[THE SHAW GROUP INC. LOGO] FOR IMMEDIATE RELEASE
CONTACT: Chris D. Sammons
Vice President, Investor Relations &
Corporate Communications
225.932.2546
THE SHAW GROUP ANNOUNCES FINANCIAL RESULTS FOR
THIRD QUARTER OF FISCAL 2004
SHAW GENERATES OVER $48 MILLION IN NET CASH FROM OPERATIONS
BACKLOG INCREASES TO $6 BILLION
BATON ROUGE, LOUISIANA, JULY 15, 2004 - The Shaw Group Inc. (NYSE: SGR)
today announced financial results for its third quarter ended May 31, 2004. The
Company reported net income from continuing operations of $10.0 million, or
$0.16 per diluted share, versus $3.6 million, or $0.10 per diluted share, for
the quarter ended May 31, 2003. Results for the third quarter of fiscal 2004
also include $3.6 million after taxes, or $0.06 per diluted share, after taxes,
for losses from discontinued operations versus loss from discontinued operations
of $0.5 million, or $0.02 per diluted share, in the May 31, 2003 quarter. After
the loss from discontinued operations, net income for the third quarter of 2004
was $6.4 million, or $0.10 per diluted share, versus $3.1 million, or $0.08 per
diluted share in the May 31, 2003 quarter. Results for the prior year's third
quarter included a $30 million pre-tax charge related to the settlement of
project claims.
Shaw also generated $48.3 million of net cash from operations during
the third quarter ended May 31, 2004 versus net cash used in operations of $45.6
million in the third quarter of last year. Revenues for the quarter ended May
31, 2004 were $917.8 million versus $821.7 million for the third quarter of
fiscal 2003. Revenues increased 33 percent over the $691.2 million reported for
the second quarter of fiscal 2004.
Shaw's backlog increased to $6.0 billion at May 31, 2004, a $0.5
billion increase over the $5.5 billion recorded for the second quarter ended
February 29, 2004 and a $1.2 billion increase over the $4.8 billion recorded at
August 31, 2003. Contributing to backlog during the quarter was $1.5 billion in
net new awards. The Shaw engineering, construction and maintenance (ECM)
division's backlog from the power generating industry, including nuclear,
increased to $2.2 billion, or 37% of total backlog at May 31, 2004, with
approximately $820 million in net new awards. ECM's backlog from process
industry businesses posted over $100 million in net new awards. Shaw's
environmental and infrastructure (E&I) division reported backlog as of May 31,
2004 of
$3.1 billion, or 51% of total backlog, with approximately $460 million in net
new awards during the quarter. Approximately 42% of the May 31, 2004 backlog, or
$2.5 billion, is expected to be worked off during the next 12 months.
J.M. Bernhard, Jr., Chairman and Chief Executive Officer of Shaw said,
"Our improving performance was reflected in our third quarter financial results
and near record backlog. We posted income from continuing operations of $0.16
per diluted share. In addition, we generated over $48 million of net cash from
operations this quarter."
Mr. Bernhard continued, "In addition to our good financial results, we
are extremely pleased with the growth of our backlog of work which has increased
across all industry sectors. The addition of two large power plant construction
contracts contributed over $730 million to our backlog to be worked off over
about two years. The energy sector continues to show signs of recovering and our
maintenance group has achieved several bookings of new work. Our process
technologies line is expanding internationally and our environmental and
infrastructure group is currently involved in projects in the Middle East and
new infrastructure work domestically."
Mr. Bernhard also said, "Our third quarter results also reflect our
strategic decision to discontinue involvement in the hanger engineering and pipe
support businesses. We began marketing these businesses for sale and
consequently have included them as discontinued operations in our financial
statements. This is a decisive step as we work to position the Company for
improving domestic and global economies. We will continue to view our businesses
strategically, as we focus on streamlining our operations, creating innovative
solutions and technologies, and targeting strategic markets and clients in the
U.S and abroad."
Shaw also announced that fourth quarter fiscal 2004 earnings are
expected to be within a range of approximately $0.14 to $0.18 per diluted share,
lower than previously expected, primarily because of the delays in the startup
of our two major power plant construction projects, although these projects are
both currently well underway.
The Shaw Group Inc. is a leading global provider of engineering,
procurement, construction, maintenance, fabrication, manufacturing, consulting,
remediation, and facilities management services for government and private
sector clients in the power, process, environmental, infrastructure and
emergency response markets. A Fortune 500 Company, The Shaw Group is
headquartered in Baton Rouge, Louisiana, and employs approximately 17,000 people
at its offices and operations in North America, South America, Europe, the
Middle East and the Asia-Pacific region. For further information, please visit
the Company's website at www.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 its Form 10-K and Form 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
at www.shawgrp.com.
