<PAGE>

                                  United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-Q

                                   (MARK ONE)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period Ended June 30, 2004

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Transition Period From             to
                                           -----------    -----------

Commission file number 0-29416

                           UNIFAB International, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Louisiana                                        72-1382998
------------------------------------               ----------------------------
  (State or other jurisdiction or                        (I.R.S. Employer
  incorporation or organization)                       Identification No.)

        5007 Port Road
        New Iberia, LA                                         70560
-------------------------------------              -----------------------------
(Address of principal executive offices)                    (Zip Code)

                                 (337) 367-8291
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
--------------------------------------------------------------------------------
      (Former name, former address and former fiscal year, if changed since
                                  last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities and Exchange Act of 1934)
Yes [ ] No [X]

Common Stock, $0.01 Par Value -- 8,226,913 shares outstanding as of August 8,
2004.

<PAGE>

                           UNIFAB INTERNATIONAL, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                            PAGE
<S>                                                                                                         <C>
PART I.     FINANCIAL INFORMATION

        Item 1.   Financial Statements (Unaudited)

                  Condensed Consolidated Balance Sheets -- June 30, 2004 and December 31,
                    2003..........................................................................            1

                  Condensed Consolidated Statements of Operations -- Three Months Ended
                    June 30, 2004 and 2003; Six months ended June 30, 2004 and 2003...............            2

                  Condensed Consolidated Statements of Cash Flows  -- Six months ended
                    June 30, 2004 and 2003........................................................            3

                  Notes to Condensed Consolidated Financial Statements............................            4

        Item 2.   Management's Discussion and Analysis of Financial Condition and Results
                    of Operations.................................................................           13

        Item 3.   Quantitative and Qualitative Disclosure of Market Risk..........................           18

        Item 4.   Controls and Procedures.........................................................           20

PART II.    OTHER INFORMATION

        Item 1.   Legal Proceedings...............................................................           20

        Item 5.   Other Information...............................................................           20

        Item 6.   Exhibits and Reports on Form 8-K................................................           20

Signatures........................................................................................           21
</TABLE>

<PAGE>

                           UNIFAB INTERNATIONAL, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                   JUNE 30            DECEMBER 31
                                                                                                     2004                 2003
                                                                                                 ----------           -----------
                                                                                                 (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                                                              <C>                  <C>
Assets
Current assets:
  Cash and cash equivalents                                                                        $    148             $     10
  Accounts receivable, net                                                                            7,646               11,411
  Costs and estimated earnings in excess of billings on uncompleted contracts                         1,719                1,287
  Income tax receivable                                                                                   5                  147
  Prepaid expenses and other assets                                                                     609                1,441
                                                                                                   --------             --------
Total current assets                                                                                 10,127               14,296

Property, plant and equipment, net                                                                   20,328               25,223
Other assets                                                                                          1,295                  700
                                                                                                   --------             --------
Total assets                                                                                       $ 31,750             $ 40,219
                                                                                                   ========             ========

Liabilities and shareholders' equity (deficit)
Current liabilities:
  Accounts payable                                                                                 $  2,921             $  4,782
  Billings in excess of costs and estimated earnings on uncompleted contracts                         1,038                  875
  Accrued liabilities                                                                                 1,771                2,454
  Contract loss reserves                                                                                146                  697
  Notes payable to Midland                                                                            7,800                5,900
  Current maturities of long-term debt                                                                7,964                  929
                                                                                                   --------             --------
Total current liabilities                                                                            21,640               15,637

Long-term debt, less current maturities                                                                   -                7,902
 Secured, subordinated notes payable                                                                  6,848                6,848
 Secured, subordinated, convertible debenture, net of unamortized discount of $2,669 and
    $2,931, respectively                                                                              7,982                7,721
                                                                                                   --------             --------
 Total liabilities                                                                                   36,470               38,108

 Commitments and contingencies (Note 7)

 Shareholders' equity (deficit):
  Preferred stock, no par value, 5,000 shares authorized, no shares outstanding                           -                    -
  Common stock, $0.01 par value, 150,000,000 shares authorized, 8,226,913 and 8,201,899
   shares outstanding, respectively                                                                      82                   82
  Additional paid-in capital                                                                         62,173               62,076
  Accumulated deficit                                                                               (66,975)             (60,047)
                                                                                                   --------             --------
Total shareholders' equity (deficit)                                                                 (4,720)               2,111
                                                                                                   --------             --------
Total liabilities and shareholders' equity (deficit)                                               $ 31,750             $ 40,219
                                                                                                   ========             ========
</TABLE>

            See accompanying notes.

                                        1
<PAGE>

                           UNIFAB INTERNATIONAL, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                          THREE MONTHS ENDED JUNE 30         SIX  MONTHS ENDED JUNE 30
                                          --------------------------         -------------------------
                                             2004             2003             2004            2003
                                          ---------         --------         --------         --------
                                                      (In thousands except per share data)
<S>                                       <C>               <C>              <C>              <C>
Revenue................................    $  9,068         $ 14,483         $ 22,908         $ 24,006
Cost of revenue........................       9,323           13,964           23,066           23,303
                                           --------         --------         --------         --------
Gross profit (loss)....................        (255)             519             (158)             703
Impairment of Lake Charles facility....       3,307                -            3,307                -
Loss on disposal of equipment..........         389                -              389                -
Impairment of goodwill.................           -                -              260                -
Selling, general and administrative
  expense..............................         780            1,206            1,744            2,364
                                           --------         --------         --------         --------
Loss from operations...................      (4,731)            (687)          (5,858)          (1,661)
Other income (expense):
  Interest expense.....................        (538)            (504)          (1,078)            (965)
  Interest income......................           5                1                8                5
                                           --------         --------         --------         --------
Loss before income taxes...............      (5,264)          (1,190)          (6,928)          (2,621)
Income tax benefit.....................           -                -                -                -
                                           --------         --------         --------         --------
 Net loss..............................    $ (5,264)        $ (1,190)        $ (6,928)        $ (2,621)
                                           ========         ========         ========         ========

Basic and diluted loss per share.......    $  (0.64)        $  (0.15)        $  (0.84)        $  (0.32)
                                           ========         ========         ========         ========
Basic and diluted weighted average
  shares outstanding...................       8,220            8,199            8,211            8,199
                                           ========         ========         ========         ========
</TABLE>

(a)   All earnings (loss) per share amounts and weighted average number of
      shares outstanding have been restated to give effect to a one-for-ten
      reverse stock split effected on August 3, 2003

See accompanying notes.

                                        2
<PAGE>

                           UNIFAB INTERNATIONAL, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED
                                                                  JUNE 20
                                                           -----------------------
                                                            2004            2003
                                                           -------         -------
                                                               (IN THOUSANDS)
<S>                                                        <C>             <C>
Net cash used in operating activities                      $(1,089)        $(2,136)

Investing activities:
Purchases of equipment                                         (59)           (719)
Proceeds from sale of equipment                                120               -
Collections on notes receivable                                 36              37
                                                           -------         -------
Net cash provided by (used in) investing activities             97            (682)
                                                           -------         -------
Financing activities:
Proceeds from notes payable to Midland                       9,600               -
Payments of notes payable to Midland                        (7,700)              -
Net change in other borrowings                                (867)          3,029
Proceeds from exercise of options                               97               -
                                                           -------         -------
Net cash provided by financing activities                    1,130           3,029
                                                           -------         -------
Net change in cash and cash equivalents                        138             211
Cash and cash equivalents at beginning of period                10              80
                                                           -------         -------
Cash and cash equivalents at end of period                 $   148         $   291
                                                           =======         =======
Supplemental disclosure of cash flow information:
   Income taxes (refunded), net                            $  (131)        $   (82)
                                                           =======         =======
   Interest paid, net of capitalized interest              $   777         $   402
                                                           =======         =======
</TABLE>

See accompanying notes.

                                        3
<PAGE>

                           UNIFAB INTERNATIONAL, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                  JUNE 30, 2004

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

      UNIFAB International, Inc. (the Company) fabricates and assembles jackets,
decks, topside facilities, quarters buildings, drilling rigs and equipment for
installation and use offshore in the production, processing and storage of oil
and gas. Through a wholly-owned subsidiary, Allen Process Systems, LLC, the
Company designs and manufactures specialized process systems such as oil and gas
separation systems, gas dehydration and treatment systems, and oil dehydration
and desalting systems, and other production equipment related to the development
and production of oil and gas reserves. Compression Engineering Services, Inc.
(CESI), a division of Allen Process Systems, LLC, rents compressors. The
Company's main fabrication facilities are located at the Port of Iberia in New
Iberia, Louisiana. Through a wholly-owned subsidiary, Rig Port Services, LLC,
the Company has provided repair, refurbishment and conversion services for oil
and gas drilling rigs at its deep-water facility in Lake Charles, Louisiana.

