The Shaw Group Inc. (NYSE: SGR) today reported net income of $62.8
million, or $0.75 per diluted share excluding the Westinghouse
segment, which continues to reflect significant non-cash foreign
exchange translation losses resulting from an appreciation of the
Japanese yen against the U.S. dollar. Inclusive of the Westinghouse
segment, Shaw reported a net loss for the three months ended
November 30, 2008, of $39.9 million, or $0.48 per diluted share. In
comparison, the prior year results excluding the Westinghouse
segment were net income of $37.7 million, or $0.45 per diluted
share, and including the Westinghouse segment were net income of
$2.2 million, or $0.03 per diluted share. Earnings before interest
expense, income taxes, depreciation and amortization (EBITDA) for
the first quarter of fiscal year 2009 excluding the Westinghouse
segment were a record $121.2 million and including the Westinghouse
segment were a loss of $37.5 million. In comparison, for the first
quarter of fiscal year 2008, Shaw reported EBITDA of $78.6 million
excluding the Westinghouse segment and EBITDA of $29.3 million
including the Westinghouse segment. Revenues during the three
months ended November 30, 2008, increased 11 percent from the same
period in the prior fiscal year to a record $1.9 billion. New
awards for the quarter totaled $1.1 billion, driven primarily by a
large combined cycle, natural gas-fired power plant contract within
the Fossil Division of the Power Group. The company�s backlog of
unfilled orders at November 30, 2008, was $14.8 billion compared to
$14.0 billion at November 30, 2007. Approximately $6.0 billion, or
41 percent, of the current backlog is expected to be converted to
revenues during the next 12 months. As previously disclosed, the
reported backlog does not contain material amounts related to the
engineering, procurement and construction contracts with Georgia
Power Company, South Carolina Electric & Gas Company and
Progress Energy Florida, Inc. to construct a total of six new
Westinghouse AP1000� nuclear reactors. Net cash used by operating
activities totaled $98.9 million during the first quarter of fiscal
year 2009 compared to net cash provided by operating activities of
$108.6 million in the first quarter of fiscal year 2008. The
company�s previously announced guidance for cash provided by
operating activities for fiscal year 2009 remains unchanged at
$250-$300 million. �Our operating results exceeded our plan for the
first quarter. In spite of the current economic environment, Shaw�s
operating segments are performing well, and we remain positive
about the activity within the markets Shaw serves,� said J.M.
Bernhard Jr., chairman, president and chief executive officer of
Shaw. �We continue to experience significant bookings, including
the engineering, procurement and construction contract to construct
two Westinghouse AP1000 nuclear power units for Progress Energy at
its Levy County, Fla., site, which we announced earlier this week.�
A conference call to discuss the company�s first quarter financial
results will be held today, Thursday, Jan. 8, at 9 a.m. Eastern
time (8 a.m. Central time).�A slide presentation will be posted on
the Investor Relations page of Shaw's Web site at www.shawgrp.com
approximately one hour prior to the conference call. Interested
parties may dial 800-471-6718 to listen live to the conference call
or access a live audio webcast on the Investor Relations page of
Shaw's Web site at www.shawgrp.com. A replay of the conference call
will be available by telephone, as well as on the company�s Web
site, approximately one hour after the conclusion of the call. To
listen to a replay of the conference call by telephone, dial
888-843-8996 and use pass code �23572576#.� Calculation of EBITDA
The Shaw Group Inc. defines EBITDA as earnings before interest
expense, income taxes, depreciation and amortization. EBITDA is an
important financial measure used by The Shaw Group Inc. to assess
performance. Although it is calculated using components derived
from our financial statements prepared under generally accepted
accounting principles (GAAP), EBITDA itself is not a GAAP measure.
