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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): February [24], 2003
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THE SHAW GROUP INC.
(Exact name of registrant as specified in its charter)
Louisiana 0-22992 72-1106167
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
4171 Essen Lane
Baton Rouge, Louisiana 70809
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (225) 932-2500
Not applicable
(Former name or former address, if changed since last report.)
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits. The following materials are filed as exhibits to this Current
Report on Form 8-K:
Exhibit Number Description of Exhibit
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99.1 Press Release dated April 14, 2003
Item 9. REGULATION FD DISCLOSURE
On April 14 ,2003, The Shaw Group Inc. (the "Registrant") issued a press release
announcing that after extensive negotiations it has agreed upon terms with PG&E
National Energy Group ("NEG"), the project entities and their lenders for the
settlement of claims related to the completion of the Harquahala and Covert
power plant projects. The information regarding this press release is being
furnished to the Securities and Exchange Commission (the "SEC") pursuant to the
requirements of Regulation FD.
On April 14, 2003, the Registrant issued a press release announcing its
financial results for the second quarter ended February 28, 2003. The
information regarding this press release is being furnished to the SEC pursuant
to Item 12 of Form 8-K.
The full text of the press release dated April 14, 2003 announcing the
non-definitive settlement of claims related to the completion of the Harquahala
and Covert power plant projects is set forth below. The full text of the press
release dated April 14, 2003 announcing the Registrant's earnings results for
the second quarter ended February 28, 2003 is furnished to the SEC as an exhibit
to this Current Report on Form 8-K pursuant to Item 12 of Form 8-K.
Limitation on Incorporation by Reference
In accordance with General Instruction B.2 of Form 8-K, the information set
forth in this Item 9 shall not be deemed to be "filed" for purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act or
the Exchange Act, except as shall be expressly set forth by specific reference
in such a filing. The information set forth in this Item 9 shall not be deemed
an admission as to the materiality of any information in this report on Form 8-K
that is required to be disclosed solely to satisfy the requirements of
Regulation FD.
####
SHAW REACHES AGREEMENT ON Harquahala and Covert Projects
Baton Rouge, Louisiana, April 14, 2003 - The Shaw Group Inc. (NYSE: SGR) ("Shaw"
or "the Company") today announced that after extensive negotiations it has
agreed upon terms with PG&E National Energy Group ("NEG"), the project entities
and their lenders for the settlement of claims related to the completion of the
Harquahala and Covert power plant projects.
Under the proposed settlement, parties will enter into a new agreement, which
provides for a fixed-price contract to complete the projects under revised
schedules, and an increase of $65 million over the original target prices. As a
result of the agreement, the Company will realize a $19 million after-tax charge
relating to the settlement of claims for the completion of the Harquahala and
Covert power plant projects.
Shaw, through its subsidiary Stone & Webster, Inc., is the EPC contractor on the
two projects. The Company has been in discussions with NEG and its lenders since
October 2002 regarding NEG's ability to assure payment to the Company on the
projects. Shaw recently announced the termination of the contracts for these
projects, but continued work while in negotiations.
"Over the last several months, the management teams of NEG and Shaw, along with
representatives of NEG's lenders, have been working diligently to come to a
mutually agreeable resolution," stated J. M. Bernhard, Jr., Shaw's Chairman,
President and Chief Executive Officer. "While we have experienced numerous
challenges on these projects due to NEG's financial difficulties, we are pleased
to have reached an agreement that eliminates litigation risk for all parties
involved and allows Shaw to complete these projects with reduced uncertainty."
The Company, NEG, the project entities and the lenders have executed a term
sheet which is subject to definitive documentation. The parties are working
diligently to that end and expect this settlement to be consummated before April
30, 2003.
Shaw expects to complete Harquahala by September 2003 and Covert by December
2003.
The Shaw Group Inc. offers a broad range of services to clients in the
environmental and infrastructure, power and process industries worldwide. The
Company is a leading provider of consulting, engineering, construction,
remediation and facilities management services to the environmental,
infrastructure and homeland security markets. Shaw is also a
vertically-integrated provider of comprehensive engineering, consulting,
procurement, pipe fabrication, construction and maintenance services to the
power and process industries. The Company is headquartered in Baton Rouge,
Louisiana with offices and operations in North America, South America, Europe,
the Middle East and the Asia-Pacific region and employs approximately 17,000
people. For more information please visit our website at www.shawgrp.com .
