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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 27, 2003
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THE SHAW GROUP INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 1-12227 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 5. OTHER EVENTS
On February 26, 2003, The Shaw Group Inc. (the "Company") issued a press release
announcing that it has received commitments for an aggregate of $250.0 million
in borrowing capacity to amend and restate its senior secured credit facility
under a credit agreement dated July 14, 2000, as amended and restated as of the
date hereof (the "Existing Credit Facility"). The Existing Credit Facility
provides for borrowing capacity of up to $350.0 million and expires in July
2003. The Company anticipates that the closing of the amendment and restatement
of the Existing Credit Facility (the "Amended Credit Facility") will occur
concurrently with the closing of a proposed private placement of senior notes
that the Company also announced today.
In the press release, the Company also announced the commencement of a tender
offer (the "Tender Offer") to purchase for cash up to $384.6 million in
aggregate principal amount at maturity of its outstanding $790 million aggregate
principal amount at maturity 20-year, zero coupon, unsecured, convertible debt
Liquid Yield Option(TM) Notes (the "LYONs") at prices determined by means of a
modified Dutch auction procedure. The LYONs were issued by the Company in May
2001 at an original issue discount basis of $639.23 per $1,000 principal amount
at maturity. The Company intends to fund the repurchase of LYONs in the Tender
Offer primarily from the net proceeds of the proposed private placement of the
senior notes.
The Tender Offer will expire on March 26, 2003 unless the offer is extended by
the Company prior to its expiration. The Tender Offer is subject to a number of
conditions as described in the Offer to Purchase that the Company filed with
the Securities and Exchange Commission on February 26, 2003 as an exhibit to
Schedule TO filed in connection with the Tender Offer.
The full text of the Company's press release announcing the Tender Offer, the
commitments for the Amended Credit Facility and other matters is set forth
below in Item 9, but is not incorporated by reference in this Item 5.
ITEM 9. REGULATION FD DISCLOSURE
A. INTRODUCTION
On February 26, 2003, the Company issued a press release announcing revised
earnings guidance and outlook for fiscal 2003, earnings guidance for fiscal 2004
and other matters set forth in the press release, including the announcement of
the Tender Offer and the commitments for the Amended Credit Facility as
described above in Item 5. The full text of the Company's press release dated
February 26, 2003 announcing the Tender Offer, commitments for the Amended and
Restated Credit Facility, revised earnings guidance and outlook for fiscal 2003,
earnings guidance for fiscal 2004 and other matters is set forth below in
Section C.
B. 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.
C. PRESS RELEASE
The following is the text of a press release made by the Company on February 26,
2003:
SHAW ANNOUNCES TENDER OFFER FOR $384.6 MILLION OF ITS
LIQUID YIELD OPTION(TM) NOTES
COMPANY ALSO RECEIVES COMMITMENTS TO AMEND CREDIT FACILITY AND
ANNOUNCES REVISED GUIDANCE
Baton Rouge, Louisiana, February 26, 2003 - The Shaw Group Inc. (NYSE: SGR)
("Shaw" or "the Company") today announced that it has commenced a tender offer
(the "Offer") for a portion of its convertible debt securities described below.
Shaw is offering to purchase for cash up to a maximum aggregate principal amount
at maturity of $384.6 million (the "Offer Amount") of its Liquid Yield
Option(TM) Notes due 2021 (Zero Coupon - Senior) (the "LYONs"), or approximately
49% of the $790 million aggregate principal amount at maturity of outstanding
LYONs, at prices determined by a "Modified Dutch Auction" tender offer procedure
within the purchase price range of $620 to $650 per $1,000 principal amount at
maturity. Shaw has not previously offered to repurchase any of the LYONs.
At the maximum purchase price in the price range for the tender offer, Shaw
would pay approximately $250 million to purchase $384.6 million in principal
amount of LYONs. Shaw intends to fund the repurchase of LYONs in the tender
offer primarily from the net proceeds from a proposed private placement of
$250 million in principal amount of senior notes that Shaw announced today.
The Company also announced today that it has achieved its objective of obtaining
commitments from its lenders to amend its existing revolving credit facility to
extend the term through March
2006 and to provide for borrowing capacity, including letters of credit, of $250
million. The credit facility and senior notes offering are expected to close
simultaneously.
