<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, 1999
-------------
[ ] 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 ---- 6,800,489 shares as of August 1, 1999.
<PAGE> 2
UNIFAB INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -- June 30, 1999 and
March 31, 1999.................................................................... 1
Condensed Consolidated Statements of Income -- Three Months
Ended June 30, 1999 and 1998...................................................... 2
Condensed Consolidated Statements of Cash Flows -- Three
months Ended June 30, 1999 and 1998............................................... 4
Notes to Condensed Consolidated Financial Statements --
June 30, 1999..................................................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................................... 7
Item 3. Qualitative and Quantitative Disclosure of Market Risk............................... 8
PART II. OTHER INFORMATION
Item 5. Other Information.................................................................... 9
Item 6. Exhibits and Reports on Form 8-K.................................................... 10
</TABLE>
<PAGE> 3
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30 MARCH 31
1999 1999
-------- --------
(Unaudited) (Note 2)
(In Thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,961 $ 1,125
Accounts receivable 20,477 22,997
Costs and estimated earnings in excess of billings on uncompleted contracts 6,469 4,388
Prepaid expenses and other assets 7,231 4,060
-------- --------
Total current assets 38,138 32,570
Property, plant and equipment, net 27,511 23,259
Cost in excess of net assets acquired, net 14,633 10,234
Other assets 1,767 3,958
-------- --------
Total assets $ 82,049 $ 70,021
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,341 $ 4,075
Billings in excess of costs and estimated earnings on uncompleted contracts 6,763 4,853
Accrued liabilities 3,463 1,661
Notes payable 2,174 10,972
-------- --------
Total current liabilities 17,741 21,561
Deferred income taxes 2,286 2,286
Noncurrent notes payable 15,550 6,607
Shareholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized, 6,800,489 and
6,020,736 shares outstanding 68 60
Additional paid-in capital 35,284 28,542
Retained earnings 11,038 10,923
Currency translation adjustment 82 42
-------- --------
Total shareholders' equity 46,472 39,567
-------- --------
Total liabilities and shareholders' equity $ 82,049 $ 70,021
======== ========
</TABLE>
See accompanying notes.
<PAGE> 4
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30
--------------------------
1999 1998
-------- --------
(Unaudited)
(In Thousands,
Except Per-Share
Amounts)
<S> <C> <C>
Revenue $ 16,255 $ 31,419
Cost of revenue 13,874 25,132
-------- --------
Gross profit 2,381 6,287
Selling, general and administrative expense 1,990 2,447
-------- --------
Income from operations 391 3,840
Other income (expense):
Interest expense (247) (120)
Interest income 42 118
-------- --------
Income before income taxes 186 3,838
Income tax provision 71 626
-------- --------
Net income $ 115 $ 3,212
======== ========
Basic earnings per share $ 0.02 $ 0.54
======== ========
Basic earnings per share weighted average shares 6,542 5,953
======== ========
Diluted earnings per share $ 0.02 $ 0.54
======== ========
Diluted earnings per share weighted average shares 6,599 5,953
======== ========
Pro forma data:
Income before income taxes, as reported above $ 3,838
Pro forma provision for income taxes 1,309
--------
Pro forma net income $ 2,529
========
Pro forma basic earnings per share $ 0.42
========
Pro forma diluted earnings per share $ 0.42
========
</TABLE>
See accompanying notes.
<PAGE> 5
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
----------------------
1999 1998
-------- --------
(Unaudited)
(In Thousands,
Except Per-Share
Amounts)
<S> <C> <C>
Net cash provided by operating activities $ 3,654 $ 1,372
Investing activities:
Acquisition of business, net of cash acquired 233 --
Purchases of equipment (1,886) (3,574)
-------- --------
(1,653) (3,574)
Financing activities:
Net change in short-term borrowings 835 (66)
Exercise of stock options -- 123
-------- --------
835 57
Net decrease in cash and cash equivalents for Allen Tank for the
12-week period ended March 31, 1998 -- (120)
-------- --------
Cash and cash equivalents at beginning of period 1,125 8,482
Cash and cash equivalents at end of period 3,961 6,217
-------- --------
Net change in cash and cash equivalents $ 2,836 $ (2,265)
======== ========
</TABLE>
See accompanying notes.