A table reconciling EBITDA to its most directly comparable GAAP
measure is included in the summarized financial information within
this release. Calculations of EBITDA should not be viewed as a
substitute for calculations under GAAP, including net cash provided
by operations, operating income and net income. In addition, EBITDA
calculations by one company may not be comparable to EBITDA
calculations made by another company. The Shaw Group Inc. is a
leading global provider of technology, engineering, procurement,
construction, maintenance, fabrication, manufacturing, consulting,
remediation and facilities management services for government and
private sector clients in the energy, chemicals, environmental,
infrastructure and emergency response markets. A Fortune 500
company with fiscal year 2008 annual revenues of $7 billion, Shaw
is headquartered in Baton Rouge, La., and employs approximately
26,000 people at its offices and operations in North America, South
America, Europe, the Middle East and the Asia-Pacific region. Shaw
is the power sector industry leader according to Engineering
News-Record's list of Top 500 Design Firms. For further
information, please visit Shaw'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 herein that are not historical facts (including without
limitation statements to the effect that the Company or its
management �believes,� �expects,� �anticipates,� �plans�
�includes�, �foresees�, �should�, �would�, �could� 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. However, the absence of these words does not mean the
statements are not forward looking. 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, including but not limited to current economic
conditions. 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
Statements.��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. � THE SHAW GROUP INC. AND SUBSIDIARIES UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 (In thousands,
except per share amounts) � � Three Months Ended November 30, 2008
2007 Revenues $ 1,900,433 $ 1,712,160 Cost of revenues � 1,712,340
� � 1,577,142 � Gross profit 188,093 135,018 General and
administrative expenses � 73,106 � � 68,888 � Operating income
114,987 66,130 Interest expense (1,745 ) (2,164 ) Interest expense
on Japanese Yen-denominated bonds including accretion and
amortization (9,862 ) (8,892 ) Interest income 3,923 4,815 Foreign
currency translation gains (losses) on Japanese Yen-denominated
bonds, net (161,202 ) (57,238 ) Other foreign currency transaction
gains (losses), net (2,399 ) 1,164 Other income (expense), net �
(1,861 ) � (295 ) Income before income taxes, minority interest and
earnings from unconsolidated entities (58,159 ) 3,520 Provision for
income taxes � (22,698 ) � 2,116 � Income before minority interest
and earnings from unconsolidated entities (35,461 ) 1,404 Minority
interest (5,860 ) (4,982 ) Income from 20% Investment in
Westinghouse, net of income taxes 1,543 4,815 Earnings (losses)
from unconsolidated entities, net of income taxes � (139 ) � 993 �
Net income (loss) $ (39,917 ) $ 2,230 � � Net income (loss) per
common share: Basic $ (0.48 ) $ 0.03 � Diluted $ (0.48 ) $ 0.03 � �
Weighted average shares outstanding: Basic 83,103 80,684 Diluted
83,103 83,575 � THE SHAW GROUP INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS FOR THE THREE MONTHS ENDED NOVEMBER 30,
2008 AND AUGUST 31, 2007 (In thousands, except per share amounts) �
� � November 30, 2008 (Unaudited) August 31, 2008 � ASSETS Current
assets: Cash and cash equivalents $ 817,592 $ 927,756 Restricted
and escrowed cash 13,629 8,901 Accounts receivable, including
retainage, net 900,474 665,870 Inventories 266,936 241,463 Costs
and estimated earnings in excess of billings on uncompleted
contracts, including claims 555,883 488,321 Deferred income taxes
90,111 93,823 Prepaid expenses 36,471 25,895 Other current assets �
41,485 � � 37,099 � Total current assets 2,722,581 2,489,128
Investments in and advances to unconsolidated entities, joint
ventures and limited partnerships 19,543 19,535 Investment in
Westinghouse 1,116,513 1,158,660 Property and equipment, less
accumulated depreciation of $231,357 and $233,755, respectively
271,721 285,550 Goodwill 503,955 507,355 Intangible assets 23,267
24,065 Deferred income taxes 87,851 3,245 Other assets � 95,072 � �
99,740 � Total assets $ 4,840,503 � $ 4,587,278 � � LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $
753,863 $ 731,074 Accrued salaries, wages and benefits 100,433
120,038 Other accrued liabilities 260,139 187,045 Advanced billings
and billings in excess of costs and estimated earnings on
uncompleted contracts 847,266 748,395 Short-term debt and current
maturities of long-term debt � 5,487 � � 6,004 � Total current
liabilities 1,967,188 1,792,556 Long-term debt, less current
maturities 2,105 3,579 Japanese Yen-denominated long-term bonds
secured by Investment in Westinghouse, net 1,325,131 1,162,007
Interest rate swap contract on Japanese Yen-denominated bonds
20,744 8,802 Other liabilities 95,456 101,522 Minority interest
24,969 29,082 Contingencies and commitments Shareholders' equity
Preferred Stock, no par value, 20,000,000 shares authorized; no
shares issued and outstanding - - Common Stock, no par value,
200,000,000 shares authorized; 89,204,997 and 89,195,901 shares
issued, respectively; and 83,501,583 and 83,535,441 shares
outstanding, respectively 1,210,168 1,204,914 Retained earnings
369,459 409,376 Accumulated other comprehensive loss (58,771 )
(9,609 ) Treasury stock, 5,703,414 shares and 5,660,460 shares,
respectively � (115,946 ) � (114,951 ) Total shareholders' equity �
1,404,910 � � 1,489,730 � Total liabilities and shareholders'
equity $ 4,840,503 � $ 4,587,278 � � � � � REVENUES BY GEOGRAPHY
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007
� Three Months Ended November 30, 2008 2007 (In millions) % (In
millions) % United States $ 1,525.1 80 $ 1,343.9 78 Asia/Pacific
Rim 204.8 11 81.1 5 Middle East 107.1 6 195.9 11 Canada 5.8 � 4.4 �
Europe 35.2 2 67.8 4 South America and Mexico 16.6 1 9.3 1 Other �
5.8 � � 9.8 1 Total revenues $ 1,900.4 100 $ 1,712.2 100 � BACKLOG
BY SEGMENT (In millions) � November 30, 2008 % August 31, 2008 % �
Fossil & Nuclear $ 5,870.1 39 $ 6,109.7 39 E&I 4,967.4 33
5,155.4 33 E&C 2,019.4 14 2,175.5 14 Maintenance 1,283.7 9
1,423.3 9 F&M � 675.4 5 � 763.1 5 Total backlog $ 14,816.0 100
$ 15,627.0 100 � REVENUES AND GROSS PROFIT BY SEGMENT FOR THE THREE
MONTHS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 � Three Months
Ended November 30, 2008 2007 � Revenues Fossil & Nuclear $
676.6 $ 598.5 E&I 401.4 389.9 E&C 321.7 296.1 Maintenance
334.1 290.4 F&M 164.7 136.6 Corporate � 1.9 � � 0.7 � Total
revenues $ 1,900.4 � $ 1,712.2 � � Gross profit Fossil &
Nuclear $ 51.8 $ 42.9 E&I 34.5 25.1 E&C 52.4 16.4
Maintenance 11.7 14.8 F&M 35.7 35.1 Corporate � 2.0 � � 0.7 �
Total gross profit $ 188.1 � $ 135.0 � � Gross profit percentage
Fossil & Nuclear 7.7 % 7.2 % E&I 8.6 % 6.4 % E&C 16.3 %
5.5 % Maintenance 3.5 % 5.1 % F&M 21.7 % 25.7 % Corporate � NM
� � NM � Total gross profit percentage � 9.9 % � 7.9 % � � NM - Not
Meaningful � � � REGULATION G DISCLOSURES The Shaw Group Inc.
believes it is important that we discuss our operating results
excluding the Investment in Westinghouse segment. We acquired a 20
percent interest in Westinghouse in October 2006. We have
classified the Investment in Westinghouse as a separate operating
segment. The majority of the activity related to this segment will
be recorded below the operating income line. During the quarter, we
have recorded interest expense, as well as other significant
non-cash charges related to the investment. We believe that
presenting our financial results excluding the Investment in
Westinghouse segment is important to investors and management to
demonstrate the profitability of our other segments, as well as to
point out certain non-cash charges related to this investment. � �
� � The Shaw Group Inc. Reconciliation of Shaw Consolidated Results
to Shaw Excluding Investment in Westinghouse Segment for the three
months ended November 30, 2008 (in millions, except per share data)
� � � � � � Q1 FY 2009 Quarter ended November 30, 2008 Westinghouse
Excluding Consolidated Segment Westinghouse � Revenues $ 1,900.4 $
0.0 $ 1,900.4 Cost of revenues � 1,712.3 � � 0.0 � � 1,712.3 �
Gross profit 188.1 0.0 188.1 � General and administrative expenses
� 73.1 � � 0.1 � � 73.0 � � Operating income (loss) 115.0 (0.1 )
115.1 � Interest expense (1.7 ) 0.0 (1.7 ) Interest expense on
JPY-denominated bonds including accretion and amortization (9.9 )
(9.9 ) 0.0 Interest income 3.9 0.0 3.9 Foreign currency translation
gains (losses) on JPY-denominated bonds, net (161.2 ) (161.2 ) 0.0
Other foreign currency transaction gains (losses), net (2.3 ) 0.0
