Server: Microsoft-IIS/2.0 Date: Thu, 20 Nov 1997 18:59:55 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Sat, 18 Oct 1997 01:07:19 GMT Content-Length: 11551 Halter Marine Group, Inc. - Press Release

PRESS RELEASE
For release: October 15, 1997
Contact: Rick S. Rees, Executive Vice-President
Keith Voigts, Senior Vice-President and CFO

 

HALTER ANNOUNCES FY1998 SECOND QUARTER EARNINGS. NET INCOME INCREASES 100% OVER PRIOR YEAR FISCAL QUARTER, CONSTRUCTION BACKLOG AT RECORD LEVEL.

 


GULFPORT, Miss...Halter Marine Group, Inc. (AMEX:HLX) reported net income for the three months ended September 30, 1997 of $7.8 million, or $.40 per share, on revenue of $151.2 million. Second quarter 1998 earnings doubled from the level achieved in the second quarter of 1997 when the Company had net income of $3.9 million, or $.22 per share on a pro forma basis, on revenue of $94.5 million. For the six months ended September 30, 1997 the Company reported net income of $13.2 million, or $.69 per share on revenue of $300.2 million, compared to net income of $7.2 million, or $.40 per share on a pro forma basis, on revenue of $180.4 million for the first six months of the Company's prior fiscal year. After adjusting for the effect of the Company's recently announced three for two stock split, net income per share would be $.27 and $.14 for the three month periods ended September 30, 1997 and 1996 respectively, and $.46 and $.27 per share for the six month periods ended September 30, 1997 and 1996 respectively.

During the quarter ended September 30, 1997 the Company lowered its estimated annual effective tax rate to approximately 30%, reflecting anticipated benefit of income tax credits arising from certain of the Company's construction contracts. This change in effective tax rate had the effect of increasing net income for the three month and six month periods by $1.5 million, or $.08 per share.

John Dane III, chairman, president and CEO said, "Our level of business activity remains strong. The positive performance of this quarter continues the Company's record of achieving increased earnings per share in each quarter that it has been public." Dane added, "The Company's revenue and income growth for the quarter and six months continue to be positively impacted by the operations of TDI-HALTER which was acquired in April 1997."

Dane continued, "I am particularly encouraged by the increase in the Company's gross profit margin to 14.4% during the quarter compared to the gross profit margin of 12.5% achieved during the Company's first quarter of fiscal 1998. This improvement reflects gains in productivity and efficiency and overall improvements in market conditions."

The Company also announced its backlog was a record $607 million at September 30, 1997. This represents a 6% increase during the second quarter of the current fiscal year, from $570 million at June 30, 1997, and a 33% increase during the twelve month period, from $457 million at September 30, 1996. The energy related portion of the backlog increased to $368 million and represents 61% of the Company's total backlog. Halter's backlog at September 30, 1997 included 21 offshore support vessels, compared to 18 at June 30, 1997. The Company's backlog also consisted of $166 million of government related work, $52 million of commercial work, and $21 million of other work.

In addition, the Company announced that its rig subsidiary, TDI-HALTER, Inc. has signed a letter of intent with Diamond Offshore (NYSE:DO) for the conversion of the Polyconfidence from a quarters semisubmersible into a deepwater drilling unit. The shipyard contract value is expected to exceed $50 million, and will be included in the Company's backlog when the contract is signed.

Halter also recently announced the pending acquisition of three companies that will form the basis of its new Engineered Products Group. The companies, AmClyde Engineered Products, Inc., Utility Steel Fabrication, Inc., and Fritz Culver, Inc., manufacture and market winches, cranes, mooring systems, jacks, locking devices, windlasses, capstans, tuggers and other related equipment used in the construction and modification of vessels and drilling rigs. The acquisition of these three companies, which are expected to close within 45 days, is consistent with Halter's previously announced objective to pursue a vertical integration strategy as it pertains to some of the more critically engineered components used in the production of rigs and vessels.

Halter also announced earlier this month that it was re-opening its Panama City, Fla. shipyard which has been inactive since it was acquired in 1993. Dane said, "The decision to reopen this yard reflects our confidence in the energy related markets. We intend to have approximately 300 employees within 18 months at this facility."

Halter Marine Group, Inc. includes 20 shipyards in Texas, Louisiana, Mississippi and Florida. The Company specializes in the design, construction, conversion and repair of a wide variety of vessels and mobile offshore rigs for commercial, government/military and pleasure boat markets. Shipyards of the Halter Marine Group have built more than 2,000 vessels in the past 40 years.

Halter Marine Group Inc.
Consolidated Income Statement



Certain statements (other than statements of historical fact) contained in this announcement are forward-looking statements. Forward-looking statements are generally accompanied by words such as "anticipate," "believe," "estimate" or "expect" or similar statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements include risks such as dependence on U. S. Navy contracts, intense competition and contractual, labor, regulatory and other risks in the shipbuilding industry and risks relating to the market for offshore support vessels and offshore double hull tank barges. All forward-looking statements in this announcement are expressly qualified in their entirety by the cautionary statements in this paragraph.

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