BATON ROUGE, La., Feb 26, 2003 (BUSINESS WIRE) -- 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
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 and 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 financing strategy and path going forward."
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
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
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
CONTACT: The Shaw Group Inc.
Christine Mollere, 225/932-2500
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