<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, 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 or (I.R.S. Employer
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 ---- 5,980,013 shares outstanding as of February
14, 1999.
<PAGE> 2
UNIFAB INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -- December 31, 1998 and
March 31, 1998................................................................ 1
Condensed Consolidated Statements of Income -- Three Months
Ended December 31, 1998 and 1997; Nine Months Ended
December 31, 1998 and 1997.................................................... 2
Condensed Consolidated Statement of Shareholders' Equity -- Nine
Months Ended December 31, 1998................................................ 3
Condensed Consolidated Statements of Cash Flows -- Nine Months
Ended December 31, 1998 and 1997.............................................. 4
Notes to Consolidated Financial Statements -- December 31, 1998................ 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................................... 8
PART II. OTHER INFORMATION
Item 5. Other Information............................................................. 10
Item 6. Exhibits and Reports on Form 8-K.............................................. 10
</TABLE>
<PAGE> 3
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
1998 1998
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................... $ 1,842,940 $ 8,482,196
Accounts receivable..................................... 21,908,821 26,031,271
Costs and estimated earnings in excess of billings on
uncompleted contracts................................ 5,506,190 2,064,295
Prepaid expenses........................................ 1,148,150 987,520
Other assets............................................ 3,559,148 638,942
------------ ------------
Total current assets............................ 33,965,249 38,204,224
Property, plant and equipment, net...................... 21,379,497 13,333,207
Cost in excess of net assets acquired, net of
accumulated amortization of $645,770 and
$144,128............................................. 10,360,847 6,774,019
Other assets............................................ 1,561,263 1,932,149
------------ ------------
Total assets.................................... $ 67,266,856 $ 60,243,599
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................ $ 3,588,322 $ 6,859,447
Notes Payable........................................... 9,350,000 11,454,005
Billings in excess of costs and estimated earnings on
uncompleted contracts................................ 859,613 2,951,249
Accrued liabilities..................................... 1,185,239 1,349,663
Payroll and related liabilities......................... 487,821 1,956,876
Current portion of long-term debt....................... 2,189,961 --
Income tax payable...................................... 82,652 754,970
------------ ------------
Total current liabilities....................... 17,743,608 25,326,210
Deferred income taxes..................................... 1,222,661 991,725
Long-term debt............................................ 7,178,507 --
Other noncurrent liabilities.............................. 628,775 1,237,673
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, 5,980,013 and 5,867,655 shares
outstanding............................................ 59,800 58,677
Additional paid-in capital.............................. 25,271,438 23,973,392
Currency translation adjustment......................... (7,393) --
Retained earnings....................................... 15,169,460 8,655,922
------------ ------------
Total shareholders' equity...................... 40,493,305 32,687,991
------------ ------------
Total liabilities and shareholders' equity...... $ 67,266,856 $ 60,243,599
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 4
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31 NINE MONTHS ENDED DECEMBER 31
------------------------------ ------------------------------
1998 1997 1998 1997
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenue ..................................... $ 23,474,041 $ 21,219,376 $ 83,731,832 $ 81,482,881
Cost of revenue ............................. 18,526,735 17,049,573 66,630,845 68,336,695
------------ ------------ ------------ -------------
Gross profit ................................ 4,947,306 4,169,803 17,100,987 13,146,186
Selling, General and Administrative
expense ................................... 2,045,746 1,761,397 6,932,631 5,013,678
------------ ------------ ------------ -------------
Income from operations ...................... 2,901,560 2,408,406 10,168,356 8,132,508
Other income (expense):
Interest expense .......................... (234,699) (211,362) (696,281) (767,876)
Interest income ........................... 11,711 225,731 168,156 328,262
Other income (expense) .................... (45,154) (91,278) (329,092) (91,278)
------------ ------------ ------------ -------------
Income before income taxes .................. 2,633,418 2,331,497 9,311,139 7,601,616
Income tax provisions ....................... 956,217 673,500 2,797,601 2,030,789
------------ ------------ ------------ -------------
Net income .................................. $ 1,677,201 $ 1,657,997 $ 6,513,53 $ 5,570,827
============ ============ ============ =============
Basic and diluted earnings per share ........ $ 0.28 $ 0.28 $ 1.10 $ 1.15
============ ============ ============ =============
Basic and diluted earnings per share
weighted average shares ................... 5,974,835 5,841,250 5,947,799 4,865,024
============ ============ ============ =============
Pro forma data:..............................
