THE SHAW GROUP

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The Shaw Group Inc. Announces Record Results for the Third Quarter of Fiscal 2001; Backlog Exceeds $3.6 Billion
BATON ROUGE, La., Jul 10, 2001 (BUSINESS WIRE) -- The Shaw Group Inc. (NYSE:SGR) ("Shaw" or "the Company") today announced a 142% increase in earnings to $17.9 million, or $0.42 per diluted share, for the three months ended May 31, 2001. This compares to earnings of $7.4 million, or $0.23 per diluted share, for the three months ended May 31, 2000. Third quarter fiscal 2001 sales increased 125% reaching $394 million, compared to $175 million for the third quarter of fiscal 2000.

Shaw's backlog totaled $3.6 billion at May 31, 2001 with approximately 44%, or $1.6 billion, to be worked off during the next 12 months. Driven primarily by strength in the domestic power market, this represents a 313% increase over the $878 million backlog reported at May 31, 2000, and a 15% increase over Shaw's backlog at February 28, 2001 of $3.1 billion.

J. M. Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer, stated, "Driven by continued growth opportunities in the domestic power market, we posted another quarter of solid performance both in our financial results and operationally. Backlog continues to increase at a steady pace and our capacity to execute this work has strengthened with the addition of qualified engineers and project managers to our team. On top of robust proposal activity, we are well positioned to move into fiscal 2002 and look for continued success in our future operations."

For the nine months ended May 31, 2001, the Company reported an increase in earnings before an extraordinary item to $41.9 million, or $1.00 per diluted share. This compares to earnings before a change in accounting principle of $20.2 million, or $0.67 per diluted share, for the nine months ended May 31, 2000. Sales for the nine months ended May 31, 2001 increased 131% to $1.2 billion, compared to $499 million in sales for the nine months ended May 31, 2000.

The Shaw Group Inc. is the world's only vertically-integrated provider of complete piping systems and comprehensive engineering, procurement and construction services to the power generation industry. Shaw is the largest supplier of fabricated piping systems in the United States and a leading supplier worldwide, having installed piping systems in power plants with an aggregate generation capacity in excess of 200,000 megawatts. While the majority of Shaw's backlog is attributable to the power generation industry, the Company also does work in the process industries, including petrochemical, chemical and refining, and the environmental and infrastructure sector. The Company currently has offices and operations in North America, South America, Europe, the Middle East and Asia-Pacific; and has more than 13,000 employees. For additional information on The Shaw Group, please visit the Company's web site at www.shawgrp.com.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release that are not historical facts (including without limitation statements to the effect that The Shaw Group Inc. (the "Company" or "Shaw") or its management "believes," "expects," "anticipates," "plans," or other similar expressions) 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 the control of the Company) and assumptions and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the demand for and market acceptance of the Company's products and services; changes in general economic conditions, and, specifically, changes in the rate of economic growth in the United States and other major international economies; the presence of competitors with greater financial resources and the impact of competitive products, services and pricing; the cyclical nature of the individual markets in which the Company's customers operate; changes in investment by the energy, power and environmental industries; the availability of qualified engineers and other professional staff needed to execute contracts; the uncertain timing of awards and contracts; cost overruns on fixed, maximum or unit priced contracts; changes in trade, monetary and fiscal policies worldwide; currency fluctuations; the effect of the Company's policies, including but not limited to the amount and rate of growth of Company expenses; the continued availability to the Company of adequate funding sources; delays or difficulties in the production, delivery or installation of products and the provision of services; the ability of the Company to successfully integrate the operations of Stone & Webster, Incorporated; the protection and validity of patents and other intellectual property; and various legal, regulatory and litigation risks. Should one or more of these risks or uncertainties materialize, or should any of the Company's 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. For a more detailed discussion of some of the foregoing risks and uncertainties, see the Company's filings with the Securities and Exchange Commission.

