<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 September 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 ---- 6,773,007 shares as of November 12, 1999.
<PAGE> 2
UNIFAB INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets -- September 30, 1999 and March 31, 1999....................... 1
Condensed Consolidated Statements of Income -- Three Months Ended
September 30, 1999 and 1998; Six months Ended September 30, 1999 and 1998......................... 2
Condensed Consolidated Statements of Cash Flows -- Six months Ended
September 30, 1999 and 1998....................................................................... 3
Notes to Condensed Consolidated Financial Statements -- September 30, 1999........................... 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations..................................................................................... 6
Item 3. Quantitative and Qualitative Disclosure of Market Risk............................................... 9
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
<TABLE>
<CAPTION>
SEPTEMBER 30 MARCH 31
1999 1999
------------ --------
(UNAUDITED) (NOTE 2)
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 92 $ 1,125
Accounts receivable 20,514 22,997
Costs and estimated earnings in excess of billings on uncompleted contracts 6,153 4,388
Prepaid expenses and other assets 4,982 4,060
------- -------
Total current assets 31,741 32,570
Property, plant and equipment, net 28,719 23,259
Cost in excess of net assets acquired, net 14,988 10,234
Other assets 4,163 3,958
------- -------
Total assets $79,611 $70,021
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Accounts payable $ 8,139 $ 4,075
Billings in excess of costs and estimated earnings on uncompleted contracts 1,016 4,853
Accrued liabilities 3,395 1,661
Notes payable 2,168 10,972
------- -------
Total current liabilities 14,718 21,561
Deferred income taxes 1,286 2,286
Noncurrent notes payable 17,352 6,607
Shareholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized, 6,773,007 and
6,020,736 shares outstanding 68 60
Additional paid-in capital 35,070 28,542
Retained earnings 11,113 10,923
Currency translation adjustment 4 42
------- -------
Total shareholders' equity 46,255 39,567
------- -------
Total liabilities and shareholders' equity $79,611 $70,021
======= =======
</TABLE>
See accompanying notes.
1
<PAGE> 4
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30 SIX MONTHS ENDED SEPTEMBER 30
------------------------------- -----------------------------
1999 1998 1999 1998
----------- ----------- -------- --------
(In thousands except per share data)
<S> <C> <C> <C> <C>
Revenue ................................ $ 21,511 $ 31,585 $ 37,766 $ 63,004
Cost of revenue ........................ 18,728 25,212 32,601 50,344
-------- -------- -------- --------
Gross profit ........................... 2,783 6,373 5,165 12,660
Selling, General and Administrative
expense .............................. 2,216 2,441 4,206 4,888
-------- -------- -------- --------
Income from operations ................. 567 3,932 959 7,772
Other income (expense):
Interest expense ..................... (328) (300) (707) (421)
Interest income ...................... 9 32 183 150
Other income (expense) ............... -- (284) -- (284)
-------- -------- -------- --------
Income before income taxes ............. 248 3,380 435 7,217
Income tax provisions .................. 174 1,215 245 1,841
-------- -------- -------- --------
Net income ............................. $ 74 $ 2,165 $ 190 $ 5,376
======== ======== ======== ========
Basic and diluted earnings per share ... $ 0.01 $ 0.36 $ 0.03 $ 0.90
======== ======== ======== ========
Basic earnings per share
weighted average shares .............. 6,773 5,931 6,658 5,902
======== ======== ======== ========
Diluted earnings per share
weighted average shares .............. 6,806 5,931 6,683 5,902
======== ======== ======== ========
Pro forma data:
Income before income taxes, as
reported above ...................... 3,380 7,217
Pro forma provision for income taxes ... 1,152 2,334
-------- --------
Pro forma net income ................... $ 2,228 $ 4,883
======== ========
Pro forma basic and diluted earnings
per share ........................... $ 0.38 $ 0.83
======== ========
</TABLE>
See accompanying notes.
2
<PAGE> 5
UNIFAB INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30
-----------------------
1999 1998
------- -------
(IN THOUSANDS,
EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C>
Net cash provided by operating activities $ 514 $ 1,777
Investing activities:
Net cash acquired in acquisition of business 233 528
Purchases of equipment (3,729) (7,135)
------- -------
(3,496) (6,607)
Financing activities:
Net change in borrowings 1,949 (1,524)
Exercise of stock options -- 123
------- -------
1,949 (1,401)
Net decrease in cash and cash equivalents for Allen Tank for the
12-week period ended March 31, 1998 -- (120)
------- -------
Net change in cash and cash equivalents (1,033) (6,351)
Cash and cash equivalents at beginning of period 1,125 8,482
------- -------
Cash and cash equivalents at end of period $ 92 $ 2,131
======= =======
</TABLE>
See accompanying notes.
3
<PAGE> 6
UNIFAB INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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. Compression Engineering Services, Inc.
(CESI), a division of Allen Process Systems, LLC, 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. Through a wholly
owned subsidiary, Oil Barges, Inc., the Company designs and fabricates drilling
rigs, including first of a kind barges using proprietary designs. 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
September 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 six-month period ended September 30, 1999
are not necessarily indicative of the results that may be expected for the
fiscal year ending March 31, 2000.
