Net income for 1997 totaled $26.8 million, or $1.85 per share. That compares with net income of $30.8 million, or $2.13 per share, for 1996. The net income for 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 benefit was recorded in 1997. Net sales for 1997 totaled $614.0 million compared with $624.9 million for 1996.

For the fourth quarter of 1997, Avondale reported net income of $7.2 million, or $0.50 per share, compared with $6.2 million, or $0.43 per share in the year-earlier period. Net sales for the fourth quarter of 1997 increased to $169.5 million compared with $167.5 million during the year-earlier period.

"The growth in income before income taxes for both the fourth quarter and all of 1997 highlights a very successful year for Avondale," said Albert L. Bossier, Jr., Chairman and Chief Executive Officer. "Our achievements in generating higher operating efficiencies and increasing operating income were coupled with the start of our work on the Navy’s major LPD-17 shipbuilding program. The Company’s noteworthy progress, including being confirmed to serve as the prime contractor for this important military initiative, provides a significant return from the actions taken over the past several years to strengthen our position as a leader in the shipbuilding industry. Our total backlog, including unexercised options, currently amounts to $3.4 billion. This includes military-related contracts and the contract for five crude oil carriers for ARCO, the largest commercial contract in the Company’s history.

"Our challenge is to extend this positive momentum by participating in additional Navy and commercial shipbuilding projects. A key step toward achieving that objective was the completion of funding during 1997 related to a maritime technology center that Avondale will operate in cooperation with the University of New Orleans School of Naval Architecture. The construction of this revolutionary new facility and the significant investment in 3-D design and product modeling technology are critical to our work on the LPD-17 series of vessels and ensure that we have the technological resources required for the Company’s longer term success. Success in today’s shipbuilding environment demands an ever increasing knowledge of technology and a willingness to embrace new technologies and change throughout an organization. Avondale has embraced this change and has the advantages of a sound financial position, a multi-year backlog of business and the proven ability to integrate new processes and procedures to improve productivity."

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

AVONDALE INDUSTRIES, INC, AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) Three Months Twelve Months Ended Ended December 31 December 31 1997 1996 1997 1996 Net sales $ 169,471 $ 167,472 $ 613,993 $ 624,929 Cost of sales 151,797 140,145 538,515 543,102 Gross profit 17,674 27,327 75,478 81,827 S G & A 6,196 16,901 31,885 45,037 Income from operations 11,478 10,426 43,593 36,790 Interest expense (1,157) (1,194) (4,804) (4,986) Other - net 1,071 625 3,294 2,691 Income before income taxes 11,392 9,857 42,083 34,495 Income tax provision (4,150) (3,700) (15,250) (3,700) Net income $ 7,242 6,157 26,833 30,795 Net income per share of common stock-basic $ 0.50 $ 0.43 $ 1.85 $ 2.13 Net income per share of common stock- diluted $ 0.50 $ 0.43 $ 1.85 $ 2.13