<PAGE>

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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                      For the period ended March 31, 2001

                                      OR

[_] 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 000-24263

                            CONRAD INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)

              Delaware                                  Delaware
   (State of other jurisdiction of                  (I.R.S. Employer
   incorporation or organization)                  Identification No.)

          1501 Front Street                               70381
            P.O. Box 790                               (Zip Code)
       Morgan City, Louisiana
   (Address of principal executive
              offices)

   Registrant's telephone number, including area code: (504) 384-3060

   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 period 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 the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

   As of May 8, 2001, 7,071,056 shares of the registrant's Common Stock were
outstanding.

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<PAGE>

                                   FORM 10-Q

                   CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

                               Table of Contents

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Part I. Financial Information
 Item 1. Financial Statements (Unaudited)
  Consolidated Balance Sheets March 31, 2001 and December 31, 2000.........   3
  Consolidated Statements of Operations Three Months Ended March 31, 2001
   and 2000................................................................   4
  Consolidated Statements of Cash Flows Three Months Ended March 31, 2001
   and 2000................................................................   5
  Notes to the Consolidated Financial Statements...........................   6

 Item 2. Management's Discussion and Analysis of Financial Condition and
  Results of Operations....................................................  11
 Item 3. Quantitative and Qualitative Disclosures about Market Risk........  16
Part II. Other Information
 Item 1. Legal Proceedings.................................................  16
 Item 6. Exhibits and Reports on Form 8-K..................................  17
Signature..................................................................  18
</TABLE>

                          FORWARD-LOOKING-STATEMENTS

   This Form 10-Q includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements contained herein other than statements of
historical fact are forward-looking statements. When used in this Form 10-Q,
the words "anticipate", "believe", "estimate" and "expect" and similar
expressions are intended to identify forward-looking statements. Such
statements reflect the Company's current views with respect to future events
and are subject to certain risks, uncertainties and assumptions, including the
Company's reliance on cyclical industries, the Company's reliance on principal
customers and government contracts, the Company's ability to perform contracts
at costs consistent with estimated costs utilized in bidding for the projects
covered by such contracts, variations in quarterly revenues and earnings
resulting from the percentage of completion accounting method, the possible
termination of contracts included in the Company's backlog at the option of
customers, operating risks, competition for marine vessel contracts, the
Company's ability to retain key management personnel and to continue to
attract and retain skilled workers, state and federal regulations, the
availability and cost of capital, and general industry and economic
conditions. These and other risks and assumptions are discussed in more detail
in the Company's Form 10-K. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, believed, estimated or expected.
The Company does not intend to update these forward-looking statements.
Although the Company believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such
expectations will prove correct.

                                       2
<PAGE>

                         PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                    CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                       (In thousands, except share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                         March 31, December 31,
                                                           2001        2000
                                                         --------- ------------
<S>                                                      <C>       <C>
                         ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.............................  $ 2,103    $ 3,513
  Accounts receivable, net..............................    7,075      1,622
  Costs and estimated earnings in excess of billings on
   uncompleted contracts................................    4,757      4,663
  Inventories...........................................      192        240
  Other current assets..................................    1,372      1,801
                                                          -------    -------
    Total current assets................................   15,499     11,839
PROPERTY, PLANT AND EQUIPMENT, net......................   23,772     22,675
COST IN EXCESS OF NET ASSETS ACQUIRED...................   13,191     13,388
OTHER ASSETS............................................      394         62
                                                          -------    -------
TOTAL ASSETS............................................  $52,856    $47,964
                                                          =======    =======

          LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable......................................  $ 2,576    $ 1,390
  Accrued employee costs................................      856        504
  Accrued expenses......................................    1,517      1,441
  Current maturities of long-term debt..................    2,508      2,508
  Billings in excess of costs and estimated earnings on
   uncompleted contracts................................    4,620      1,889
                                                          -------    -------
    Total current liabilities...........................   12,077      7,732
LONG-TERM DEBT, less current maturities.................    1,671      2,298
DEFERRED INCOME TAXES...................................    3,472      3,249
                                                          -------    -------
    Total liabilities...................................   17,220     13,279
                                                          -------    -------
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDERS' EQUITY:
  Common stock, $0.01 par value, 20,000,000 shares
   authorized, 7,091,856 shares issued in 2001 and
   2000.................................................       71         71
  Additional paid-in capital............................   27,868     27,868
  Treasury stock at cost, 20,800 shares in 2001 and
   2000.................................................      (84)       (84)
  Retained earnings.....................................    7,781      6,830
                                                          -------    -------
    Total shareholders' equity..........................   35,636     34,685
                                                          -------    -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..............  $52,856    $47,964
                                                          =======    =======
</TABLE>

           See notes to unaudited consolidated financial statements.

