Shaw (SHAW) 8-K The Shaw Group Announces Financial Results for Fourth Quarter and Fiscal Year 2005

FOR IMMEDIATE RELEASE

CONTACT:	Chris D. Sammons
	Vice President, Investor Relations &
	Corporate Communications
	225.932.2546

THE SHAW GROUP ANNOUNCES FINANCIAL RESULTS FOR
FOURTH QUARTER AND FISCAL YEAR 2005

     Baton Rouge, Louisiana, October 21, 2005– The Shaw Group Inc. (NYSE: SGR) today announced financial results for its fourth quarter and fiscal year ended August 31, 2005. Net income for the fourth quarter of fiscal 2005 was $17.9 million, or $0.23 per diluted share. This compares to net income of $10.9 million, or $0.17 per diluted share for the fourth quarter of fiscal 2004. Income from continuing operations for the fourth quarter of fiscal 2005 was $17.9 million, compared to $12.2 million for the fourth quarter of fiscal 2004. Revenues for the fourth quarter of fiscal 2005 were $818.7 million compared to $806.2 million in the previous year’s fourth quarter.

     For the fiscal year ended August 31, 2005, the Company reported net income of $16.4 million, or $0.23 per diluted share, including charges of $47.8 million ($31.1 million after taxes), or $0.44 per diluted share for the early retirement of debt and $6.9 million after taxes, or $0.10 per diluted share, for the valuation of a deferred tax asset. Not including the charges, net income would have been $54.3 million, or $0.77 per diluted share, for fiscal 2005. For the year ended August 31, 2004, Shaw reported a net loss of $29.0 million, or $0.50 per diluted share. Revenues for the fiscal year ended August 31, 2005 were $3.3 billion, compared to $3.0 billion for the fiscal year ended August 31, 2004.

     Shaw’s backlog totaled $6.7 billion at August 31, 2005, Shaw’s highest ever backlog and a 16% increase over the backlog at August 31, 2004. Approximately $2.4 billion, or 36% of the backlog, is expected to be converted during fiscal 2006. Nearly $3.0 billion, or 45% of the backlog, is comprised of projects for energy industry customers, primarily in fossil fuel and nuclear power plants and approximately $2.2 billion, or 33%, is in the environmental and infrastructure sector, primarily in contracts with Federal agencies. Approximately $1.4 billion of the backlog is related to the chemicals industry.

     J.M. Bernhard, Jr., Chairman and Chief Executive Officer of The Shaw Group, Inc., said, “We are very pleased with our fourth quarter net income of $0.23 per diluted share, as well as our positive net cash flows from operations of $7.0 million. This marks our sixth consecutive quarter with positive results in both net income and net cash flows, excluding the third quarter charges for the debt retirement and a deferred tax asset valuation allowance. Not including the third quarter charges, our net income for fiscal 2005 was a strong $0.77 per diluted share.”

     Mr. Bernhard added, “Shaw reported record backlog as of August 31, 2005, as we added three very significant projects this past quarter — the PPL scrubbers, the SHARQ ethylene plant in Saudi Arabia, and the Cleco CFB power plant. We are particularly pleased with these major awards because they demonstrate our success in establishing a global leadership position in the markets we serve. As we move into fiscal 2006, Shaw will continue to be a world leader in providing solutions to industrial and governmental clients. We are well positioned with premier technology and professional capabilities to continue to pursue additional significant opportunities afforded us by expanding markets, especially within the fossil fuel and nuclear power generation, petrochemical processing, emergency response and infrastructure markets.”

     The Shaw Group Inc. is a leading global provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for the energy, chemicals, environmental, infrastructure and emergency response markets. With over $3 billion in annual revenues, Shaw is headquartered in Baton Rouge, Louisiana, and employs approximately 19,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. The Company was recently named for the second consecutive year to Fortune magazine’s annual list of “America’s Most Admired Companies.” For further information, please visit Shaw’s website atwww.shawgrp.com.

     Forward-Looking Statements — The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. The statements contained herein that are not historical facts (including without limitation statements to the effect that the Company or its management “believes,” “expects,” “anticipates,” “plans,” or other similar expressions) and statements related to revenues, earnings, backlog, or other financial information or results are forward-looking statements based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions and are subject to change based upon various factors. Should one or more of such risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A description of some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in the Company’s reports and registration statements filed with the Securities and Exchange Commission, including itsForm 10-K andForm 10-Q reports, and on the Company’s website under the heading “Forward-Looking Statements”. These documents are also available from the Securities and Exchange Commission or from the Investor Relations department of Shaw. For more information on the company and announcements it makes from time to time on a regional basis visit our website atwww.shawgrp.com.