Although the Company will report strong bookings during its second quarter,
primarily related to its environmental & infrastructure and nuclear maintenance
businesses, the lack of new construction activity in the power generation
industry, as well as the interest cost expected from the proposed new senior
notes offering, has resulted in the Company revising its previous earnings
guidance for fiscal year 2003 to a range of $1.32 to $1.37 per diluted share,
from its previous earnings guidance in the range of $1.92 to $2.08 per diluted
share. The Company expects revenue for fiscal year 2003 to be in the range of
$3.1 to $3.3 billion, comprised of approximately 39% from its environmental and
infrastructure segment; 52% from engineering, procurement, construction, and
maintenance; and 9% from pipe fabrication and manufacturing.
Excluded from fiscal 2003 diluted earnings per share guidance is any potential
gain from the early extinguishment of debt related to the Company's tender for
$384.6 million aggregate principal amount of outstanding LYONs.
J. M. Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer,
stated, "We remain very optimistic about the prospects for our environmental and
infrastructure, nuclear maintenance and pipe fabrication and manufacturing
businesses. While we are experiencing the effects of one of the most extreme
downturns in the history of the power generation industry, we are focused on
placing our resources where we can receive the most benefit at present, and
further believe we will be positioned for a recovery in this sector."
Bernhard continued, "We are aware there have been concerns in the market
regarding our liquidity, and we are confident that the transactions announced
today will help to alleviate those concerns and provide the necessary guidance
to our strategy and path going forward."
TENDER OFFER
Under the "Modified Dutch Auction" procedure, and subject to the terms and
conditions of the Offer, Shaw will accept tendered LYONs in the Offer in the
order of the lowest to the highest tender prices specified by tendering holders
within the prescribed price range, and will select the single lowest price so
specified (the "Purchase Price") that will enable Shaw to purchase the Offer
Amount (or, if less than the Offer Amount, all LYONs tendered). Shaw will pay
the same Purchase Price for all LYONs that are tendered at or below the Purchase
Price, upon the terms and subject to the conditions of the Offer, including the
proration terms.
The Offer for the LYONs will expire at 4:00 p.m., Eastern time, on Wednesday,
March 26, 2003, unless the Offer is extended. Tendered LYONs may be withdrawn at
any time prior to the expiration date.
In the event that the amount of LYONs tendered on or prior to the expiration
date for the Offer at or below the Purchase Price exceeds the Offer Amount, then
subject to the terms and conditions of the Offer, Shaw will accept for payment
such LYONs that are tendered at or below the Purchase Price on a pro rata basis
from among the tendered LYONs.
The terms and conditions of the Offer are set forth in Shaw's Offer to Purchase,
which is dated February 26, 2003. Subject to applicable law, Shaw may, in its
sole discretion, waive any condition applicable to the Offer or extend or
terminate or otherwise amend the Offer.
The Offer is not conditioned on a minimum principal amount of LYONs being
tendered. The consummation of the Offer for the LYONs is subject to certain
conditions, including the successful completion of Shaw's issuance and sale of
new senior notes, which are described in the Offer to Purchase.
Credit Suisse First Boston LLC ("CSFB") is acting as dealer manager, D.F. King &
Co., Inc. is the
information agent, and The Bank of New York is the depositary in connection with
the Offer. Additional information concerning the terms of the Offer, including
all questions relating to the mechanics of the Offer, may be obtained by
contacting the information agent at (800) 848-3416 (toll free) or (212) 269-5550
(call collect) or CSFB at (800) 646-4543 (toll free) or (212) 538-4479 (call
collect).
This announcement is not an offer to purchase, a solicitation of an offer to
purchase, or a solicitation of an offer to sell securities, with respect to any
LYONs. The Offer may only be made pursuant to the terms of the Offer to Purchase
and the accompanying Letter of Transmittal. You should read the Offer to
Purchase and the Letter of Transmittal as they contain important information.
Copies of the Offer to Purchase, Letter of Transmittal and related documents may
be obtained from the information agent at (800) 848-3416 or (212) 269-5550 and
these documents and other documents filed by Shaw are available for free on the
SEC'S web site, www.sec.gov.
REVENUE, EARNINGS PER SHARE, EBITDA AND FREE CASH FLOW GUIDANCE
On a quarterly basis, diluted earnings per share for fiscal 2003 are expected to
be in the range of $0.29 to $0.31 for the second quarter, $0.29 to $0.31 for the
third quarter and $0.31 to $0.33 for the fourth quarter. Previous guidance was
in the range of $0.34 to $0.38, $0.51 to $0.55 and $0.67 to $0.71 per diluted
share for the second, third and fourth quarters of fiscal 2003, respectively.