Income before income taxes, as
reported above............................ 2,633,418 2,331,497 9,311,140 7,601,616
Current tax provision........................ 956,217 673,500 2,272,601 2,030,789
Pro forma provision for income taxes
related to S Corporation operations....... -- 148,352 904,815 682,200
------------ ------------ ------------ -------------
Pro forma net income ........................ $ 1,677,201 $ 1,509,645 $ 6,133,724 $ 4,888,627
============ ============ ============ =============
Pro forma basic and diluted earnings
per share ................................ $ 0.28 $ 0.26 $ 1.03 $ 1.00
============ ============ ============ =============
</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 CURRENCY
------------------------ PAID-IN TRANSLATION RETAINED
SHARES AMOUNT CAPITAL ADJUSTMENT EARNINGS TOTAL
---------- --------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1998 ......... 5,867,655 $ 58,677 $ 23,973,392 $ -- $ 8,655,922 $ 32,687,991
Exercise of stock options ........ 3,500 35 62,965 -- -- 63,000
Acquisition of LATOKA ............ 79,000 790 996,585 -- -- 997,375
Shares issued under incentive
stock plans .................... 29,858 298 238,496 -- -- 238,794
Translation adjustment ........... -- -- -- (7,393) -- (7,393)
Net income ....................... -- -- -- -- 6,513,538 6,513,538
---------- --------- ------------ ----------- ------------ ------------
Balance at December 31, 1998 ...... 5,980,013 $ 59,800 $ 25,271,438 $ (7,393) $ 15,169,460 $ 40,493,305
========== ========= ============ =========== ============ ============
</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
------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash from operations ............................... $ (2,666,521) $ 4,657,806
Investing activities:
Increase in note receivable ...................... (2,000,000) --
Purchases of equipment ........................... (9,300,198) (2,305,863)
------------ ------------
(11,300,198) (2,305,863)
Financing activities:
Net proceeds from initial public offering ........ -- 25,037,001
Payment for surrender of shareholder rights ...... -- (6,300,000)
Dividends paid ................................... -- (3,622,189)
Exercise of stock options ........................ 63,000 --
Net change in borrowings ......................... 7,264,463 (94,000)
------------ ------------
7,327,463 15,020,812
------------ ------------
Net change in cash and cash equivalents .......... $ (6,639,256) $ 17,372,755
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
UNIFAB INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 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. Through a wholly-owned subsidiary, Allen Process Systems, LLC, the
Company 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. The Company's main fabrication
facilities are 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. Through a wholly-owned subsidiary, Allen
Process Systems, Ltd., headquartered in Wimbledon, England, the Company provides
engineering and project management services primarily in Europe and the Middle
East.
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
December 31, 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 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, 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.
5
<PAGE> 8
3. BUSINESS COMBINATIONS
On July 24, 1998 the Company acquired all of the outstanding common stock of
Allen Tank, Inc. ("Allen Tank") for 819,000 shares of the Company's common
stock, plus $400,000 in cash and $800,000 in notes paid to a dissenting
shareholder. Allen Tank, (which has been converted to a limited liability
company and renamed Allen Process Systems, LLC, is located in New Iberia,
Louisiana on property near the Company's Port of Iberia facilities. Allen
Process Systems, LLC designs and manufactures specialized process systems
related to the development of oil and gas reserves. This business combination
has been accounted for as a pooling-of-interests and, accordingly, the
consolidated financial statements for periods prior to the combination have been
restated to include the accounts and results of operations of Allen Tank.
Operating results prior to the combination of the separate companies and the
combined amounts presented in the consolidated financial statements are
summarized below:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
December 31, December 31,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
UNIFAB 14,083,025 13,469,749 52,653,971 46,920,824
Allen Tank 9,391,016 7,749,627 31,077,861 34,562,057
---------- ---------- ---------- ----------
Combined 23,474,041 21,219,376 83,731,832 81,482,881
========== ========== ========== ==========
Net Income:
UNIFAB 1,125,170 1,237,139 3,523,457 3,678,728
Allen Tank 552,031 420,858 2,990,081 1,892,099
---------- ---------- ---------- ----------
Combined 1,677,201 1,657,997 6,513,538 5,570,827
========== ========== ========== ==========
</TABLE>
Adjustments to conform Allen Tank's accounting policies to those of UNIFAB and
to apply pooling-of-interests accounting reduced net income of the combined
entity for the above periods by $0 and $325,815 for the three- and nine- month
periods ended December 31, 1998, respectively, and by $45,609 and $518,050 for
the three- and nine-month periods ended December 31, 1997, respectively. The
adjustments to conform accounting policies relate to the accrual of performance
incentives for interim reporting periods.