<PAGE> 6
UNIFAB INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
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 June
30, 1999, 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, 1999 are
not necessarily indicative of the results that may be expected for the fiscal
year ending March 31, 2000.
These financial statements should be read in conjunction with the financial
statements and footnotes thereto for the year ended March 31, 1999 included in
the Company's Annual Report on Form 10-K.
<PAGE> 7
3. MERGERS AND ACQUISITIONS
On July 24, 1998, the Company acquired all of the outstanding common stock
of Allen Tank, Inc. (Allen Tank) for 819,000 shares of UNIFAB International,
Inc. common stock plus $1.2 million in cash and notes paid to a dissenting
shareholder. The business combination was accounted for as 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 condensed
financial statements are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
-------------
JUNE 30, 1998
-------------
<S> <C>
Revenues:
UNIFAB $ 19,662
Allen Tank 11,757
--------
Combined $ 31,419
========
Net Income:
UNIFAB $ 1,657
Allen Tank 1,555
--------
Combined $ 3,212
========
</TABLE>
Adjustments to conform Allen Tank's accounting policies to those of UNIFAB,
which relate to the accrual of performance incentives for interim reporting
periods and to apply pooling-of-interests accounting, reduced net income of the
combined entity for the three-month period ended June 30, 1998 by $50,000.
On April 29, 1999, the Company completed its acquisition of Oil Barges, Inc.
("OBI") and substantially all the assets of Southern Rentals, LLC, an affiliate
of OBI. The Company also acquired equipment and machinery from an affiliate of
OBI. The purchase price was approximately $7.2 million paid through the issuance
of approximately 700,000 shares of UNIFAB International, Inc. common stock. OBI
recognized revenue and pretax income of $28.0 million and $1.2 million,
respectively, for the year ended December 31, 1998. Prior to the acquisition,
the Company advanced $2.0 million to OBI for working capital needs under the
terms of a secured credit agreement, secured by substantially all assets of OBI.
As of March 31, 1999, the outstanding balance was $2.0 million and was included
in noncurrent assets. OBI will operate as a wholly owned subsidiary of UNIFAB
International, Inc. The business combination will be accounted for under the
purchase method of accounting.
4. PRO FORMA EARNINGS PER SHARE
Pro forma earnings per share for the three month period ended June 30, 1998
include the pro forma effect for the application of federal and state income
taxes on the earnings of Allen Tank, Inc. as if it had always been a C
Corporation. Prior to the merger with the Company, Allen Tank, Inc. had operated
as an S Corporation. 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.
<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, 1999 decreased 48% to $16.3
million from the $31.4 million generated in the three months ended June 30,
1998. The Company's direct labor hours worked during the three months ended June
30, 1999 decreased 30.5% from the same period last year. The decrease is
primarily due to the general reduction in demand for the Company's structural
and process equipment fabrication services brought on by continued low commodity
prices and reduced expenditures by oil and gas companies. Structural fabrication
and process equipment fabrication revenue decreased 50% from $27.3 million in
the June quarter last year to $13.6 million in the June 1999 quarter.
Cost of revenue for the three months ended June 30, 1999 decreased 45% or
$11.3 million to $13.9 million from $25.1 million in the three months ended June
30, 1998. Cost of revenue consists of costs associated with the fabrication
process, including direct costs (such as direct labor costs and raw materials)
and indirect costs (such as supervisory labor, utilities, welding supplies and
equipment costs) that can be specifically allocated to projects. These costs
increased as a percentage of revenues from 80% in 1997 to 85% in 1998. This
increase in costs as a percentage of revenues reflects reduced margins for all
services from the same period last year caused by the decreased demand noted
above and competition for the projects being awarded.
Selling, general and administrative expense decreased to $2.0 million in the
three months ended June 30, 1999 from $2.4 million in the corresponding period
in 1998. The Company's selling, general and administrative expense as a
percentage of revenue increased to 12.2% in June 1999 from 7.8% in June 1998 due
mainly to the activity decrease discussed above.
Interest expense increased to $0.2 million in the June 1999 quarter from
$0.1 million in the June 1998 quarter from increased borrowings under the
Company's line of credit facility and other financings.
LIQUIDITY AND CAPITAL RESOURCES
Historically the Company has funded its business activities through funds
generated from operations, short-term borrowings on its revolving credit
facilities for working capital needs and individual financing arrangements for
equipment, facilities improvements, insurance premiums, and long-term needs. The
Company's available funds and $4.5 million generated from operations and
financing activities together funded investing activities of $1.7 million during
the June 1999 quarter. Investing activities consisted mainly of capital
expenditures.