                                       3
<PAGE>

                    CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                March 31,
                                                            --------------------
                                                              2001       2000
                                                            ---------  ---------
<S>                                                         <C>        <C>
REVENUE.................................................... $  11,885  $  9,875
COST OF REVENUE............................................     9,116     7,350
                                                            ---------  --------
GROSS PROFIT...............................................     2,769     2,525
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES...............     1,165     1,139
                                                            ---------  --------
INCOME FROM OPERATIONS.....................................     1,604     1,386
INTEREST EXPENSE...........................................       (17)     (148)
OTHER INCOME, NET..........................................        29       100
                                                            ---------  --------
INCOME BEFORE INCOME TAXES.................................     1,616     1,338
PROVISION FOR INCOME TAXES.................................       665       556
                                                            ---------  --------
NET INCOME................................................. $     951  $    782
                                                            =========  ========
Net income per common share:
  Basic.................................................... $    0.13  $   0.11
                                                            =========  ========
  Diluted.................................................. $    0.13  $   0.11
                                                            =========  ========
Weighted average common shares outstanding:
  Basic....................................................     7,071     7,078
                                                            =========  ========
  Diluted..................................................     7,098     7,078
                                                            =========  ========
</TABLE>



           See notes to unaudited consolidated financial statements.

                                       4
<PAGE>

                    CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                          --------------------
                                                            2001       2000
                                                          ---------  ---------
<S>                                                       <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income.............................................. $     951  $     782
 Adjustments to reconcile net income to net cash provided
  by operating activities:
  Depreciation and amortization..........................       542        554
  Deferred income tax expense............................       223         61
  Changes in assets and liabilities:
   Accounts receivable...................................    (5,453)    (1,120)
   Net change in billings related to cost and estimated
    earnings on uncompleted contracts....................     2,637        668
   Inventory and other assets............................       141        573
   Accounts payable and accrued expenses.................     1,614        823
                                                          ---------  ---------
    Net cash provided by operating activities............       655      2,341
                                                          ---------  ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures for plant and equipment............    (1,438)      (263)
                                                          ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Principal repayments of debt............................      (627)      (627)
                                                          ---------  ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS.....    (1,410)     1,451
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...........     3,513      4,252
                                                          ---------  ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD................. $   2,103  $   5,703
                                                          ---------  ---------
SUPPLEMENTAL DISCLOSURES CASH FLOW INFORMATION:
 Interest paid, net of capitalized interest.............. $      17  $     148
                                                          =========  =========
 Taxes paid.............................................. $     355  $      80
                                                          =========  =========
</TABLE>


           See notes to unaudited consolidated financial statements.

                                       5
<PAGE>

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

   The accompanying unaudited consolidated financial statements include the
accounts of Conrad Industries, Inc. and its wholly-owned subsidiaries (the
"Company") which are primarily engaged in the construction, conversion and
repair of a variety of marine vessels for commercial and government customers.
The Company was incorporated in March 1998 to serve as the holding company for
Conrad Shipyard, L.L.C. ("Conrad") and Orange Shipbuilding Company, Inc.
("Orange Shipbuilding"). New construction work and some repair work is
performed on a fixed-price basis. The Company performs the majority of repair
work under cost-plus-fee agreements. All significant intercompany transactions
have been eliminated. In the opinion of the management of the Company, the
interim consolidated financial statements included herein have been prepared
in accordance with generally accepted accounting principles and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
disclosures required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (such
adjustments consisting only of a normal recurring nature) considered necessary
for a fair presentation have been included in the interim consolidated
financial statements. These interim consolidated financial statements should
be read in conjunction with the Company's audited 2000 consolidated financial
statements and related notes filed on Form 10-K for the year ended December
31, 2000.

   The results of operations for the three-month period ended March 31, 2001
are not necessarily indicative of the results that may be expected for the
year ending December 31, 2001.

2. RECEIVABLES

   Receivables consisted of the following at March 31, 2001 and December 31,
2000 (in thousands):

<TABLE>
<CAPTION>
                                                                 2001    2000
                                                                ------- ------
   <S>                                                          <C>     <C>
   U.S. Government
     Amounts billed............................................ $ 1,581 $   --
     Unbilled costs and estimated earnings on uncompleted
      contracts................................................   1,374  1,921
                                                                ------- ------
                                                                  2,955  1,921
   Commercial:
     Amounts billed............................................   5,494  1,622
     Unbilled costs and estimated earnings on uncompleted
      contracts................................................   3,383  2,742
                                                                ------- ------
       Total................................................... $11,832 $6,285
                                                                ======= ======
</TABLE>

   Included above in amounts billed is an allowance for doubtful accounts of
$20,000 at March 31, 2001 and December 31, 2000. During 2000 and 1999 there
were no significant transactions recorded in the allowance for doubtful
accounts.

   Unbilled costs and estimated earnings on uncompleted contracts were not
billable to customers at the balance sheet dates under terms of the respective
contracts. Of the unbilled costs and estimated earnings at March 31, 2001,
substantially all is expected to be collected within the next twelve months.