# # #
THE SHAW GROUP INC.
REVENUE AND BACKLOG
BY INDUSTRY AND GEOGRAPHY
REVENUE BY INDUSTRY
(For Third Quarter Ended May 31, 2004)
<Table>
Environmental & Infrastructure $375.2 million 41%
Power Generation 371.3 million 40%
Process Industries 146.5 million 16%
Other Industries 24.8 million 3%
-------------- ---
Total $917.8 million 100%
============== ===
</Table>
REVENUE BY GEOGRAPHY
(For Third Quarter Ended May 31, 2004)
<Table>
United States $729.6 million 80%
Asia/Pacific Rim 67.8 million 7%
Canada 18.3 million 2%
Europe 20.4 million 3%
South America and Mexico 2.6 million --%
Middle East 75.1 million 8%
Other 4.0 million --%
-------------- ---
Total $917.8 million 100%
============== ===
</Table>
BACKLOG BY INDUSTRY
(As of May 31, 2004)
<Table>
Environmental & Infrastructure $3,082 million 51%
Power Generation
Nuclear Power 978 million 16%
Fossil Fuel EPC 1,136 million 19%
Other Power 112 million 2%
Process Industries 699 million 11%
Other Industries 20 million 1%
-------------- ---
Total $6,027 million 100%
============== ===
</Table>
BACKLOG BY GEOGRAPHY
(As of May 31, 2004)
<Table>
Domestic $5,599 million 93%
International 428 million 7%
-------------- ---
Total $6,027 million 100%
============== ===
</Table>
THE SHAW GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
<Table>
<Caption>
THREE MONTHS ENDED NINE MONTHS ENDED
MAY 31, MAY 31,
---------------------- --------------------------
2004 2003 2004 2003
-------- -------- ---------- ----------
Revenues $917,772 $821,657 $2,253,773 $2,529,999
Cost of revenues 845,276 747,038 2,109,483 2,334,411
-------- -------- ---------- ----------
Gross profit 72,496 74,619 144,290 195,588
General and administrative expenses 45,086 49,614 162,250 147,083
-------- -------- ---------- ----------
Operating income (loss) 27,410 25,005 (17,960) 48,505
Interest expense (9,588) (9,597) (29,237) (21,130)
Interest income 379 918 1,179 4,522
Loss on LYONs repurchase (95) -- (1,298) --
Foreign currency transaction gains
(losses), net 817 (806) (3,442) (900)
Other income (expense), net 1,944 (10,148) 1,186 (10,021)
-------- -------- ---------- ----------
(6,543) (19,633) (31,612) (27,529)
-------- -------- ---------- ----------
Income (loss) before income taxes,
minority interest, earnings (losses)
from unconsolidated entities and (loss)
income from discontinued operations 20,867 5,372 (49,572) 20,976
Provision (benefit) for income taxes 6,961 1,839 (16,233) 6,872
-------- -------- ---------- ----------
Income (loss) before minority interest,
earnings (losses) from unconsolidated
entities and (loss) income from
discontinued operations 13,906 3,533 (33,339) 14,104
Minority Interest (4,196) -- (4,196) --
-------- -------- ---------- ----------
Income (loss) before earnings (losses)
from unconsolidated entities and (loss)
income from discontinued operations 9,710 3,533 (37,535) 14,104
Earnings (losses) from unconsolidated
entities, net of taxes 326 110 608 (2,874)
-------- -------- ---------- ----------
Income (loss) from continuing operations 10,036 3,643 (36,927) 11,230
(Loss) income from discontinued operations
of certain businesses of the Fabrication,
Manufacturing and Distribution Segment,
net of taxes:
(Loss) income from operations (642) (560) (1,075) 434
Impairment on discontinued operations (2,995) -- (2,995) --
-------- -------- ---------- ----------
(Loss) income from discontinued
operations, net of taxes (3,637) (560) (4,070) 434
Net income (loss) $ 6,399 $ 3,083 $ (40,997) $ 11,664
======== ======== ========== ==========
</Table>
THE SHAW GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(Unaudited)
(In thousands, except per share amounts)
<Table>
Net income (loss) per common share:
BASIC:
Income (loss) from continuing
operations $0.16 $0.10 $(0.66) $0.30
(Loss) income from discontinued
operations, net of taxes (0.06) (0.02) (0.07) 0.01
----- ----- ------ -----
Net income (loss) $0.10 $0.08 $(0.73) $0.31
===== ===== ====== =====
DILUTED:
Income (loss) from continuing
operations $0.16 $0.10 $(0.66) $0.29
(Loss) income from discontinued
operations, net of taxes (0.06) (0.02) (0.07) 0.01
----- ----- ------ -----
Net income (loss) $0.10 $0.08 $(0.73) $0.30
===== ===== ====== =====
</Table>