Conrad Industries, Inc.

Conrad Industries, Inc. specializes in the construction, conversion, and repair of steel and aluminum marine vessels for commercial and governmental customers. The company operates four shipyards through its subsidiaries: one in Morgan City, Louisiana, two in Amelia, Louisiana, and one in Orange, Texas. In 2003, Conrad Industries expanded into aluminum marine fabrication and repair by converting an existing repair yard in Amelia, Louisiana, into a dedicated facility. Additionally, in February 2003, the company opened a second facility in Amelia, which now houses four of its six largest drydocks. The new construction segment generated 67.5% of total revenue in 2003, 75.1% in 2002, and 71.7% in 2001. Vessels constructed include barges, tug boats, towboats, ferries, lift boats, and aluminum crew/supply vessels. All new construction is performed indoors, and facilities can construct vessels up to 400 feet in length. The repair and conversion segment accounted for 32.5% of total revenue in 2003, 24.9% in 2002, and 28.3% in 2001. This segment repairs a wide variety of marine vessels and undertakes conversion projects such as lengthening midbodies, modifying vessels for different activities, and other modifications to increase capacity or functionality. Customers include the Gulf of Mexico oil and gas industry, other commercial markets, various local and state governments, and the U.S. government. As of December 31, 2003, the company's backlog consisted of 73.8% government projects, 6.3% energy projects, and 19.9% other commercial projects.