<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 June 30, 1998
-------------
[ ] 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 X No
Common Stock, $0.01 Par Value ---- 5,052,155 shares as of August 8, 1998.
<PAGE> 2
UNIFAB INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
<S> <C> <C>
Condensed Consolidated Balance Sheets -- June 30, 1998
and March 31, 1998......................................... 1
Condensed Consolidated Statements of Income -- Three
Months Ended June 30, 1998 and 1997........................ 2
Condensed Consolidated Statement of Shareholders' Equity
-- Three months Ended June 30, 1998......................... 3
Condensed Consolidated Statements of Cash Flows -- Three
months Ended June 30, 1998 and 1997........................ 4
Notes to Condensed Consolidated Financial Statements --
June 30, 1998.............................................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 6
PART II. OTHER INFORMATION
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>
JUNE 30 MARCH 31
1998 1998
----------- -----------
Current assets:
<S> <C> <C>
Cash and cash equivalents ............................. $ 6,217,037 $ 8,379,131
Accounts receivable ................................... 16,465,901 16,396,255
Costs and estimated earnings in excess of billings on
uncompleted contracts .............................. 214,234 292,284
Prepaid expenses ...................................... 744,343 770,611
Other current assets .................................. 200,747 237,426
----------- -----------
Total current assets .......................... 23,842,262 26,075,707
Property, plant and equipment, net ...................... 14,097,562 10,802,324
Cost in excess of net assets acquired, net of accumulated
amortization of $288,256 and $144,128 .................. 6,629,891 6,774,019
Other assets ............................................ 860,965 757,884
----------- -----------
Total assets .................................. $45,430,680 $44,409,939
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................................... $ 5,653,686 $ 4,934,939
Billings in excess of costs and estimated earnings on
uncompleted contracts .............................. 903,821 1,192,701
Accrued liabilities ................................... 942,753 874,421
Payroll and related liabilities ....................... 542,930 1,761,780
Income tax payable .................................... 934,455 754,971
Notes payable ......................................... 195,423 154,005
----------- -----------
Total current liabilities ..................... 9,173,068 9,672,817
Deferred income taxes ................................... 974,556 991,725
Other noncurrent liabilities ............................ 541,517 723,353
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, 5,052,155 and 5,048,655 shares
outstanding........................................... 50,522 50,487
Additional paid-in capital ............................ 25,595,643 25,532,678
Retained earnings ..................................... 9,033,698 7,438,874
----------- -----------
Total shareholders' equity .................... 34,741,539 33,022,039
----------- -----------
Total liabilities and shareholders' equity .... $45,430,680 $44,409,934
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE> 4
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
1998 1997
------------ ------------
<S> <C> <C>
Revenue................................ $ 19,662,324 $ 15,503,153
Cost of revenue ........................ 16,172,517 13,313,942
------------ ------------
Gross profit ........................... 3,489,807 2,189,211
General and administrative expense ..... 1,048,025 408,902
------------ ------------
Income from operations ................. 2,441,782 1,780,309
Other income (expense):
Interest expense ..................... (28,565) (3,359)
Interest income ...................... 118,714 27,016
------------ ------------
Income before income taxes ............. 2,531,931 1,803,966
Income tax provisions .................. 875,431 659,918
------------ ------------
Net income............................. $ 1,656,500 $ 1,144,048
============ ============
Basic and diluted earnings per share... $ 0.33 $ 0.33
============ ============
Basic and diluted earnings per share
weighted average shares ................ 5,053,494 3,500,000
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
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, 1998........... 5,048,655 $ 50,487 $25,532,678 $ 7,438,874 $33,022,039
Exercise of stock options......... 3,500 35 62,965 -- 63,000
Net income........................ -- -- -- 1,656,500 1,656,500
--------- --------- ----------- ----------- -----------
Balance at June 30, 1998............ 5,052,155 $ 50,522 $25,595,643 $ 9,095,374 $34,741,539
========== ========= =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
----------------------------
1998 1997
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<S> <C> <C>
Cash from operations .................... $ 1,321,783 $ 5,642,923
Investing activities:
Purchases of equipment ................ (3,508,376) (50,206)
----------- -----------
(3,508,376) (50,206)
Financing activities:
Net change in borrowings .............. (38,501) --
Exercise of stock options ............. 63,000 --
Dividends paid ........................ -- (3,622,189)
----------- -----------
24,499 (3,622,189)
----------- -----------
Net change in cash and cash equivalents $(2,162,094) $ 1,970,528
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
UNIFAB INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
1. DESCRIPTION OF BUSINESS
UNIFAB International, Inc. (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 at
New Iberia, Louisiana. Through a wholly owned subsidiary, UNIFAB International
West, LLC, the Company provides repair, refurbishment and conversion services
for oil and gas drilling rigs and industrial maintenance services.