      The operating cycle of the Company's contracts is typically less than one
year, although some large contracts may exceed one year's duration. Assets and
liabilities have been classified as current and noncurrent under the operating
cycle concept whereby all contract-related items are regarded as current
regardless of whether cash will be received within a 12-month period. At June
30, 2004, it was anticipated that substantially all contracts in progress, and
receivables associated therewith, would be completed and collected within a
12-month period.

      The accompanying unaudited condensed consolidated financial statements
include the accounts of the Company and its subsidiaries, all of which are
wholly owned. Significant intercompany accounts and transactions have been
eliminated in consolidation.

      The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments, consisting of normal recurring adjustments,
considered necessary for a fair presentation have been included. Operating
results for the three- and six-month periods ended June 30, 2004 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2004.

      These financial statements should be read in conjunction with the
financial statements and footnotes thereto for the year ended December 31, 2003
included in the Company's Annual Report on Form 10-K.

      Certain amounts previously reported have been reclassified to conform to
the presentation at June 30, 2004.

2. CURRENT MATTERS

      Prior to and since the initiation of the Midland Recapitalization and
Investment Transaction in April 2002, described more fully below, the Company
has been incurring losses from operations. In response to this situation, the
Company has eliminated noncore businesses and excess facilities, reduced
overhead and restructured its management team and operations in an effort to
return to profitability. In the three- and six-month periods ended June 30,
2004, the Company incurred a net loss of $5.3 million and $6.9 million,
respectively. Included in the three-month period ended June 30, 2004 is a loss
in the process systems segment of $546,000, which includes a $389,000 loss on
the sale of a compressor rented from the Company and a loss from operations of
$207,000 primarily related to underutilization of the process systems

                                        4
<PAGE>

fabrication facility in New Iberia, Louisiana. Also included in the three-month
period ended June 30, 2004 is a loss in the drilling rig fabrication segment of
$3.6 million, which includes a loss from operations of $294,000 related to
underutilization of the drilling rig fabrication facility in Lake Charles,
Louisiana, and a $3.3 million charge for the impairment of that facility, which
was closed during the quarter. The Company began having discussions with an
interested party during the June 2004 quarter about selling the facility for
$2.5 million in cash and notes. This impairment writes down the assets at the
facility to $2.5 million. In addition to these items, the six-month period ended
June 30, 2004 includes a charge of $260,000 related to goodwill associated with
the Company's Compression Engineering business unit, which was recorded in the
quarter ended March 31, 2004. During the first quarter of 2004 and as part of
the Company's ongoing evaluation and reorganization of operations, the Company
decided to suspend engineering and maintenance operations related to
compressors, including compressors being rented from the Company. Operating
results for these operations are included in the Process Systems segment and are
not significant to the historical operations of the Company. Also included in
the net loss for the three- and six-month periods ended June 30, 2004 are
selling, general and administrative expenses of $780,000 and $1.7 million,
respectively, and interest expense of $538,000 and $1.1 million, respectively.
Current pricing for the Company's services and the level of utilization of the
Company's main fabrication facilities have not resulted in operating profits
sufficient to cover these costs.

      Revenue and gross (loss) produced at the Company's fabrication facility in
Lake Charles, Louisiana were $56,000 and ($294,000) in the three-month period
ended June 30, 2004 and $3.5 million and ($82,000) in the six-month period ended
June 30, 2004. Nearly all of the operating results related to one significant
project at the facility, which was completed in April 2004. Upon completion of
the project, there was no backlog for the facility, and as a result management
decided to temporarily idle this facility. The Company has received an offer to
acquire the facility for $2.5 million in cash and notes. Based on the current
state of the drilling rig market, the low business level related to projects
that could be placed at the facility, and the offer received to acquire the
facility, the Company has recorded an impairment loss on these assets of $3.3
million in the second quarter of 2004. Management is currently evaluating this
as well as other various business alternatives relating to this facility and the
impact, if any, these alternatives would have on the remaining $2.5 million
carrying value of the long-lived assets related to this facility.

      The Company received an informal notification from the Internal Revenue
Service subsequent to June 30, 2004, stating that tax returns for certain
carryback refunds had cleared certain levels of review by the IRS, and
indicating that a more favorable outcome could result than that which was
originally anticipated. The potential benefit to the Company is $2.6 million,
which has not been recorded pending the completion of this review process and
the ultimate collection of this amount from the IRS.

      The Company renewed the Credit Agreement in November 2003, with Midland's
continuing guarantee, and extended the maturity to January 31, 2005. As a
result, the amounts outstanding under the Credit Agreement were classified as
noncurrent in the December 31, 2003 balance sheet and are classified as current
in the June 30, 2004 balance sheet. Under an informal arrangement with the
Company, Midland has agreed from time to time to provide financial support and
funding for working capital or other needs at Midland's discretion. During the
year ended December 31, 2003, Midland advanced $5.9 million to the Company for
working capital, which is classified as a current liability at December 31,
2003. At June 30, 2004, $7.8 million was outstanding and owed to Midland related
to this informal arrangement, which was classified as a current liability. As a
result of classifying the amounts outstanding related to the Credit Agreement
and the informal arrangement with Midland, the Company has working capital
deficits of $11.5 million at June 30, 2004 and $1.3 million at December 31,
2003. The liquidity afforded by these advances from Midland was necessary for
the Company to meet its obligations and fund operations. At December 31, 2002,
Midland provided a standby letter of credit to a customer in support of a
contract, which was completed during the March 2004 quarter. The letter of
credit expired in March 2004. Since that time, the Company has been awarded
contracts totaling $13.1 million, which have required a financial guarantee or
letter of credit from Midland. Management believes that additional funds
available from Midland under the informal arrangement described above are
necessary to fund its working capital needs and planned capital expenditures for
the next 12 months and that guarantees from Midland are necessary to win
contract awards. However, the Company has no control over whether Midland will
provide additional funding or financial guarantees in the future and does not
know whether such additional funding or financial guarantees will be available
from Midland as the Company requires them. If Midland does not provide such
additional funding

                                        5
<PAGE>

or financial guarantees to the Company when needed in the future, the Company
will not be able to satisfy its working capital requirements and meet its
obligations, including obligations under the Credit Agreement, in the ordinary
course of business, or could be unable to qualify for contract awards. The
Company requires the continued support from Midland until such time as it has
sustained profitable operations and its financial condition is stable and no
longer requires this support.

      If the Company is unsuccessful in its efforts to return to profitability
or obtain necessary capital from Midland as needed, it will not be able to meet
its obligations in the ordinary course of business. The Company must experience
a marked improvement in 2004 in order to remain a going concern. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.

3. MIDLAND RECAPITALIZATION AND INVESTMENT TRANSACTION

      In April 2002, the Company entered into an agreement with Midland
Fabricators and Process Systems, LLC ("Midland") as a result of which, among
other things, Midland acquired the rights of the Company's lenders under the
Company's Senior Secured Credit Agreement. On August 13, 2002, pursuant to the
agreement with Midland, Midland exchanged $24.1 million outstanding under the
Company's Senior Secured Credit Agreement and $5.6 million in acquired claims of
unsecured creditors for 738 shares of preferred stock, a secured subordinated
convertible debenture in the amount of $10.7 million and two secured
subordinated notes which total in the aggregate $6.8 million. The debenture is
convertible into the Company's common stock at a price of $3.50 per share on a
post reverse split basis. Midland's 738 shares of preferred stock converted
automatically into a total of 7,380,000 shares of the Company's common stock on
August 1, 2003, the date the shareholders authorized additional shares of common
stock. The Company also recorded additional paid in capital on the transaction
of $3.7 million resulting from the discount recorded on the secured subordinated
convertible debenture, and capital contributions of $680,000 resulting from
forgiveness by Midland of penalties accrued under the Senior Secured Credit
Agreement and $914,000 resulting from partial forgiveness of the unsecured
creditor claims acquired by Midland. Further, $675,000 of the amount the Company
owed Midland under the Company's Senior Secured Credit Agreement was cancelled
in exchange for the assignment to Midland of certain accounts.

4. CONTRACTS IN PROGRESS

      Information pertaining to contracts in progress at June 30, 2004 and
December 31, 2003 consisted of the following:

<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,
                                                               JUNE 30, 2004         2003
                                                               -------------       --------
                                                                       (In thousands)
<S>                                                            <C>                 <C>
Costs incurred on uncompleted contracts                           $ 37,087         $ 48,876
Estimated loss                                                      (2,281)          (2,866)
                                                                  --------         --------
                                                                    34,806           46,010
Less billings to date                                              (34,125)         (45,598)
                                                                  --------         --------
                                                                  $    681         $    412
                                                                  ========         ========
Included in the accompanying balance sheets under the
  following captions:
     Costs and estimated earnings in excess of billings on
       uncompleted contracts                                      $  1,719         $  1,287
     Billings in excess of costs and estimated earnings on
       uncompleted contracts                                        (1,038)            (875)
                                                                  --------         --------
                                                                  $    681         $    412
                                                                  ========         ========
</TABLE>

                                        6
<PAGE>

      Accounts receivable includes unbilled receivables and retainages,
respectively, of $170,000 and $10,000 at June 30, 2004, and of $138,000 and
$10,000 at December 31, 2003.