The Company is developing a deep-water fabrication and drilling
rig-refurbishing facility on property leased from the Lake Charles Harbor and
Terminal District in Lake Charles, Louisiana. Estimated completion of the
facility is the third quarter of the March 31, 2000 fiscal year. Under the terms
of the lease, the Company is committed to fund capital expenditures totaling
$8.0 million to develop the facility and acquire equipment necessary for
operations. Through June 30, 1999 the Company has funded $2.4 million toward
this development. The Company expects to fund these capital expenditures through
the issuance of debt.
<PAGE> 9
On July 27, 1998, the Company amended and restated its unsecured credit
facility with a commercial lender (the Credit Facility), which provides for up
to $10.0 million in borrowings for general corporate purposes and for up to
$10.0 million in letters of credit under a revolving credit facility. At June
30, 1999, the Company had $9.8 million in borrowings and $6.3 million in letters
of credit outstanding under the revolving credit facility. The credit facility
also provides for a $7.0 million term loan facility. The term loan facility
calls for principal payments of $350,000 per quarter, beginning September, 1998.
At June 30, 1999, the Company had $5.6 million outstanding under the term loan
facility. Borrowings under the Credit Facility bear interest at the prime
lending rate established by Chase Manhattan Bank, N.A. (7.75% at June 30, 1999)
or LIBOR plus 2% (6.94%-7.03% at June 30, 1999) at the Company's option. The fee
for issued letters of credit is 7/8% per annum on the principal amount of
letters of credit issued for performance or payment, or 1.75% per annum on the
principal amount if the letter of credit is a financial letter of credit. The
unused commitment fee is 3/8 of 1% per annum. The Credit Facility matures August
31, 2000.
On April 29, 1999, the Company completed its acquisition of OBI and
substantially all the assets of Southern Rentals, LLC, an affiliate of OBI. The
purchase price was approximately $7.2 million paid through the issuance of
approximately 700,000 shares of UNIFAB International, Inc. common stock. OBI
recognized revenue and pretax income of $28.0 million and $1.2 million,
respectively, for the year ended December 31, 1998. OBI will operate as a wholly
owned subsidiary of UNIFAB International, Inc. The business combination has been
accounted for under the purchase method of accounting.
Management believes that its available funds, cash generated by operating
activities, and funds available under the Credit Facility and contemplated debt
issuance discussed above will be sufficient to fund the OBI acquisition, planned
capital expenditures, scheduled payments under the term credit facility and its
working capital needs for the next 12 months. In the normal course of business,
the Company is evaluating its debt structure and is considering alternatives to
refinance a portion of its credit facility to extend the payment terms beyond
the current expiration. Additionally, any expansion of the Company's operations
through future acquisitions may require additional equity or debt financing.
YEAR 2000 ISSUES
Year 2000 issues result from the past practice in the computer industry of
using two digits rather than four when coding the year portion of a date. This
practice can create breakdowns or erroneous results when computers and
processors embedded in other equipment perform operations involving dates later
than December 31, l999. The Company makes use of computers in its gathering,
manipulating, calculating and reporting of accounting, financial,
administrative, and management information. Computers are also utilized in
communication within the organization and with customers and vendors as an
efficient method of transferring documents and information. Year 2000 issues
could 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 similar normal business activities.
Readiness: The Company has assessed and continues to assess the year 2000
compliance of its information technology systems and has purchased and installed
software and hardware that it believes will be adequate to upgrade all of these
systems to Year 2000 compliance. The Company has also surveyed its significant
non-information technology equipment for Year 2000 issues. While several of
these items of equipment are significant to the Company's operations (such as
automated welding and cutting equipment), none of the automated functions of
this equipment are date sensitive. The Company believes the equipment will not
require replacement or modification for Year 2000 compliance.
The Company does not have any significant customers, suppliers or vendors
whose information technology systems directly interface with the Company's
information technology systems. However, it is possible the noncompliance of
significant customers or suppliers could adversely affect, to a material extent,
the operations of the Company.