Prior to the combination Allen Tank's fiscal year end was December 31. UNIFAB's
fiscal year end is March 31. In applying pooling-of-interests accounting, the
December 31, 1998 UNIFAB statement of income was combined with the Allen Tank
statements of income for the six month period ended December 31, 1998 and the
twelve-week period ended June 13, 1998. The December 31, 1997 UNIFAB statement
of income was combined with the Allen Tank statement of income for the 40-week
period ended December 27, 1997. Retained earnings of the combined entities were
adjusted by approximately $675,000 as of the beginning of UNIFAB's fiscal 1998
year to include the unaudited net earnings of Allen Tank, including adjustments
to conform accounting policies to those of UNIFAB, for the period December 28,
1997 to March 21, 1998. During this period Allen Tank's revenues were
$8,986,700.
Merger expenses of approximately $275,000 include legal, investment banking and
accounting fees related to the business combination and are classified as "other
expense" in the Consolidated Statements of Income.
6
<PAGE> 9
The Company also acquired LATOKA Engineering, Ltd. for 79,000 shares of UNIFAB
common stock.
Prior to the acquisition, Allen Tank was taxed as an S Corporation. Upon the
acquisition, S Corporation status was terminated and the corporation was subject
to federal and state income taxes. In conjunction with the termination of S
Corporation status, Allen Tank distributed $1.5 million to its shareholders in
the form of notes. This distribution, which was consistent with prior
distributions to the Allen Tank shareholders, represented the tax liability of
those shareholders for S Corporation earnings through the date of the
acquisition and termination of S Corporation status. The remaining undistributed
earnings at the date of acquisition were accounted for as additional capital at
the beginning of fiscal year March 31, 1998.
The balance sheet of the Company as of December 31, 1998 includes a current
deferred income tax liability of approximately $742,000 and a non-current
deferred income tax asset of approximately $217,000 to reflect deferred income
taxes recorded as of the date of acquisition as a result of the termination of
the S Corporation status of Allen Tank.
4. PRO FORMA EARNINGS PER SHARE
Pro forma earnings per share for the three and nine month periods ended
December 31, 1998 and 1997 consists of the Company's historical income, adjusted
to reflect income taxes as if the Allen Tank had operated as a C Corporation for
all periods. This calculation excludes the charge of $525,000 related to the
cumulative deferred income taxes resulting from the conversion to a C
Corporation on July 24, 1998, as described in Note 3, above. The basic and
diluted earnings per share calculation includes shares issued in the acquisition
of Allen Tank transaction, giving effect to the issuance at the beginning of the
periods presented.
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 on Form
10-K.
RESULTS OF OPERATIONS
Revenue for the three months ended December 31, 1998 increased 11% to
$23.5 million from the $21.2 generated in the three months ended December 31,
1997. For the nine-month period ended December 31, 1998, revenue increased 3% to
$83.7 million compared to $81.5 million for the nine-month period ended December
31, 1997. The increase in the quarter was primarily due to revenue recognized on
time and material fabrication contracts, and engineering, design and manufacture
of specialized process systems, which vary in size, complexity and types of
materials used, all of which impact the revenue volume. Additionally, revenues
increased from plant maintenance and international project management businesses
acquired in 1998. At December 31, 1998 backlog was approximately $25.1 million.
Cost of revenue for the three months ended December 31, 1998 increased
8.7% or $1.5 million to $18.5 million from $17.0 million in the three months
ended December 31, 1997. For the nine-month period ended December 31, 1998, cost
of revenue was $66.6 million, which was $1.7 million or 2.5% lower than for the
same period in 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 to 78.9% and 79.6% in the
three- and nine-month periods ended December 31, 1998, respectively, from 80.3%
and 83.9% for the same periods in 1997. The decrease in cost as a percentage of
revenues is a result of the make up of projects including the
7
<PAGE> 10
type of material called for on process systems, such as stainless steel,
cladding or duplex stainless steel content, the extent of design and engineering
required and the mix between fixed-price and time-and-material contracts.
