Todd Shipyards Corporation (NYSE:TOD) announced financial results for the third quarter ended January 2, 2011. For the quarter, we reported net income of $0.8 million or $0.14 per diluted share on revenue of $58.3 million. For the prior year third quarter ended December 27, 2009, we reported net income of $1.6 million or $0.27 per diluted share on revenue of $47.1 million.

Our third quarter revenue of $58.3 million reflects an increase of $11.2 million or 24% from the same period last fiscal year. The quarter to quarter increase largely results from higher volumes associated with vessel maintenance and repair activity under cost type contracts for the U.S. Coast Guard and U.S. Navy.

For the quarter ended January 2, 2011, we reported operating income of $1.4 million. In the third quarter of the prior year ended December 27, 2009, we reported operating income of $2.3 million. The decrease in operating income in the third quarter of fiscal 2011 versus the third quarter of the prior year primarily results from lower profitability on certain fixed price and cost type contracts, as well as transaction costs incurred in conjunction with the Merger Agreement, the Offer and the Merger.

We reported investment and other income of $0.3 million and $0.1 million for the quarters ended January 2, 2011 and December 27, 2009, respectively.

For the third quarter ended January 2, 2011, we reported income before income taxes of $1.8 million and recorded $1.0 million of federal income tax expense, resulting in net income for the period of $0.8 million. For the prior year third quarter ended December 27, 2009, we reported net income before income taxes of $2.4 million and recorded federal income tax expense of $0.8 million, resulting in net income for the period of $1.6 million.

The Company’s fiscal year consists of 52 or 53 weeks, ending on the Sunday closest to March 31. The 2010 fiscal year consisted of 52 weeks ending on March 28, 2010 while the 2011 fiscal year consists of 53 weeks ending April 3, 2011. All quarters of both fiscal years 2010 and 2011 consist of 13 weeks, except for the first quarter of 2011, which consisted of 14 weeks. The additional week did not materially affect the comparability of operating results between the first quarters of fiscal years 2011 and 2010. All references to years relate to fiscal years rather than calendar years.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements contained in this Release which are not historical facts or information are “forward-looking statements.” Words such as “believe,” “expect,” “intend,” “will,” “should,” and other expressions that indicate future events and trends identify such forward-looking statements. These forward-looking statements involve risks and uncertainties, which could cause the outcome to be materially different than stated. Such risks and uncertainties include matters which relate directly to the Company’s operations and properties and are discussed in the Company’s filings with the Securities & Exchange Commission, as well as general economic risks and uncertainties. The Company cautions that any forward-looking statement reflects only the belief of the Company or its management at the time the statement was made. Although the Company believes such forward-looking statements are based upon reasonable assumptions, such assumptions may ultimately prove to be inaccurate or incomplete. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement was made.

The results of operations are as follows:
 

TODD SHIPYARDS CORPORATIONUNAUDITED CONSOLIDATED STATEMENTS OF INCOMEPeriods ended January 2, 2011 and December 27, 2009(in thousands of dollars, except per share data)
 
  Three Months Ended   Nine Months Ended
01/02/11   12/27/09 01/02/11   12/27/09
 
Revenues $ 58,287 $ 47,129 $ 211,796 $ 131,335
Operating expenses:
Cost of revenue 45,619 35,545 159,904 97,425
Administrative and manufacturing overhead 11,276 9,311 35,579 27,064
Other insurance settlements   (27 )   (24 )   (144 )   (62 )
Total operating expenses 56,868 44,832 195,339 124,427
Operating income 1,419 2,297 16,457 6,908
Investment and other income 343 69 759 902
Income before income tax expense 1,762 2,366 17,216 7,810
Income tax expense   (963 )   (783 )   (6,056 )   (2,636 )
Net income $ 799   $ 1,583   $ 11,160   $ 5,174  
 
Net income per common share
Diluted $ 0.14 $ 0.27 $ 1.92 $ 0.89
Weighted average shares outstanding
Diluted 5,809 5,794 5,805 5,787
 

A copy of our financial statements for the quarter ended January 2, 2011 will be filed with the Securities & Exchange Commission as part of our quarterly report on Form 10-Q. Our Form 10-Q should be read in conjunction with this earnings report.
 

TODD SHIPYARDS CORPORATIONUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSJanuary 2, 2011 and March 28, 2010(in thousands of dollars)
 
  01/02/11   03/28/10
 
ASSETS
Cash and cash equivalents $ 1,575 $ 8,171
Securities available-for-sale 28,007 20,021
Accounts receivable
U.S. Government 12,109 6,689
Other, net 13,160 15,592
Costs and estimated profits in excess of billings on incomplete contracts 25,166 20,675
Inventory 1,956 1,491
Insurance receivable 447 447
Restricted cash 5,889 -
Other current assets 3,647 2,068
Deferred taxes   1,131     402  
Total current assets 93,087 75,556
Property, plant, and equipment, net 28,211 29,716
Restricted cash 3,803 5,627
Deferred pension assets 10,858 11,657
Insurance receivable 6,869 7,180
Intangible assets, net 1,323 1,553
Goodwill 1,109 1,109
Other long-term assets   838     898  
Total assets $ 146,098   $ 133,296  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accruals $ 24,265 $ 16,635
Line of credit 2,100 -
Accrued payroll and related liabilities 2,685 3,586
Billings in excess of costs and estimated profits on incomplete contracts 10,024 13,624
Environmental and other reserves 447 447
Taxes payable other than income taxes 794 1,559
Income taxes payable   -     676  
Total current liabilities 40,315 36,527
Environmental and other reserves 8,264 10,415
Accrued post retirement health benefits 6,022 6,171
Deferred taxes 2,712 2,648
Other non-current liabilities   2,695     2,133  
Total liabilities 60,008 57,894
Stockholders’ equity
Common stock $.01 par value, authorized 19,500,000 shares, issued 11,828,305 shares at January 2, 2011 and March 28, 2010, and outstanding 5,787,231 shares at January 2, 2011 and 5,775,691 shares at March 28, 2010 118 118
Paid-in capital 39,010 38,885
Retained earnings 96,714 86,564
Accumulated other comprehensive loss (5,979 ) (6,308 )
Treasury stock (6,041,074 shares at January 2, 2011 and 6,052,614 at March 28, 2010)   (43,773 )   (43,857 )
Total stockholders' equity   86,090     75,402  
Total liabilities and stockholders' equity $ 146,098   $ 133,296  
 

A copy of our financial statements for the quarter ended January 2, 2011 will be filed with the Securities & Exchange Commission as part of our quarterly report on Form 10-Q. Our Form 10-Q should be read in conjunction with this earnings report.

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