<PAGE> 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Period Ended December 31, 1997
-----------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition Period
From to
-------------- --------------
Commission file number 0-29416
UNIFAB International, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-1382998
(State or other jurisdiction (I.R.S. Employer
or incorporation or organization) Identification No.)
5007 Port Road
New Iberia, LA 70562
(Address of principal executive offices) (Zip Code)
(318) 367-8291
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No X
--- ---
Common Stock, $0.01 Par Value ---- 5,022,250 shares outstanding as of February
4, 1998.
<PAGE> 2
UNIFAB INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -- December 31, 1997 and
March 31, 1997 1
Condensed Consolidated Statements of Income -- Three Months Ended
December 31, 1997 and 1996; Nine months Ended December 31, 1997
and 1996 2
Condensed Consolidated Statement of Shareholders' Equity
-- Nine months Ended December 31, 1997 3
Condensed Consolidated Statements of Cash Flows -- Nine
months Ended December 31, 1997 and 1996 4
Notes to Condensed Consolidated Financial Statements --
December 31, 1997 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 9
</TABLE>
<PAGE> 3
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
1997 1997
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $17,929,316 $ 659,626
Accounts receivable 10,546,635 19,368,473
Costs and estimated earnings in excess of billings on
uncompleted contracts 908,491 239,097
Prepaid expenses 759,317 444,045
Other current assets 152,298 102,062
----------- -----------
Total current assets 30,296,057 20,813,303
Property, plant and equipment, net 7,382,223 5,341,122
Other assets 739,558 --
----------- -----------
Total assets $38,417,838 $26,154,425
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ -- $ 763,010
Accounts and note payable 3,685,013 6,210,166
Billings in excess of costs and estimated earnings on
uncompleted contracts 523,469 4,317,837
Accrued liabilities 1,181,822 813,762
Income tax payable 925,371 516,462
----------- -----------
Total current liabilities 6,315,675 12,621,237
Long term note payable 40,273 --
Deferred income taxes 1,239,830 1,332,168
Shareholders' equity:
Preferred stock, no par value, 5,000,000 shares
authorized, no shares outstanding -- --
Common stock, $0.01 par value, 20,000,000 shares
authorized, 5,022,250 and 3,500,000 shares outstanding
50,223 35,000
Additional paid-in capital 25,032,942 6,483,664
Retained earnings 5,738,895 5,682,356
----------- -----------
Total shareholders' equity 30,822,060 12,201,020
----------- -----------
Total liabilities and shareholders' equity $38,417,838 $26,154,425
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE> 4
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31 NINE MONTHS ENDED DECEMBER 31
------------------------------ ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 13,469,749 $ 14,514,962 $ 46,920,823 $ 51,171,947
Cost of revenue 11,056,730 12,808,009 39,932,246 45,165,928
------------ ------------ ------------ ------------
Gross profit 2,413,019 1,706,953 6,988,577 6,006,019
General and administrative expense 716,169 399,145 1,572,085 1,125,923
------------ ------------ ------------ ------------
Income from operations 1,696,850 1,307,808 5,416,492 4,880,096
Other income (expense):
Interest expense (11,942) (1,720) (20,837) (60,353)
Interest income 225,731 38,732 313,862 124,829
------------ ------------ ------------ ------------
Income before income taxes 1,910,639 1,344,820 5,709,517 4,944,572
Income tax provisions 673,500 506,998 2,030,789 1,901,349
------------ ------------ ------------ ------------
Net income $ 1,237,139 $ 837,822 $ 3,678,728 $ 3,043,223
============ ============ ============ ============
Basic earnings per share $ 0.25 $ 0.24 $ 0.91 $ 0.87
============ ============ ============ ============
Basic earnings per share weighted
average shares 5,022,250 3,500,000 4,046,024 3,500,000
============ ============ ============ ============
Diluted earnings per share $ 0.25 $ 0.24 $ 0.91 $ 0.87
============ ============ ============ ============
Diluted earnings per share adjusted
weighted average shares 5,038,606 3,500,000 4,054,004 3,500,000
============ ============ ============ ============
</TABLE>
2
<PAGE> 5
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED 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 March 31, 1997 3,500,000 $ 35,000 $ 6,483,664 $ 5,682,356 $ 12,201,020
Proceeds to the Company from public
offering of common stock, net of
underwriting discount and
offering expenses 1,522,250 15,223 24,849,278 -- 24,864,501
Payment for surrender of
shareholder rights -- -- (6,300,000) -- (6,300,000)
Dividends paid -- -- -- (3,622,189) (3,622,189)
Net income -- -- -- 3,678,728 3,678,728
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1997 5,022,250 $ 50,223 $ 25,032,942 $ 5,738,895 $ 30,822,060
============ ============ ============ ============ ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 31
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash from operations $ 4,090,979 $ 3,916,951
Investing activities:
Proceeds from sale of equipment -- 17,175
Purchases of equipment (1,936,101) (731,739)
------------ ------------
(1,936,101) (714,564)
Financing activities:
Net proceeds from initial public offering 25,037,001 --
Payment for surrender of shareholder (6,300,000) --
rights .