<PAGE> 10
Costs: Because the Company's information technology systems have been
regularly upgraded and replaced as part of the Company's ongoing efforts to
maintain high-grade technology and because the Company is not heavily dependent
on non-information technology equipment that is date sensitive, the Company's
Year 2000 compliance costs are expected to be relatively low. To date, the
Company has spent $100,000 for software and hardware, which it considers to be
related to the Year 2000 issue. Additional costs are not expected to be material
to the Company's financial condition. However, there can be no guarantee that
actual costs incurred will not exceed that anticipated by management.
Worst Case Scenario: The Securities and Exchange Commission requires that
public companies forecast the most likely worst case Year 2000 scenario. In
doing so, management is assuming that the procedures and assessment described
above will not be effective. Analysis of the most likely worst case Year 2000
scenario the Company may face leads to contemplation of the following
possibilities which, though unlikely in some or many cases, must be included in
any consideration of worst cases: widespread failure of electrical, gas and
similar supplies by utilities supplying the Company; widespread disruption of
communications services of common carriers domestically and internationally;
similar disruption to means and modes of transportation of the Company and its
employees, contractors, suppliers and customers; significant disruption of the
Company's ability to gain access to, and remain working in, office buildings and
fabrication facilities; the failure of a substantial number of the Company's
critical information (computer) hardware and software systems; and the failure,
domestically and internationally, of systems of outside entities, the cumulative
effect of which could have a material adverse impact on the Company's critical
systems. Among other things, the Company could face substantial claims by
customers or loss of revenues due to the inability to fulfill contractual
obligations or to bill customers accurately and on a timely basis, and increased
expenses associated with litigation, stabilization of operations following
critical failures, and the development and execution of any contingency plans.
The Company could also experience an inability by customers to pay, on a timely
basis or at all, obligations owed to the Company. Under these circumstances, the
adverse effect on the Company and the diminution of the Company's revenues,
would be material, although not quantifiable at this time.
Summary: The Company believes it has taken appropriate measures to assess
its internal systems and prepare them for Year 2000 issues. However, if those
measures prove inadequate, the Company's ability to estimate and bid on new jobs
and its financial and other daily business procedures may be interrupted or
delayed, any of which could have a materially adverse effect on the Company's
operations. 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.
While the Company intends to continue to monitor Year 2000 issues, it does
not currently have a contingency plan for dealing with the possibility that its
current systems may prove inadequate, nor does the Company currently intend to
develop such a plan.
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Quantitative and qualitative disclosures about market risk are in Item 7A of
the Company's 10K for the year ended March 31, 1999.
<PAGE> 11
PART II
ITEM 5. OTHER INFORMATION
On July 30, 1999 the Company announced its first quarter fiscal 2000 earnings
and related matters. The press release making this announcement is attached
hereto as Exhibit 99.1.
On April 30, 1999 the Company announced that it had completed the acquisition of
Oil Barges, Inc. The press release making this announcement is attached hereto
as Exhibit 99.2.
On June 28, 1999 the Company announced that it had completed the acquisition of
Compression Engineering Services, Inc. The press release making this
announcement is attached hereto as Exhibit 99.3.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
27.1 Financial Data Schedule
99.1 Press release issued by the Company on July 30, 1999
announcing its earnings and related matters for the first
quarter fiscal year ending March 31, 2000.
99.2 Press release issued by the Company on April 30, 1999
announcing it had completed the acquisition Oil Barges,
Inc.
99.3 Press release issued by the Company on June 28, 1999
announcing it had completed the acquisition Compression
Engineering Services, Inc.
(b) Reports on Form 8-K
The Company filed a current report on Form 8-K under Items 2. and 7.
dated April 29, 1999.
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 16, 1998 /s/ Peter J. Roman
--------------- -----------------------------------------
Peter J. Roman
Vice President and Chief Financial Officer
(Principal Financial and Accounting
Officer)
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
27.1 Financial Data Schedule
99.1 Press release issued by the Company on July 30, 1999
announcing its earnings and related matters for the first
quarter fiscal year ending March 31, 2000.
99.2 Press release issued by the Company on April 30, 1999
announcing it had completed the acquisition Oil Barges,
Inc.
