Conrad Announces Third Quarter 2014 Results and Backlog $CNRD

Conrad announced third quarter results:

"For the quarter ended September 30, 2014, Conrad had net income of $4.5 million and earnings per diluted share of $0.74 compared to net income of $6.5 million [down 30%] and earnings per diluted share of $1.09 during the third quarter of 2013. The Company had net income of $17.7 million and earnings per diluted share of $2.96 for the nine months ended September 30, 2014 compared to net income of $18.5 million [down 4.4%] and earnings per diluted share of $3.10 for the nine months ended September 30, 2013.

During the first nine months of 2014, Conrad added $175.5 million of backlog to its new construction segment compared to $185.6 million added to backlog during the first nine months of 2013. Backlog at September 30, 2014 was $135.0 million compared to $152.3 million at September 30, 2013 [down 12%], $152.9 million at December 31, 2013, and $173.0 million at June 30, 2014."

Wow, the third quarter earnings really declined. Glad we sold this. Here's comments on the demand trends that they are seeing:

"Although we are optimistic about the long-term prospects of our business, we also take note of near-term risks. Current declining oil prices and a decrease in demand for tank barges used to transport petroleum products produced from shale plays lead to some uncertainty about our shorter-term demand and margins. Although bid activity has been good and we are pursuing many opportunities, we have not signed contracts as anticipated which is leading to gaps in our production schedules."

And more details on what caused the weakness this recent quarter:

Revenue for the third quarter of 2014 decreased $3.9 million, or -4.7%, to $78.9 million compared to $82.8 million for the third quarter of 2013, while revenue for the first nine months of 2014 reflected an increase of $23.5 million, or 10.9%, compared to the same period in 2013. Vessel construction revenue increased $3.2 million or 5.4% for the third quarter of 2014, and increased by $25.3 million, or 15.5% for first nine months of 2014 compared to the same period in 2013. Repair and conversion revenue decreased $7.1 million for the third quarter of 2014, or -30.0%, compared to the same period in 2013, while repair and conversion revenue decreased $1.8 million, or -3.5%, for the first nine months of 2014 compared to the same period in 2013.

Gross profit for the third quarter of 2014 decreased $2.6 million, or -22.6%, and increased $611,000, or 1.9%, for the first nine months of 2014 compared to the same periods of the prior year. Vessel construction gross profit increased $2.4 million for the third quarter of 2014 compared to the third quarter of 2013, while vessel construction gross profit increased $6.1 million or 27.9%, for the first nine months of 2014 compared to the same period in 2013.

Repair and conversion gross profit decreased $5.0 million or -114.5% for the third quarter of 2014 compared to the third quarter of 2013, while repair and conversion gross profit decreased $5.5 million or -54.7%, for the first nine months of 2014 compared to the same period in 2013.

Vessel construction gross profit margins increased to 15.5% for the quarter, compared to 12.3% for the prior year quarter, primarily due to the mix of jobs. Vessel construction gross profit margins increased to 14.9% for the first nine months of 2014, compared to gross profit margins of 13.4% for the same period in 2013.

Repair and conversion gross profit margins decreased to -3.9% for the quarter, compared to 18.7% for the prior year quarter. Repair and conversion gross profit margins decreased to 9.0% for the first nine months of 2014, compared to gross profit margins of 19.1% the same period in 2013. Repair and conversion gross profit decreased for the three and nine month periods primarily as a result of less volume, a loss job being performed during 2014, and a profitable job in the second half of 2013.