For more information on The Shaw Group Inc., please contact Robert L. Belk,
Executive Vice President and Chief Financial Officer, at
225-932-2500.
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 its Form 10-K and Form 10-Q, reports and on the Company's web-site
under the heading "Forward Looking Statement". 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 web site
at www.shawgrp.com.
####
Item 12. REGULATION FD DISCLOSURE
The information provided in this Current Report on Form 8-K regarding the
Registrant's financial results for the second quarter ended February 28, 2003,
including the press release included as Exhibit 99.1 hereto, is being furnished
to the Securities and Exchange Commission pursuant to Item 12 of Form 8-K.
Limitation on Incorporation by Reference
In accordance with General Instruction B.2 of Form 8-K, the information set
forth in this Item 12 shall not be deemed to be "filed" for purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act or
the Exchange Act, except as shall be expressly set forth by specific reference
in such a filing.
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 hereunto duly authorized.
THE SHAW GROUP INC.
(Registrant)
Date: April 14, 2003 /s/ Robert L. Belk
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Robert L. Belk
Executive Vice President and Chief Financial Officer
EXHIBIT 99.1
THE SHAW GROUP INC. ANNOUNCES FINANCIAL RESULTS FOR
THE SECOND QUARTER OF FISCAL 2003
Agreement Reached with NEG Resulting in
$19 Million After-Tax Charge
Baton Rouge, Louisiana, April 14, 2003 - The Shaw Group Inc. (NYSE: SGR) ("Shaw"
or "the Company") today announced a loss of $7.9 million, or $0.21 per diluted
share, for the second quarter ended February 28, 2003 after recording a $19
million after-tax charge relating to the settlement of claims with PG&E National
Energy Group ("NEG") for the completion of the Harquahala and Covert power plant
projects, the details of which were provided in a separate announcement released
today. Earnings for the three months ended February 28, 2002 were $21.3 million,
or $0.51 per diluted share.
Revenues for the second quarter of fiscal 2003 increased 27% to $720.5 million
compared to the prior year's second quarter revenues of $566.2 million.
Shaw booked over $960 million in new awards during the second quarter, 50% of
which were from the Company's environmental and infrastructure business. Backlog
for the second quarter totaled $5.0 billion, compared to $4.5 billion reported
at February 28, 2002, with approximately 90% of the total backlog relating to
projects for the domestic market. Approximately $2.0 billion, or 40%, of total
backlog is expected to be worked off during the next 12 months.
J. M. Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer,
commented, "In addition to our healthy bookings in the quarter, we continue to
be encouraged by the level of bidding activity across all business segments,
which allows us to remain optimistic about our operations going forward.
Furthermore, through the continued integration of our businesses we are
realizing greater operational efficiencies and also leveraging our capabilities
to broaden our customer base and bring greater value to our stakeholders."
For the six months ended February 28, 2003, the Company reported earnings of
$8.6 million, or $0.22 per diluted share. This compares to earnings of $40.3
million, or $0.95 per diluted share, for the six months ended February 28, 2002.
Revenues for the six months ended February 28, 2003 increased approximately 70%
to $1.7 billion compared to $1.0 billion in revenues for the same period last
year.
Robert L. Belk, Executive Vice President and Chief Financial Officer, stated,
"The recent tender for 49% of our outstanding convertible debt and the
simultaneous closing of our $250 million credit facility should alleviate
concerns regarding our future cash position."
On March 31, 2003, Shaw completed its tender offer for 49% or $384.6 million
aggregate principal amount at maturity of its Liquid Yield Option(TM) Notes due
2021, with the proceeds of its recent senior notes offering. Concurrent with the
closing of its senior notes offering, the Company amended and restated its $250
million credit facility.
The Shaw Group Inc. offers a broad range of services to clients in the
environmental and infrastructure, power and process industries worldwide. The
Company is a leading provider of consulting, engineering, construction,
remediation and facilities management services to the environmental,
infrastructure and homeland security markets. Shaw is also a
vertically-integrated provider of comprehensive engineering, consulting,
procurement, pipe fabrication, construction and maintenance services to the
power and process industries. The Company is headquartered in Baton Rouge,
Louisiana with offices and operations in North America, South America, Europe,
the Middle East and the Asia-Pacific region and employs approximately 17,000
people. For more information please visit our website at www.shawgrp.com .
