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The Shaw Group Inc. Announces Increases in Sales and Earnings for the First Quarter of Fiscal 2002

BATON ROUGE, La.--(BUSINESS WIRE)--Jan. 14, 2002--The Shaw Group Inc. (NYSE:SGR) ("Shaw" or "the Company") today announced a 56% increase in earnings to $19.0 million, or $0.45 per diluted share, for the first quarter ended November 30, 2001. This compares to $12.2 million in earnings, or $0.31 per diluted share, for the three months ended November 30, 2000. The Company also announced an increase in sales for the first quarter of fiscal 2002 to $453.6 million, representing an 8% increase over the prior year's first quarter sales of $418.8 million.

The Company's backlog remained strong at $4.5 billion at November 30, 2001, with approximately 85% relating to projects for the domestic market. This represents an increase of over 110% over the $2.1 billion backlog reported at November 30, 2000. The Company anticipates that approximately 50% of its backlog will be worked off during the next 12 months.

"The results of the first quarter are impressive given the events which occurred in September and the negativity that has saturated the power generation industry over the past several months," stated J. M. Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer. "We are confident that the need for additional power plants remains and that our customers will continue with their building plans. Furthermore, with the Company's diversity in other markets, such as process and environmental and infrastructure, Shaw is positioned to quickly capitalize on new opportunities."

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

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

                          The Shaw Group Inc.
                  Consolidated Statements of Income
               (In thousands, except per share amounts)
                                                 Three Months Ended
                                                    November 30, 
                                                 2001          2000
                                               ---------    ---------
   Sales                                       $ 453,609    $ 418,757
   Cost of sales                                 390,899      354,689
                                               ---------    ---------
     Gross profit                                 62,710       64,068
General and administrative expenses               30,908       34,202
Goodwill amortization                               --          3,836
                                               ---------    ---------
   Total general and administrative expenses      30,908       38,038
                                               ---------    ---------
Operating income                                  31,802       26,030
Interest expense                                  (5,805)      (6,632)
Interest income                                    3,022          591
Other income, net                                    367           59
                                               ---------    ---------
                                                  (2,416)      (5,982)
                                               ---------    ---------
Income before income taxes and earnings
 (losses) from unconsolidated entities            29,386       20,048
Provision for income taxes                        10,585        7,801
                                               ---------    ---------
Income before earnings (losses) from
 unconsolidated entities                          18,801       12,247
Earnings (losses) from unconsolidated
 entities                                            151          (86)
                                               ---------    ---------
Net Income                                     $  18,952    $  12,161
                                               =========    =========
Basic income per common share:
   Number of shares                               40,834       37,980
                                               =========    =========
   Net income per common share                 $    0.46    $    0.32
                                               =========    =========
Diluted income per common share
 (includes addback of $2,632 of interest
 on convertible debt, net of taxes, for
 three months ending November 30, 2001):
   Number of shares                               48,465       39,804
                                               =========    =========
   Net income per common share                 $    0.45    $    0.31
                                               =========    =========
                           Sales by Industry
                (First Quarter Ended November 30, 2001)
Power Generation                        $319.1 million           (70%) 
Process Industries                      $ 57.0 million           (13%)
Other Industries                        $ 40.3 million            (9%)
Environmental & Infrastructure          $ 37.2 million            (8%)
                                        --------------          ------
Total                                   $453.6 million          (100%)
                      Sales by Geography
            (First Quarter Ended November 30, 2001)
United States                           $364.5 million           (80%)
Asia/Pacific Rim                        $ 29.2 million            (6%)
Europe                                  $ 27.2 million            (6%)
Other North America                     $ 22.0 million            (5%)
South America                           $  4.4 million            (1%)
Middle East                             $  3.5 million            (1%)
Other                                   $  2.8 million            (1%)
                                        --------------          ------
Total                                   $453.6 million          (100%)
                      Backlog by Industry
                    (At November 30, 2001)
Power Generation                        $3,629.9 million         (80%)
Process Industries                      $  616.1 million         (14%)
Environmental & Infrastructure          $  200.5 million          (4%)
Other Industries                        $   76.2 million          (2%)
                                        ----------------        ------
Total                                   $4,522.7 million        (100%)
                     Backlog by Geography
                    (At November 30, 2001)
Domestic                                $3,841.2 million         (85%)
International                           $  681.5 million         (15%)
                                        ----------------        ------
Total                                   $4,522.7 million        (100%)


CONTACT: The Shaw Group Inc., Baton Rouge
Kevin LeBlanc, 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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