   Information with respect to uncompleted contracts as of March 31, 2001 and
December 31, 2000 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                               2001      2000
                                                             --------  --------
   <S>                                                       <C>       <C>
   Costs incurred on uncompleted contracts.................. $ 21,855  $ 18,577
   Estimated earnings.......................................    6,382     5,235
                                                             --------  --------
                                                               28,237    23,812
   Less billings to date....................................  (28,100)  (21,038)
                                                             --------  --------
                                                             $    137  $  2,774
                                                             ========  ========
</TABLE>

                                       6
<PAGE>

                   CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The above amounts are included in the accompanying balance sheets under the
following captions (in thousands):

<TABLE>
<CAPTION>
                                                               2001    2000
                                                              ------  ------
   <S>                                                        <C>     <C>
   Costs and estimated earnings in excess of billings on
    uncompleted contracts.................................... $4,757  $4,663
   Billings in excess of cost and estimated earnings on
    uncompleted contracts.................................... (4,620) (1,889)
                                                              ------  ------
     Total................................................... $  137  $2,774
                                                              ======  ======
</TABLE>

3. LONG-TERM DEBT

   The Company has a Loan Agreement with a commercial bank, which specifies
the terms of the Term Loan and the Revolving Credit Facility. Interest accrues
at LIBOR plus 2.0% until June 1, 2001, and thereafter at the option of the
Company either at the lender's prime rate minus 0.5% or LIBOR plus 2.0%. The
Loan Agreement is secured by substantially all of the Company's assets,
contains customary restrictive covenants and requires the maintenance of
certain financial ratios, including a current ratio requirement of 1.25 to 1.0
that could limit the Company's use of available capacity under the Revolving
Credit Facility. In addition, the Loan Agreement prohibits the Company from
paying dividends without the consent of the lender and restricts the ability
of the Company to incur additional indebtedness. At March 31, 2001, the
Company was in compliance with these covenants.

   The Term Loan has a maturity date of April 2004 and is payable in twenty
monthly principal payments of $209,000 plus interest.

   The Revolving Credit Facility permits the Company to borrow up to $10.0
million for working capital and other general corporate purposes, including
the funding of acquisitions and matures on June 30, 2001. The Company pays a
fee of 0.25% per annum on the unused portion of the facility. No draws against
the Revolving Credit Facility were outstanding as of March 31, 2001.

4. INCOME PER SHARE

   The calculation of basic earnings per share excludes any dilutive effect of
stock options, while diluted earnings per share includes the dilutive effect
of stock options. The number of weighted average shares outstanding for
"basic" income per share was 7,071,056 and 7,077,723 for the three months
ended March 31, 2001 and 2000, respectively. The number of weighted average
shares outstanding for "diluted" income per share was 7,097,996 and 7,077,723
for the three months ended March 31, 2001 and 2000, respectively.

5. SEGMENT AND RELATED INFORMATION

   The Company classifies its business into two segments:

 Vessel Construction

   The Company constructs a variety of marine vessels, including large and
small deck barges, single and double hull tank barges, lift boats, push boats,
offshore tug boats and offshore support vessels. The Company also fabricates
components of offshore drilling rigs and floating production, storage and
offloading vessels including sponsons, stability columns, blisters, pencil
columns and other modular components.

 Repair and Conversions

   The Company's conversion projects primarily consist of lengthening the
midbodies of vessels, modifying vessels to permit their use for a different
type of activity and other modifications to increase the capacity or

                                       7
<PAGE>

                   CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

functionality of a vessel. The Company also derives a significant amount of
revenue from repairs made as a result of periodic inspections required by the
U.S. Coast Guard, the American Bureau of Shipping and other regulatory
agencies.

   The Company evaluates the performance of its segments based upon gross
profit. Selling, general and administrative expenses, interest expense, other
income, net, and income taxes are not allocated to the segments. Accounting
policies are the same as those described in Note 1, "Summary of Significant
Accounting Policies" in the Company's Form 10-K for the year ended December
31, 2000. Intersegment sales and transfers are not significant.

   Selected information as to the operations of the Company by segment is as
follows (in thousands):

<TABLE>
<CAPTION>
                                                                 Three Months
                                                                 Ended March
                                                                     31,
                                                                ---------------
                                                                 2001     2000
                                                                -------  ------
   <S>                                                          <C>      <C>
   Revenue:
     Vessel construction....................................... $ 7,944  $6,977
     Repair and conversions....................................   3,941   2,898
                                                                -------  ------
       Total revenue...........................................  11,885   9,875
                                                                -------  ------
   Cost of revenue:
     Vessel construction.......................................   6,238   5,145
     Repair and conversions....................................   2,878   2,205
                                                                -------  ------
       Total cost of revenue...................................   9,116   7,350
                                                                -------  ------
   Gross profit:
     Vessel construction.......................................   1,706   1,832
     Repair and conversions....................................   1,063     693
                                                                -------  ------
       Total gross profit......................................   2,769   2,525
   Selling, general and administrative expenses................   1,165   1,139
                                                                -------  ------
   Income from operations......................................   1,604   1,386
   Interest expense............................................     (17)   (148)
   Other income, net...........................................      29     100
                                                                -------  ------
   Income before income taxes..................................   1,616   1,338
   Provision for income taxes..................................     665     556
                                                                -------  ------
   Net income.................................................. $   951  $  782
                                                                =======  ======
</TABLE>