99.3 Press release issued by the Company on June 28, 1999
announcing it had completed the acquisition Compression
Engineering Services, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIFAB
INTERNATIONAL, INC.'S JUNE 30, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 3,961
<SECURITIES> 0
<RECEIVABLES> 20,477
<ALLOWANCES> 0
<INVENTORY> 6,469
<CURRENT-ASSETS> 38,138
<PP&E> 37,743
<DEPRECIATION> (10,231)
<TOTAL-ASSETS> 82,049
<CURRENT-LIABILITIES> 17,741
<BONDS> 0
0
0
<COMMON> 68
<OTHER-SE> 46,404
<TOTAL-LIABILITY-AND-EQUITY> 82,049
<SALES> 16,255
<TOTAL-REVENUES> 16,255
<CGS> 13,874
<TOTAL-COSTS> 13,874
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 247
<INCOME-PRETAX> 186
<INCOME-TAX> 71
<INCOME-CONTINUING> 115
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 115
<EPS-BASIC> 0.02
<EPS-DILUTED> 0.02
</TABLE>
<PAGE> 1
EXHIBIT 99.1
Press Release dated July 30, 1999
NEWS RELEASE
Dailey J. Berard Pete Roman
Chief Executive Officer Chief Financial Officer
(318) 367-8291 (318) 373-5506
FOR IMMEDIATE RELEASE
FRIDAY, July 30, 1999
UNIFAB INTERNATIONAL, INC.
REPORTS FIRST QUARTER RESULTS
New Iberia, La. -- (Business Wire) - July 30, 1999 -- UNIFAB International, Inc.
(NASDAQ:UFAB) today reported net income of $0.1 million ($0.02 per share, basic
and diluted) on revenue of $16.3 million for the first fiscal quarter ended June
30, 1999, compared to net income of $3.2 million ($0.54 per share) on revenue of
$31.4 million for the first fiscal quarter last year. Backlog at June 30, 1999
is $24.0 million.
"Our first quarter operating results reflect the current state of the industry,"
said Dailey J. Berard, UNIFAB International, Inc. President, CEO, and Chairman
of the Board. "Biding activity remains strong and we have been able to maintain
backlog, however, our results have been impacted by the delay in contract
awards. The long-term fundamentals of the offshore drilling business remain
positive. We are beginning to see rig utilization increase, which should result
in increased demand for our services. Our focus remains growth through
acquisition, alliance and internal investment and development."
Prior year amounts have been restated for the pooling with Allen Tank, Inc.
completed on July 24, 1998. Pro forma net income for the June quarter of last
year was $2.5 million ($0.42 per share). Pro forma net income consists of the
Company's historical net income, adjusted to reflect income taxes as if Allen
Tank, Inc., formerly an S Corporation, had operated as a C Corporation during
all periods.
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. In addition, the Company
designs and manufactures specialized process systems, refurbishes and retrofits
existing jackets and decks, provides design, 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.
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, availability of skilled employees, and UNIFAB's ability to integrate
and manage 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
Press Release dated April 30, 1999
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, April 30, 1999
UNIFAB INTERNATIONAL, INC.
ACQUIRES OIL BARGES, INC.
New Iberia, Louisiana - UNIFAB International, Inc. (NASDAQ-UFAB) announced today
that it has completed its acquisition of Oil Barges, Inc. ("OBI"). OBI designs
and fabricates drilling rigs from its 22-acre facility in New Iberia, Louisiana.
OBI is completing a first-of-a-kind drilling barge for an international drilling
company, which will be utilized in Nigeria. This drilling rig, scheduled to be
delivered in June 1999, incorporates OBI's proprietary substructure technology,
which makes it uniquely suited to address some of the problems encountered in
oil and gas production in Nigeria, and has applications worldwide. OBI furnished
all design, fabrication and equipment for the drilling rig and 84-man living
quarters, including equipment that had been renovated at the Company's
refurbishment facility in Parks, Louisiana. Superior Derrick Services, a wholly
owned subsidiary of OBI also obtained in the acquisition, manufactured the 1.5
million-pound hookload mast used on the drilling rig. The purchase price was
approximately 490,000 shares of UNIFAB International, Inc. common stock. UNIFAB
also acquired equipment and machinery from an affiliate of OBI for 210,000
shares of UNIFAB International, Inc. common stock.