      The Company had contract loss reserves of $146,000 at June 30, 2004 and
$697,000 at December 31, 2003. Included in contract loss reserves at June 30,
2004 is $144,000 related to platform fabrication contracts, including $137,000
recorded in the three-month period ended June 30, 2004 related to two new fixed
price platform fabrication contracts. The contracts are approximately 13%
complete and 72% complete and both will be delivered in the September 2004
quarter. The remaining reserves for platform fabrication contracts relate to
contracts that were substantially complete at June 30, 2004. The reserves for
these contracts at December 31, 2003 was $15,000, substantially all of which was
realized in the six-month period ended June 30, 2004.

      The remaining contract loss reserve at June 30, 2004 and at December 31,
2003 relates to contracts to provide process equipment. All of these contracts
will be delivered during the September quarter of 2004.

5. CREDIT FACILITY

      On November 18, 2002, the Company entered into a Commercial Business Loan
Agreement with Whitney National Bank (the "Credit Agreement"), which provides
for up to $8.0 million in borrowings for working capital purposes, including up
to $2.0 million in letters of credit under a revolving credit facility. The
Credit Agreement is guaranteed by Nassau Holding Company (an affiliate of
Midland), the subsidiaries of Unifab, and the principle members of Midland, and
is secured by the assets of Universal Fabricators, LLC and Allen Process
Systems, LLC, both wholly-owned subsidiaries of the Company. At June 30, 2004,
the Company had $7.9 million in borrowings and letters of credit totaling $3,000
outstanding under the Credit Agreement. Borrowings under the Credit Agreement
bear interest at Libor plus 1.75% or the Prime rate (2.875% at June 30, 2004),
at the Company's discretion. The Credit Agreement matures January 31, 2005.

6. INCOME TAXES

      The Company provides for income taxes using the liability method in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes. As of June 30, 2004, the Company recorded deferred tax assets
of $25.3 million, including $24.8 million related to net operating loss
carryforwards which, if not used, expire in years 2020 through 2024. The ability
of the Company to utilize net operating loss carryforwards is limited on an
annual basis because the Midland transaction resulted in a change in control
under the current tax regulations. The Company has recorded a valuation
allowance of $23.2 million to offset the deferred tax asset related to the net
operating loss carryforward and other deferred tax assets that exceed deferred
tax liabilities because the Company believes that it is more likely than not
that these deferred tax assets will not be utilized.

      The Company received an informal notification from the Internal Revenue
Service subsequent to June 30, 2004, stating that tax returns for certain
carryback refunds had cleared certain levels of review by the IRS, and
indicating that a more favorable outcome could result than that which was
originally anticipated. The potential benefit to the Company is $2.6 million,
which has not been recorded pending the completion of this review process and
the ultimate collection of this amount from the IRS.

7. SHAREHOLDERS' EQUITY (DEFICIT)

      EARNINGS (LOSS) PER SHARE

      In April 2002, the Company entered into an agreement with Midland
Fabricators and Process Systems, LLC ("Midland") as a result of which, among
other things, Midland acquired the rights of the Company's lenders under the
Company's Senior Secured Credit Agreement. On August 13, 2002, pursuant to the
agreement with Midland, Midland exchanged $24.1 million outstanding under the
Company's Senior Secured Credit Agreement and $5.6 million in acquired claims of
unsecured creditors for 738 shares of our preferred stock, a secured
subordinated convertible debenture in the amount of $10.7 million and two
secured subordinated notes which total in the aggregate $6.8 million. The
debenture is convertible into the

                                        7
<PAGE>

Company's common stock at a price of $3.50 per share on a post reverse split
basis. Midland's 738 shares of preferred stock converted automatically into a
total of 73,800,000 shares of the Company's common stock on August 1, 2003, the
date the shareholders authorized additional shares of common stock. The Company
also recorded additional paid in capital on the transaction of $3.7 million
resulting from the discount recorded on the secured subordinated convertible
debenture, and capital contributions of $680,000 resulting from forgiveness by
Midland of penalties accrued under the Senior Secured Credit Agreement and
$914,000 resulting from partial forgiveness of the unsecured creditor claims
acquired by Midland. Further, $675,000 of the amount the Company owed Midland
under the Company's Senior Secured Credit Agreement was cancelled in exchange
for the assignment to Midland of certain accounts.

      On August 1, 2003, the Company's shareholders approved a one-for-ten
reverse stock split of the outstanding shares of the Company's common stock, to
be effective immediately after the conversion of Midland's Series A preferred
shares. Accordingly, on August 1, 2003, each share of series A preferred stock
was converted into 100,000 shares of Unifab common stock and the one-for-ten
reverse stock split was effected resulting in Midland holding a total of
7,380,000 common shares after the reverse stock split.

      The denominator in the table below includes the common shares related to
these Series A Preferred Shares as if they had been converted into shares of
common stock on August 13, 2002, the date of the Midland Investment and
Recapitalization Transaction. All prior periods weighted average share and
option amounts have been restated for the effect of the reverse stock split.
Midland's $10,652,000 convertible debenture is convertible into Unifab common
stock at a conversion price of $3.50 per share on a post reverse split basis,
for a total of 3,043,400 shares of common stock. Since the conversion price is
"out-of-the-money," these shares are anti-dilutive and are not included in the
computation of diluted earnings per share during periods when the Company incurs
a loss.

      The following table sets forth the computation of basic and diluted
earnings (loss) per share giving retroactive effect to the assumed conversion of
Midland's 738 shares as of August 13, 2002 and giving effect to the one-for-ten
reverse stock split:

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED JUNE 30          SIX  MONTHS ENDED JUNE  30
                                             --------------------------          --------------------------
                                               2004              2003              2004              2003
                                             --------           -------          --------           -------
                                                          (In thousands, except per share data)
<S>                                          <C>                <C>              <C>                <C>
Numerator:
   Net loss                                   $(5,264)          $(1,190)          $(6,928)          $(2,621)
Denominator:
   Weighted average shares of common
      stock outstanding                         8,220               819             8,211               819
   Effect of issuance of convertible
      preferred stock on weighted
      average shares of common stock                -             7,380                 -             7,380
                                              -------           -------           -------           -------
   Denominator for basic and diluted
      earnings per share - weighted
      average shares                            8,220             8,199             8,211             8,199
                                              =======           =======           =======           =======
Basic and diluted loss per share              $ (0.64)          $ (0.15)          $ (0.84)          $ (0.32)
                                              =======           =======           =======           =======
</TABLE>

      Options with an exercise price greater than the average market price of
the Company's common stock for the year and options outstanding during years
where the Company incurs a net loss are anti-dilutive and, therefore, not
included in the computation of diluted earnings per share. During the period
ended June 30, 2004, 50,000 options and 6,000 warrants outstanding were
anti-dilutive due to the net loss incurred by the Company. During the period
ended June 30, 2003, 133,500 options and 6,000 warrants outstanding were
anti-dilutive due to the net loss incurred by the Company.

      STOCK BASED COMPENSATION

      The Company uses the intrinsic value method of accounting for
employee-based compensation prescribed by Accounting Principles Board ("APB")
Opinion No. 25 and, accordingly, follows the

                                        8
<PAGE>

disclosure-only provisions of Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123
encourages the use of fair value based method of accounting for compensation
expense associated with stock option and similar plans. However, SFAS No. 123
permits the continued use of the intrinsic value based method prescribed by
Opinion No. 25 but requires additional disclosures, including pro forma
calculations of net earnings and earnings per share as if the fair value method
of accounting prescribed by SFAS No. 123 had been applied.

      Had compensation cost for the Company's stock plans been determined based
on the fair value at the grant dates consistent with the method of SFAS No. 123,
the Company's net income and net income per share amounts would have
approximated the following pro forma amounts (in thousands, except per share
data):

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED              SIX MONTHS ENDED
                                                        JUNE 30                       JUNE 30
                                                -----------------------      ------------------------
                                                  2004          2003            2004          2003
                                                ---------     ---------      ----------     ---------
                                                        (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                             <C>           <C>            <C>            <C>
Net loss, as reported                           $  (5,264)    $  (1,190)     $   (6,928)    $  (2,621)
Add: Total stock-based employee compensation
    expense included in reported net loss,
    net of related tax effects                          -             -               -             -
Deduct: Total stock-based employee
    compensation expense determined under
    fair value based method for all awards,
    net of related tax effects                          -            (6)              -           (14)
                                                ---------     ---------      ----------     ---------
Pro forma net loss                              $  (5,264)    $  (1,196)     $   (6,928)    $  (2,635)
                                                =========     =========      ==========     =========
Loss per share
    Basic and diluted, as reported              $   (0.64)    $   (0.15)     $    (0.84)    $   (0.32)
                                                =========     =========      ==========     =========
    Basic and diluted, pro forma                $   (0.64)    $   (0.15)     $    (0.84)    $   (0.32)
                                                =========     =========      ==========     =========
Weighted average fair value of grants           $       -     $       -      $        -     $       -
                                                =========     =========      ==========     =========
</TABLE>

     Black-Scholes option pricing model assumptions:

<TABLE>
<CAPTION>
                                                      SIX MONTHS ENDED JUNE 30,
                                                       2004               2003
                                                      -----              ------
<S>                                                   <C>                <C>
Risk-free interest rate                                 N/A                1.82%
Volatility factor of the expected market price
  of UNIFAB stock                                       N/A               1.072
Weighted average expected life of the option            N/A              2 years
Expected dividend yield                                   -                   -
</TABLE>

      There were no option grants in the three-month periods ended June 30, 2004
and 2003.