     Certain other financial information of the Company by segment is as
  follows (in thousands):

<TABLE>
<CAPTION>
                                                                        Three
                                                                       Months
                                                                        Ended
                                                                      March 31,
                                                                      ---------
                                                                      2001 2000
                                                                      ---- ----
   <S>                                                                <C>  <C>
   Depreciation and amortization expense:
     Vessel construction............................................. $202 $195
     Repair and conversions..........................................  107  122
     Included in selling, general and administrative expenses........  233  237
                                                                      ---- ----
       Total depreciation and amortization expense................... $542 $554
                                                                      ==== ====
</TABLE>

                                       8
<PAGE>

                   CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


<TABLE>
<CAPTION>
                                                                       Three
                                                                      Months
                                                                       Ended
                                                                     March 31,
                                                                    -----------
                                                                     2001  2000
                                                                    ------ ----
   <S>                                                              <C>    <C>
   Capital expenditures:
     Vessel construction........................................... $  211 $134
     Repair and conversions........................................  1,171   33
     Other.........................................................     56   96
                                                                    ------ ----
       Total capital expenditures.................................. $1,438 $263
                                                                    ====== ====
</TABLE>

   Total assets of the Company by segment is as follows as of March 31, 2001
and December 31, 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                  2001    2000
                                                                 ------- -------
   <S>                                                           <C>     <C>
   Total assets:
     Vessel construction........................................ $30,996 $29,565
     Repair and conversions.....................................  15,544  11,759
     Other......................................................   6,316   6,640
                                                                 ------- -------
       Total assets............................................. $52,856 $47,964
                                                                 ======= =======
</TABLE>

   Certain assets and capital expenditures of the Company are allocated to
corporate and are included in the "Other" caption.

   Revenues included in the consolidated financial statements of the Company
are derived from customers domiciled in the United States. All assets of the
Company are located in the United States.

6. COMMITMENTS AND CONTINGENCIES

   Legal Matters--The Company is a party to various legal proceedings
primarily involving commercial claims and workers' compensation claims. While
the outcome of these claims and legal proceedings cannot be predicted with
certainty, management believes that the outcome of all such proceedings, even
if determined adversely, would not have a material adverse effect on the
Company's consolidated financial statements.

   Employment Agreements--The Company has employment agreements with certain
of its executive officers which originally provided for employment of the
officers through March 31, 2001, and provides for annual extensions at the end
of its term, subject to the parties' mutual agreement. These agreements have
been extended for a one-year term through March 31, 2002. The minimum annual
total compensation of these agreements is $766,000.

   Letters of Credit and Bonds--In the normal course of its business, the
Company is required to provide letters of credit to secure the payment of
workers' compensation obligations. Additionally, under certain contracts the
Company may be required to provide letters of credit and bonds to secure
certain performance and payment obligations of the Company thereunder.
Outstanding letters of credit and bonds relating to these business activities
amounted to $0.2 million and $1.6 million at March 31, 2001 and December 31,
2000.

                                       9
<PAGE>

                   CONRAD INDUSTRIES, INC. AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


7. NEW ACCOUNTING PRONOUNCEMENTS

   The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 133, Accounting for Derivative Instruments and Hedging Activities as
amended by SFAS No. 138 on January 1, 2001. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative and hedging
activities and requires, among other things, that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. Management has concluded that the adoption of
SFAS No. 133 did not have a significant impact on the financial position,
results of operations, or cash flows of the Company.

                                      10
<PAGE>

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

   The following discussion and analysis should be read in conjunction with
the Unaudited Consolidated Financial Statements and the Notes to Unaudited
Consolidated Financial Statements included elsewhere in this Form 10-Q as well
as the Company's annual report on Form 10-K for the year ended December 31,
2000.

Overview

   The Company was incorporated in March 1998 to serve as the holding company
for Conrad Shipyard, Inc. ("Conrad") and Orange Shipbuilding Company, Inc.
("Orange Shipbuilding"). The Company completed an initial public offering in
June 1998 by issuing 2.1 million shares of common stock. Conrad has operated
since 1948 at its shipyard in Morgan City, Louisiana, and specializes in the
construction, conversion and repair of large and small deck barges, single and
double hull tank barges, lift boats, push boats, tow boats, offshore tug boats
and offshore supply vessels. In December 1997, Conrad acquired Orange
Shipbuilding to increase its capacity to serve Conrad's existing markets and
to expand its product capability into the construction of additional types of
marine vessels, including offshore tug boats, push boats and double hull
barges, and the fabrication of modular components for offshore drilling rigs
and FPSOs. In February 1998, Conrad commenced operations at a conversion and
repair facility in Amelia, Louisiana, thereby expanding its capacity to
provide conversion and repair services for marine vessels. In 2000, Conrad
Shipyard, Inc. was converted into a Louisiana limited liability company named
Conrad Shipyard, L.L.C.