Dividends paid (3,622,189) (5,807,418)
------------ ------------
15,114,812 (5,807,418)
------------ ------------
Net change in cash and cash equivalents $ 17,269,690 $ (2,605,031)
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
UNIFAB INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND INITIAL PUBLIC OFFERING
UNIFAB International, Inc. (International) was formed on July 16, 1997 to
serve as the parent corporation of Universal Fabricators Incorporated, 51% of
the outstanding common stock of which was owned by Universal Partners, Inc.
(Universal Partners) and 49% of which was owned by McDermott Incorporated
(McDermott). On September 24, 1997 immediately prior to the completion of an
initial public offering of 3,237,250 shares of International's $.01 par value
common stock (the Offering), Universal Partners and McDermott exchanged their
respective shares of common stock of Universal Fabricators Incorporated for
shares of International's common stock. The shareholders of Universal Partners
received 1,785,000 shares of common stock of International and McDermott
received 1,715,000 shares of common stock of International in this share
exchange. In the Offering, 1,522,250 shares were sold by International (422,250
of which represents Underwriters' overallotment) and the balance of the shares
were sold by McDermott.
Also on September 24, 1997, Universal Fabricators Incorporated paid
$6,300,000 to McDermott for the surrender of certain contractual rights,
including the cancellation of an option held by McDermott which allowed it to
acquire the other 51% of outstanding common stock of Universal Fabricators
Incorporated.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of International and its wholly-owned subsidiary, Universal
Fabricators Incorporated, (collectively referred hereinafter as the "Company").
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 accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, considered necessary for a fair
presentation have been included. Operating results for the three- and nine-month
periods ended December 31, 1997 are not necessarily indicative of the results
that may be expected for the fiscal year ending March 31, 1998.
These financial statements should be read in conjunction with the financial
statements and footnotes thereto for the year ended March 31, 1997 included in
the Company's Registration Statement on Form S-1 (Registration No. 333-31609),
as declared effective by the Securities and Exchange Commission on September 18,
1997.
3. ACQUISITION OF PIM
On February 5, 1998, International completed its acquisition of the assets and
business of Professional Industrial Maintenance, LLC (PIM), a company which
provided industrial plant maintenance services and repair, refurbishment and
conversion services for oil and gas drilling rigs from its fabrication facility
located on an industrial canal twelve miles south of Lake Charles, Louisiana.
The acquisition was effective as of January 1, 1998, and the operating results
of PIM will be included in the consolidated operating results of International
as of that date. The press release announcing the completion of this acquisition
is being filed as an exhibit to this Form 10-Q. Additional information relating
to this acquisition will be included in a Current Report on Form 8-K to be filed
by International on or before February 20, 1998.
5
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis of financial condition and results of
operations should be read in conjunction with the unaudited condensed
consolidated financial statements and the related disclosures included elsewhere
herein and Management's Discussion and Analysis of Financial Condition and
Results of Operations included as part of the Company's Registration Statement
on Form S-1 (Registration No. 333-31609), as declared effective by the
Securities and Exchange Commission on September 19, 1997.
RESULTS OF OPERATIONS
Revenue for the three months ended December 31, 1997 decreased 7.2% to
$13.5 million from the $14.5 million generated in the three months ended
December 31, 1996. For the nine-month period ended December 31, 1997, revenue of
$46.9 million was $4.3 million, or 8.3% lower than the same period in 1996. This
decrease was primarily due to revenue recognized as a result of the large amount
of contract materials purchased in the 1996 period as compared to the 1997
period. Although the Company's direct labor hours worked during the three months
ended December 31, 1997 period increased 12.2% from the number worked in the
same period in 1996 and prices realized under fixed-price contracts were
slightly higher in the 1997 period, the decreases in the amount of revenue
recognized as a result of contract materials purchased offset these increases.
