of Universal Partners will receive
1,785,000 shares of common stock of the Company. Concurrently, McDermott will
exchange the shares of Universal Fabricators' common stock owned by it for
1,715,000 shares of common stock in the Company.

F-14
<PAGE> 65

UNIFAB INTERNATIONAL, INC.

PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

BASIS OF PRESENTATION

The accompanying pro forma balance sheet as of March 31, 1997 and the
related pro forma statement of income for the year ended March 31, 1997 gives
effect to (i) the proposed merger of UNIFAB International, Inc. (the Company)
and Universal Partners Inc. (Universal Partners) and the proposed exchange of
shares of Universal Fabricators Incorporated (Universal Fabricators) owned by
McDermott Incorporated (McDermott) for shares of the Company, which will result
in Universal Fabricators being a 100%-owned subsidiary of the Company, and (ii)
a dividend to the shareholders of Universal Fabricators declared and paid on
June 19, 1997. The pro forma financial statements are based on the historical
financial statements of the Company and Universal Fabricators, giving effect to
the assumptions and adjustments in the accompanying note to the pro forma
financial statements.

The pro forma financial statements have been prepared by the Company's
management and include such adjustments to reflect the pro forma financial
statements as if the events described above had occurred as of March 31, 1997
for the pro forma balance sheet and as of April 1, 1996 for the pro forma
statement of income. The pro forma financial statements may not be indicative of
the results that would have occurred if the events described above had taken
place on the dates indicated or which may be obtained in the future. The pro
forma financial statements should be read in conjunction with the historical
financial statements and notes thereto included elsewhere in this Prospectus.

F-15
<PAGE> 66

UNIFAB INTERNATIONAL, INC.

PRO FORMA BALANCE SHEET (UNAUDITED)
MARCH 31, 1997

<TABLE>
<CAPTION>
UNIFAB UNIVERSAL
INTERNATIONAL, FABRICATORS
INC. INCORPORATED ADJUSTMENTS PRO FORMA
-------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............... $1,000 $ 659,626 $ -- $ 660,626
Accounts receivable..................... -- 19,368,473 -- 19,368,473
Costs and estimated earnings in excess
of billings on uncompleted
contracts............................ -- 239,097 -- 239,097
Prepaid expenses........................ -- 444,045 -- 444,045
Other assets............................ -- 102,062 -- 102,062
------ ----------- ----------- -----------
Total current assets............ 1,000 20,813,303 -- 20,814,303
Property, plant and equipment, net........ -- 5,341,122 -- 5,341,122
------ ----------- ----------- -----------
Total assets.................... $1,000 $26,154,425 $ -- $26,155,425
====== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank overdraft.......................... $ -- $ 763,010 $ 3,622,189(1) $ 4,385,199
Accounts payable........................ -- 6,210,166 -- 6,210,166
Billings in excess of costs and
estimated earnings on uncompleted
contracts............................ -- 4,317,837 -- 4,317,837
Accrued liabilities..................... -- 813,762 -- 813,762
Income tax payable...................... -- 516,462 -- 516,462
------ ----------- ----------- -----------
Total current liabilities....... -- 12,621,237 3,622,189 16,243,426
Deferred income taxes..................... -- 1,332,168 -- 1,332,168
Shareholders' equity:
Common stock............................ 10 1,000 34,990(2) 35,000
(1,000)(3)
Additional paid-in capital.............. 990 6,517,664 (34,990)(2) 8,544,831
2,061,167(3)
Retained earnings....................... -- 5,682,356 (3,622,189)(1) --
(2,060,167)(3)
------ ----------- ----------- -----------
Total shareholders' equity...... 1,000 12,201,020 (3,622,189) 8,579,831
------ ----------- ----------- -----------
Total liabilities and
shareholders' equity.......... $1,000 $26,154,425 $ -- $26,155,425
====== =========== =========== ===========
</TABLE>

See accompanying notes to pro forma financial statements (unaudited).

F-16
<PAGE> 67

UNIFAB INTERNATIONAL, INC.