Gross profit for the three months ended December 31, 1998 increased to
$4.9 million and for the nine months ended December 31, 1998 increased to $17.1
million from $4.2 million and $13.1 million in the corresponding periods in 1997
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. While the
downturn in oil and natural gas prices has not yet affected the Company's
financial results, reductions in capital budgets announced by the major oil
companies could result in fewer projects. As competition for those projects
increases, the Company's margins could be affected.
Selling, general and administrative expense increased to 2.0 million in
the three months ended December 31, 1998 from $1.8 million in the same period in
1997, and was $6.9 million in the nine months ended December 31, 1998 compared
to $5.0 million in the same period in 1997. This increase is due to increases in
regulatory, reporting and other costs associated with being a corporation with
publicly traded securities, the additional general and administrative costs
associated with the acquired Lake Charles facility and London operations, and
costs associated with the Company's safety program.
Other income (expense) includes interest income and expense, which
fluctuate with the weighted average amount of funds invested or borrowed over
the period. Other expense also includes approximately $275,000 in costs
associated with the acquisition of Allen Tank, Inc. on July 24, 1998, which was
accounted for as a pooling of interests.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has funded its business activities through
funds generated from its operations and borrowings under its credit facility.
Net cash used in operations was $2.7 million for the nine months ended December
31, 1998. During the same period the Company had capital expenditures of $9.3
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 July 27, 1998, the Company amended and restated its unsecured credit
facility (the "Second Restated 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, 1998, the Company had letters of credit of $11.7 million in the
aggregate and borrowings outstanding of $7.5 million under the revolving credit
facility. The Second Restated Credit Facility also provides for replacement of
several letters of credit under a non-revolving credit facility. At December 31,
1998, the Company had outstanding letters of credit in the amount of $168,000
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.
The Second Restated Credit Facility provides for a $7,000,000 term loan
facility with quarterly principle payments of $350,000 plus interest commencing
September 30, 1998. Amounts outstanding under the term loan facility bear
interest under the same terms described above for borrowings under the revolving
credit facility.
The Company paid amounts outstanding and terminated its (pound)500,000
revolving credit facility and its (pound)1,000,000 non-revolving term credit
facility with a commercial lender in London, England. The
8
<PAGE> 11
facilities were secured by a letter of credit which was no longer required and
was cancelled in January, 1999. Funds to pay the facilities were available under
the Company's Second Restated Credit Facility.
On July 24, 1998, the Company 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 Company used available funds in the acquisition.
Management believes that its available funds, cash generated by
operating activities and funds available under its revolving credit facility
will be sufficient to fund any capital expenditures and working capital needs.
The Company may expand its operations through acquisitions in the future, which
may require additional equity or debt financing.
IMPACT OF THE YEAR 2000
The Company has assessed and continues to assess the impact of the year 2000
on its reporting systems and operations. The year 2000 issue is the result of
computer programs being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs that have date sensitive
software may recognize a date using "00" as the year 1900 rather than 2000. This
could potentially result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in other similar normal
business operations. Although the Company is still assessing the impact of the
year 2000 issue on its information technology systems, at this time the Company
believes the impact will not be material to the Company's financial position or
results of operations.
The Company has not yet communicated with all of its significant customers,
suppliers and vendors to ensure that they have appropriate plans to address year
2000 issues where they may otherwise impact the operations of the Company.
However, the Company does not have any significant customers, suppliers or
vendors that directly interface with the Company's information technology
systems. There is no guarantee that the systems of other companies on which the
Company relies will be converted timely and will not have an adverse effect on
the Company.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
Certain statements included in this report and in oral statements made from time
to time by management of the Company that are not statements of historical fact
are forward-looking statements. In this report, forward-looking statements are
included primarily in the section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operation." The words "expect," "believe,"
"anticipate," "project," "plan," "estimate," "predict," and similar expressions
often identify forward-looking statements. All such statements are subject to
factors that could cause actual results and outcomes to differ materially from
the results and outcomes predicted in the statements and investors are cautioned
not to place undue reliance upon them.
9
<PAGE> 12
PART II
ITEM 5. OTHER INFORMATION
On February 12, 1998 the Company announced its third quarter fiscal 1999
earnings and related matters. The press release making this announcement is
attached hereto as Exhibit 99.1.
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 February 12, 1998 announcing its
earnings and related matters for the third quarter fiscal year ending March
31, 1999.
</TABLE>
(b) The Company filed no reports on Form 8-K during the quarter for which this
report is filed.