For more information on The Shaw Group Inc., please contact Bob Belk,
Executive Vice President and Chief Financial Officer, at 225-932-2500.
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 its Form 10-K and Form 10-Q, reports and on the Company's web-site
under the heading "Forward Looking Statement". 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 web site
at www.shawgrp.com.
<table>
<caption>
REVENUE AND BACKLOG BY INDUSTRY AND GEOGRAPHY
Revenue by Industry
(Second Quarter Ended February 28, 2003)
<s> <c> <c>
Power Generation $ 319.2 million 44 %
Environmental & Infrastructure $ 269.0 million 37 %
Process Industries $ 107.7 million 15 %
Other Industries $ 24.6 million 4 %
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Total $ 720.5 million 100 %
Revenue by Geography
(Second Quarter Ended February 28, 2003)
United States $ 597.1 million 83 %
Asia/Pacific Rim $ 59.7 million 8 %
Europe $ 28.2 million 4 %
Other North American $ 23.6 million 3 %
Other $ 6.4 million 1 %
South America $ 3.2 million 1 %
Middle East $ 2.3 million 0 %
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Total $ 720.5 million 100 %
Backlog by Industry
(At February 28, 2003)
Environmental & Infrastructure $2,543.4 million 50 %
Power Generation
Nuclear Power $1,228.4 million 24 %
Fossil Fuel EPC $ 406.6 million 8 %
Other Power $ 143.5 million 3 %
Process Industries $ 645.3 million 13 %
Other Industries $ 75.7 million 2 %
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Total $5,042.9 million 100 %
Backlog by Geography
(At February 28, 2003)
Domestic $4,528.8 million 90 %
International $ 514.1 million 10 %
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Total $5,042.9 million 100 %
</table>
<table>
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The Shaw Group Inc.
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Consolidated Statements of Operations
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(In thousands, except per share amounts)
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<caption>
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Three Months Ended Six Months Ended
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February 28, February 28,
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2003 2002 2003 2002
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<s> <c> <c> <c> <c>
Income:
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Revenues $ 720,458 $ 566,227 $ 1,717,364 $ 1,019,836
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Cost of revenues 678,605 498,485 1,593,085 889,384
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Gross profit 41,853 67,742 124,279 130,452
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General and administrative expenses 49,230 33,026 99,122 63,934
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Operating income (loss) (7,377) 34,716 25,157 66,518
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Interest expense (5,759) (5,431) (11,533) (11,236)
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Interest income 2,065 2,399 3,604 5,421
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Other income, net 132 77 33 444
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(3,562) (2,955) (7,896) (5,371)
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Income (loss) before income taxes and earnings (losses)
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from unconsolidated entities (10,939) 31,761 17,261 61,147
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Provision for income taxes (benefit) (4,456) 11,434 5,696 22,019
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Income (loss) before earnings (losses) from
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unconsolidated entities (6,483) 20,327 11,565 39,128
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Earnings (losses) from unconsolidated entities (net of taxes) (1,389) 1,013 (2,984) 1,164
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Net Income (loss) $ (7,872) $ 21,340 $ 8,581 $ 40,292
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Basic income (loss) per common share:
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Net income (loss) available to common shareholders $ (7,872) $ 21,340 $ 8,581 $ 40,292
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Weighted average common shares 37,741 40,299 38,081 40,610
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Net income (loss) per common share $ (0.21) $ 0.53 $ 0.23 $ 0.99
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Diluted income (loss) per common share:
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Net income (loss) available to common shareholders $ (7,872) $ 21,340 $ 8,581 $ 40,292
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Interest on convertible debt, net of taxes -- 2,652 -- 5,284
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Net income (loss) for diluted computation $ (7,872) $ 23,992 $ 8,581 $ 45,576
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Weighted average common shares 37,741 47,455 38,507 47,994
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Diluted income (loss) per common share $ (0.21) $ 0.51 $ 0.22 $ 0.95
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</table>