8. COMMITMENTS AND CONTINGENCIES

      LEGAL MATTERS

      In addition to the matter described below, the Company is a party to
various routine legal proceedings primarily involving commercial claims,
workers' compensation claims, and claims for personal injury under the General
Maritime Laws of the United States. While the outcome of these legal proceedings
and claims cannot be predicted with certainty, management believes that the
outcome of such proceedings is not likely to have a material adverse effect on
the Company's consolidated financial statements.

                                        9
<PAGE>

      In a lawsuit filed against the Company in the 14th Judicial Court in the
Parish of Calcasieu, State of Louisiana, Professional Industrial Maintenance,
L.L.C., Don E. Spano and Kimberly Spano alleged multiple claims for breach of
contract, breach of specific performance, a request for injunction, request for
damages, and a request for treble damages and attorney fees for violations of
the Louisiana Unfair Trade Practices Act. Mr. Spano was the managing member of
Professional Industrial Maintenance, LLC, the company whose assets we acquired
in January 1998. The Company filed a counterclaim for recovery of certain
amounts paid on behalf of Professional Industrial Maintenance, LLC and Mr. Spano
as a result of the transaction. In January 2004, the parties agreed to settle
the disputes subject of the lawsuit with full and final releases for all claims
in exchange for a cash payment to the plaintiffs in the amount of $300,000 and,
accordingly, the Company recorded the related liability at December 31, 2003.
However, as of the filing of this report, the details of the settlement
agreement and release have not been finalized, and the Company has not yet made
the cash payment.

      LETTERS OF CREDIT

      In the normal course of its business activities, the Company is required
to provide letters of credit to secure performance. At June 30, 2004, cash
deposits totaling $115,000 secured outstanding letters of credit totaling
$110,000. In addition, at June 30, 2004, letters of credit totaling $3,000 were
outstanding under the Credit Agreement.

      EMPLOYMENT AGREEMENTS

      The Company has an employment agreement with one of its former officers.
This agreement terminates on August 18, 2006. The minimum annual compensation
commitment by the Company under this agreement is $60,000.

      LEASES

      The Company leases land, upon which portions of its structural fabrication
and process equipment fabrication facilities in New Iberia are located, under
noncancelable operating leases. The leases expire in 2013 for the structural
fabrication facility with one 10-year renewal option, and in 2006 for the
process equipment facilities with one 10-year renewal option. The Company also
leases its facility in Lake Charles under a noncancelable operating lease. The
lease expires in 2005 and has two five-year renewal options. At June 30, 2004,
the Company had approximately $9.7 million in aggregate lease commitments under
operating leases, of which $0.7 million is payable during the next twelve
months.

9. RELATED PARTY TRANSACTIONS

      Under an informal arrangement with the Company, Midland has agreed to
provide financial support and funding for working capital or other needs at
Midland's discretion, from time to time. During the six month period ended June
30, 2004, Midland advanced amounts to the Company for working capital, which
were repaid and readvanced from time to time as needed. At June 30, 2004,
$7,800,000 was outstanding and owed to Midland. The liquidity afforded by these
advances from Midland was necessary for the Company to meet its obligations and
fund operations. However, the Company has no control over whether Midland will
provide additional funding in the future and does not know whether such
additional funding will be available from Midland as the Company requires it. If
Midland does not make available such additional funding to the Company when
needed in the future, the Company would not be able to meet its obligations,
including obligations under the Credit Agreement, in the ordinary course of
business. The Company requires the continued support from Midland until such
time as it has sustained profitable operations and its financial condition is
stable and no longer requires this support.

      The Company provides health care benefits to its employees under a plan
that covers the employees of companies owned by Nassau Holding Company, an
affiliate of Midland ("Nassau"), including the employees of Nassau. In the
six-month periods ended June 30, 2004 and 2003, the Company incurred costs of
approximately $1,125,000 and $980,000, respectively, for coverage under this
plan.

                                       10
<PAGE>

      Midland provides accounting information system and reporting services to
the Company, including maintaining computer hardware and software to process
financial information and produce management reports, processing data associated
with those reports, assisting in report design and preparation, processing
operating and payroll checks, consulting assistance with the design and
implementation of financial reporting systems, and other related services.
Included in general and administrative expenses for the three- and six-month
periods ended June 30, 2004 and 2003 are $45,000 and $90,000, respectively,
related to these services. At June 30, 2004, all amounts relative to these
services had been paid.

      In the three-month period ended June 30, 2004, the Company had no
contracts with any affiliates of Midland and had no uncollected receivables
related to prior contract activity with any affiliates of Midland. In the
six-month period ended June 30, 2003, the Company executed several contracts
with Ridgelake Energy, Inc. to fabricate a platform and design and manufacture
process equipment. The total value of these contracts was $6.7 million. In the
three- and six-month periods ended June 30, 2003, $3.2 million and $5.2 million,
respectively, in revenue, and $340,000 and $641,000, respectively, in gross
profit was recognized related to these contracts. At June 30, 2003, the Company
had no uncollected amounts from Ridgelake Energy, Inc. related to these
contracts. Ridgelake Energy, Inc. is owned and controlled by Mr. William A.
Hines, Chairman of our Board of Directors, and his family.

10. INDUSTRY SEGMENT INFORMATION

      Effective January 1, 2003, as a result of the Midland Recapitalization and
Investment transaction, management has evaluated the changed organizational and
reporting structure and has concluded that the Company operates three reportable
segments: the platform fabrication segment, the process systems segment and the
drilling rig fabrication segment. The platform fabrication segment fabricates
and assembles platforms and platform components for installation and use
offshore in the production, processing and storage of oil and gas. The process
systems segment designs and manufactures specialized process systems and
equipment related to the development and production of oil and gas reserves. The
drilling rig fabrication segment provides fabrication services for new
construction and repair of drilling rigs. The accounting policies of the
segments are the same as those described in the summary of significant
accounting policies, except that income taxes are accounted for on a
consolidated basis and deferred tax assets are managed as corporate assets and
are not recorded in the operating segments. The Company evaluates performance
based on segment income, which is defined as revenue less cost of revenue and
selling, general and administrative expense allocated to the operating segment.
The Company does not allocate interest expense to the operating segments.
Unallocated overhead consists primarily of corporate general and administrative
costs that the Company does not allocate to the operating segments. The Company
accounts for intersegment sales at fixed labor rates and at cost for materials
and other costs. Intersegment sales are not intended to represent current market
prices for the services provided.

                                       11
<PAGE>

     The following tables show information about the revenue, profit or loss,
depreciation and amortization, assets and expenditures for long-lived assets of
each of the Company's reportable segments for the three-and six-month periods
ended June 30, 2004 and 2003. Segment assets do not include intersegment
receivable balances as the Company believes inclusion of such assets would not
be meaningful. Segment assets are determined by their location at period end.
Some assets that pertain to the segment operations are recorded on corporate
books, such as prepaid insurance. These assets have been allocated to the
segment in a manner that is consistent with the methodology used in recording
the segment's expense.

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED                     SIX MONTHS ENDED
                                                    JUNE 30                               JUNE 30
                                          ---------------------------           ---------------------------
                                            2004               2003               2004               2003
                                          --------           --------           --------           --------
                                                                   (IN THOUSANDS)
<S>                                       <C>                <C>                <C>                <C>
Segment revenue:
  Platform fabrication                    $  6,711           $ 11,061           $ 15,273           $ 16,788
  Process systems                            2,301              3,258              4,156              6,950
  Drilling rig fabrication                      56                164              3,479                268
  Intersegment eliminations                      -                  -                  -                  -
                                          --------           --------           --------           --------
                                          $  9,068           $ 14,483           $ 22,908           $ 24,006
                                          ========           ========           ========           ========
Segment income (loss):
  Platform fabrication                    $     29           $    379           $   (153)          $    387
  Process systems                             (546)              (223)            (1,146)              (412)
  Drilling rig fabrication (a)              (3,601)              (253)            (3,301)              (321)
                                          --------           --------           --------           --------
                                            (4,118)               (97)            (4,600)              (346)
  Interest expense                            (538)              (504)            (1,077)              (965)
  Unallocated corporate overhead              (608)              (589)            (1,251)            (1,310)
                                          --------           --------           --------           --------
  Loss before income tax                  $ (5,264)          $ (1,190)          $ (6,928)          $ (2,621)
                                          ========           ========           ========           ========
</TABLE>

(a)   Included in the Drilling rig fabrication segment loss for the three and
      six month periods ended June 30, 2004 is an impairment loss of $3.3
      million on the Lake Charles facility

Total assets of the Company by segment is as follows as of June 30, 2004 and
December 31, 2003:

<TABLE>
<CAPTION>
                                       JUNE 30, 2004  DECEMBER 31, 2003
                                       -------------  -----------------
                                               (IN THOUSANDS)
<S>                                    <C>            <C>
Segment assets at end of period:
  Platform fabrication                    $22,390          $21,846
  Process systems                           5,430            6,742
  Drilling rig fabrication                  2,880            9,229
                                          -------          -------
                                           30,700           37,817
  Corporate                                 1,050            2,402
                                          -------          -------
                                          $31,750          $40,219
                                          =======          =======
</TABLE>

11 COMPREHENSIVE INCOME

      The following is a summary of the Company's comprehensive income (loss)
for the three- and six- month periods ended June 30, 2004 and 2003.