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 June
30, 1998, it was anticipated that substantially all contracts in progress, and
receivables associated therewith, would be completed and collected within a
12-month period.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of the Company and its subsidiaries, all of which are
wholly owned. Significant intercompany accounts and transactions have been
eliminated in consolidation.
The accompanying 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-month period ended June 30, 1998 are
not necessarily indicative of the results that may be expected for the fiscal
year ending March 31, 1999.
These financial statements should be read in conjunction with the financial
statements and footnotes thereto for the year ended March 31, 1998 included in
the Company's Annual Report on Form 10-K.
3. ACQUISITIONS
On July 28, 1998, the Company completed its acquisition of Allen Tank, Inc.
(Allen Tank). The purchase price was 819,000 shares of UNIFAB International,
Inc. common stock plus $1.2 million in cash and notes. From its main operating
facility in New Iberia, Louisiana, Allen Tank designs and manufactures
specialized process systems, such as oil and gas separation systems, gas
dehydration and treatment systems, and oil dehydration and desalting systems,
and other production equipment related to the development and production of oil
and gas reserves. Allen Tank also provides a full complement of engineering and
field commissioning services related to production systems. The acquisition will
be accounted for as a pooling of interests. Allen Tank will operate as a
wholly-owned subsidiary of the Company. 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 is available in a Current
Report on Form 8-K filed by the Company on August 10, 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 Annual Report of Form
10-K.
RESULTS OF OPERATIONS
Revenue for the three months ended June 30, 1998 increased 27% to $19.7
million from the $15.5 million generated in the three months ended June 30,
1997. The Company's direct labor hours worked during the three months ended June
30, 1998 increased 30% over the same period last year. The increase is primarily
due to revenue and manhours generated from the Company's facility in Lake
Charles, Louisiana, which was acquired in January, 1998.
Cost of revenue for the three months ended June 30, 1998 increased 21%
or $2.9 million to $16.2 million from $13.3 million in the three months ended
June 30, 1997. 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 from 85.9% in 1997 to 82.2% 1998.
Gross profit for the three months ended June 30, 1998 increased to $3.5
million from $2.2 million in the 1996 period mainly due to a favorable mix of
services and materials on the Company's time and materials contracts and
improved margins on fixed price contracts.
General and administrative expense increased to $1.0 million in the
three months ended June 30, 1998 from $0.4 million in the corresponding period
in 1996. This increase is due to regulatory, reporting and other costs
associated with being a corporation with publicly traded securities, and the
additional general and administrative costs associated with the acquired Lake
Charles facility.
Interest income increased in the three-month period ended June 30, 1998
compared to the same periods in 1997 as the weighted average of invested funds
increased in 1998, due mainly to the investment of funds from the Company's sale
of common stock in September, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has funded its business activities through
funds generated from its operations. Net cash provided by operations was $1.3
million for the three months ended June 30, 1998. During the same period the
Company had capital expenditures of $3.5 million, including improvements to
facilities and equipment which will increase the productivity of the labor
force, add a product line of rolled goods and increase the load out capacity of
the fabrication facility located at the Port of Iberia.
On September 22, 1997, the Company 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 June 30, 1998, the Company
had a letter of
6
<PAGE> 9
credit in the amount of $168,000 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. At
June 30, 1998, the Company had outstanding letters of credit in the amount of
$4.8 million under this non-revolving credit facility. The non-revolving letter
of credit facility is reduced upon the expiration of each letter of credit, the
last of which is scheduled to expire in January, 2000.
On July 28, 1998, the Company announced that it had completed the
acquisition of Allen Tank, Inc. for 819,000 shares of UNIFAB common stock,
$400,000 in cash and notes of $800,000. The transaction is expected to be
accounted for by the pooling of interests method of accounting for business
combinations and is expected to be tax-free to the shareholders of the Company
and of Allen Tank. Allen Tank designs and manufactures oil and gas processing
systems at its facility located in New Iberia, Louisiana for sale worldwide. The
Company used available funds in the acquisition. 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 is available in a
Current Report on Form 8-K filed by the Company on August 10, 1998.
