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Gold/Mining/Energy : UFAB - oil drilling deck fabrication -- Ignore unavailable to you. Want to Upgrade?

To: SargeK who wrote (282)	3/12/1999 9:55:00 AM
From: andrew r harwood	Read Replies (2) \| Respond to of 337

well i certainly hope that you are right.i live 20 milles from unifabs hq in new iberia and there are not many people bullish about its prospects right now in acadiana .fortunately it doesnt have much debt which should help it survive .i wouldnt want to disagree with the experts and analysts but most of them have been negative about the internet stocks and we all know they have all been right there . in my opinion a much better oil service spec based in acadiana is global industries .time will tell o fcourse , we are all hoping that we have seen the bottom in oil and gas . gas prices are much more important to unifab and the price of that has been severely affected by the warm winter .anyway since i own unifab bought at higher levels i certainly hope that it comes back but if you look at stock price action this week unifab has not performed well compared for example to global industries.interesting to go back on prior notes on this board and see the euphoria that marked the top of unifab in the 40,s. arh

To: SargeK who wrote (282)	3/16/1999 12:04:00 PM
From: SargeK	Read Replies (2) \| Respond to of 337

Subject: Unifab International, Inc. 'UFAB' Earnings/Growth Analysis - Update I had a telephone chat with Mr. Peter Roman/VP/CFO/CAO recently and prospects for the company were discussed. Earnings for the quarter and fiscal year ending 3/31/99 is expected to be in the range of $.27 to $.36 and approx $.35 for the next quarter (1Q/00) ending 6/30/99. Mr. Roman indicated that it appears that earnings forecast* for FY/00 may be optimistic. He indicated he was more comfortable with $1.50 than the analyst concensus of $1.95 biz.yahoo.com . The latter forecasts derived primarily from projecting trends at the Lake Charles facility prior to the business downturn in the sector, which in retrospect were ambitious. He further indicated that a pickup in activity @Lake Charles (LC) could make the $1.95 attainable; but, at present sees a $1.50 as more likely. Asked about concensus earnings growth forecasts* of 34.3% over the 5 year business cycle, Mr. Roman indicated that absent a more favorable business environment, he would be more comfortable with 20% growth forecast for the time period. Asked about earnings contributions by Allen (acquired last year), he stated the acquisition is already contributing and is reflected in the numbers just expressed. A pick-up in activity and with further acquisitions which are being considered , the higher forecasts could be attainable. The statement was made that further acquisitions (should they occur) would be funded primarily with stock not long term debt, pointing out that he thought more shares (increased float) may benefit stock holder liquidity. The potential for UFAB to outgrow its competition is focused on the Lake Charles (LC) facility which continues to be developed. Development of this facility was slowed due to the business downturn in the sector. When completed and with 'Allen Process Systems' capability to work the top side of FPSOs, The Company will have the capability to convert a ship or barge into an FSPO and they will have a shipyard with deep-water access to the GOM to do it in. UFAB has more acquisitions in mind; but, at present the Wild Card to growth is Lake Charles. Lake Charles is going from ground zero and whatever they add to the equation and whatever synergy is developed will be key to future growth. Some dredging is is on track and should be completed in the June quarter. If things go according to plan full operations are anticipated between Sep and Dec, next year. Quoting Mr. Roman directly per phone call received just ten minutes ago: "At April 1, 1998 we employed approximately 130 in LC. Today we have around 60. However, the comparative manpower numbers in LC are not relevant. They fluctuate with projects and will not be stable until the facility is completed and running, which is where we are heading." SUMMARY: I have accepted the more modest estimates expressed herein to develop the basis for a new model for predicting more reliable and sustainable future earnings growth and to develop stock price targets during a period of an anticipated more favorable business environment. Using $1.50 for FY/00 earnings and 20% annual growth with an increasing P/E multiple gives us potential prices of $12.00 (near term, 1-6months/with a P/E of 8 * $1.50). Starting with $12.00 as an attainable, near term target, we can forecast stock prices of $18. ($1.80P/E10) for next year, $26.00 ($2.16P/E12)/2001, $34.00 ($2.60P/E13)/2002, $44.00 ($3.12P/E14)/2003..etc..(rounded to nearest dollar). I have used very modest multiples when relating present earnings with sustainable 20% annual growth. P/E14/2003 is less than half the current S&P500 P/E of 28.9 and UFAB potential growth rate is almost 3 times the 7.2% anticipated growth rate of the index. biz.yahoo.com This model is considerably more conservative than Zacks or IBES estimates both in terms of earnings, potential earnings growth, and P/E multiples. Completion of the Lake Charles development and possibly new acquisitions may add to earnings growth potential. A more favorable business climate over the next few years may augment this potential. *The concensus earnings forecast reflected on YAHOO and elsewhere exemplify the deficiencies in static computer modeling of future earnings trends based on brisk; but, sometimes brief, business activity which turns out to be unsustainable. It also helps explain significant stock price gyrations especially with Small Cap companies. Confirmation of this information and/or my interpretation may be obtained by calling: Mr Roman at 318 367-8291 or E-Mail to: Roman@net-connect.net SargeK