Conrad Industries, Inc. reported a net loss of $132,000 and loss per diluted share of $0.02 for the three months ended March 31, 2004 compared to a net loss of $321,000 and loss per diluted share of $0.04 for the first quarter of 2003. Revenues for the three months ended March 31, 2004 were $11.7 million compared to $10.5 million for the first quarter of 2003. The Company’s backlog was $37.1 million at March 31, 2004 as compared to $43.6 million at December 31, 2003 and $31.8 million at March 31, 2003. Gross profit was $1.0 million (8.6% of revenue) for the first three months of 2004 as compared to gross profit of $815,000 (7.8% of revenue) for the first quarter of 2003.
Vessel construction segment revenue for the first quarter increased $676,000, or 9.9%, and gross profit increased
$249,000, or 110.2%, as compared to vessel construction revenue and gross profit in the first quarter of 2003. Vessel construction segment revenue for the current quarter increased $2.7 million while gross profit increased $542,000 compared to the fourth quarter of 2003. Vessel construction production hours for the first quarter of 2004 increased by 8.4% compared to the same period in 2003 and 63.0% compared to the fourth quarter of 2003. The increase in revenue in the current period compared to the fourth quarter of 2003 is primarily a result of the sale of barges built and not under customer contract at the end of 2003 and an increase in production hours attributable to the timing of the execution of the Company’s significant backlog. Johnny Conrad, Conrad’s President and CEO commented, “A significant contract in our vessel construction segment has successfully transitioned from design to production.
In addition, several of the vessels in our backlog during the first quarter of 2004 are in the initial stages of construction. As a result, vessel construction margins should improve when the vessels reach a higher degree of completion and the associated risks are mitigated.”
Repair segment revenue increased $553,000, or 15.1%, while gross profit decreased $53,000, or 9.0% as compared to repair segment revenue and gross profit in the first quarter of 2003. Repair segment revenue and gross profit increased $2.1 million and $551,000, respectively, compared to the fourth quarter of 2003. The repair segment had a 23.2% increase in production hours compared to the first quarter of 2003 and an increase of 116.4% compared to the fourth quarter of 2003. Mr. Conrad added
, “The repair segment continues to be difficult. We responded to the depressed conditions by strategically entering into a single, large, low margin fixed price repair job. This job allowed us to absorb some overhead and preserve margins on the other repair work. We have seen an increase in repair and conversion activity and are hopeful that it is more than just normal seasonal workload patterns; however, there continues to be little to no visibility at this time into the repair market. We have responded to these challenges by, among other things, aggressively reducing our costs, pursuing new business opportunities, and seeking to operate more efficiently. The cost reduction plan implemented last year is beginning to be realized. We will continue to seek out other opportunities to reduce costs while focusing on strengthening our customer relationships and our core competencies.”