(2.3 ) Other income (expense), net � (1.9 ) � 0.0 � � (1.9 ) (173.1
) (171.1 ) (2.0 ) Income (loss) before income taxes, minority
interest, earnings (losses) from unconsolidated entities (58.1 )
(171.2 ) 113.1 Provision (benefit) for income taxes � (22.7 ) �
(67.0 ) � 44.3 � � Income (loss) before minority interest and
earnings (losses) from unconsolidated entities (35.4 ) (104.2 )
68.8 � Minority interest (5.9 ) 0.0 (5.9 ) Income from 20%
Investment in Westinghouse, net of income taxes 1.5 1.5 0.0
Earnings (losses) from unconsolidated entities, net of income taxes
� (0.1 ) � 0.0 � � (0.1 ) Net income (loss) � ($39.9 ) � ($102.7 )
$ 62.8 � � Net income (loss) per common share: Basic income (loss)
per common share $ (0.48 ) $ (1.23 ) $ 0.75 � Diluted income (loss)
per common share $ (0.48 ) $ (1.23 ) $ 0.75 � � Weighted average
shares outstanding: Basic 83.1 83.1 83.1 Diluted: 83.1 83.1 83.9 �
The Shaw Group Inc. Reconciliation of Shaw Consolidated Results to
Shaw Excluding Investment in Westinghouse Segment for the three
months ended November 30, 2007 (in millions, except per share data)
� � � � � � Q1 FY 2008 Quarter ended November 30, 2007 Westinghouse
Excluding Consolidated Segment Westinghouse � Revenues $ 1,712.2 $
0.0 $ 1,712.2 Cost of revenues � 1,577.2 � � 0.0 � � 1,577.2 �
Gross profit 135.0 0.0 135.0 � General and administrative expenses
� 68.9 � � 0.0 � � 68.9 � � Operating income (loss) 66.1 (0.0 )
66.1 � Interest expense (2.2 ) 0.0 (2.2 ) Interest expense on
JPY-denominated bonds including accretion and amortization (8.9 )
(8.9 ) 0.0 Interest income 4.8 0.0 4.8 Foreign currency translation
gains (losses) on JPY-denominated bonds, net (57.2 ) (57.2 ) 0.0
Other foreign currency transaction gains (losses), net 1.2 0.0 1.2
Other income (expense), net � (0.3 ) � 0.0 � � (0.3 ) (62.6 ) (66.1
) 3.5 Income (loss) before income taxes, minority interest,
earnings (losses) from unconsolidated entities 3.5 (66.1 ) 69.6
Provision (benefit) for income taxes � 2.1 � � (25.8 ) � 27.9 � �
Income (loss) before minority interest and earnings (losses) from
unconsolidated entities 1.4 (40.3 ) 41.7 � Minority interest (5.0 )
0.0 (5.0 ) Income from 20% Investment in Westinghouse, net of
income taxes 4.8 4.8 0.0 Earnings (losses) from unconsolidated
entities, net of income taxes � 1.0 � � � 0.0 � � 1.0 � Net income
(loss) $ 2.2 � � � ($35.5 ) $ 37.7 � � Net income (loss) per common
share: Basic income (loss) per common share $ 0.03 � $ (0.44 ) $
0.47 � Diluted income (loss) per common share $ 0.03 � $ (0.42 ) $
0.45 � � Weighted average shares outstanding: Basic 80.7 80.7 80.7
Diluted: 83.6 83.6 83.6 � � The Shaw Group Inc. defines EBITDA as
earnings before interest expense, income taxes, depreciation and
amortization. EBITDA is an important financial measure used by The
Shaw Group Inc. to assess performance. Although it is calculated
using components derived from our GAAP financial statements, EBITDA
itself is not a GAAP measure. The following table reflects the
company's calculation of EBITDA and EBITDA percentage. Calculations
of EBITDA should not be viewed as a substitute for calculations
under GAAP, including cash flow from operations, operating income
and net income. In addition, EBITDA calculations by one company may
not be comparable to EBITDA calculations made by another company. �
� Reconciliation of EBITDA calculation for the three months ended
November 30, 2008 � � � � � � � � Q1 FY 2009 � � � � (in millions)
Consolidated Westinghouse Segment Excluding Westinghouse � � Net
Income (Loss) $ (39.9 ) $ (102.7 ) $ 62.8 � Interest Expense 11.6
9.9 1.7 Depreciation and Amortization 12.6 - 12.6 Provision for
Income Taxes (22.7 ) (67.0 ) 44.3 Income Taxes on Unconsolidated
Subs � 0.9 � � � 1.1 � � � (0.2 ) EBITDA $ (37.5 ) � $ (158.7 ) � $
121.2 � � Revenue � 1,900.4 � � N/A � � 1,900.4 � EBITDA % � -2.0 %
� N/A � � 6.4 % � Reconciliation of EBITDA calculation for the
three months ended November 30, 2007 � � � � � Q1 FY 2008 � � � (in
millions) Consolidated Westinghouse Segment Excluding Westinghouse
� Net Income (Loss) $ 2.2 � $ (35.5 ) $ 37.7 � Interest Expense
11.1 8.9 2.2 Depreciation and Amortization 10.4 - 10.4 Provision
for Income Taxes 2.1 (25.8 ) 27.9 Income Taxes on Unconsolidated
Subs � 3.5 � � � 3.1 � � � 0.4 � EBITDA $ 29.3 � � $ (49.3 ) � $
78.6 � � Revenue � 1,712.2 � � N/A � � 1,712.2 � EBITDA % � 1.7 % �
N/A � � 4.6 %
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