10
<PAGE> 13
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, 1998 /s/ Peter J. Roman
---------------------- ------------------------------------
Peter J. Roman
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
11
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
27.1 Financial Data Schedule
99.1 Press release issued by the Company on February 12, 1998
announcing its earnings and related matters for the third
quarter fiscal year ending March 31, 1999.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIFAB
INTERNATIONAL, INC.'S DECEMBER 31, 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> DEC-31-1998
<CASH> 1,842,940
<SECURITIES> 0
<RECEIVABLES> 21,908,821
<ALLOWANCES> 0
<INVENTORY> 5,506,190
<CURRENT-ASSETS> 33,965,249
<PP&E> 30,339,729
<DEPRECIATION> 8,960,232
<TOTAL-ASSETS> 67,266,856
<CURRENT-LIABILITIES> 17,743,608
<BONDS> 0
0
0
<COMMON> 59,800
<OTHER-SE> 40,433,505
<TOTAL-LIABILITY-AND-EQUITY> 67,266,856
<SALES> 23,474,041
<TOTAL-REVENUES> 23,474,041
<CGS> 18,526,735
<TOTAL-COSTS> 18,526,735
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 234,699
<INCOME-PRETAX> 2,633,418
<INCOME-TAX> 956,217
<INCOME-CONTINUING> 1,677,201
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,677,201
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</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, February 12, 1999
UNIFAB INTERNATIONAL, INC.
REPORTS THIRD QUARTER EARNINGS
New Iberia, LA - (Business Wire) - February 12, 1999 -- UNIFAB International,
Inc. (NASDAQ: UFAB) today reported net income increased to $1.68 million ($.28
per share) on revenue of $23.5 million for its third quarter ended December 31,
1998, compared to net income of $1.66 million ($.28 per share) on revenue of
$21.2 million for the third quarter ended December 31, 1997. Net income for the
nine months ended December 31, 1998 increased to $6.5 million ($1.10 per share)
on revenue of $83.7 million, compared to net income of $5.6 million ($1.15 per
share) on revenue of $81.5 million for the nine months ended December 31, 1997.
Backlog at December 31, 1998 was approximately $25 million. Operating results
for the nine months ended December 31, 1998 include acquisition expenses of
$275,000 and a one time charge of $525,000 related to the cumulative deferred
income taxes resulting from the acquisition of Allen Tank, Inc.
Pro forma net income for the nine months ended December 31, 1998 increased to
$6.1 million ($1.03 per share) from pro forma net income of $4.9 million ($1.00
per share) for the same period in 1997. Pro forma net income consists of the
Company's historical net income, adjusted to reflect income taxes as if Allen
Tank, Inc. had operated as a C Corporation for all periods. This calculation
excludes the one time charge of $525,000 related to the cumulative deferred
income taxes resulting from the conversion to a C Corporation on July 24, 1998.
"UNIFAB continues to expand capabilities and enhance performance," notes Dailey
J. Berard, UNIFAB International, Inc.'s President, CEO, and Chairman of the
Board. "Our results reflect continued growth, in particular in our core
fabrication and process system businesses. Our offshore maintenance and service
operations also increased revenue over last year. The lower activity level in
the December quarter, which is normal in the industry, allowed us to emphasize
important programs such as safety and equipment upgrade and maintenance, which
will pay benefits in the long run. While bidding activity is good, this market
is very competitive, which puts pressure on contract margins. Backlog has
decreased since last quarter, but recent awards have put it back in line with
historical amounts. Although our deep water facility in Lake Charles is
developing slower than we expected, we are optimistic that it will be the
Company's cornerstone in the future, and will allow us to offer world-class
capabilities in concert with UNIFAB service. By drawing on the capabilities of
the Allen Process Systems international marketing team, we have broadened our
focus and increased international marketing of our Total Project Capabilities.
We remain aggressive seeking growth opportunities through acquisition, as well
as through facilities enhancements."
UNIFAB International, Inc. is an industry leader in the custom fabrication of
topsides facilities, equipment modules and other structures used in the
development and production of oil and gas reserves.
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In addition, the Company designs and manufactures specialized process systems,
refurbishes and retrofits existing jackets and decks, provides repair,
refurbishment and conversion services for oil and gas drilling rigs and performs
offshore piping hook-up and platform maintenance services. Dailey Berard serves
as a commissioner on a number of committees and task forces that are working to
improve training and education of the workforce in Louisiana.