Cost of revenue for the three months ended December 31, 1997 decreased
13.7% or $1.8 million to $11.1 million from $12.8 million in the three months
ended December 31, 1996. For the nine-month period ended December 31, 1997, cost
of revenue of $39.9 million was $5.2 million or 11.6% lower than for the same
period in 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 decreased as a percentage of revenues to 82.1% and 85.1% in the
three and nine-month periods ended December 31, 1997 from 88.2% and 88.3% for
the same periods in 1996.
Gross profit for the three months ended December 31, 1997 increased to
$2.4 million and for the nine months ended December 31, 1997 increased to $7.0
million from $1.7 million and $6.0 million in the corresponding periods in 1996
mainly due to improved margins on fixed price contracts and a favorable mix of
services and materials on the Company's time and materials contracts which
offset the decrease in revenue.
General and administrative expense increased to $0.7 million in the
three months ended December 31, 1997 from $0.4 million in the corresponding
period in 1996, and to $1.6 million in the nine months ended December 31, 1997
compared to $1.1 million in the corresponding period in 1996. This increase is
due to increases in employee costs, primarily salaries and benefits, and costs
related to being a public company.
Interest income increased in the three and nine-month periods ended
December 31, 1997 compared to the same periods in 1996 as the weighted average
of invested funds increased in 1997, due mainly to the investment of funds from
the Company's sale of common stock and from the collection of international
receivables near the end of the June 30, 1997 quarter.
6
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company completed its initial public offering on September 24, 1997
in which it sold 1.5 million shares of common stock for net proceeds of $18.6
million after underwriting discount and other offering expenses of $2.5 million
and a $6.3 million payment to McDermott for the surrender of certain contractual
rights. The balance of the proceeds was invested in money market funds and
short-term, interest-bearing securities.
Historically, the Company has funded its business activities through
funds generated from its operations. Net cash provided by operations was $4.1
million for the nine months ended December 31, 1997. During the same period the
Company had capital expenditures of $1.9 million, including $700,000 to purchase
approximately 18 acres of land from McDermott, where the Company's 12,000 square
foot main office building is located, and $100,500 for an additional 10 acres
from Universal Partners. The remaining capital expenditures were for
improvements to facilities and equipment which will increase the productivity of
the labor force and increase the load out capacity of the fabrication facility
located at the Port of Iberia.
On September 22, 1997, the Company has entered into an unsecured credit
facility (the "Credit Facility") with a commercial lender, which provides for up
to $10.0 million in borrowings for general corporate purposes and for letters of
credit up to $10.0 million under a revolving credit facility. Borrowings under
the revolving credit facility bear interest at the prime lending rate
established by Chase Manhattan Bank, N.A. or LIBOR plus 2.0%, at the Company's
option. The fee for issued letters of credit is 7/8 of 1% per annum on the
principal amount of the letter of credit. The unused commitment fee is 3/8 of 1%
per annum. The revolving credit facility matures August 31, 2000. At December
31, 1997, the Company had no letters of credit and no borrowings outstanding
under the revolving credit facility. The Credit Facility also provides for
replacement of several letters of credit under a non-revolving letter of credit
facility. These letters of credit, which aggregate $7.0 million, were previously
provided by McDermott (the "McDermott Letters of Credit"). The non-revolving
letter of credit facility 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, 2000.
Capital expenditures for the remaining three months of fiscal year
ended March 31, 1998 are estimated to be approximately $6.0 million, including
purchase and installation of a four-inch rolling mill, the dredging and
construction of a new slip and loadout facilities for the slip and the expansion
of the Company's pipe shop. Management believes that its available funds, cash
generated by operating activities and funds available under its revolving credit
facility will be sufficient to fund these capital expenditures and working
capital needs. As described in the notes to the condensed consolidated financial
statements, the Company announced that it had completed the acquisition of the
assets and business of Professional Industrial Maintenance, LLC. The Company
used available funds in the acquisition. The Company may expand its operations
through further acquisitions in the future, which may require additional equity
or debt financing.