   The demand for the Company's products and services is dependent upon a
number of factors, including the economic condition of the Company's customers
and markets, the age and state of repair of the vessels operated by the
Company's customers and the relative cost to construct a new vessel as
compared with repairing an older vessel. Demand for the Company's products and
services were adversely impacted beginning in the latter part of 1998 by
decreased activity in the offshore oil and gas industry. During 2000, the
Company began to experience a modest increase in demand for products and
services due to the upturn in activity in the offshore oil and gas industry.
Activity by other commercial and government customers to construct new vessels
to replace older vessels and upgrade the capacity or functionality of existing
vessels has remained steady. In addition, the Orange acquisition has enabled
the Company to capitalize on the demand for new vessel construction by
government customers such as the U.S. Army, U.S. Navy, U.S. Coast Guard and
Corps of Engineers.

   The Company is engaged in various types of construction under contracts
that generally range from one month to 36 months in duration. The Company uses
the percentage-of-completion method of accounting and therefore, takes into
account the estimated costs, estimated earnings and revenue to date on fixed-
price contracts not yet completed. The amount of revenue recognized is equal
to the portion of the total contract price that the labor hours incurred to
date bears to the estimated total labor hours, based on current estimates to
complete. This method is used because management considers expended labor
hours to be the best available measure of progress on these contracts.
Revenues from cost-plus-fee contracts are recognized on the basis of cost
incurred during the period plus the fee earned.

   Most of the contracts entered into by the Company for new vessel
construction, whether commercial or governmental, are fixed-price contracts
under which the Company retains all cost savings on completed contracts but is
liable for all cost overruns. The Company develops its bids for a fixed price
project by estimating the amount of labor hours and the cost of materials
necessary to complete the project and then bids such projects in order to
achieve a sufficient profit margin to justify the allocation of its resources
to such project. The Company's revenues therefore may fluctuate from period to
period based on, among other things, the aggregate amount of materials used in
projects during a period and whether the customer provides materials and
equipment. The Company generally performs conversion and repair services on
the basis of cost-plus-fee arrangements pursuant to which the customer pays a
negotiated labor rate for labor hours spent on the project as well as the cost
of materials plus a margin on materials purchased.

   On March 21, 2000 the Company's Board of Directors authorized management to
repurchase up to 200,000 shares or $1 million of its outstanding common stock.
Management may repurchase shares from time to time in

                                      11
<PAGE>

the open market at prevailing prices, or through privately negotiated
transactions depending on prevailing market conditions. The shares will be
held as treasury stock and will be available for use in connection with the
Company's stock option plan and other compensation programs or for other
corporate purposes. Funds for the program will come from cash, internally
generated funds or additional borrowings. The Company repurchased 20,800
shares at a total cost of approximately $84,000 through April 2000. The
Company has not repurchased any additional shares since that time.

Recent Events

   In May 2000 the Company began construction of a new drydock, which is 280'
long and 160' wide with a lifting capacity of 10,000 tons. The drydock was put
into operation during the first part of March 2001 at the Company's Morgan
City shipyard. The cost was $5.7 million. Funds for the construction of the
drydock came from cash and internally generated funds. This dock will allow
the Company to (1) increase repair and conversion capacity; (2) compete for
larger repair and conversion projects; and (3) launch larger new vessel
construction projects more competitively.

   On October 23, 2000, the Company purchased 52 acres of land in Amelia,
Louisiana for $1.3 million. The land is strategically located on the
Intracoastal Waterway approximately 30 miles from the Gulf of Mexico. Work is
currently in progress to develop the property as a repair and conversion
facility. The Company anticipates that the first phase of development will
cost approximately $4 million and will include clearing land, dredging slip,
bulkheading and partial construction of an infrastructure to support repair
and conversion activities. The property is within one mile of the other
existing Amelia facility.

                                      12
<PAGE>

Results of Operations

   The following table sets forth certain historical data of the Company and
percentage of revenues for the periods presented (in thousands):

             Conrad Industries, Inc. Summary Results of Operations

                                (in thousands)