                          The Shaw Group Inc.
                   Consolidated Statements of Income
               (In thousands, except per share amounts)
                            Three Months Ended      Nine Months Ended
                                  May 31,                May 31,
                          ----------------------  ----------------------
                             2001        2000        2001        2000
                          ----------  ----------  ----------  ----------
Income:
   Sales                    $394,154    $175,046  $1,153,194    $498,817
   Cost of sales             328,624     147,390     970,078     416,796
                          ----------  ----------  ----------  ----------
     Gross profit             65,530      27,656     183,116      82,021
General and
  administrative expenses     35,125      15,934     106,654      49,094
                          ----------  ----------  ----------  ----------
   Operating income           30,405      11,722      76,462      32,927
Interest expense              (2,206)     (1,490)    (10,007)     (4,933)
Other income, net              1,316         211       2,544         584
                          ----------  ----------  ----------  ----------
                                (890)     (1,279)     (7,463)     (4,349)
                          ----------  ----------  ----------  ----------
Income before income taxes,
  earnings (losses) from
  unconsolidated entities,
  extraordinary item and
  cumulative effect of
  change in accounting
  principle                   29,515      10,443      68,999      28,578
Provision for income taxes    11,452       3,407      26,771       9,329
                          ----------  ----------  ----------  ----------
Income before earnings
  (losses) from
  unconsolidated entities,
  extraordinary item
  and cumulative effect
  of change in accounting
  principle                   18,063       7,036      42,228      19,249
Earnings (losses) from
  unconsolidated entities
  (net of taxes)                (173)        348        (357)        979
                          ----------  ----------  ----------  ----------
Income before
  extraordinary item
  and cumulative
  effect of change
  in accounting principle     17,890       7,384      41,871      20,228
Extraordinary item for
  early extinguishment
  of debt, net of taxes           --          --        (203)         --
Cumulative effect on prior
  years of change in
  accounting for start-up
  costs, net of taxes             --          --          --        (320)
                          ----------  ----------  ----------  ----------
Net Income                   $17,890      $7,384     $41,668     $19,908
                          ==========  ==========  ==========  ==========
Basic income per common share:
   Number of shares           40,903      30,656      39,832      28,722
   Income before
     extraordinary item
     and cumulative effect
     of change in accounting
     principle                 $0.44       $0.24       $1.05       $0.70
   Extraordinary item             --          --          --          --
   Cumulative effect
     of change in
     accounting principle         --          --          --       (0.01)
                          ----------  ----------  ----------  ----------
   Net income per common
     share                     $0.44       $0.24       $1.05       $0.69
                          ==========  ==========  ==========  ==========
Diluted income per common
  share (includes addback
  of $836 of interest on
  convertible debt, net of
  taxes, for periods ending
  May 31, 2001):
   Number of shares           44,798      32,302      42,394      30,297
   Income before
     extraordinary item
     and cumulative effect
     of change in accounting
     principle                 $0.42       $0.23       $1.00       $0.67
   Extraordinary item             --          --          --          --
   Cumulative effect of
     change in
     accounting principle         --          --          --       (0.01)
                          ----------  ----------  ----------  ----------
   Net income per common
     share                     $0.42       $0.23       $1.00       $0.66
                          ==========  ==========  ==========  ==========
              SALES AND BACKLOG BY INDUSTRY AND GEOGRAPHY
                           Sales by Industry
                  (Third Quarter Ended May 31, 2001)
Power Generation                   $    221.1 million           56 %
Process Industries                 $     86.4 million           22 %
Environmental & Infrastructure     $     47.7 million           12 %
Other Industries                   $     38.9 million           10 %
                                   ------------------         ------
Total                              $   394.1 million           100 %
                          Sales by Geography
                  (Third Quarter Ended May 31, 2001)
United States                      $    319.0 million           81 %
Asia/Pacific Rim                   $     41.8 million           11 %
Europe                             $     20.4 million            5 %
Other                              $      5.7 million            1 %
South America                      $      5.6 million            1 %
Middle East                        $      1.6 million            1 %
                                   ------------------         ------
Total                              $    394.1 million          100 %
                          Backlog by Industry
                           (At May 31, 2001)
Power Generation                   $  2,779.1 million           77 %
Process Industries                 $    644.5 million           18 %
Environmental & Infrastructure     $    126.0 million            3 %
Other Industries                   $     71.6 million            2 %
                                   ------------------         ------
Total                              $  3,621.2 million          100 %
                         Backlog by Geography
                           (At May 31, 2001)
Domestic                           $  2,924.5 million           81 %
International                      $    696.7 million           19 %
                                   ------------------         ------
Total                              $  3,621.2 million          100 %
CONTACT:          The Shaw Group Inc., Baton Rouge
                  Christine R. Noel, 225/932-2500
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SHAW GROUP INC's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.


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