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED               SIX MONTHS ENDED
                                                    JUNE 30                         JUNE 30
                                           -------------------------        ------------------------
                                              2004          2003                 2004       2003
                                           ----------     ----------        ----------    ----------
                                                                   (IN THOUSANDS)
<S>                                        <C>            <C>               <C>           <C>
  Net loss                                 $   (5,264)    $   (1,190)       $   (6,928)   $   (2,621)
  Currency translation adjustment                   -             65                 -            41
                                           ----------     ----------        ----------    ----------
                                           $   (5,264)    $   (1,125)       $   (6.928    $   (2,580)
                                           ==========     ==========        ==========    ==========
</TABLE>

                                       12
<PAGE>

12. SHUT DOWN OF ALLEN PROCESS SYSTEMS LIMITED

      On June 12, 2003, at a meeting of the creditors of Allen Process Systems
Limited, Mr. Tony Freeman of TonyFreeman & Company, New Maxdov House,
Manchester, England was appointed as Liquidator of Allen Process Systems Limited
("APS Limited"), located in London, England, for the purposes of ceasing and
voluntarily winding up operations of that company. The Company, as the sole
shareholder of APS Limited, ratified Mr. Freeman's appointment. APS Limited was
acquired by the Company in June 1998 and has provided engineering and project
management services for process systems mainly to Europe and the Middle East.
Allen Process Systems, LLC, a wholly owned subsidiary of the Company will
provide these services in the future. The Company does not expect that ceasing
and winding up operations of APS Limited will have a material impact on the
consolidated financial statements of the Company.

13. NEW ACCOUNTING PRONOUNCEMENTS

      In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 requires that companies that control another entity through interests
other than voting interests should consolidate the controlled entity. FIN 46
applies to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. In December 2003 the FASB issued modifications to FIN 46 ("FIN 46R")
resulting in multiple effective dates based on the nature as well as the
creation date of a variable interest entity. The adoption of FIN 46 did not have
a material impact on the Company's consolidated financial position or results of
operations because the Company does not believe that the Company has interests
that would be considered variable interest entities under FIN 46.

                                       13
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

      The following discussion presents management's discussion and analysis of
the Company's financial condition and results of operations and should be read
in conjunction with the Consolidated Financial Statements.

SUMMARY

      During the three- and six- month periods ended June 30, 2004:

            -     The Company has been awarded new work, which has required
                  financial guarantees from Midland, including letters of credit
                  provided by Midland. The Company currently has bids for new
                  work outstanding that has required guarantees from Midland,
                  including letters of credit to be provided by Midland. These
                  guarantees are necessary for the Company to be successful in
                  qualifying for and being awarded new work. The Company has no
                  control over whether Midland will continue to provide these
                  guarantees in the future, as the Company requires them. If
                  Midland does not provide such guarantees in the future, the
                  Company may be unable to qualify for or be successful in
                  winning new work.

            -     Since the Midland Transaction, Midland has provided financial,
                  operational, and management support to the Company. During the
                  six-month period ended June 30, 2004, the Company funded
                  operations and capital expenditures through advances from
                  Midland. At June 30, 2004, the Company had $7.8 million in
                  advances from Midland and $7.9 million outstanding under its
                  line of credit, which is guaranteed by Midland. The liquidity
                  afforded by these advances from Midland was necessary for the
                  Company to meet its obligations and fund operations. However,
                  the Company has no control over whether Midland will provide
                  additional funding in the future and does not know whether
                  such additional funding will be available from Midland as the
                  Company requires it. If Midland does not provide such
                  additional funding in the future as the Company requires it,
                  the Company will be unable to meet its obligations, including
                  obligations under its line of credit, in the ordinary course
                  of business.

            -     Revenue for the three-month period ended June 30, 2004
                  decreased from the same period last year by 37% to $9.1
                  million. The decrease relates primarily to reduced revenue in
                  the Company's platform fabrication segment. In the six-month
                  period ended June 30, 2004, revenue decreased 5% to $22.9
                  million. The platform fabrication segment and the process
                  systems segment decreased relative to the same period last
                  year, which was offset in part by an increase in revenue in
                  the drilling rig fabrication segment.

            -     Cost of sales for the three- and six-month periods ended June
                  30, 2004 decreased compared to the same periods last year.
                  Cost of sales exceeded revenue in the three- and six- month
                  periods ended June 30, 2004.

            -     Selling, general and administrative expenses were reduced by
                  approximately 35% in the three-month period ended June 30,
                  2004, compared to the same period in 2003, and by
                  approximately 26% in the six-month period ended June 30, 2004,
                  compared to the same period last year. This was achieved
                  mainly by reducing administrative personnel and other
                  administrative costs over the respective periods.

            -     The Company received an informal notification from the
                  Internal Revenue Service subsequent to June 30, 2004, stating
                  that tax returns for certain carryback refunds had cleared
                  certain levels of review by the IRS, and indicating that a
                  more favorable outcome could result than that which was
                  originally anticipated. The potential benefit to the Company
                  is $2.6 million, which has not

                                       14
<PAGE>

                  been recorded pending the completion of this review process
                  and the ultimate collection of this amount from the IRS.

            -     The Company recorded an impairment charge of $3.3 million in
                  the three-month period ended June 30, 2004 related to the
                  facility in Lake Charles, Louisiana, which is idle at this
                  time. The charge reduced the recorded value of the facility to
                  $2.5 million.

            -     The Company recorded a charge of $260,000 related to goodwill
                  associated with the Company's Compression Engineering business
                  unit during the first quarter of 2004. As part of the
                  Company's ongoing evaluation and reorganization of operations,
                  the Company suspended engineering and maintenance operations
                  related to compressors, including compressors rented from the
                  Company.

            -     On August 1, 2003, the shareholders of the Company approved
                  the increase in the number of shares of authorized common
                  stock to 150,000,000 shares. This increase allowed Midland to
                  convert the 738 shares of preferred stock issued in relation
                  to the Midland Investment and Recapitalization transaction
                  into 73,800,000 shares of common stock. The shareholders also
                  approved a one-for-ten reverse stock split, which was effected
                  on August 3, 2003. After giving effect to the one-for-ten
                  reverse stock split, the number of shares of common stock held
                  by Midland was 7,380,000. All earnings (loss) per share
                  amounts and weighted average number of shares outstanding have
                  been restated to give effect to the one-for-ten reverse stock
                  split effected on August 3, 2003.

MIDLAND SUPPORT

      Since the Midland Transaction, Midland has provided financial, operational
and management support to the Company. Nassau Holding Company (an affiliate of
Midland) has guaranteed the Company's Senior Secured Credit Agreement with
Whitney National Bank. Under an informal arrangement with the Company, Midland
has agreed to provide financial support and funding for working capital or other
needs at Midland's discretion, from time to time. Through June 30, 2004, Midland
advanced $7.8 million to the Company for working capital, which was outstanding
at June 30, 2004. From time to time as needed, Midland provides financial
guarantees, including letters of credit, in support of contract awards to the
Company. Midland provides accounting information system and reporting services
to the Company, including maintaining computer hardware and software to process
financial information and produce management reports, processing data associated
with those reports, assisting in report design and preparation, processing
operating and payroll checks, consulting assistance with the design and
implementation of financial reporting systems, and other related services.
Included in general and administrative expenses for the three- and six- month
periods ended June 30, 2004 and 2003 are $45,000 and $90,000, respectively,
related to these services. This support was necessary to stabilize the financial
position and operations of the Company. The Company will require the continued
support from Midland, or another source of working capital until such time as it
has sustained profitable operations and its financial condition is stable and no
longer requires this support.

IDENTIFICATION OF OPERATING SEGMENTS

      Effective January 1, 2003, as a result of the Midland Recapitalization and
Investment transaction, management has evaluated the changed organizational and
reporting structure and has concluded that the Company operates three reportable
segments: the platform fabrication segment, the process systems segment and the
drilling rig fabrication segment. The platform fabrication segment fabricates
and assembles platforms and platform components for installation and use
offshore in the production, processing and storage of oil and gas. The process
systems segment designs and manufactures specialized process systems and
equipment related to the development and production of oil and gas reserves. The
drilling rig fabrication segment provides fabrication services for new
construction and repair of drilling rigs.

