Conrad reports soft market, but adds to backlog

Written by Nick Blenkey
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Morgan City, La., headquartered shipbuilder Conrad Industries, Inc. (OTC Pink: CNRD) yesterday reported its third quarter and nine months 2020 financial results and backlog at September 30, 2020.

For the quarter ended September 30, 2020, Conrad had net loss of $3.6 million and loss per diluted share of $0.72 compared to net income of $983,000 and earnings per diluted share of $0.20 during the third quarter of 2019. The Company had net loss of $2.7 million and loss per diluted share of $0.54 for the nine months ended September 30, 2020 compared to net loss of $1.5 million and loss per diluted share of $0.30 for the nine months ended September 30, 2019.

In its full financial report for the period, the company said the losses were primarily a result of a decrease in volume and a soft market in new construction but were partially offset by an increase in volume and more profitable product mix in its repair segment. In addition, in the third quarter of 2020, we recorded charges of approximately $6.9 million relating primarily to backlog added at an expected loss, losses on the sale of stock vessels and the sale of two vessels. it also recorded a provision of approximately $1.6 million in the third quarter of 2020, reflecting a lower-of-cost-or-market accounting adjustment to inventory related to its stock vessel program.

“Our results for the three and nine months ended September 30, 2020 reflect a continued challenging operating environment, which is further challenged by the coronavirus (COVID-19) pandemic,” says the company. “In new construction, we continue to experience a soft market particularly for energy transportation projects and projects related to the offshore oil and gas industry, and low demand for large barge project orders. We believe that, largely as a result of the pandemic, many new construction customers have delayed new orders. The repair market continues to be adversely effected by low crude oil prices and depressed Gulf of Mexico activity; however, profitable jobs in the government and infrastructure markets enhanced our results in our repair and conversion segment, particularly in the second and third quarters of 2020. We continue to experience pricing pressure in both segments, which has intensified due to the pandemic. Some new construction customers continue to request favorable contract terms with smaller up-front and progress payments during construction.”

BACKLOG INCLUDES LARGEST CONTRACT TO DATE

“During the first nine months of 2020,” says the company, “we added $171.7 million of backlog, as compared to $96.0 million added in the first nine months of 2019, which includes fifteen spud barges, four 30,000 bbl. barges, two asphalt barges, two anchor barges, a 6,500-cubic-yard-capacity dredge, a flood gate, a keyway barge, a docking barge, a hopper barge, a LPG barge, two tank barges, an acid barge, a deck barge and two governmental repair contracts. Our backlog was $160.4 million at September 30, 2020, $79.2 million at December 31, 2019 and $89.2 million at September 30, 2019. As of September 30, 2020, approximately 60.5% of our backlog is related to a contract for one commercial customer. As of December 31, 2019, approximately 73.9% of our backlog related to contracts for four customers. Our management team is committed to effectively executing our backlog and obtaining additional backlog. We signed our largest contract to date in the second quarter of 2020, a 6,500-cubic-yard-capacity Trailing Suction Hopper Dredge, which will be constructed at our Deepwater South shipyard in Amelia with expected delivery in the first quarter of 2023.”

Download the full filing HERE

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