Conrad Details Impact of Hurricanes

Wednesday, October 12, 2005
Conrad Industries, Inc. announced the impacts of Hurricanes Katrina and Rita and the award of contracts totaling $9.4 million to build a 99', 4200 HP Z-Drive Tug for South Puerto Rico Towing Corporation and the 16th ST Tug for the U.S. Army.

Johnny Conrad, President and CEO stated "In the wake of the devastation on the Gulf Coast caused by Hurricanes Katrina and Rita, our thoughts and prayers go out to the victims ravaged by these disasters. Hurricane Katrina did not have a direct impact on any of our four shipyards. Unfortunately, Hurricane Rita did not spare our Orange employees from loss and damage. Our Orange facility has sustained minor wind damage to our buildings that can be repaired but did not receive any water damage. Our equipment and jobs in progress were not damaged. The costs to clean up and repair our facility will in large part be covered by our insurance program. Power has been restored to our Orange yard and we are gradually returning to normal operations as employees are able to return to the area after three weeks of limited activity."

Conrad further commented, "These events have also impacted our vendors' and subcontractors' abilities to supply us with necessary goods and services.

Consequently, it is not yet possible to determine the amount of delay and additional cost that will result from these hurricanes. Conrad is working with suppliers and others to insure that materials continue to flow to our facilities.

We at Conrad Industries have been very fortunate to escape disruption in service at three of our four locations, and with Orange back on line we are fully operational at all of our facilities. In addition, we have openings for qualified welders, fitters, supervisors and project management personnel."

Conrad also commented, "We are excited to announce the signing of contracts for the construction of a 99', 4200 HP Z-Drive Tug for South Puerto Rico Towing Corporation and the 16th ST Tug for the U.S. Army. These two new contracts are scheduled to be constructed at our Orange facility and we do not expect any significant impact on these jobs from Hurricane Rita. With these additions, our current backlog is approximately $40 million. The Z-Drive Tug for South Puerto Rico Towing Corporation is similar to other tugs that Orange has previously built."

Additionally Conrad commented "We appreciate the U.S. Army TACOM Watercraft Group's confidence by awarding this contract for the Small Tug "ST916". This tug is the latest of over one hundred hulls provided by Conrad Industries to U.S. Government Agencies over the past thirty years. Orange Shipbuilding started work on a solicitation for this project in 1992. In 1995 an award was made for one tug with options. Since then Orange Shipbuilding has delivered 15 identical tugs to the U.S. Army."

"We take a lot of pride in delivering top notch vessels to our customers. When that customer also happens to be the U.S. Military, it makes each one of us at Orange Shipbuilding and Conrad Industries all the more proud and grateful to support, in our own way, the men and women who serve in our armed forces," Conrad concluded.

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