<TABLE>
<CAPTION>
                                                  Three Months Ended March 31,
                                                  ------------------------------
                                                   2001            2000
                                                  -------         ------
<S>                                               <C>      <C>    <C>     <C>
Financial Data:
Revenue
  Vessel construction............................ $ 7,944   66.8% $6,977   70.7%
  Repair and conversions.........................   3,941   33.2%  2,898   29.3%
                                                  -------         ------
    Total revenue................................  11,885  100.0%  9,875  100.0%
                                                  -------         ------
Cost of revenue
  Vessel construction............................   6,238   78.5%  5,145   73.7%
  Repair and conversions.........................   2,878   73.0%  2,205   76.1%
                                                  -------         ------
    Total cost of revenue........................   9,116   76.7%  7,350   74.4%
                                                  -------         ------
Gross profit
  Vessel construction............................   1,706   21.5%  1,832   26.3%
  Repair and conversions.........................   1,063   27.0%    693   23.9%
                                                  -------         ------
    Total gross profit...........................   2,769   23.3%  2,525   25.6%
SG&A expenses....................................   1,165    9.8%  1,139   11.5%
                                                  -------         ------
Income from operations...........................   1,604   13.5%  1,386   14.0%
Interest expense.................................      17    0.1%    148    1.5%
Other expense (income), net......................     (29)  -0.2%   (100)  -1.0%
                                                  -------         ------
Income before income taxes.......................   1,616   13.6%  1,338   13.5%
Income taxes.....................................     665    5.6%    556    5.6%
                                                  -------         ------
Net income....................................... $   951    8.0% $  782    7.9%
                                                  =======         ======
EBITDA(1)........................................ $ 2,146   18.1% $1,940   19.6%
                                                  =======         ======
Operating Data: Labor hours......................     165            146
</TABLE>
--------
(1) Represents income from operations before deduction of depreciation, and
    amortization. EBITDA is not a measure of cash flow, operating results or
    liquidity as determined by generally accepted accounting principles. The
    Company has included information concerning EBITDA as supplemental
    disclosure because management believes that EBITDA provides meaningful
    information regarding a company's historical ability to incur and service
    debt. EBITDA as defined and measured by the Company may not be comparable
    to similarly titled measures reported by other companies. EBITDA should
    not be considered in isolation or as an alternative to, or more meaningful
    than, net income or cash flow provided by operations as determined in
    accordance with generally accepted accounting principles as an indicator
    of the Company's profitability or liquidity.

 Three Months Ended March 31, 2001 Compared with Three Months Ended
March 31,2000.

   During the three months ended March 31, 2001, the Company generated revenue
of $11.9 million, an increase of approximately $2.0 million, or 20.4%,
compared to $9.9 million generated for the three months ended March 31, 2000.
The increase was due to a $1.0 million (13.9%) increase in vessel construction
revenue to $7.9 million for the three months ended March 31, 2001, compared to
$7.0 million for the three months ended March 31, 2000 and an increase of $1.0
million (36.0%) in repair and conversion revenue to $3.9 million for the

                                      13
<PAGE>

three months ended March 31, 2001 compared to $2.9 million for the three
months ended March 31, 2000. The increase in vessel construction revenue was
attributable to the increase in vessel construction production hours which
increased by 14.1% during the three months ended March 31, 2001 compared to
the three months ended March 31, 2000 and to the nature of the jobs during the
three months ended March 31, 2001 which required more material and equipment
as compared to jobs during the three months ended March 31, 2000. The increase
in repair and conversion revenue during the three months ended March 31, 2001
compared to the three months ended March 31, 2000 was primarily attributable
to (1) two conversion jobs in progress during the three months ended March 31,
2001, which required more material and equipment as compared to projects
completed or in progress during the three months ended March 31, 2000 and (2)
increased demand for repair and conversions due to increased offshore oil and
gas activity. Repair and conversion hours were substantially the same during
the three months ended March 31, 2001 compared to the three months ended March
31, 2000.

   Gross profit increased $244,000, or 9.7% to $2.8 million (23.3% of revenue)
for the three months ended March 31, 2001 as compared to gross profit of $2.5
million (25.6% of revenue) for the three months ended March 31, 2000. Vessel
construction gross profit decreased $126,000 or 6.9% to $1.7 million for the
three months ended March 31, 2001 as compared to vessel construction gross
profit of $1.8 million for the three months ended March 31, 2000. Repair and
conversion gross profit increased $370,000 or 53.4% to $1.1 million for the
three months ended March 31, 2001 as compared to repair and conversion gross
profit of $693,000 for the three months ended March 31, 2000. The decrease in
vessel construction gross profit was primarily due to greater job cost for
jobs completed or in progress during the three months ended March 31, 2001, as
compared to the three months ended March 31, 2000. The increase in repair and
conversion gross profit was primarily due to improved market conditions and
pricing opportunities during the three months ended March 31, 2001 as compared
to the three months ended March 31, 2000.

   Repair and conversion gross profit margins increased to 27.0% for the three
months ended March 31, 2001, compared to gross profit margins of 23.9% for the
three months ended March 31, 2000. Vessel construction gross profit margins
decreased to 21.5% for the three months ended March 31, 2001, compared to
gross profit margins of 26.3% for the three months ended March 31, 2000.

   Selling, general and administrative expenses increased $26,000, or 2.3%, to
$1.2 million (9.8% of revenue) for the three months ended March 31, 2001, as
compared to $1.1 million (11.5% of revenue) for the three months ended March
31, 2000. This increase was primarily due to an increase in bonuses accrued.

