Todd Shipyards Corporation
announced financial results for the first quarter ended June 29, 2003. For the quarter, the Company reported a net loss of $2.2 million or $0.42 per diluted share on revenue of $21.1 million. For the prior year first quarter ended June 30, 2002, the Company reported net income of $2.3 million or $0.41 per diluted share on revenue of $49.3 million.
The company's first quarter revenue of $21.1 million reflects a decrease of $28.1 million (57%) from the prior year's first quarter levels. The period to period decrease is primarily attributable to the relative levels of Navy repair
and overhaul projects and reflects in part accelerated scheduling by the Navy during the prior period in anticipation of military activity and deferred scheduling during the current period due to deployment of ships in support of the military combat and activities in Iraq.
In announcing the results, Stephen G. Welch, Chief Executive Officer of Todd stated, 'The dramatic decline in this quarter's revenues when compared to last year's first quarter is due to the timing of Navy repair volumes. Last year's first quarter revenues were unusually high when compared to recent historical levels, due to the acceleration of Navy work in anticipation of the Iraqi conflict. Conversely, Navy work that was planned for this year's first quarter was delayed until the second quarter. These scheduling changes, which are at the sole discretion of the Navy, affect our work volumes, revenues and associated financial results. Currently, we are performing significant repairs on two Navy ships that were involved in the Iraqi conflict and our confirmed backlog of Navy work has increased significantly: $55 million at the end of this quarter compared to $18 million a year ago.'
For the quarter ended June 29, 2003, the Company reported an operating loss of $3.7 million, including a $2.5 million charge discussed below. In the prior year quarter ended June 30, 2002, the Company reported operating income of $3.2 million. The decrease in operating income from levels reported in the first quarter of fiscal year 2003 are attributable to two factors. First, the Company experienced significant increases in work volumes during the first quarter of fiscal year 2003, which favorably impacted operating income during that period. By comparison, the fiscal year 2004's first quarter volumes were substantially reduced from last year, primarily due to delays in anticipated Navy repair work. This reduction in work volume resulted in lower operating income. Second, the Company recorded a $2.5 million charge related to the unanticipated bankruptcy of one of its previous insurance carriers. The charge, which reflects the Company's best estimate of the known liabilities associated with unpaid worker compensation claims arising during the two-year period commencing October 1, 1998, is subject to change as additional facts are uncovered. These claims have reverted to the Company due to the liquidation of the insurance carrier. Although the Company expects to recover at least a portion of these costs from the liquidation and other sources, the amount of any such recovery cannot be estimated currently and therefore no estimate of amounts recovered is included in the current financial results.