Exhibit 99.1
The Shaw Group Announces Financial Results for
Fourth Quarter and Fiscal 2006
BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 31, 2006--The Shaw Group
Inc. (NYSE:SGR):
-- Record backlog of $9.1 billion reflects continued strong end
markets.
-- Fourth Quarter and Fiscal Year 2006 Revenues increased 44% and
46%, from prior year revenues, respectively.
-- Operating cash flow totals $163.7 million for fourth quarter.
The Shaw Group Inc. (NYSE:SGR) today announced financial results
for its fiscal fourth quarter and fiscal year ended August 31, 2006.
Net income for the fourth quarter was $13.0 million, or $0.16 per
diluted share, which included a charge of approximately $19.6 million,
$11.9 million after taxes, or approximately $0.15 per diluted share,
for previously disclosed cost overruns on a domestic clean fuels
project and a $1.0 million loss from discontinued operations, after
taxes, or $0.01 per diluted share. Excluding the charge on the clean
fuels project, net income would have been $24.9 million, or $0.31 per
diluted share. In comparison, for the three months ended August 31,
2005, Shaw reported net income of $17.2 million, or $0.22 per diluted
share. Revenues for fourth-quarter 2006 were $1,174.5 million compared
to $816.8 million in the prior year quarter, a 44% increase. During
fourth-quarter 2006, Shaw generated operating cash flow of $163.7
million, compared to $4.2 million in fourth-quarter 2005.
For the fiscal year ended August 31, 2006, the Company reported
net income of $50.9 million, or $0.63 per diluted share, which
included a non-cash charge totaling $48.2 million, $29.2 million after
taxes, or $0.36 per diluted share, for the previously reported
unfavorable ruling on the AES Wolf Hollow litigation. Not including
the charge, net income would have been $80.0 million, or $1.00 per
diluted share, for fiscal 2006. For the fiscal year ended August 31,
2005, the Company reported net income of $16.0 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. Excluding the charges in prior year, net
income would have been $53.9 million or $0.77 per diluted share.
Revenues for the fiscal year ended August 31, 2006, were $4.8 billion,
compared to $3.3 billion for the fiscal year ended August 31, 2005, an
increase of 46%.
Shaw's backlog totaled $9.1 billion as of August 31, 2006, a new
record and an increase of $2.4 billion from the August 31, 2005,
backlog of $6.7 billion. Approximately $4.1 billion, or 45%, of the
backlog is expected to be converted during the next 12 months. Nearly
$4.4 billion, or 49%, of the backlog is comprised of projects for
fossil fuel, nuclear and other power generating plants, and
approximately $1.9 billion, or 20%, of the backlog is made up of the
chemical industry projects. Approximately $2.8 billion, or 30%, of the
backlog is in the environmental and infrastructure sector, primarily
contracts with federal and other governmental agencies.
J.M. Bernhard, Jr., Chairman and Chief Executive Officer of The
Shaw Group Inc., said, "As we previously disclosed, our fourth-quarter
2006 financial results were negatively affected by charges on a
domestic clean fuels project related to cost overruns for which
payment is disputed by our customer. Notwithstanding those charges,
our operating results were strong in every sector of our business. We
continue to see this strength building over time, especially in our
electricity generation business."
Mr. Bernhard continued, "As we look to the future, we believe
nuclear power will be a key component for meeting the energy needs of
our nation and the world. Our recent investment to become a 20% owner
of Westinghouse Electric demonstrates our confidence in nuclear power
and complements our nuclear services capabilities. We believe nuclear
power will create significant opportunities for us - providing
architect-engineer, design, procurement, construction and expansions
and uprates for existing nuclear power plants, as well as new-build
opportunities."
Mr. Bernhard concluded, "Lastly, our $9.1 billion backlog, another
record, is 35% higher than last year and 57% higher than two years
ago, reflecting the exceptional strength we have seen in the power and
chemical process markets. What's encouraging is that we still see
strong growth possibilities ahead in these markets even after such
exceptional performance over the past two years. We expect our
revenues and financial performance will soon begin to reflect
execution on several of these major projects."
The Shaw Group Inc. is a leading global provider of engineering,
procurement, construction, technology, maintenance, fabrication,
manufacturing, consulting, remediation, and facilities management
services for government and private sector clients in the energy,
chemical, environmental, infrastructure and emergency response
markets. Headquartered in Baton Rouge, Louisiana, with over $4 billion
in annual revenues, Shaw employs approximately 22,000 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 Shaw's website at www.shawgrp.com.
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 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 web site at www.shawgrp.com.