7
<PAGE> 10
PART II
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In connection with the initial public offering of stock described in
note 1 to the notes to the Condensed Consolidated Financial Statements included
in Part I of this report and in the Company's Registration Statement on Form S-1
(Registration No. 333-31609), as declared effective by the Securities and
Exchange Commission on September 18, 1997 (the IPO), the Company registered
3,237,250 shares of its $.01 par value common stock (422,250 of which represents
Underwriters' overallotment). The Company sold 1,522,250 shares of stock and
received $25,482,465 net of underwriting discount. Net proceeds to the Company
after deducting expenses was $24,864,465.
In prior reports on Form 10-Q the Company has provided information as
to the use of $7.1 million of such proceeds. The balance of such net proceeds
has been applied or is committed to be applied for the expansion and upgrade of
the Port of Iberia facility as follows:
<TABLE>
<S> <C>
Applied and expended $ 820,000
Committed 5,200,000
----------
Total $6,020,000
==========
</TABLE>
This use of proceeds is consistent with the use of proceeds described
in the Company's prospectus included in the Company's Registration Statement on
Form S-1 (Registration No. 333-31609).
ITEM 5. OTHER INFORMATION
On January 23, 1998 The Company announced its third quarter fiscal 1998
earnings and related matters. The press release making this announcement is
attached hereto as Exhibit 99.1.
On February 5, 1998 The Company announced that it had completed the
acquisition of the assets and business of Professional Industrial Maintenance,
LLC. The press release making this announcement is attached hereto as Exhibit
99.2.
8
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
27.1 Financial Data Schedule
99.1 Press release issued by the Company on January 23, 1998 announcing
its earnings and related matters for the third quarter fiscal year
ending March 31, 1998.
99.2 Press release issued by the Company on February 5, 1998 it had
completed the acquisition of the assets and business of Professional
Industrial Maintenance, LLC.
</TABLE>
(b) The Company filed no reports on Form 8-K during the quarter for
which this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIFAB International, Inc.
Date February 12, 1997 /s/ Peter J. Roman
---------------------- --------------------------------------------
Peter J. Roman
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
27.1 Financial Data Schedule
99.1 Press release issued by the Company on January 23, 1998 announcing
its earnings and related matters for the third quarter fiscal year
ending March 31, 1998.
99.2 Press release issued by the Company on February 5, 1998 it had
completed the acquisition of the assets and business of Professional
Industrial Maintenance, LLC.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIFAB
INTERNATIONAL, INC.'S DECEMBER 31, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 17,929,316
<SECURITIES> 0
<RECEIVABLES> 10,546,635
<ALLOWANCES> 0
<INVENTORY> 908,491
<CURRENT-ASSETS> 30,296,057
<PP&E> 10,784,030
<DEPRECIATION> 3,401,807
<TOTAL-ASSETS> 38,417,838
<CURRENT-LIABILITIES> 6,315,675
<BONDS> 0
0
0
<COMMON> 50,223
<OTHER-SE> 30,771,837
<TOTAL-LIABILITY-AND-EQUITY> 38,417,838
<SALES> 13,469,749
<TOTAL-REVENUES> 13,469,749
<CGS> 11,056,730
<TOTAL-COSTS> 11,772,899
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,942
<INCOME-PRETAX> 1,910,639
<INCOME-TAX> 673,500
<INCOME-CONTINUING> 1,237,139
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,237,139
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0.25
</TABLE>
<PAGE> 1
NEWS RELEASE
For further information contact:
Dailey J. Berard Pete Roman
Chief Executive Officer Chief Financial Officer
(318) 367-8291 (318) 373-5506
FOR IMMEDIATE RELEASE
FRIDAY, JANUARY 23, 1998
UNIFAB INTERNATIONAL, INC.
REPORTS THIRD QUARTER AND YEAR-TO-DATE EARNINGS
New Iberia, LA - UNIFAB International, Inc. (NASDAQ: UFAB) today reported net
income of $1.2 million ($.25 per share) on revenue of $13.5 million for its
third quarter ended December 31, 1997, compared to net income of $0.8 million
($.24 per share) on revenues of $14.5 million for the third quarter ended
December 31, 1996. The Company completed its initial public offering on
September 24, 1997 in which 3.2 million shares were sold causing the weighted
average shares outstanding to increase from 3.5 million prior to completion of
the offering to 5.0 million for the quarter ended December 31, 1997.
Net income for the nine months ended December 31, 1997 was $3.7 million ($.91
per share) on revenue of $46.9 million, compared to net income of $3.0 million
($.87 per share) on revenues of $51.2 million for the nine months ended December
31, 1996. Backlog at December 31, 1997 was $31.5 million.