                                       15
<PAGE>

THE MIDLAND TRANSACTION

      On August 13, 2002, the Company and Midland Fabricators and Process
Systems, LLC closed a transaction under which Midland exchanged $24.1 million
outstanding under the Company's Senior Secured Credit Agreement and $5.6 million
in claims of unsecured creditors for 738 shares of preferred stock, a secured
subordinated debenture and two secured subordinated notes in the aggregate
amount of $17.5 million. The debenture, valued at $10.7 million, is convertible
into the Company's common stock at a price of $3.50 per share on a post-reverse
split basis. Midland's preferred stock was converted into a total of 7,380,000
shares of the Company's common stock on August 1, 2003. The Company also
recorded additional capital contributions on the transaction of $3.7 million
resulting from the discount recorded on the convertible debenture, $680,000
resulting from forgiveness by Midland of penalties accrued under the Senior
Secured Credit Agreement, and $914,000 resulting from partial forgiveness of
unsecured creditor claims acquired by Midland. On November 18, 2002, the Company
entered into a Senior Secured Credit Agreement with the Whitney National Bank,
which is guaranteed by Nassau Holding Company (an affiliate of Midland), the
subsidiaries of Unifab, and the principle members of Midland, in accordance with
the terms of the Midland transaction.

RESULTS OF OPERATIONS

      Revenue for the three months ended June 30, 2004 decreased 37% to $9.1
million from $14.5 million for the three months ended June 30, 2003. Revenue
decreased for all business segments in the three-month period ended June 30,
2004 compared to the same period last year. Backlog was approximately $12.0
million and $7.6 million at June 30, 2004 and December 31, 2003, respectively.

      Total direct labor hours worked during the three-month period ended June
30, 2004 decreased 35% overall from the levels experienced in the same period
last year, due to decreased manhours at the Company's platform fabrication and
process system facilities. For the six-month period ended June 30, 2004,
manhours at the platform fabrication and process system facilities were
approximately 13% lower than for the same period last year.

      Cost of revenue was $9.3 million and $23.1 million for the three- and six-
month periods ended June 30, 2004, compared to $14.0 million and $23.3 million
for the same periods last year. Cost of revenue consists of costs associated
with the fabrication process, including direct costs (such as direct labor costs
and raw materials) and indirect costs that can be specifically allocated to
projects (such as supervisory labor, utilities, welding supplies and equipment
costs).

      Gross profit (loss) for the three months ended June 30, 2004 was
($255,000) compared to gross profit of $519,000 for the same period last year.
Gross profit generated at the Company's platform fabrication facility was offset
by increased costs per manhour at the Company's process systems facility. The
Company's drilling rig fabrication facility was closed in April 2004.

      Other operating expenses in the three- and six-month periods ended June
30, 2004 include an impairment loss of $3.3 million on the Lake Charles
facility. Operating losses incurred at the facility, the lack of backlog for the
facility and the business outlook resulted in the Company closing the facility
early in the June 2004 quarter. Since that time the Company has sought
alternatives for the facility, including partnering with a financially stronger
entity to operate the facility or selling the facility. In evaluating the
recoverability of its investment in the Lake Charles facility, the Company
concluded the carrying value of the facility was impaired. The Company then
estimated the fair value of the facility based on the related discounted
estimated cash flows and based on this analysis recorded an impairment loss of
$3.3 million. The impairment loss reduced the recorded net value of the facility
to its estimated fair value of $2.5 million. Also included in other operating
expenses in the three- and six-month periods ended June 30, 2004 is a $389,000
loss on the disposal of a compressor, which was previously being rented from the
Company. In the three-month period ended March 31, 2004 the Company recorded an
impairment charge of $260,000 related to goodwill associated with the Company's
Compression Engineering business unit. During the first quarter of 2004 and as
part of the Company's ongoing evaluation and reorganization of operations, the
Company decided to suspend engineering and maintenance operations related to
compressors, including compressors being rented from the Company. Operating
results for these operations are included in the

                                      16
<PAGE>

Process Systems segment and are not significant to the historical operations of
the Company.

      Selling, general and administrative expense decreased to $0.8 million in
the three months ended June 30, 2004 and $1.7 million in the six months ended
June 30, 2004, compared to $1.2 million and $2.4 million in the same periods in
2003, respectively. This decrease is mainly due to reduced general and
administrative expenses associated with closing underutilized facilities and
overall reductions in administrative overhead and employees.

      Interest expense for the three- and six-month periods ended June 30, 2004
was higher than the same periods in 2003 due to the higher levels of
indebtedness maintained during 2004. Amortization of the discount on the
secured, subordinated debenture is being recorded as interest expense. In each
of the three-month periods ended June 30, 2004, the Company recorded $130,000 of
interest expense related to amortization of the discount on the secured
subordinated debenture. In each of the six-month periods ended June 30, 2004 and
2003, the Company recorded $260,000 interest expense related to amortization of
the discount on the secured subordinated debenture.

      No net income tax benefit was recognized on the net loss recorded in the
three-month periods ended June 30, 2004 and 2003. In accordance with FAS 109,
the Company considered that it had a cumulative pre-tax loss for recent years,
which must be carried forward and used to offset future taxable income. The
ability of the Company to utilize net operating loss carryforwards is also
limited on an annual basis because the transaction with Midland resulted in a
change in control under tax regulations. The Company has recorded a valuation
allowance to offset the deferred tax asset related to the net operating loss
carryforward and other deferred tax assets that exceed net deferred tax
liabilities of the Company at June 30, 2004. The valuation allowance reflects
the Company's judgment that it is more likely than not that these deferred tax
assets will not be realized. Management will continue to assess the adequacy of
the valuation allowance on a quarterly basis.

SEGMENT INFORMATION

      The Company has identified three reportable segments as required by SFAS
No. 131. The following discusses the results of operations for each of those
reportable segments during the three- and six-month periods ended June 30, 2004
and 2003.

      PLATFORM FABRICATION SEGMENT

      Revenue for the platform fabrication segment decreased 39%, or $4.4
million, to $6.7 million in the quarter ended June 30, 2004 from $11.1 million
in the second quarter of 2003. Direct manhours in the June 2004 quarter
decreased 36% from the June 2003 quarter. In the six-month period ended June 30,
2004, revenue decreased 9% from the same period last year to $15.3 million.
Segment income (loss) decreased to $29,000 in the June 30, 2004 quarter from
$379,000 in the June 30, 2003 quarter, and to a loss of ($153,000) in the
six-month period ended June 30, 2004 from segment income of $387,000 in the same
period last year. Fabrication activity has decreased from last year, and bidding
for projects in this segment has remained competitive, causing lower profit
margins. In the March 2003 quarter, segment income was reduced by $292,000
related to the repair of the roof on the Company's main fabrication building.
Savings from the reduction of administrative staff and the shifting of general
and administrative functions to corporate reduced segment loss in the three- and
six-month periods ended June 30, 2004.

      PROCESS SYSTEMS SEGMENT

      Revenue for the process systems segment was $2.3 million in the
three-month period ended June 30, 2004 compared to $3.3 million in the same
quarter last year. In the quarter ended June 30, 2004, direct manhours decreased
29% from the June 2003 quarter. Due to this low level of activity and the
increase in cost per manhour that resulted from it, segment loss increased in
the June 30, 2004 quarter to $0.5 million from $0.2 million in the same quarter
in 2003. Savings from the reduction of administrative staff and the shifting of
general and administrative functions to corporate decreased the segment loss in
the June 30, 2004 quarter. Revenue for the six-month period ended June 30, 2004
was $4.2 million compared to $7.0 million in the same period last year. Segment
loss for the six-month period ended June 30, 2004 was $1.1

                                      17
<PAGE>

million compared to $412,000 in the same period last year. Included in segment
loss in the six-month period ended June 30, 2004 was a charge of $260,000
related to goodwill associated with the Company's Compression Engineering
business unit. Included in segment loss for the six-month period ended June 30,
2003 were contract loss reserves of $220,000, including $117,000 recorded
because of delays encountered on contracts to provide process equipment that was
being manufactured overseas.

      DRILLING RIG FABRICATION SEGMENT

      Revenue for the drilling rig fabrication segment decreased to $56,000 in
the quarter ended June 30, 2004 from $164,000 in the same period last year. In
the six-month period ended June 30, 2004, revenue was $3.4 million compared to
$268,000 in the same period last year. Nearly all of the operating results in
this segment relate to one significant project being performed at the Company's
fabrication facility in Lake Charles, Louisiana. Upon the completion of this
project in April 2004, management decided to temporarily idle this facility.
Since that time, the Company has sought alternatives for the facility, including
partnering with a financially stronger entity to operate the facility or
possibly selling the facility. In evaluating the recoverability of the
investment in the Lake Charles facility, the Company concluded the carrying
value of the facility was impaired. The Company then estimated the fair value of
the facility based on the related discounted estimated cash flows and based on
this analysis recorded an impairment loss of $3.3 million. The impairment loss
reduced the recorded net value of the facility to its estimated fair value of
$2.5 million.

