Conrad Industries Update: Impressive first quarter results! ($CNRD)

I provided my investment thesis for Conrad Industries (OTC: CNRD) here, and wrote about it here and here. In case you missed the release of their recent 10-Q (which is an easy thing to do, seeing as they trade over the counter and so you have to get their updated info at, I’ll give you the quick update: they performed spectacularly.

In 1Q 2011, the company had revenues of $63 million, which compares to $139 million for all of 2010 and an increase of 120% over the $28.5 million in 1Q 2010. Pretty impressive revenue growth! Moreover, the company’s debt level declined from an already paltry $3 million to just $2.6 million in the last Q, so the company is maintaining (and improving) its extremely prudent capital structure. Cash on hand also grew 50% this quarter, to $34 million or 1/3 of the company’s current market cap! Free cash flow came in at $11.2 million representing 12% yield (for the quarter!) and an increase from $8.5 million for all of 2010.

The company ended the quarter with a backlog of $112.3 million, which is the highest in the company’s history from a revenue standpoint, and more than double where it stood one year ago.

The company is still being held back due to the Department of Interior’s slow trickle of new permit approvals for shallow water drilling. Six months ago, no new permits were being issued (despite the moratorium being lived in October, 2010, there was a de facto moratorium as new permits were only issued in the last two months). I view a return to historical levels of drilling in the Gulf of Mexico to be a major opportunity for CNRD.

Their operations are being affected by rising water levels along the Mississippi and Atchafalaya Rivers, but there is no reason to think this will have a long-term effect on the company. Water levels will return to normal and they’ll resume operations at the affected sites. The company expects operations to be disrupted for two months.

Overall, I am very pleased with this investment and believe the company has a lot more room to run.

You can find the company’s 10-Q and other filings here. As always, I’d love to hear your thoughts on CNRD, so let me know what you think in the comments below or via email.

Author Disclosure: Long CNRD

Talk to Frank about Conrad Industries