PRO FORMA STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED MARCH 31, 1997

<TABLE>
<CAPTION>
UNIFAB UNIVERSAL
INTERNATIONAL, FABRICATORS
INC. INCORPORATED ADJUSTMENTS PRO FORMA
-------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Revenue............................... $ -- $66,724,504 $ -- $66,724,504
Cost of revenue....................... -- 58,589,197 -- 58,589,197
----------- ----------- ----------- -----------
Gross profit.......................... -- 8,135,307 -- 8,135,307
General and administrative expense.... -- 1,637,563 -- 1,637,563
----------- ----------- ----------- -----------
Income from operations................ -- 6,497,744 -- 6,497,744
Other income (expense):
Interest expense.................... -- (63,304) -- (63,304)
Interest income..................... -- 145,155 -- 145,155
----------- ----------- ----------- -----------
Income before income taxes............ -- 6,579,595 -- 6,579,595
Income tax provision.................. -- 2,554,941 -- 2,554,941
----------- ----------- ----------- -----------
Net income............................ $ -- $ 4,024,654 $ -- $ 4,024,654
=========== =========== =========== ===========
Earnings per share of common stock.... $ 1.15
===========
Average common stock outstanding...... 3,500,000
===========
</TABLE>

See accompanying notes to pro forma financial statements (unaudited).

F-17
<PAGE> 68

UNIFAB INTERNATIONAL, INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)

The accompanying pro forma financial statements present the pro forma
financial position of the Company as of March 31, 1997 and the results of its
operations for the year then ended. The Company was incorporated on July 16,
1997 and had no operations prior to that date. The financial position of the
Company presented as of March 31, 1997 represents its initial capitalization.

The pro forma financial statements also include the historical financial
position and results of operations of Universal Fabricators.

The adjustments reflected in the pro forma financial statements are as
follows:

(1) The distribution to shareholders of 90% of the net income of
Universal Fabricators for the fiscal year ended March 31, 1997 under the
provisions of a shareholders' agreement. The dividend for the fiscal year
ended March 31, 1997 of $3,622,189 was declared and paid on June 19, 1997.

(2) Immediately prior to the completion of the Offering, Universal
Partners, after paying all of its liabilities and distributing to its
shareholders all of its assets except the common stock in Universal
Fabricators owned by it, will merge into the Company, and the shareholders
of Universal Partners will receive 1,785,000 shares of common stock of the
Company. Concurrently, McDermott will exchange the shares of Universal
Fabricators common stock owned by it for 1,715,000 shares of common stock
in the Company.

(3) Elimination of the equity accounts of Universal Fabricators which
becomes a 100%-owned subsidiary of the Company as a result of the Share
Exchange described above.

F-18
<PAGE> 69

======================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES OF COMMON STOCK OFFERED
HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
SOLICITATION OR OFFER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

---------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.....................
Risk Factors...........................
Use of Proceeds........................
Dividend Policy........................
Dilution...............................
Capitalization.........................
Selected Financial and Operating Data
Management's Discussion and Analysis
of Financial Condition and Results of
Operations...........................
Business...............................
Management.............................
Principal Shareholders.................
Certain Transactions...................
Description of Capital Stock...........
Underwriting...........................
Shares Eligible for Future Sale........
Legal Matters..........................
Experts................................
Other Information......................
Glossary of Certain Technical Terms....
Index to Consolidated Financial
Statements........................... F-1
</TABLE>

---------------------

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF THE DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

======================================================

======================================================
2,815,000 SHARES
[LOGO]

UNIFAB INTERNATIONAL, INC.
COMMON STOCK
---------------------

PROSPECTUS
---------------------
MORGAN KEEGAN &
COMPANY, INC.

STEPHENS INC.

, 1997
======================================================
<PAGE> 70

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses payable in connection with the proposed sale of Common
Stock covered hereby are as follows:

<TABLE>
<S> <C>
SEC registration fee........................................ $14,715
NASD filing fee............................................. 5,356
Printing expenses........................................... *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Transfer agent fees and expenses............................ *
Miscellaneous expenses...................................... *
-------
Total expenses............................................ $ *
=======
</TABLE>

- ---------------

* To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Louisiana Business Corporation Law (the "LBCL"), Section 83, (i) gives
Louisiana corporations broad powers to indemnify their present and former
directors and officers and those of affiliated corporations against expenses
incurred in the defense of any lawsuit to which they are made parties by reason
of being or having been such directors or officers; (ii) subject to specific
conditions and exclusions, gives a director or officer who successfully defends
such an action the right to be so indemnified; and (iii) authorizes Louisiana
corporations to buy directors' and officers' liability insurance. Such
indemnification is not exclusive of any other rights to which those indemnified
may be entitled under any by-law, agreement, authorization of shareholders or
otherwise.

