Tuesday, May 16, 2000

More consolidation on inland waterways
American Commercial Lines LLC and ConAgra, Inc. have signed a definitive agreement that will see ACL acquire ConAgra's inland river barge operations, including:

  • Peavey Barge Lines,
  • Brown Water Towing Inc. and
  • Superior Barge Lines, Inc.

Financial terms of the agreement were not disclosed.

The transaction is expected to be completed in the next 30 days. Under the terms of the agreement, ACL will acquire 930 owned and chartered barges, nine chartered towboats and one dry dock.

Greg Heckman, president and chief operating officer, ConAgra Trade Group, said, "Our decision to sell the barge company is a strategic one. This will allow us to
focus our efforts on supporting ConAgra and our customers in the areas of commodity origination, marketing, merchandising, trading and risk management

This agreement is one example of ConAgra's overall plan to focus on specific channels of business that are strategically important to the company. ConAgra has divested 16 businesses across the organization since mid-1999.


Red ink and dwindling backlog at FGH
Friede Goldman Halter, Inc. yesterday reported a net loss for the quarter ended
March 31, 2000 of $3.1 million, or $0.08 per fully diluted share, on revenue of $211.9 million. For the comparable 1999 period, the company reported net income of $10.0 million, or $0.43 per fully diluted share, on revenue of $145.2 million.

Results for the 2000 period incorporate the results of Halter Marine Group, which was acquired by Friede Goldman International in a stock-for-stock merger on November 3, 1999. Fully diluted shares outstanding for the first quarters of 2000 and 1999 were 40.0 million and 23.5 million, respectively.

FGH says its financial results for the 2000 period were negatively impacted by approximately $4.4 million in non-cash charges related to the amortization of
goodwill associated with the Halter merger and the accretion of the discount on the company's convertible subordinated notes. Merger-related goodwill will be
amortized over a 25-year period, and the company will continue to recognize non-cash debt accretion charges until the bonds mature in September 2004.

Backlog for the company totaled $543.4 million at March 31, 2000 and consisted of $302.7 million in the Offshore segment, $138.7 million in the Vessels
segment and $102 million in the Engineered Products segment. The backlog at March 31 includes $25.5 million associated with three vessels under construction
at the company's Trinity Yachts subsidiary, the sale of which was completed on April 14, 2000.

FGH says it "successfully reduced selling, general and administrative (SG&A) expenses during the quarter through a reduction in employee levels and lower
expenditures on outside services. SG&A expenses totaled $13.9 million for the quarter, compared to $24.8 million for the first quarter of 1999 for the combined
companies on a pro-forma basis. The company anticipates that its SG&A expenses will total approximately $60 million for 2000 compared to $86.2 million for the combined companies on a pro forma basis in fiscal 1999. The company believes that the current level of corporate overhead can sustain significantly
increased revenue levels going forward.

At March 31, 2000, the company had $11 million in liquidity through a combination of cash and availability under its revolving credit agreement. Average daily
liquidity since the beginning of the year through May 12, 2000 exceeded $24 million. The company is currently in compliance with all covenants of its credit

FGH anticipates receiving by year-end 2000 a total of $47.5 million from the sale of non-core assets currently under contract and the collection of income tax refunds.


News Index 

Marine Log Home page