Capital expenditures for the remaining nine months of fiscal year ended
March 31, 1999, include the purchase of equipment for the New Iberia fabrication
facility, construction of facilities and associated equipment for the Lake
Charles facility, and administrative facilities for the New Iberia process
sustems operations. Management believes that its available funds, cash generated
by operating activities and funds available under its revolving credit facility
or other financing vehicles will be sufficient to fund these capital
expenditures and working capital needs. However, the Company may expand its
operations through future acquisitions which may require additional equity or
debt financing.
7
<PAGE> 10
PART II
ITEM 5. OTHER INFORMATION
On August 14, 1998 the Company announced its first quarter fiscal 1999 earnings
and related matters. The press release making this announcement is attached
hereto as Exhibit 99.1.
On July 28, 1998 the Company announced that it had completed the acquisition of
Allen Tank, Inc. 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
August 14, 1998 announcing its earnings and
related matters for the first quarter fiscal
year ending March 31, 1999.
99.2 Press release issued by the Company on
July 27, 1998 announcing it had completed
the acquisition Allen Tank, Inc.
</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 August 14, 1998 /s/ Peter J. Roman
-------------------- -------------------------
Peter J. Roman
Vice President and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
9
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
----- -----------
<S> <C>
27.1 Financial Data Schedule
99.1 Press release issued by the Company on
August 14, 1998 announcing its earnings and
related matters for the first quarter fiscal
year ending March 31, 1999.
99.2 Press release issued by the Company on
July 27, 1998 announcing it had completed
the acquisition Allen Tank, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIFAB
INTERNATIONAL, INC.'S JUNE 30, 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 6,217,037
<SECURITIES> 0
<RECEIVABLES> 16,465,560
<ALLOWANCES> 0
<INVENTORY> 214,234
<CURRENT-ASSETS> 23,842,263
<PP&E> 17,921,737
<DEPRECIATION> 3,824,175
<TOTAL-ASSETS> 45,430,680
<CURRENT-LIABILITIES> 9,173,068
<BONDS> 0
0
0
<COMMON> 50,522
<OTHER-SE> 34,629,341
<TOTAL-LIABILITY-AND-EQUITY> 45,430,680
<SALES> 19,662,324
<TOTAL-REVENUES> 19,662,324
<CGS> 16,172,517
<TOTAL-COSTS> 17,220,542
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,565
<INCOME-PRETAX> 2,531,931
<INCOME-TAX> 875,431
<INCOME-CONTINUING> 1,656,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,656,500
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
<PAGE> 1
EXHIBIT 99.1
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, AUGUST 14, 1998
UNIFAB INTERNATIONAL, INC.
REPORTS FIRST QUARTER EARNINGS
New Iberia, La. -- (Business Wire) - August 13, 1998 -- UNIFAB International,
Inc. (NASDAQ:UFAB) today reported net income of $1.7 million ($0.33 per share,
basic and diluted) on revenue of $19.7 million for the first fiscal quarter
ended June 30, 1998, compared to net income of $1.1 million ($0.33 per share) on
revenue of $15.5 million for the first fiscal quarter last year. 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 over 5.1 million.
Backlog at June 30, 1998 is $18 million.
"Our first quarter operating results reflect growth in revenues, manhours and
net income, consistent with our targets," said Dailey J. Berard, UNIFAB
International, Inc.'s President, CEO, and Chairman of the Board. "Our increase
in revenue over last year is a direct result of our acquisition in Lake Charles,
Louisiana. We believe that facility will continue to contribute to our profits
as we develop its capabilities. The acquisition of Allen Tank, Inc. in July,
although not included in the first quarter operating results of the Company, has
added seasoned management experience, specialized process system design,
engineering and manufacture capabilities and a certified ISO 9001 facility to
our palette of high quality fabrication services at the Port of Iberia, and has
nearly doubled the Company's backlog."
"We continue to seek growth through acquisition and other business alliances,
capital investment in our Company's equipment and facilities, and development of
promising markets, both international and in the Gulf of Mexico. As oil prices
begin to trend upwards again, we believe demand will again far exceed capacity.
We believe the addition of Allen Tank to the growing UNIFAB family, in
combination with continued development of our deep water facility, places UNIFAB
in excellent position to support our customers needs for complete topsides
design, construction, hook up and maintenance."