LIQUIDITY AND CAPITAL RESOURCES

      Historically, the Company has funded its business activities through
borrowings from time to time as needed from Midland, as more fully described
below, funds generated from operations, short - term borrowings on its revolving
credit facilities for working capital needs and individual financing
arrangements for equipment, facilities improvements, insurance premiums and
long-term needs. During the six-month period ended June 30, 2004, the Company's
available funds, $1.1 generated from financing activities and $97,000 provided
by investing activities together funded cash used in operations of $1.1 million.

      Under an informal arrangement with the Company, Midland has agreed from
time to time to provide financial support and funding for working capital or
other needs at Midland's discretion. During the six-month period ended June 30,
2004, Midland advanced $9.6 million, which the Company used for working capital
during the period. At June 30, 2004, $7.8 million was outstanding and owed to
Midland related to this informal arrangement. As a result of classifying the
amounts outstanding related to the informal arrangement with Midland and the
Credit Agreement as current liabilities, the Company has a working capital
deficit of $11.5 million at June 30, 2004. The liquidity afforded by the
advances from Midland was necessary for the Company to meet its obligations and
fund operations throughout the six months ended June 30, 2004. Since the Midland
investment, the Company has received contracts, which have required a financial
guarantee or letter of credit from Midland. Management believes that additional
funds available from Midland under the informal arrangement described above are
necessary to fund its working capital needs and planned capital expenditures for
the next 12 months and that guarantees from Midland are necessary to win
contract awards. However, the Company has no control over whether Midland will
provide additional funding or financial guarantees in the future and does not
know whether such additional funding or financial guarantees will be available
from Midland as the Company requires them. If Midland does not provide such
additional funding or financial guarantees when needed in the future, the
Company will not be able to satisfy its working capital requirements and meet
its obligations, including obligations under the Credit Agreement, in the
ordinary course of business. The Company requires the continued support from
Midland until such time as it has sustained profitable operations and its
financial condition is stable and no longer requires this support

      On November 18, 2002, the Company entered into a Commercial Business Loan
with Whitney National Bank (the "Credit Agreement"), guaranteed by Nassau
Holding Company, an affiliate of Midland, the subsidiaries of Unifab, and the
principal members of Midland and secured by all of the assets of the Company,
which provides for up to $8.0 million in borrowings for working capital
purposes, including up to $2.0 million in letters of credit under a revolving
credit facility. At June 30, 2004 and December 31, 2003, respectively, the
Company had $7.9 million in borrowings and letters of credit totaling $3,000
outstanding under the revolving credit facility. Borrowings under the Credit
Agreement bear interest at

                                      18
<PAGE>

Libor plus 1.75% or the Prime rate (2.875% at June 30, 2004), at the Company's
discretion. The Credit Agreement matures January 31, 2005. At June 30, 2004, the
Company had other letters of credit outstanding totaling $110,000, which were
secured by cash deposits totaling $115,000.

      The table below sets out the cash contractual obligations of the Company.
The operating leases are not recorded as liabilities on the balance sheet, but
payments are treated as an expense as incurred. Each contractual obligation
included in the table contains various terms, conditions, and covenants which,
if violated, accelerate the payment of that obligation. The operating lease
obligations primarily relate to the Company's operating facilities:

<TABLE>
<CAPTION>
                                                     Payment due by year
                              -----------------------------------------------------------------
                                       Remainder                                        Beyond
                               Total     2004       2005     2006     2007     2008      2008
                              -------  ---------  -------   ------   ------   -------   -------
<S>                           <C>       <C>       <C>       <C>      <C>      <C>       <C>
Operating lease obligations   $ 9,635   $   346   $   692   $  692   $  692   $   692   $ 6,521
Settlement of lawsuit             300       300        --       --       --        --        --
Long-term debt                 15,764     7,862     7,902       --       --        --        --
Secured, subordinated notes
 payable                        6,848        --     2,139    4,709       --        --        --
Secured, subordinated,
 convertible debenture         10,652        --        --       --    2,130     2,130     6,392
                              -------   -------   -------   ------   ------   -------   -------
                              $43,199   $ 8,508   $10,733   $5,401   $2,822   $ 2,822   $12,913
                              =======   =======   =======   ======   ======   =======   =======
</TABLE>

      Management believes that additional funds available from Midland under the
informal arrangement described above are necessary to fund its working capital
needs and planned capital expenditures for the next 12 months. However,
Management has no control over whether Midland will provide additional funding
in the future and does not know whether such additional funding will be
available from Midland as the Company requires it. If Midland does not provide
such additional funding in the future as the Company requires it, the Company
will not be able to meet its obligations, including obligations under the Credit
Agreement, in the ordinary course of business.

NEW ACCOUNTING PRONOUNCEMENTS

      In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 requires that companies that control another entity through interests
other than voting interests should consolidate the controlled entity. FIN 46
applies to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. In December 2003 the FASB issued modifications to FIN 46 ("FIN 46R")
resulting in multiple effective dates based on the nature as well as the
creation date of a variable interest entity. The adoption of FIN 46 did not have
a material impact on the Company's consolidated financial position or results of
operations because the Company does not believe that the Company has interests
that would be considered variable interest entities under FIN 46.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

      The Company's discussion and analysis of its financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires the Company to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosures of contingent assets and liabilities. On an on-going basis, the
Company evaluates its estimates, including those related to revenue recognition
and long-lived assets. The Company bases its estimates on historical experience
and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. The Company believes the following critical
accounting policies affect its more significant judgments and estimates used

                                      19
<PAGE>

in the preparation of its consolidated financial statements.

      Revenue from construction contracts, which are typically of short
duration, are recognized on the percentage-of-completion method, measured by
relating actual labor hours for work performed to date to the estimated total
labor hours of the respective contract. Contract costs include all direct
material and labor costs and those indirect costs related to contract
performance, such as indirect labor, supplies, and repairs. Provisions for
estimated losses, if any, on uncompleted contracts are made in the period in
which such losses are determined. Significant changes in cost estimates due to
adverse market conditions or poor contract performance could affect estimated
gross profit, possibly resulting in a contract loss.

      The Company's customers are principally major and large independent oil
and gas companies and drilling companies. These concentrations of customers may
impact our overall exposure to credit risk, either positively or negatively, in
that our customers may be similarly affected by changes in economic or other
conditions. Reserves for uncollectible accounts receivable are evaluated
periodically against specific accounts that are known to be uncollectible.
Increases in the reserves for uncollectible accounts are charged to operating
results in the period they are identified. Receivables are generally not
collateralized. Significant adverse changes in the economic environment of the
oil and gas industry could result in materially lower collectibility of recorded
receivables and could require a charge for uncollectible accounts in the future.

      Long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The Company assesses the recoverability of
long- lived assets by determining whether the carrying values can be recovered
through projected net cash flows undiscounted, based on expected operating
results over their remaining lives. If impairment is indicated, the asset is
written down to its fair market value, or if fair market value is not readily
determinable, to its estimated discounted net cash flows. Future adverse market
conditions or poor operating results could result in the inability to recover
the current carrying value of the long-lived asset, thereby possibly requiring
an impairment charge in the future.

      Income taxes have been provided using the liability method. Deferred
income taxes reflect the net effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The amount of future income tax assets
recognized is limited to the amount of benefit that is more likely than not to
be realized. In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or the entire
deferred tax asset will not be realized. The ultimate realization of the
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become deductible.
Management considers the scheduled reversals of deferred tax liabilities, the
likelihood of future taxable income and tax planning strategies when making this
assessment. Based on this assessment, the Company records a valuation allowance
against deferred tax assets that are more likely than not unrealizable. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the future if taxable income is not available to allow for the
deduction of the deferred tax assets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company is exposed to the risk of changing interest rates and foreign
currency exchange rate risks. The Company does not use derivative financial
instruments to hedge the interest or currency risks. Interest on approximately
$30.6 million, substantially all of the Company's debt, was variable, based on
short-term interest rates. A general increase of 1.0% short-term market interest
rates would result in additional interest cost of $306,000 per year if the
Company were to maintain the same debt level and structure.

      The Company has a subsidiary located in the United Kingdom for which the
functional currency is the British Pound. The subsidiary is being liquidated,
and therefore there are no operations at June 30, 2004. However, the liquidation
proceeds are held in British Pounds pending the resolution of the liquidation
and final distribution of the proceeds, if any. The Company typically does not
hedge its foreign currency exposure. Historically, fluctuations in British
Pound/US Dollar exchange rates have not had a material effect on the Company.
Future changes in the exchange rate of the US Dollar to the British Pound may
positively or negatively impact the final amount distributed; however, the
Company does not anticipate its

                                      20
<PAGE>

exposure to foreign currency rate fluctuations to be material in 2004.