The amounts reported for the six month period ended September 30, 1998 have
been restated to reflect a revised calculation of the effects of the Allen Tank,
Inc. pooling of interests, described below. The change from the amounts
previously reported was to increase revenue, net income and earnings per share
for the six month period ended September 30, 1998 by $2,746,000, $527,000, and
$0.08, respectively.
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.
4
<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 Six Months
Ended Ended
September 30, September 30,
1998 1998
------ ------
<S> <C> <C>
Revenues:
UNIFAB 18,954 38,571
Allen Tank 12,631 24,433
====== ======
Combined 31,585 63,004
====== ======
Net Income:
UNIFAB 929 2,398
Allen Tank 1,236 2,978
====== ======
Combined 2,165 5,376
====== ======
</TABLE>
On April 29, 1999, the Company completed its acquisition of Oil Barges,
Inc. ("OBI") and equipment and machinery from 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. 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 has been
accounted for under the purchase method of accounting.
4. PRO FORMA EARNINGS PER SHARE
Pro forma earnings per share for the three and six month periods ended
September 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
calculations include shares issued in the acquisition of Allen Tank transaction,
giving effect to the issuance at the beginning of the periods presented.
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 September 30, 1999 decreased 31.9 % to
$21.5 million from $31.6 million for the three months ended September 30, 1998.
For the six month periods ended September 30, l999 and l998, revenue was $37.8
million and $63.0 million respectively. The Company's direct labor hours worked
during the three months ended September 30, 1999 decreased 24.2% 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 31.4% from $28.1 million in the September quarter last year to $19.3
million in the September 1999 quarter. At September 30, l999 backlog was
approximately $20.2 million.
Cost of revenue for the three months ended September 30, 1999 decreased
25.7% or $6.5 million to $18.7 million from $25.2 million in the three months
ended September 30, 1998. For the six month period ended September 30, l999,
cost of revenue of $32.6 million was $17.7 million or 35.2% lower than for the
same period in l998. 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 that can be specifically allocated to projects
(such as supervisory labor, utilities, welding supplies and equipment costs).
These costs increased in the September quarter as a percentage of revenues to
87% in 1999 from 79.8% in 1998, and to 86.3% for the six months ended September
30, 1999 from 79.9% for the same period 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. Reduced man hour levels at the Company's main
fabrication facilities cause hourly fixed overhead rates to increase and result
in increased costs relative to revenue.
Gross profit for the three and six month periods ended September 30, l999
decreased to $2.8 million and $5.2 respectively, from $6.4 million and $12.7
million in the corresponding periods in l998. The decreased profit is mainly due
to reductions in capital budgets announced by the major oil companies, resulting
in fewer projects and increased competition for these projects.
Selling, general and administrative expense decreased to $2.2 million in the
three months ended September 30, 1999 from $2.4 million in the corresponding
period in 1998. For the six months ended September 30, l999, these expenses
decreased $0.7 million or 14.0% to $4.2 million from $4.9 million in the same
period in l998. The Company's selling, general and administrative expense as a
percentage of revenue increased to 11.1% in the six months ended September 1999
from 7.8% in the six months ended September 1998 due mainly to the decrease in
activity discussed above.
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 $2.5 million generated from operations and
financing activities together funded investing activities of $3.5 million during
the six months ended September 30, 1999. Investing activities consisted mainly
of capital expenditures, including continued development of the Company's
deep-water fabrication and drilling rig-refurbishing facility in Lake Charles,
Louisiana.
6
<PAGE> 9
The Company's deep-water fabrication and drilling rig-refurbishing facility
is located on property leased from the Lake Charles Harbor and Terminal
District. The Company estimates that the facility will be completed during the
March 31, 2000 quarter. 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 September 30, 1999 the
Company has funded approximately $3.2 million toward the development of this
facility. The Company expects to fund the remaining commitment for these capital
expenditures through additional borrowings and funds generated by operations.
On July 27, 1998, the Company amended and restated its unsecured credit
facility with a commercial lender (the Credit Facility), which included a
revolving credit facility and a term loan facility. At September 30, 1999, the
Company had $11.3 million in borrowings and $6.0 million in letters of credit
outstanding under the revolving credit facility and $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. (8.25% at
September 30, 1999) or LIBOR plus 2.5% (7.88%-8.01% at September 30, 1999) at
the Company's option. The Credit Facility matures August 31, 2000.