"OBI broadens UNIFAB's base as a single-source supplier," said Dailey J. Berard,
President, Chairman and CEO. "The expert management and proprietary technology
OBI brings into the UNIFAB family are well recognized in the industry. The
benefits of OBI's new drilling rig designs and technologies will contribute to
productivity and facilitate development of reserves previously considered
uneconomical. Adding the drilling rig fabrication facility enhances UNIFAB's
ability to provide complimentary specialized services, including posted and
platform drilling rigs that can be manufactured or refurbished at the OBI
facility at the Port of Iberia, and jack up rig and semi-submersible rig
refurbishment at our deep water facility in Lake Charles, Louisiana. The OBI
facility is one of the finest at the Port of Iberia. It provides ample covered
shop facilities, concrete bulkheading and currently employs approximately 120
skilled craftsmen and other personnel. In addition we continue to add seasoned
management experience, marketing networks and complementary industry expertise
which will help us aggressively manage our growth. We expect to integrate OBI
into the UNIFAB family of companies. We now offer single-source design and
fabrication capabilities for production and process equipment systems, packages
and topside platforms, and state-of-the-art drilling rig design and fabrication.
This allows us to be properly positioned to capitalize on the turn around that
now appears to be materializing in the industry."
OBI recognized revenue and pretax income of $28 million and $1.2 million,
respectively, for the year ended December 31, 1998. The acquisition will be
accounted for as a purchase. OBI will operate as a wholly owned
<PAGE> 2
subsidiary of UNIFAB International, Inc.
UNIFAB 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. Allen Process Systems, LLC also provides a full complement of
engineering and field commissioning services related to production systems. 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. 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, its subsidiaries and OBI 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 its subsidiaries and OBI,
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.
<PAGE> 1
EXHIBIT 99.3
Press Release dated June 28, 1999
NEWS RELEASE
Dailey J. Berard Pete Roman
Chief Executive Officer Chief Financial Officer
(319) 367-8291 (318) 373-5506
FOR RELEASE
Monday JUNE 28, 1999
UNIFAB INTERNATIONAL, INC.
ACQUIRES COMPRESSION ENGINEERING SERVICES, INC.
New Iberia, La. -- (Business Wire) - June 28, 1999 -- (NASDAQ-UFAB)
announced today that it has completed its acquisition of Compression Engineering
Services, Inc. (CESI). CESI provides compressor project engineering from
inception through commissioning, including project studies and performance
evaluation of new and existing systems, on-site supervision of package
installation, and equipment sourcing and inspection. CESI recognized revenue and
pretax income of $814,000 and $187,000, respectively, for the year ended
December 31, 1998. The purchase price was 60,000 shares of UNIFAB International,
Inc. common stock. CESI will operate as a division of Allen Process Systems, a
wholly-owned subsidiary of UNIFAB International, Inc.
In addition to compressor project design and engineering services, CESI
provides daily monitoring of the performance of reciprocating gas compressors
using a proprietary software program named COPA (Compressor Operational
Performance Analysis). COPA detects deviations in equipment performance, which
can then be addressed minimizing repair costs and down time. CESI has also
developed TEMMP, a preventive maintenance management tool for equipment. These
products and the other services offered by CESI can be seen at the CESI website
www.comprengser.com
"Compression Engineering Services, Inc. broadens UNIFAB's base as a
single-source supplier," said Dailey J. Berard, President, Chairman and CEO.
"Bill Adams, President of CESI and a Petroleum Engineer, is well known for his
expertise in evaluations, engineering design and project management of various
gas compression systems. He also teaches technical training courses in the
design and operation of reciprocating compression systems. The expert project
management and proprietary technology Mr. Adams and CESI bring to the UNIFAB
Family are well recognized in the industry. The addition of CESI will allow
Allen Process Systems to complete the process train by now having the
capabilities of designing and manufacturing gas compression systems. Adding Mr.
Adams to the team and adding the services offered by CESI to those already
offered by the growing UNIFAB family of companies, enhances our ability to
provide complimentary specialized services to our customers."
UNIFAB 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 its 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. Allen Process Systems, LLC also provides a full complement of
engineering and field commissioning services related to production systems.
Through a wholly owned subsidiary, Oil Barges, Inc., the Company offers design
and fabrication of drilling rigs. The Company's main fabrication facilities are
located in the Port of Iberia in New Iberia, Louisiana. Through a wholly owned
subsidiary, UNIFAB International West, LLC, in Lake Charles, Louisiana, 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
<PAGE> 2
in Wimbledon, England, the Company provides engineering and project management
services primarily in Europe and the Middle East. 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 in Louisiana.