      While the Company does not currently use derivative financial instruments,
it may use them in the future if deemed appropriate.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

      Certain statements included in this report and in oral statements made
from time to time by management of the Company that are not statements of
historical fact are forward-looking statements. In this report, forward-looking
statements are included primarily in the sections entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
words "expect," "believe," "anticipate," "project," "plan," "estimate,"
"predict," and similar expressions often identify forward-looking statements.
Such statements may involve risks and uncertainties and include, among other
things, information as to possible future increases in oil and gas prices and
drilling activity and the effect of current and future levels of prices and
drilling activity on demand for products and services of the Company, on the
prices the Company can obtain for its products and services and on the
profitability of the Company. All such statements are subject to factors that
could cause actual results and outcomes to differ materially from the results
and outcomes predicted in the statements, and investors are cautioned not to
place undue reliance upon them. Those factors include, but are not limited to,
the risks, contingencies and uncertainties described immediately below:

      -     advances and financial guarantees from Midland have been necessary
            for the Company to meet its obligations and fund operations and for
            contract awards. However, the Company has no control over whether
            Midland will provide additional funding or financial guarantees in
            the future and does not know whether such additional funding or
            financial guarantees will be available from Midland as the Company
            requires them. If Midland or some other source of financial support
            does not provide such additional funding or financial guarantees in
            the future as the Company requires them, the Company probably will
            not be able to meet its obligations, including obligations under the
            Credit Agreement, in the ordinary course of business. The Company
            requires the continued support from Midland or another source of
            financial support until such time as it has sustained profitable
            operations and its financial condition is stable and no longer
            requires this support;

      -     general economic and business conditions and industry trends;

      -     the economic strength of our customers and potential customers;

      -     decisions about offshore developments to be made by oil and gas
            companies;

      -     the highly competitive nature of our businesses;

      -     our future financial performance, including availability, terms and
            deployment of capital;

      -     the continued availability of qualified personnel;

      -     changes in, or our failure or inability to comply with, government
            regulations and adverse outcomes from legal and regulatory
            proceedings;

      -     changes in existing environmental regulatory matters;

      -     rapid technological changes;

      -     realization of deferred tax assets;

      -     consequences of significant changes in interest rates and currency
            exchange rates;

      -     difficulties we may encounter in obtaining regulatory or other
            necessary approvals of any strategic transactions;

      -     social, political and economic situations in foreign countries where
            we do business, including among others, countries in the Middle
            East;

      -     effects of asserted and unasserted claims;

      -     our ability to obtain surety bonds and letters of credit; and

      -     our ability to maintain builder's risk, liability and property
            insurance in amounts we consider adequate at rates that we consider
            economical.

ITEM 4. CONTROLS AND PROCEDURES

      As of the end of the period covered by this report, the Company carried
out an evaluation under the supervision of and with the participation of the
Company's management, including the Company's Chief

                                      21
<PAGE>

Executive Officer and Chief Financial Officer, of the effectiveness of the
design and implementation of its disclosure controls and procedures. Based on
and as of the date of that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company, including its consolidated subsidiaries, required to be
included in reports the Company files with or submits to the Securities and
Exchange Commission under the Securities Act of 1934.

      There have been no significant changes in the Company's internal control
over financial reporting or in other factors during the first quarter of fiscal
year 2004 that have materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.

      PART II

ITEM 1. LEGAL PROCEEDINGS.

      In addition to the matter described below, the Company is a party to
various routine legal proceedings primarily involving commercial claims,
workers' compensation claims, and claims for personal injury under the General
Maritime Laws of the United States. While the outcome of these legal proceedings
and claims cannot be predicted with certainty, management believes that the
outcome of such proceedings is not likely to have a material adverse effect on
the Company's consolidated financial statements.

      In a lawsuit filed against the Company in the 14th Judicial Court in the
Parish of Calcasieu, State of Louisiana, Professional Industrial Maintenance,
L.L.C., Don E. Spano and Kimberly Spano alleged multiple claims for breach of
contract, breach of specific performance, a request for injunction, request for
damages, and a request for treble damages and attorney fees for violations of
the Louisiana Unfair Trade Practices Act. Mr. Spano was the managing member of
Professional Industrial Maintenance, LLC, the company whose assets we acquired
in January 1998. The Company filed a counterclaim for recovery of certain
amounts paid on behalf of Professional Industrial Maintenance, LLC and Mr. Spano
as a result of the transaction. In January 2004, the parties agreed to settle
the disputes subject of the lawsuit with full and final releases for all claims
in exchange for a cash payment to the plaintiffs in the amount of $300,000 and,
accordingly, the Company recorded the related liability at December 31, 2003.
However, as of the filing of this report, the details of the settlement
agreement and release have not been finalized, and the Company has not yet made
the cash payment.

ITEM 5. OTHER INFORMATION

      This report on Form 10-Q is accompanied by a statement of the Principal
Executive Officer and the Chief Financial Officer of the registrant making
certain certifications as to the contents hereof, as required by Section 906 of
the Sarbanes-Oxley Act of 2002.

      The Company's common stock was delisted from the NASDAQ SmallCap Market
effective June 28, 2004, as the Company ceased to meet the NASDAQ's listing
requirements. Since that time, shares of the Company's common stock have traded,
from time to time, in the over-the-counter market and on the Pink Sheets.

      On March 29, 2004, the Company's independent auditor issued its audit
report on the Company's December 31, 2003 financial statements. The audit report
included a "going concern qualification" which is an explanatory paragraph
relating to the Company's ability to continue as a going concern due to its
recurring losses from operations, negative working capital position and
difficulties in meeting its financial obligations and funding its operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Exhibits

                                      22
<PAGE>

<TABLE>
<CAPTION>
Exhibit
 Number                                 Description
-------     --------------------------------------------------------------------
<S>         <C>
 31.1       Certification pursuant to Exchange Act 13a-15 and 15d-15(e)
            accompanying and furnished with this quarterly report on Form 10-Q
            for the six-month period ended June 30, 2004

 31.2       Certification pursuant to Exchange Act 13a-15 and 15d-15(e)
            accompanying and furnished with this quarterly report on Form 10-Q
            for the six-month period ended June 30, 2004

 32.1       Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002 (18 U.S.C. Section 1350, as adopted) accompanying and furnished
            with this quarterly report on Form 10-Q for the six-month period
            ended June 30, 2004

 32.2       Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002 (18 U.S.C. Section 1350, as adopted) accompanying and furnished
            with this quarterly report on Form 10-Q for the six-month period
            ended June 30, 2004

 99.1       Press release issued by the Company on April 5, 2004 concerning the
            inclusion of a going concern qualification included in the audit
            report issued on the Company's financial statements for the year
            ended December 31, 2003, as required by NASDAQ Marketplace Rule
            4350(b)

 99.2       Press release issued by the Company on May 28, 2004 concerning the
            notice that the Company's stock would be delisted from the NASDAQ
            SmallCap Market because it did not meet the listing requirements

 99.3       Press release issued by the Company on June 21, 2004 concerning the
            final NASDAQ Staff Determination received on June 17, 2004
            announcing that the Company's common stock would be delisted from
            the NASDAQ SmallCap Market on June 28, 2004
</TABLE>

(b)   Reports on form 8-K

      None

                                      23
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            UNIFAB International, Inc.

Date August 14, 2004                        /s/ Frank J. Cangelosi, Jr.
                                            ------------------------------------
                                            Frank J. Cangelosi, Jr.
                                            Chief Financial Officer
                                            (Principal Financial and Accounting
                                            Officer)

                                      24
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
 Number                                Description
-------     --------------------------------------------------------------------
<S>         <C>
 31.1       Certification pursuant to Exchange Act 13a-15 and 15d-15(e)
            accompanying and furnished with this quarterly report on Form 10-Q
            for the six-month period ended June 30, 2004

 31.2       Certification pursuant to Exchange Act 13a-15 and 15d-15(e)
            accompanying and furnished with this quarterly report on Form 10-Q
            for the six-month period ended June 30, 2004

 32.1       Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002 (18 U.S.C. Section 1350, as adopted) accompanying and furnished
            with this quarterly report on Form 10-Q for the six-month period
            ended June 30, 2004

 32.2       Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002 (18 U.S.C. Section 1350, as adopted) accompanying and furnished
            with this quarterly report on Form 10-Q for the six-month period
            ended June 30, 2004

 99.1       Press release issued by the Company on April 5, 2004 concerning the
            inclusion of a going concern qualification included in the audit
            report issued on the Company's financial statements for the year
            ended December 31, 2003, as required by NASDAQ Marketplace Rule
            4350(b)

 99.2       Press release issued by the Company on May 28, 2004 concerning the
            notice that the Company's stock would be delisted from the NASDAQ
            SmallCap Market because it did not meet the listing requirements

 99.3       Press release issued by the Company on June 21, 2004 concerning the
            final NASDAQ Staff Determination received on June 17, 2004
            announcing that the Company's common stock would be delisted from
            the NASDAQ SmallCap Market on June 28, 2004
</TABLE>