THE SHAW GROUP

HomeWho We AreWhat We DoInvestor RelationsCareers

News Release

Printer Friendly VersionView printer-friendly version
<<Back
Shaw Announces Tender Offer for $384.6 Million of Its Liquid Yield Option Notes; Company Also Receives Commitments to Amend Credit Facility and Announces Revised Guidance
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 below.

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."

Tender Offer

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 proration terms.

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 free cash.

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 at www.shawgrp.com.

CONTACT:          The Shaw Group Inc.
                  Christine Mollere, 225/932-2500
URL:              http://www.businesswire.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
Copyright (C) 2003 Business Wire.  All rights reserved.
"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.


Additional Information

Calendar of Events

Presentations

Archived News Releases


IR Services

Receive E-mail Alerts

Request Information

Contacts

Job Search Photo