   Income before income taxes increased $278,000 to $1.6 million for the three
months ended March 31, 2001 as compared to income before income taxes of $1.3
million for the three months ended March 31, 2000, primarily due to the
factors listed above.

   The Company had net income of $951,000 for the three months ended March 31,
2001 as compared to net income of $782,000 for the three months ended March
31, 2000. Interest expense decreased $131,000 to $17,000 for three months
ended March 31, 2001 as compared to interest expense of $148,000 for the three
months ended March 31, 2000 due to capitalization of interest related to the
construction of the drydock and a reduction of debt.

   The Company had income tax expense of $665,000 (41.2% effective tax rate)
for the three months ended March 31, 2001, compared to income taxes of
$556,000 (41.6% effective tax rate) for the three months ended March 31, 2000.
The Company's effective tax rate is higher than its statutory tax rate because
its cost in excess of net assets acquired is not amortized for tax purposes.

Liquidity and Capital Resources

   Historically, the Company has funded its business through funds generated
from operations. Net cash provided by operations was $655,000 for the three
months ended March 31, 2001 due to an increase in accounts payable and accrued
expenses and decreases in billings related to costs and estimated earnings on
uncompleted

                                      14
<PAGE>

contracts and other assets, offset by an increase in accounts receivable. The
Company has borrowed in the past to expand its facilities and to fund the
acquisition of Orange Shipbuilding in December 1997. The Company's working
capital position was $3.4 million at March 31, 2001 compared to $4.1 million
at December 31, 2000. The decrease in the working capital position was
primarily due to $1.4 million in capital expenditures for plant and equipment.

   The Company's capital requirements historically have been primarily for
improvements to its facilities and equipment. The Company's net cash used in
investing activities of $1.4 million for the three months ended March 31, 2001
was for improvements to facilities and equipment of which approximately $1.1
million was for the completion of the construction of a new dry-dock, $200,000
was for improvements to its other facilities and equipment and $64,000 was for
clearing and grubbing of the 52 acres in Amelia.

   In March 2001, the Company completed construction of a new drydock, which
is 280' long and 160' wide with a lifting capacity of up to 10,000 tons. The
cost was $5.7 million. Funds for the construction of the drydock came from
cash and internally generated funds. This dock will allow the Company to (1)
increase repair and conversion capacity, (2) compete for larger repair and
conversion projects, and (3) launch larger new vessel construction projects
more competitively.

   Net cash used in financing activities was $627,000 for the three months
ended March 31, 2001 which was for the repayment of debt.

   The Company did not repurchase any of its stock during the three months
ended March 31, 2001 and currently has no plans to repurchase shares pursuant
to the Company's Board of Directors authorization on March 21, 2000 to
repurchase up to 200,000 shares or $1 million of its outstanding common stock.

   On October 23, 2000 the Company purchased 52 acres of land in Amelia,
Louisiana for $1.3 million. The Company is currently developing the property
as a shipyard and anticipates beginning repair and conversion activities
during the latter part of 2001. The Company anticipates that the first phase
of development will cost approximately $4 million and will include clearing
land, dredging slip, bulkheading and partial construction of an infrastructure
to support repair and conversion activities. During the three months ended
March 31, 2001 the Company expended $64,000 for clearing and grubbing the
property.

   The Company has a Loan Agreement with a commercial bank, which specifies
the terms of the Term Loan and the Revolving Credit Facility. Interest accrues
at LIBOR plus 2.0% until June 1, 2001, and thereafter at the option of the
Company either at the lender's prime rate minus 0.5% or LIBOR plus 2.0%. The
Loan Agreement is secured by substantially all of the Company's assets,
contains customary restrictive covenants and requires the maintenance of
certain financial ratios, including a current ratio requirement of 1.25 to 1.0
that could limit the Company's use of available capacity under the Revolving
Credit Facility. In addition, the Loan Agreement prohibits the Company from
paying dividends without the consent of the lender and restricts the ability
of the Company to incur additional indebtedness. At March 31, 2001, the
Company was in compliance with these covenants.

   The Term Loan has a maturity date of April 2004 and is payable in twenty
monthly principal payments of $209,000 plus interest. At March 31, 2001, the
Term Loan balance outstanding was $4.2 million. At the current amortization
schedule, the Term Loan will be paid in full by the end of fiscal year 2002.

   The Revolving Credit Facility permits the Company to borrow up to $10.0
million for working capital and other general corporate purposes, including
the funding of acquisitions, and matures on June 30, 2001. The Company pays a
fee of 0.25% per annum on the unused portion of the facility. No draws against
the Revolving Credit Facility were made during the three months ended March
31, 2001 and no draws were outstanding as of March 31, 2001. The Company
extended its Revolving Credit Facility until June 30, 2001 and the Company is
in discussions about extending its Credit Facility on longer-term basis.
Management believes that this facility or a similar source of borrowing will
be available on reasonable terms.