The Company's By-laws make mandatory the indemnification of directors and
officers permitted by the LBCL. The standard to be applied in evaluating any
claim for indemnification (excluding claims for expenses incurred in connection
with the successful defense of any proceeding or matter therein for which
indemnification is mandatory without reference to any such standard) is whether
the claimant acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Company. With respect to any
criminal action or proceeding, the standard is that the claimant had no
reasonable cause to believe the conduct was unlawful. No indemnification is
permitted in respect of any claim, issue or matter as to which a director or
officer shall have been adjudged by a court of competent jurisdiction to be
liable for willful or intentional misconduct or to have obtained an improper
personal benefit, unless, and only to the extent that the court shall determine
upon application that, in view of all the circumstances of the case, he is
fairly and reasonably entitled to indemnity for such expenses that the court
shall deem proper.

The Company maintains liability policies to indemnify its officers and
directors against loss arising from claims by reason of their legal liability
for acts as officers and directors, subject to limitations and conditions to be
set forth in the policies.

The Underwriters have also agreed to indemnify the directors and certain of
the Company's officers against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the "Securities Act"), or to contribute
to payments that such directors and officers may be required to make in respect
thereof.

Each of the Company's directors and executive officers has entered into an
indemnity agreement with the Company, pursuant to which the Company has agreed
under certain circumstances to purchase and maintain directors' and officers'
liability insurance. The agreements also provide that the Company will indemnify
the directors and executive officers against any costs and expenses, judgments,
settlements and fines incurred in

II-1
<PAGE> 71

connection with any claim involving a director or executive officer by reason of
his position as director or officer that are in excess of the coverage provided
by any such insurance, provided that the director or officer meets certain
standards of conduct. A form of indemnity agreement containing such standards of
conduct is included as an exhibit to this Registration Statement. Under the
indemnity agreements, the Company is not required to purchase and maintain
directors' and officers' liability insurance if it is not reasonably available
or, in the reasonable judgment of the Board of Directors, there is insufficient
benefit to the Company from the insurance.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In connection with the merger of the Company and Universal Partners, Inc.,
the Company will issue 1,785,000 shares of Common Stock to the shareholders of
Universal Partners, Inc. The Company will also issue 1,715,000 shares of Common
Stock to McDermott Incorporated in exchange for its shares in Universal
Fabricators Incorporated. All of these securities will be offered and sold
immediately prior to the completion of the Offering and without registration
under the Securities Act inasmuch as they are deemed not subject to registration
pursuant to the exemption provided in Section 4(2) of the Securities Act as
securities sold in transactions not involving any public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

<TABLE>
<CAPTION>
<C> <S>
1.1 -- Form of Underwriting Agreement.*
2.1 -- Form of Merger Agreement between the Company and
Universal Partners, Inc.*
3.1 -- Articles of Incorporation of the Company.
3.2 -- By-laws of the Company.
4.1 -- See Exhibits 3.1 and 3.2 for provisions of the Company's
Articles of Incorporation and By-laws defining the rights
of holders of Common Stock.
4.2 -- Specimen Common Stock certificate.*
5.1 -- Opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P.*
10.1 -- Form of Indemnity Agreement by and between the Company
and each of its directors and executive officers.
10.2 -- Credit Agreement dated October 7, 1993, between the
Company and the First National Bank of Lafayette, as
amended.*
10.3 -- The Company's Long-Term Incentive Plan.*
10.4 -- Form of Stock Option Agreement under the Company's
Long-Term Incentive Plan.*
10.5 -- Form of Stock Exchange Agreement between the Company and
McDermott.*
10.6 -- Contribution Agreement dated November 30, 1992, between
McDermott and Universal Partners, Inc.
10.7 -- Shareholders' Agreement dated November 30, 1992, between
McDermott and Universal Partners, Inc.
10.8 -- Put/Call Agreement dated November 30, 1992, between
McDermott and Universal Partners, Inc.
10.9 -- Employment Agreement dated November 30, 1992 between
Universal Fabricators Incorporated and Dailey J. Berard.
10.10 -- Form of Employment Agreement between the Company and
Dailey J. Berard.*
10.11 -- Form of Transition Agreement among the Company,
McDermott, Universal Partners, Inc. and Universal
Fabricators Incorporated.*
</TABLE>

II-2
<PAGE> 72
<TABLE>
<CAPTION>
<C> <S>
21.1 -- Subsidiaries of the Company.*
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre L.L.P. (included in Exhibit 5.1).*
24.1 -- Power of Attorney (included in the Signature Page to this
Registration Statement).
27.1 -- Financial Data Schedule.
</TABLE>

- ---------------

* To be filed by amendment.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-3
<PAGE> 73

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement (Registration
No. 333-31609) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Iberia, State of Louisiana, on July 25, 1997.