On October 6, l999, the Company obtained a commitment letter from a
commercial lender to act as administrative agent for $40 million in total credit
facilities (the Secured Senior Credit Facility) and to act as lender for up to
$20 million of the facilities. The commitment is subject to certain terms and
conditions, including the successful formation of a syndicated group of
financial institutions. Under the terms of the commitment, the Company will be
able to borrow up to $30.0 million for general corporate purposes under a
revolving credit facility. Up to $17.5 million is to be available under the
revolving facility for standby letters of credit. Additionally, the Secured
Senior Credit Facility is to provide for $10.0 million under a term loan
facility with monthly principal payments of $167,000, plus interest, beginning
December l999. Borrowings under the Secured Senior Credit Facility shall bear
interest at the prime lending rate established by the banks or LIBOR, at the
Company's option, plus an interest margin determined based on the ratio of the
total funded indebtedness to EBITDA, as defined in the Secured Senior Credit
Facility Agreement. The fees for issued letters of credit and for unused
commitment will also vary based on the funded indebtedness to EBITDA ratio
described above. The Company has received commitments from two of the financial
institutions making up the syndicated group and expects to receive the
commitment from the third financial institution, completing the syndicated
group, and close on this Secured Senior Credit Facility in mid November 1999.
Under the terms of the commitment, the Secured Senior Credit Facility will
mature in November 2004.
Based on this commitment for the Secured Senior Credit Facility and the
Company's intention to complete negotiations and replace the current Credit
Facility, which matures on August 31, 2000, as described above, the amounts
outstanding under the Credit Facility at September 30, 1999 have been classified
as non current.
Management believes that its available funds, cash generated by operating
activities, and funds available under the Secured Senior Credit Facility
described above will be sufficient to fund planned capital expenditures, future
acquisitions, scheduled payments under the term loan facility and other
commitments, and its working capital needs for the next 12 months. In the normal
course of business, the Company evaluates its capital structure in light of
alternatives available to it. 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
7
<PAGE> 10
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.
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.
8
<PAGE> 11
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. No material changes have
occurred since March 31, 1999.
9
<PAGE> 12
PART II
ITEM 5. OTHER INFORMATION
On November 8, 1999 the Company announced its second quarter fiscal 2000
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 November
8, 1999 announcing its earnings and related
matters for the second quarter fiscal year ending
March 31, 2000.
</TABLE>
The Company did not file any reports on Form 8-K during the three months ended
September 30, 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 November 15, 1999 /s/ Peter J. Roman
--------------------- --------------------------------------------
Peter J. Roman
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
10
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
27.1 Financial Data Schedule
99.1 Press release issued by the Company on November
8, 1999 announcing its earnings and related
matters for the second quarter fiscal year ending
March 31, 2000.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIFAB
INTERNATIONAL, INC.'S SEPTEMBER 30, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> SEP-30-1999
<CASH> 92
<SECURITIES> 0
<RECEIVABLES> 20,514
<ALLOWANCES> 0
<INVENTORY> 6,153
<CURRENT-ASSETS> 31,741
<PP&E> 40,063
<DEPRECIATION> 11,344
<TOTAL-ASSETS> 79,611
<CURRENT-LIABILITIES> 14,718
<BONDS> 0
0
0
<COMMON> 68
<OTHER-SE> 46,187
<TOTAL-LIABILITY-AND-EQUITY> 79,611
<SALES> 37,766
<TOTAL-REVENUES> 37,766
<CGS> 32,601
<TOTAL-COSTS> 32,601
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 707
<INCOME-PRETAX> 435
<INCOME-TAX> 245
<INCOME-CONTINUING> 190
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 190
<EPS-BASIC> 0.03
<EPS-DILUTED> 0.03
</TABLE>
<PAGE> 1
NEWS RELEASE
Dailey J. Berard Pete Roman
Chief Executive Officer Chief Financial
Officer (318) 367-8291 (318) 373-5500
FOR IMMEDIATE RELEASE
Monday, November 8, 1999
UNIFAB INTERNATIONAL, INC.
SECOND QUARTER RESULTS
New Iberia, LA - (Business Wire) - November 8, 1999-- UNIFAB International, Inc.
(NASDAQ: UFAB) today reported net income of $74,000 ($0.01 per share, basic and
diluted) on revenue of $21.5 million for the three months ended September 30,
1999 compared to net income of $2.2 million ($0.36 per share, basic and diluted)
on revenue of $31.6 million for the three months ended September 30, 1998. Net
income for the six months ended September 30, 1999 was $191,000 ($0.03 per
share, basic and diluted) on revenue of $37.7 million compared to net income of
$4.8 million ($0.82 per share, basic and diluted) on revenue of $60.3 million
for the six months ended September 30, 1998. The Company reported backlog of
approximately $20.2 million at September 30, 1999.
"Our second quarter operating results reflect the severe downturn that began in
November 1998," said Dailey J. Berard, UNIFAB International, Inc. President,
Chairman and CEO. "Currently the momentum in bidding activities is accelerating
at an unprecedented pace compared to prior months. Natural gas shortages are
anticipated this winter season, which emphasizes the fact that the industry is
finding only six billion barrels of oil annually while the world uses 25 billion
barrels. The long-term fundamentals of the offshore drilling and production
business are positively improving. Rig utilization rates are increasing rapidly,
which will increase demand for UNIFAB's broad-based services. Our focus remains
continuing growth through acquisition, alliance, and broadened 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 three months ended
September 30, 1998 was $2.2 million ($0.38 per share). Pro forma net income for
the six months ended September 30, 1998 was $4.5 million ($0.76 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.