Quarterly revenue is expected to be in the range of $780 to $850 million for the
second quarter, $725 to $800 million for the third quarter and $600 to $670
million for the fourth quarter of fiscal 2003, respectively. The Company
previously issued revenue guidance for the second, third and fourth quarters of
fiscal 2003 in the range of $620 to $660 million, $650 to $690 million and $760
to $800 million, respectively.
For fiscal 2004, Shaw expects earnings to be in the range of $1.47 and $1.63 per
diluted share. Revenue for fiscal year 2004 is expected to be in the range of
$2.4 to $2.8 billion, comprised of approximately 51% from its environmental and
infrastructure segment; 39% from engineering, procurement, construction, and
maintenance; and 10% from pipe fabrication and manufacturing.
For fiscal years 2003 and 2004, the Company expects its earnings before
interest, taxes, depreciation and amortization ("EBITDA") to be in the range of
$160 to $170 million and $175 to $190 million, respectively.
Shaw expects to use free cash in a range of $130 to $150 million to fund its
working capital needs and other investing activities during fiscal 2003. For
fiscal 2004, the Company expects to generate between $90 and $110 million of
free cash.
ABOUT THE SHAW GROUP
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. The Company 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, please contact Christine Mollere, Vice President of
Corporate Communications 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.
D. FORWARD LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain forward-looking statements. The statements contained in this Current
Report on Form 8-K that are not historical facts (including without limitation
statements to the effect that we "believe," "expect," "anticipate," "plan,"
"intend" or "foresee," and other similar expressions) are forward-looking
statements. These forward-looking statements are based on our current
expectations and beliefs concerning future developments and their potential
effects on us. There can be no assurance that future developments affecting us
will be those anticipated by us. These forward-looking statements involve
significant risks and uncertainties (some of which are beyond our control) and
assumptions. They are subject to change based upon various factors, including
but not limited to the following risks and uncertainties:
o changes in the demand for our products and services;
o changes in general economic conditions, and, specifically, changes
in the rate of economic growth in the United States and other major
international economies;
o the presence of competitors with greater financial resources and
the impact of competitive products, services and pricing;
o the cyclical nature of the individual markets in which our
customers operate;
o the financial strength of our customers and their ability to make
scheduled payments on their contracts with us;
o changes in investment by the energy, power and environmental and
infrastructure industries;
o the availability of qualified engineers, professional staff and
craft labor needed to execute contracts;
o the uncertain timing of awards and contracts;
o the funding of backlog, including government budget constraints,
cost overruns on fixed or unit priced contracts;
o cost overruns which negatively affect fees to be earned or cost
variances to shared on cost-plus contracts;
o changes in laws and regulations and in trade, monetary and fiscal
policies worldwide;
o currency fluctuations;
o the effect of our policies, including but not limited to the amount
and rate of growth of our expenses;
o the continued availability to us of adequate funding sources;
o delays or difficulties in the production, delivery or installation
of products and the provision of services, including in the ability
to recover for changed conditions;
o our ability to successfully integrate acquisitions;
o the protection and validity of patents and other intellectual
property; and
o various other legal, regulatory and litigation risks.
Should one or more of these 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. We undertake no
obligation to publicly update or revise any forward-looking statements contained
in this Current Report on Form 8-K whether as a result of new information,
future events or otherwise. For a more detailed discussion of some of the
foregoing risks and uncertainties, see Section 14 - "Certain Significant
Considerations" of the Offer to Purchase filed as an exhibit to our Schedule TO
filed with the SEC on February 26, 2003 relating to the Tender Offer and the
"Risk Factors" described in Item 7. - "Management's Discussion and Analysis of
Financial Condition and Results of Operations" of our Annual Report on Form 10-K
for the fiscal year ended August 31, 2002.
The information contained in this Current Report on Form 8-K is neither an offer
to sell nor a solicitation of an offer to buy any of the senior notes proposed
to be issued. The notes to be offered will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), or applicable state
securities laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of
the Securities Act.
The information contained in this Current Report on Form 8-K is also not an
offer to purchase, a solicitation of an offer to purchase, or a solicitation of
an offer to sell securities, with respect to any LYONs. The offer to purchase
LYONs may only be made pursuant to the terms of the Company's Offer to Purchase
and the accompanying Letter of Transmittal.
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: February 27, 2003 /s/ GARY P. GRAPHIA
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Gary P. Graphia
Secretary and General Counsel