BATON ROUGE, La.--(BUSINESS WIRE)--Jan. 14, 2004--
Results Reflect $74.2 Million in Pre-tax Charges;
Company Lowers Fiscal 2004 Guidance
The Shaw Group Inc. (NYSE:SGR) today announced financial results
for its first quarter ended November 30, 2003. The Company reported a
net loss of $49.6 million or ($1.07) per diluted share versus earnings
of $16.5 million or $0.42 per diluted share for its first quarter
ended November 30, 2002. Results reflect $74.2 million in pre-tax
charges taken during the quarter, including $44.8 million related
primarily to increased costs on three power projects and a $29.4
million depreciation charge related to legacy software systems, which
were successfully replaced by a new integrated systems platform.
Revenues for the quarter were $649.2 million versus $996.9 million
for the first quarter of fiscal 2003. The decrease in revenue for the
period was primarily attributable to continued weakness in the
domestic power market, which negatively impacted revenues and
profitability from the Company's Engineering, Construction and
Maintenance (ECM) and Fabrication, Manufacturing and Distribution
divisions.
Shaw's backlog totaled $5.1 billion at November 30, 2003, a 7%
increase over the $4.8 billion recorded at August 31, 2003.
Contributing to backlog during the quarter was over $1 billion in new
awards and increases in scope to existing contracts. Maintenance
contracts were $1.4 billion or 27% of total backlog and process work
under contract expanded over 34% to $710 million at quarter end.
Approximately 36% of total backlog, or $1.8 billion, is expected to be
worked off during the next 12 months.
"We are disappointed with our operational performance, primarily
from our ECM division, and with the fact that we had to take
additional project-related write-downs during the quarter. However, we
believe we have laid the groundwork for improved operational
performance in the second half of 2004 and well into fiscal 2005,"
stated J. M. Bernhard, Jr., Shaw's Chairman and Chief Executive
Officer. "Our confidence is supported by the healthy booking and
bidding activity we experienced across all business segments during
the quarter, including over $600 million in bookings by our
Environmental and Infrastructure division and our Maintenance group,
both of which provide a stable stream of revenues and earnings for the
Company."
Weaker than expected operating performance in the quarter has
resulted in a revision to the Company's earnings guidance for fiscal
2004. Diluted earnings per share for the remainder of fiscal 2004 are
estimated to be in the range of $0.55 to $0.65. Earnings before
interest, taxes, depreciation and amortization (EBITDA) for the
balance of fiscal 2004 are expected to be $100 to $110 million.
This press release contains non-GAAP financial measures within the
meaning of Regulation G promulgated by the Securities and Exchange
Commission. Included at the end of this press release is a
reconciliation of these non-GAAP financial measures to their most
directly comparable financial measures calculated in accordance with
generally accepted accounting principles as well as certain Regulation
G disclosures.
The Shaw Group Inc. is a leading global provider of engineering,
procurement, construction, maintenance, fabrication, manufacturing,
consulting, remediation, and facilities management services for
government and private sector clients in the power, process,
environmental, infrastructure and homeland defense markets. The
Company is headquartered in Baton Rouge, Louisiana, and employs
approximately 14,800 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 the Company'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 website 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 website at www.shawgrp.com.