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REVENUE AND BACKLOG BY INDUSTRY AND GEOGRAPHY
(Dollars in millions)
Revenue by Industry
(Fourth Quarter Ended August 31, 2005)

Environmental & Infrastructure	$	283.2	35	%
Energy		315.7	39
Chemicals		210.5	25
Other Industries		9.3	1
Total	$	818.7	100	%

Revenue by Geography
(Fourth Quarter Ended August 31, 2005)

United States	$	716.6	88	%
Asia/Pacific Rim		50.9	6
Middle East		22.9	3
Europe		18.3	2
Canada		4.7	1
Latin America		2.8	—
Other		2.5	—
Total	$	818.7	100	%

Revenue by Industry
(Year Ended August 31, 2005)

Environmental & Infrastructure	$	1,120.1	34	%
Energy		1,393.1	43
Chemicals		693.9	21
Other Industries		58.8	2
Total	$	3,265.9	100	%

Revenue by Geography
(Year Ended August 31, 2005)

United States	$	2,845.9	87	%
Asia/Pacific Rim		227.5	7
Middle East		87.4	3
Europe		59.1	2
Canada		13.7	—
Latin America		20.3	1
Other		12.0	—
Total	$	3,265.9	100	%

Backlog by Industry
(As of August 31, 2005)

Environmental & Infrastructure	$	2,244.6	33	%
Energy
Nuclear Energy		958.9	15
Fossil Fuel EPC		1,953.1	29
Other Energy		87.2	1
Chemicals		1,424.4	22
Other Industries		34.2	—
Total	$	6,702.4	100	%

Backlog by Geography
(As of August 31, 2005)

Domestic	$	5,206.5	78
International		1,495.9	22
Total	$	6,702.4	100	%

THE SHAW GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended						Twelve Months Ended
	August 31,						August 31,
	2005			2004			2005			2004
Revenues	$	818,742		$	806,188		$	3,265,916		$	3,015,813
Cost of revenues		745,882			729,178			2,973,500			2,795,489
Gross profit		72,860			77,010			292,416			220,324
General and administrative expenses		49,689			52,582			190,248			211,914
Operating income		23,171			24,428			102,168			8,410
Interest expense		(2,542	)		(9,116	)		(29,225	)		(38,190	)
Interest income		1,782			539			5,571			1,718
Gain (loss) on retirement of debt		—			(27	)		(47,772	)		(1,325	)
Foreign currency transaction gains (losses), net		505			740			919			(2,702	)
Other income (expense), net		5,577			337			6,870			1,523
		5,322			(7,527	)		(63,637	)		(38,976	)
Income (loss) before income taxes, minority interest, earnings(losses) from unconsolidated entities and income(loss) from discontinued operations		28,493			16,901			38,531			(30,566	)
Provision (benefit) for income taxes		10,508			5,570			20,610			(9,901	)
Income (loss) before minority interest, earnings from unconsolidated entities and income (loss) from discontinued operations		17,985			11,331			17,921			(20,655	)
Minority interest, net of taxes		(1,188	)		(1,088	)		(3,915	)		(5,455	)
Earnings(losses) from unconsolidated entities, net of taxes		1,066			1,969			3,809			2,578
Income (loss) from continuing operations		17,863			12,212			17,815			(23,542	)
Income (loss) from discontinued operations, net of taxes		(356	)		(1,291	)		(1,795	)		(2,438	)
Gain (impairment) of discontinued operations, net of taxes		356			—			356			(2,995	)
Net income (loss)	$	17,863		$	10,921		$	16,376		$	(28,975	)
Basic:
Income (loss) from continuing operations	$	0.23		$	0.19		$	0.26		$	(0.41	)
Income (loss) from discontinued operations, net of taxes		—			(0.02	)		(0.02	)		(0.09	)
Net income (loss)	$	0.23		$	0.17		$	0.24		$	(0.50	)
Diluted:
Income (loss) from continuing operations	$	0.23		$	0.19		$	0.25		$	(0.41	)
Income (loss) from discontinued operations, net of taxes		—			(0.02	)		(0.02	)		(0.09	)
Net income (loss)	$	0.23		$	0.17		$	0.23		$	(0.50	)