"Our revenue, profit and profit margins for the third quarter have met the goals
we anticipated," said Dailey J. Berard, UNIFAB International, Inc.'s President,
CEO, and Chairman of the Board. "We are proud of this because we think it shows
strong demand for the high quality fabrication services that UNIFAB offers. Net
income grew nearly 48% over the third quarter last year, in spite of the
terrible weather experienced in the area. Our backlog has exceeded our
expectations and we do not believe that the ratcheting down of oil and natural
gas prices has negatively affected our growth."
Mr. Berard also noted that the Company is on schedule with the $7 million of
capital improvement anticipated to be made with the proceeds of its initial
public offering. "We anticipate that these capital improvements will only
increase the productivity of our work force," said Mr. Berard. "We also
anticipate that the Company will expand into a deeper water facility on the ship
channel in Lake Charles, Louisiana. We are in the final stages of negotiating
the acquisition of those facilities and we believe it should be finalized in the
near future. We remain very optimistic about UNIFAB's continued growth well into
the next decade."
The Company has scheduled a conference call to discuss earnings, operations and
the business outlook for Wednesday, January 28, 1998 at 9:00 a.m. (CST). To
participate in the conference call, please call (973) 628-9554. A question and
answer session will follow the Company's presentation.
UNIFAB International, Inc. is an industry leader in the custom fabrication of
decks and modules of drilling and production equipment and other structures used
in the development and production of oil and gas reserves. In addition, the
Company refurbishes and retrofits existing jackets and decks and performs
offshore piping hook-up and platform maintenance services. Dailey Berard serves
on a number of committees and task forces that are working to improve training
and education of the workforce in Louisiana.
<PAGE> 1
NEWS RELEASE
For further information contact:
Dailey J. Berard Pete Roman
Chief Executive Officer Chief Financial Officer
(319) 367-8291 (318) 373-5506
FOR IMMEDIATE RELEASE
THURSDAY, FEBRUARY 5, 1998
New Iberia, Louisiana - UNIFAB International, Inc. (NASDAQ-UFAB) announced today
that it has completed its acquisition of the assets of Professional Industrial
Maintenance, LLC (PIM). PIM provides maintenance services to the petrochemical
industry and, at its 60 acre fabrication facility located twelve miles south of
Lake Charles, Louisiana, PIM provides repair, refurbishment and conversion
services for oil and gas drilling rigs. PIM will operate as a wholly-owned
subsidiary of UNIFAB International, Inc.
"With 40-foot water depth to the Gulf of Mexico, the PIM facility provides
UNIFAB with the deepest Gulf of Mexico access of any fabrication facility along
the Louisiana coast," said Dailey J. Berard, President, Chairman and CEO. "Its
location on the industrial canal at the intersection of the Calcasieu River and
Pass and the Gulf Intracoastal Waterway is just twenty miles from the Gulf of
Mexico and provides our customers ideal access. This acquisition significantly
expands our capability to service the expanding deep water fabrication needs for
both the domestic and international markets. We expect to continue PIM's
existing maintenance service business in the petrochemical industry and to
expand PIM's existing repair, refurbishment and conversion services for deep
water drilling rigs and jack ups. We also expect in the near future to make
substantial capital investment that will enable the deep water fabrication
facility to support the drilling industry's needs in both refurbishment upgrades
of jack up and semi-submersible drilling rigs for deep water use, as well as new
construction of deep water drilling rigs, platforms, and platform components.
PIM currently employs over two hundred production employees and we expect to
increase that number significantly. We also expect to be able to cut costs and
to benefit from the synergy of combining PIM's operations with UNIFAB's."
UNIFAB International, Inc. is an industry leader in the custom fabrication of
decks, equipment modules and other structures used in the development and
production of offshore oil and gas reserves. The Company also refurbishes and
retrofits existing jackets and decks and performs offshore piping hookup and
platform maintenance services. Dailey J. Berard serves on the Louisiana
Workforce Commission and other task forces that are working to improve the
training and education of the workforce of Louisiana.
Statements made in this news release regarding UNIFAB's expectations as to
future operations of UNIFAB and PIM and other statements included herein that
are not statements of historical fact are forward-looking statements that depend
upon the following factors, among others: continued demand for the services
provided by UNIFAB and PIM, availability of skilled employees, and UNIFAB's
ability to integrate and manage the acquired business. Should any of these
factors not continue as anticipated, actual results and plans could differ
materially from those expressed in the forward-looking statements.