UNIFAB INTERNATIONAL, INC.

By: /s/ DAILEY J. BERARD
----------------------------------
Dailey J. Berard
President, Chief Executive Officer
and Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement (Registration No. 333-31609) has been signed
by the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ DAILEY J. BERARD President, Chief Executive July 25, 1997
- ----------------------------------------------------- Officer and Chairman of the
Dailey J. Berard Board (Principal Executive
Officer)

* Vice President and Chief July 25, 1997
- ----------------------------------------------------- Financial Officer (Principal
Peter J. Roman Financial and Accounting
Officer)

* Director July 25, 1997
- -----------------------------------------------------
Charles E. Broussard

* Director July 25, 1997
- -----------------------------------------------------
Perry Segura
</TABLE>

II-4
<PAGE> 74

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
-------------- -----------------------
<C> <S>
1.1 -- Form of Underwriting Agreement*
2.1 -- Form of Merger Agreement between the Company and
Universal Partners, Inc.*
3.1 -- Articles of Incorporation of the Company**
3.2 -- By-laws of the Company**
4.1 -- See Exhibits 3.1 and 3.2 for provisions of the Company's
Articles of Incorporation and By-laws defining the rights
of holders of Common Stock**
4.2 -- Specimen Common Stock certificate*
5.1 -- Opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P.*
10.1 -- Form of Indemnity Agreement by and between the Company
and each of its directors and executive officers**
10.2 -- Credit Agreement dated October 7, 1993, between the
Company and the First National Bank of Lafayette, as
amended*
10.3 -- The Company's Long-Term Incentive Plan*
10.4 -- Form of Stock Option Agreement under the Company's
Long-Term Incentive Plan*
10.5 -- Form of Stock Exchange Agreement between the Company and
McDermott*
10.6 -- Contribution Agreement dated November 30, 1992, between
McDermott and Universal Partners, Inc.**
10.7 -- Shareholders' Agreement dated November 30, 1992, between
McDermott and Universal Partners, Inc.**
10.8 -- Put/Call Agreement dated November 30, 1992, between
McDermott and Universal Partners, Inc.**
10.9 -- Employment Agreement dated November 30, 1992 between
Universal Fabricators Incorporated and Dailey J. Berard**
10.10 -- Form of Employment Agreement between the Company and
Dailey J. Berard.*
10.11 -- Form of Transition Agreement among the Company,
McDermott, Universal Partners, Inc. and Universal
Fabricators Incorporated.*
21.1 -- Subsidiaries of the Company*
23.1 -- Consent of Ernst & Young LLP**
23.2 -- Consent of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, L.L.P. (included in Exhibit 5.1)*
24.1 -- Power of Attorney (included in the Signature Page to this
Registration Statement)**
27.1 -- Financial Data Schedule**
</TABLE>

- ---------------

* To be filed by amendment

** Previously filed.

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Selected Financial
and Operating Data" and "Experts" and to the use of our report dated April 17,
1997 (except Note 6, as to which the date is June 19, 1997, and Note 7, as to
which the date is August 1, 1997) with respect to the financial statements of
Universal Fabricators Incorporated, and our report dated July 17, 1997 (except
for Note 2, as to which the date is July 23, 1997), with respect to the
balance sheet of UNIFAB International, Inc., in Amendment No. 1 to the
Registration Statement (Form S-1) and related Prospectus of UNIFAB
International, Inc. for the registration of 3,237,250 shares of its common
stock.

Ernst & Young LLP

New Orleans, Louisiana

- ------------------------------------------------------------------------------

The foregoing consent is in the form that will be signed upon completion of the
agreements described in Note 7 to the financial statements of Universal
Fabricators Incorporated.

/s/ ERNST & YOUNG LLP
---------------------

Ernst & Young LLP

New Orleans, Louisiana
July 25, 1997