Net income for the third quarter of 1998 rose to $7.9 million versus $6.9 million in the year-earlier period while sales for the three months ended September 30, 1998 totaled $198.0 million compared with $159.2 million in the year-earlier period. For the first nine months of 1998, Avondale reported net income of $22.9 million, or $1.63 per share diluted, compared with $19.6 million, or $1.35 per share diluted, a year ago. Sales for the first nine months of 1998 totaled $561.0 million compared with $444.5 million in the year-earlier period.

"The third quarter was highlighted by continued financial gains as well as meaningful progress in both our commercial and military shipbuilding programs", remarked Albert L. Bossier, Jr., Chairman and Chief Executive Officer. "Avondale's firm backlog of contracts currently amounts to more than $1.6 billion. In addition, Avondale’s military and commercial customers hold options for additional vessels worth approximately $1.3 billion. Our efforts to increase our firm backlog have been coupled with a thorough emphasis on improving productivity. We are focused on extending this positive record by profitably completing the vessels currently under construction and by maintaining active initiatives to secure future work. During the third quarter, our alliance was awarded a contract by the Navy to start procurement of long lead-time materials for the second ship in the major LPD-17 program for which Avondale is serving as prime contractor. Also, a separate alliance for which we will serve as prime contractor was one of three teams to receive a $7 million contract from the U.S. Coast Guard to design a program that will comprehensively upgrade much of the U.S. Coast Guard's deepwater resources over a decade-long period."

Bossier added, "In the commercial sector, we added to the firm backlog during the quarter with the exercise of an option by ARCO Marine for a third crude carrier valued at $164 million. This ship represents the third ship Avondale will construct for ARCO and affirms ARCO’s satisfaction with our progress on the construction of the first two ships under the original contract. ARCO holds options for two additional ships in the Millenium Class which is being designed to comply with all regulatory requirements for vessels transporting products between U.S. ports."

Cautionary Statement for Purposes of Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

Certain statements, other than statements of historical fact, contained in this Press Release are forward-looking statements. These forward-looking statements are generally accompanied by such terms and phrases as "anticipates," "estimates," "expects," "believes," "should," "projects," "scheduled," or similar statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause the Company’s results to differ materially from the results discussed in such forward-looking statements include the Company’s reliance on U.S. Navy contracts, including its ability to replenish its backlog by securing additional contracts from the U.S. Navy, profit recognition on government contracts, the outcome of the Company’s litigation involving efforts to unionize the Company’s production workers and the competitive impact of a resolution in favor of the union, the importance of obtaining commercial contracts, the Company’s ability to complete its contracts within its cost estimates, intense competition for government and commercial contracts, labor, regulatory and other risks in the shipbuilding and marine construction industries and other unanticipated events affecting the Company’s efforts and the efforts of its suppliers, subcontractors, and customers (including the U. S. Navy) to timely correct Year 2000 problems inherent in essential computer systems, which could impair the Company’s operations or the ability of its customers to timely pay for products and services provided. All forward-looking statements in this Press Release are expressly qualified in their entirety by the cautionary statements in this paragraph.

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