Net income for the first nine months of 1997 totaled $19.6 million, or $1.35 per share as compared to net income of $24.6 million, or $1.70 per share a year ago. Net income for the same period in 1996 included an income tax benefit of $9.0 million, or $0.62 per share, recorded principally to recognize for financial reporting purposes the benefit of certain net operating loss carry forwards available to offset estimated future taxable earnings. No similar income tax benefit was recorded in the 1997 period. Operating results for the first nine months of 1997 also included a 25% increase in income before income taxes to $30.7 million versus $24.6 million a year ago. For the first nine months of 1997, Avondale reported net sales of $444.5 million compared with $457.5 million in the year-earlier period.

"The significant increase in operating results for the third quarter and year to date underscores the positive momentum that Avondale has established," remarked Albert L. Bossier, Jr., Chairman and Chief Executive Officer. "We are operating with a backlog of $3.7 billion, including unexercised options for vessels under multi-ship contracts. The improvement in Avondale's profitability reflects the increasing pace of activity in our shipyard from contracts awarded to Avondale since 1993 coupled with the advances we are realizing in raising our overall efficiency. We believe that the current year will represent a period in which the Company improves its financial results and positions itself for future success."

Bossier added, "One of the key indicators of Avondale's progress has been an ongoing improvement in our balance sheet. At the close of the third quarter, the Company's total debt amounted to only 21% of our total capital of $256.6 million. Maintaining a strong financial position is an important component of our overall growth strategy. We are pleased with how our backlog of work has increased in recent years, and we continue to have an active marketing program pursuing opportunities to participate in both commercial and Naval projects in ways which will enable the Company's revenues and margins to grow. Having a sound capital structure is essential to our ability to compete effectively for this work, most of which involves multi-ship programs that span a number of years.

"Another vital element of the Company's overall business plan is to continue the implementation of the highest level of ship design and production technology. An integral part of this plan is the creation of the UNO/Avondale Maritime Technology Center of Excellence, which will be operated in cooperation with the University of New Orleans School of Naval Architecture. Avondale's leadership in such diverse and sophisticated projects as the LPD-17 contract and the ARCO tanker new building program demonstrates our success in implementing our plan."

Avondale Industries, Inc., headquartered in metro New Orleans, designs, builds and overhauls both military and commercial vessels.