                                      15
<PAGE>

   The Company's backlog of $13.2 million at March 31, 2001 was attributable
to 17 projects, of which $3.6 million was attributable to four government
projects. We are currently in discussion and negotiations with various
customers for vessel construction projects, and have learned that the U. S.
Army is planning to purchase three additional ST Tugs, which have already been
authorized and appropriated by Congress for approximately $7.5 million. We are
optimistic that some of these projects will be added to our backlog soon.

   For 2001, the Board of Directors has approved $2.0 million in capital
expenditures for the maintenance, repair and upgrade of existing facilities
and approximately $4.0 million for the first phase of development of the 52
acres of property in Amelia as a repair and conversion facility. In addition,
the Board of Directors approved a $798,000 expansion of the Morgan City
facility which will increase capabilities for pre-fabricated components and
modular constructions techniques.

   Management believes that the Company's existing working capital and cash
flows from operations will be adequate to meet its working capital needs for
operations and some capital expenditures through 2001. Management believes
that some of the planned capital expenditures may require additional
borrowings and believes that borrowings should be available on reasonable
terms. The Company may pursue acquisition opportunities it believes are
attractive if and when such opportunities arise. The timing, size or success
of any acquisition effort and the associated potential capital commitments
cannot be predicted.

New Accounting Pronouncements

   The Company adopted Statement of Financial Accounting Standards ("SFAS" )
No. 133, Accounting for Derivative Instruments and Hedging Activities as
amended by SFAS No. 138 on January 1, 2001. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative and hedging
activities and requires, among other things, that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. Management has concluded that the adoption of
SFAS 133 did not have a significant impact on the financial position, results
of operations, or cash flows of the Company.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

   The Company is exposed to the risk of changing interest rates. Interest on
$4.2 million of the Company's long-term debt with an interest rate of 7.08% at
March 31, 2001 was variable based on short-term market rates. Thus a general
increase of 1.0% in short-term market interest rates would result in
additional interest cost of $42,000 per year if the Company were to maintain
the same debt level and structure.

                          PART II. OTHER INFORMATION

Item 1. Legal Proceedings

   The Company is a party to various routine legal proceedings primarily
involving commercial claims and workers' compensation claims. While the
outcome of these claims and legal proceedings cannot be predicted with
certainty, management believes that the outcome of such proceedings in the
aggregate, even if determined adversely, would not have a material adverse
effect on the Company's business or financial condition.

                                      16
<PAGE>

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

   (a) Exhibits

<TABLE>
 <C>  <S>
  3.1 --Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1
       to the Company's Annual Report on Form 10-K for year ended December 31,
       1998 and incorporated by reference herein).
  3.2 --Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company's
       Annual Report on Form 10-K for year ended December 31, 1998 and
       incorporated by reference herein).
  4.1 --Specimen Common Stock Certificate (filed as Exhibit 4 to the Company's
       Registration Statement on Form 8-A and incorporated by reference
       herein).
  4.2 --Registration Rights Agreement by and among Conrad Industries, Inc., J.
       Parker Conrad, John P. Conrad, Jr., Katherine C. Court, The John P.
       Conrad, Jr. Trust, The Daniel T. Conrad Trust, The Glen Alan Conrad
       Trust, The Kenneth C. Conrad Trust, The Katherine C. Court Trust, The
       James P. Conrad Trust, William H. Hidalgo, and Cecil A. Hernandez (filed
       as Exhibit 4.2 to the Company's Annual Report on Form 10-K for year
       ended December 31, 1998 and incorporated by reference herein).
  4.3 --Registration Rights Agreement between Conrad Industries, Inc. and
       Morgan Keegan & Company, Inc (filed as Exhibit 4.3 to the Company's
       Annual Report on Form 10-K for year ended December 31, 1998 and
       incorporated by reference herein).
 10.1 --Amendment No. 1 to Employment Agreement between Conrad Shipyard, L.L.C.
       and J. Parker Conrad.
 10.2 --Amendment No. 1 to Employment Agreement between Conrad Shipyard, L.L.C.
       and John Parker Conrad, Jr.
 10.3 --Amendment No. 1 to Employment Agreement between Conrad Shipyard, L.L.C.
       and William H. Hidalgo.
 10.4 --Amendment No. 1 to Employment Agreement between Conrad Shipyard, L.L.C.
       and Cecil A. Hernandez.
 10.5 --Allonge to Note by Conrad Shipyard, L.L.C. and Whitney National Bank,
       Dated December 31, 1999, in the Original Principal Amount of
       $10,000,000.00.
</TABLE>

   (b) Reports on Form 8-K

     The Company has not filed any Current Reports on Form 8-K during the
  quarter which this report is filed.

                                      17
<PAGE>

                                   SIGNATURE

   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.

Date: May 10, 2001

                                          CONRAD INDUSTRIES, INC.

                                                 /s/ Cecil A. Hernandez
                                          By:__________________________________
                                             Cecil A. Hernandez
                                             Senior Vice President and
                                             Chief Financial Officer

                                       18