REVENUE AND BACKLOG BY INDUSTRY AND GEOGRAPHY
(Fourth Quarter Ended August 31, 2006)
Revenue by Industry
- ----------------------------------------
(In Millions) Percentage
-------------- --------------
Environmental & Infrastructure $418.8 36%
Energy 401.7 34
Chemical 312.8 27
Other Industries 41.2 3
-------------- --------------
Total $1,174.5 100%
============== ==============
Revenue by Geography
- ----------------------------------------
(In Millions) Percentage
-------------- --------------
United States $959.7 82%
Middle East 126.6 11
Asia/Pacific Rim 38.6 3
Europe 31.8 3
South America & Mexico 12.0 1
Canada 2.8 -
Other 3.0 -
-------------- --------------
Total $1,174.5 100%
============== ==============
Backlog by Industry
- ----------------------------------------
(In Millions) Percentage
-------------- --------------
Environmental & Infrastructure $2,765.1 30%
Energy
Nuclear Power 884.9 10
Fossil Fuel 3,319.5 37
Other Power 155.4 2
Chemical 1,857.8 20
Other Industries 92.9 1
-------------- --------------
Total $9,075.6 100%
============== ==============
Backlog by Geography
- ----------------------------------------
(In Millions) Percentage
-------------- --------------
Domestic $7,330.5 81 %
International 1,745.1 19
-------------- --------------
Total $9,075.6 100 %
============== ==============
THE SHAW GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
August 31 August 31
--------------------- -----------------------
2006 2005 2006 2005
----------- --------- ----------- -----------
Revenues $1,174,538 $816,785 $4,775,615 $3,262,328
Cost of revenues 1,084,978 744,165 4,446,143 2,969,658
----------- --------- ----------- -----------
Gross profit 89,560 72,620 329,472 292,670
General and
administrative expenses 64,192 50,271 226,244 190,252
----------- --------- ----------- -----------
Operating income 25,368 22,349 103,228 102,418
Interest expense (5,798) (2,542) (19,059) (29,225)
Interest income 1,604 1,782 5,877 5,571
Loss on retirement of
debt - - - (47,772)
Foreign currency
transaction gains
(losses), net (43) 505 (961) 919
Other income (expense),
net (1,089) 5,577 (1,380) 6,870
----------- --------- ----------- -----------
(5,326) 5,322 (15,523) (63,637)
Income (loss) before
income taxes, minority
interest, earnings
(losses) from
unconsolidated entities
and income (loss) from
discontinued operations 20,042 27,671 87,705 38,781
Provision (benefit) for
income taxes 1,389 9,940 20,540 17,784
----------- --------- ----------- -----------
Income (loss) before
minority interest,
earnings (losses) from
unconsolidated entities
and income (loss) from
discontinued operations 18,653 17,731 67,165 20,997
Minority interest (5,526) (1,718) (15,680) (7,243)
Earnings (losses) from
unconsolidated
entities, net of taxes 839 1,066 1,513 3,809
----------- --------- ----------- -----------
Income (loss) from
continuing operations 13,966 17,079 52,998 17,563
Income (loss) from
discontinued
operations, net of
taxes:
Income (loss) from
operations 10 (271) (1,144) (1,943)
Gain (impairment) of
discontinued
operations (1,004) 356 (1,004) 356
----------- --------- ----------- -----------
Income (loss) from
discontinued
operations, net
of taxes (994) 85 (2,148) (1,587)
----------- --------- ----------- -----------
Net income (loss) $12,972 $17,164 $50,850 $15,976
=========== ========= =========== ===========
Net income (loss) per
common share:
Basic:
Income (loss) from
continuing
operations $0.17 $0.22 $0.68 $0.25
Income (loss) from
discontinued
operations, net
of taxes (0.01) - (0.03) (0.02)
----------- --------- ----------- -----------
Net income (loss) $0.16 $0.22 $0.65 $0.23
=========== ========= =========== ===========
Diluted:
Income (loss) from
continuing
operations $0.17 $0.22 $0.66 $0.25
Income (loss) from
discontinued
operations, net
of taxes (0.01) - (0.03) (0.02)
----------- --------- ----------- -----------
Net income (loss) $0.16 $0.22 $0.63 $0.23
=========== ========= =========== ===========
Weighted average shares
outstanding:
Basic 79,218 77,737 78,791 68,673
Diluted:
Stock options 699 1,064 1,168 921
LYONs Convertible
Debt 10 - 10 -
Restricted stock 349 249 320 198
----------- --------- ----------- -----------
Total 80,276 79,050 80,289 69,792
=========== ========= =========== ===========
CONTACT: The Shaw Group Inc.
Investor Relations & Corporate Communications
Chris D. Sammons, Vice President, 225-932-2546
www.shawgrp.com