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. Through a wholly owned subsidiary, UNIFAB
International West, LLC, UNIFAB provides industrial maintenance services and, at
its 60 acre fabrication facility located twelve miles south of Lake Charles,
Louisiana, provides repair, refurbishment and conversion services for oil and
gas drilling rigs. 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 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,
<PAGE> 2
availability of skilled employees, and UNIFAB's ability to integrate and manage
the acquired businesses. Should any of these factors not continue as
anticipated, actual results and plans could differ materially from those
expressed in the forward-looking statements.
<PAGE> 1
EXHIBIT 99.2
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
MONDAY, July 27, 1998
New Iberia, Louisiana - UNIFAB International, Inc. (NASDAQ-UFAB) announced today
that it has completed its acquisition of Allen Tank, Inc. (Allen Tank). The
purchase price was 819,000 shares of UNIFAB International, Inc. common stock
plus $1.2 million in cash and notes. From its main operating facility in New
Iberia, Louisiana, Allen Tank designs and manufactures specialized process
systems, such as oil and gas separation systems, gas dehydration and treatment
systems, and oil dehydration and desalting systems, and other production
equipment related to the development and production of oil and gas reserves.
Allen Tank also provides a full complement of engineering and field
commissioning services related to production systems. The acquisition will be
accounted for as a pooling of interests. Allen Tank will operate as a
wholly-owned subsidiary of UNIFAB International, Inc.
"Allen Tank is a recognized leader throughout the industry for quality products
and expert craftsmanship," said Dailey J. Berard, President, Chairman and CEO.
"The combination of Allen Tank with UNIFAB allows us to offer a greater range of
services to our customers, including complete topside facilities. Allen Tank is
a certified ISO 9001 company and currently employs over one hundred fifty
personnel, including skilled craftsmen, designers and engineers. In addition we
have acquired seasoned management experience and complementary industry
expertise which will help us manage the growth plans we have undertaken. We
expect to integrate the two companies, increase our overall capabilities, better
handle fluctuations in the business and grow into our deep water facility in
Lake Charles effectively and efficiently. The capabilities of the combined
companies are very exciting. We also expect to be able to realize cost benefits
from the synergy of combining Allen Tank's operations with UNIFAB's. With this
acquisition UNIFAB's annual revenues will exceed $100 million and we expect
continued growth as oil and gas prices stabilize."
The four founders of Allen Tank, each a degreed mechanical engineer, will remain
with the Company. Mr. Vince Cuevas has been appointed President of Allen Tank.
Mr. Cuevas has 27 years experience in the industry, most recently as Vice
President of Operations with Allen Tank, prior to which he served various
capacities with Natco, including Regional Sales and Marketing Manager. Mr. Gil
Weisberger, Vice President Engineering, has 22 years of experience in the
industry. Prior to joining Allen Tank, Mr. Weisberger served as Chief Engineer
of Southern Operations for Natco. Mr. Walt Hampton, Vice President of Sales, has
27 years experience. Mr. Hampton was formerly with Natco as Regional Sales and
Marketing Manager, as well as other capacities. Mr. Allen C. Porter, Jr, has
accepted the position of Special Consultant to the President. Mr. Porter, with
over 38 years industry experience, served as President of Allen Tank. Mr.
Porter's experience prior to the formation of Allen Tank includes serving as
Production and Gas Engineer for Gulf Oil Corporation and various positions for
Natco including Vice President Southern Region.
Allen Tank recognized revenue, operating profit, and pretax income of $40.6
million, $6.6 million, and $1.8 million, respectively, for the 52-week period
ended December 27, 1997 and $18.0 million, $4.4 million, and $2.3
<PAGE> 2
million, respectively, for the 24-week period ended June 13, 1998.
UNIFAB also announced the acquisition of LATOKA USA, Inc. for approximately
79,000 shares of UNIFAB International, Inc. Common Stock. LATOKA USA, Inc.,
through a wholly owned subsidiary, LATOKA Engineering, Ltd., headquartered in
London, England, provides engineering and project management services mainly in
Europe and the Middle East. LATOKA Engineering, Ltd. Had revenues of $4.0
million and pre tax loss of $0.5 million for the year ended December 31, 1997.
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. Through a wholly owned subsidiary, PIM, LLC,
UNIFAB provides industrial maintenance services and, at its 60 acre fabrication
facility located twelve miles south of Lake Charles, Louisiana, provides repair,
refurbishment and conversion services for oil and gas drilling rigs. 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 Allen Tank 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 Allen Tank, 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.