REVENUE AND BACKLOG BY INDUSTRY AND GEOGRAPHY
Revenue by Industry
-------------------
(First Quarter Ended November 30, 2003)
Environmental & Infrastructure $ 316.8 million 49 %
Power Generation $ 196.2 million 30 %
Process Industries $ 121.2 million 19 %
Other Industries $ 15.0 million 2 %
------------------------
Total $ 649.2 million 100 %
Revenue by Geography
--------------------
(First Quarter Ended November 30, 2003)
United States $ 551.4 million 85 %
Asia/Pacific Rim $ 38.5 million 6 %
Europe $ 30.6 million 5 %
Canada $ 20.6 million 3 %
Middle East $ 6.1 million 1 %
South America and Mexico $ 1.3 million - %
Other $ 0.7 million - %
------------------------
Total $ 649.2 million 100 %
Backlog by Industry
--------------------
(At November 30, 2003)
Environmental & Infrastructure $ 2,855.4 million 56 %
Power Generation
Nuclear Power $ 986.6 million 19 %
Fossil Fuel EPC $ 441.6 million 9 %
Other Power $ 60.1 million 1 %
Process Industries $ 710.1 million 14 %
Other Industries $ 43.8 million 1 %
------------------------
Total $ 5,097.6 million 100 %
Backlog by Geography
--------------------
(At November 30, 2003)
Domestic $ 4,620.4 million 91 %
International $ 477.2 million 9 %
------------------------
Total $ 5,097.6 million 100 %
The Shaw Group Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended
November 30,
------------------
2003 2002
------------------
Income:
Revenues $649,212 $996,906
Cost of revenues 636,520 914,480
-------- --------
Gross profit 12,692 82,426
General and administrative expenses 73,602 49,892
-------- --------
Operating income (loss) (60,910) 32,534
Interest expense (10,531) (5,774)
Interest income 344 1,539
Loss on LYONs repurchase (1,147) --
Foreign currency transaction losses, net (1,666) (148)
Other income (expenses), net (920) 49
-------- --------
(13,920) (4,334)
-------- --------
Income (loss) before income taxes and earnings
(losses) from unconsolidated entities (74,830) 28,200
Provision (benefit) for income taxes (24,679) 10,152
-------- --------
Income (loss) before earnings (losses) from
unconsolidated entities (50,151) 18,048
Earnings (losses) from unconsolidated entities
(net of taxes) 559 (1,595)
-------- --------
Net Income (loss) $(49,592) $ 16,453
======== ========
Basic income per common share:
Net income (loss) available to common
shareholders $(49,592) $ 16,453
======== ========
Weighted average common shares 46,147 38,417
======== ========
Net income (loss) per common share $ (1.07) $ 0.43
======== ========
Diluted income (loss) per common share:
Net income (loss) available to common
shareholders $(49,592) $ 16,453
Interest on convertible debt, net of taxes -- 2,632
-------- --------
Net income (loss) for diluted computation $(49,592) $ 19,085
======== ========
Weighted average common shares 46,147 45,423
======== ========
Diluted income (loss) per common share $ (1.07) $ 0.42
======== ========
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G
DISCLOSURE
This press release contains non-GAAP financial measures within the
meaning of Regulation G promulgated by the Securities and Exchange
Commission. A reconciliation of these non-GAAP financial measures to
their most directly comparable financial measures calculated in
accordance with generally accepted accounting principles in the United
States ("GAAP") follows. Although Shaw believes that these non-GAAP
financial measures provide useful information to investors about its
financial condition and results of operations, this information should
be considered supplemental in nature and not as a substitute for
financial information prepared in accordance with GAAP. Management's
statements regarding the reasons why it believes the presentation of
the non-GAAP financial information in this press release provides
useful information to its investors, and any other material purposes
for which management uses this non-GAAP financial information, are set
forth in Shaw's Current Report on Form 8-K to which this press release
is attached as an exhibit.
The ranges of forecasted financial information presented in this
press release are based on management's current estimates of those
amounts and are subject to change once actual amounts are recorded.
EBITDA
The Company computes EBITDA as earnings before interest expense,
income taxes, depreciation and amortization, earnings (losses) from
unconsolidated entities, extraordinary items and the cumulative
effects of accounting changes. EBITDA may also exclude certain charges
which are considered non-cash charges for the period presented. EBITDA
is not a measure of financial performance or liquidity under GAAP and
should not be considered as a substitute for net income, operating
income, net cash provided by operating activities or any other
operating or liquidity measure prepared in accordance with GAAP. Other
companies may define EBITDA differently and, as a result, Shaw's
EBITDA computation may not be comparable to EBITDA or similarly titled
measures of other companies.
The following table reconciles EBITDA to net income for the last
three quarters of the fiscal year ending August 31, 2004:
EBITDA PROJECTIONS
(in millions)
Low Range High Range
---------- -----------
Net income $ 34 $ 41
Add (deduct):
Provision for income taxes 17 20
Interest Expense 25 25
Depreciation and amortization 24 24
---------- -----------
EBITDA $ 100 $ 110
========== ===========
Shaw has not provided a reconciliation of EBITDA to net cash
provided by operating activities due to the difficulty in identifying
changes in the individual working capital components that comprise net
cash provided by operating activities.
CONTACT: The Shaw Group Inc., Baton Rouge
Investor Relations:
Laurie LaChiusa, 225-932-2500
www.shawgrp.com
SOURCE: The Shaw Group Inc.
