THE SHAW GROUP INC. REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS.

BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 31, 1996--The Shaw Group Inc. (NYSE:SGR) today reported record financial results for the fourth quarter and fiscal year ended August 31, 1996.

For the fourth quarter ended August 31, 1996, sales increased 56% to a record $70.4 million over the $45.4 million reported for the fourth quarter of fiscal 1995. Net income increased 40% to $2.8 million compared to $2.0 million earned in the fourth quarter of 1995. Earnings per share were $0.29 for the fourth quarter of fiscal 1996, compared to $0.23 reported for the fourth quarter of fiscal 1995.

For the year ended August 31, 1996, sales increased 64% to a record $222.6 million from $135.5 million in fiscal 1995. Net income more than doubled to $8.8 million compared to $4.3 million earned in fiscal 1996. Earnings per share increased 88% to $0.94, compared to $0.50 per share reported for the year ended August 31, 1995.

Revenues for the fourth quarter and fiscal year ended August 31, 1996 were positively influenced by the further expansion of the Company's international sales, specifically in the electric power sector, and an increase in projects in the domestic chemical and refining sectors.

Alloy Piping Products, Inc., which was acquired during the third quarter of 1996 by Shaw, also contributed to the increase in the Company's sales for the fourth quarter and fiscal year ended August 31, 1996 compared to the same periods of the prior year.

Shaw reported backlog of approximately $154 million at August 31, 1996, which excludes $5 million in joint-venture backlog. This represents a 52% increase over the $101 million that was reported at the end of fiscal 1995. The increase in backlog over the prior year primarily reflects strong momentum in overseas power project bookings, which make up over 57% of the Company's backlog.

J.M. Bernhard, Jr., Shaw's President and Chief Executive Officer, commented, "In 1996 we increased our capacity with the acquisition of the Word Industries fabrication facility, expanded our capabilities with the acquisition of APP, a leading specialty pipe fittings manufacturer, and invested in additional induction pipe bending machines, designed to improve the fabrication process by helping to lower costs and shorten lead times for our customers."

Bernhard continued, "Although we have taken steps to vertically integrate our operations and increase our fabrication capacity through strategic acquisitions, we are encouraged by the growth in our existing operations and are pleased to report that the bidding activity for projects in the international power market and the domestic chemical and refining sectors continues at healthy levels."

The Shaw Group Inc. is a leading supplier of industrial piping systems, serving primarily the electric power, chemical and refining sectors throughout the world. Shaw, which operates primarily through wholly-owned subsidiaries, has fabrication facilities in Louisiana, Oklahoma, South Carolina and Venezuela, and a joint-venture facility in Bahrain. The Company also has a state-of-the-art specialty pipe fittings manufacturing facility in Shreveport, Louisiana, engineering and design offices in New Jersey and Toronto, Canada, and a pipe hanger facility in Texas.

EDITOR'S NOTE 

This press release does not constitute an offer to sell or the solicitation of an offer to buy any Shaw securities, nor shall there be any sale of Shaw securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. A registration statement relating to a public offering of Shaw securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration becomes effective. The offering of securities will be made only by means of a prospectus. A written prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, may be obtained upon issuance of such prospectus by writing Ms. Laurie J. Schultz, Director of Investor Relations, The Shaw Group Inc., 11100 Mead Road , Second Floor, Baton Rouge, Louisiana 70816 or by contacting Ms. Schultz by telephone at [phone].

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this press release that are not historical facts may be forward looking. The forward looking statements are subject to certain risks and uncertainties, including without limitation those identified below, which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of their dates. The following factors could cause actual results to differ materially from historical results or those anticipated: adverse economic conditions, the impact of competitive products and pricing, product demand and acceptance risks, the presence of competitors with greater financial resources, costs and difficulties associated with the integration and administration of distribution arrangements, capacity and supply constraints or difficulties, the results of financing efforts, delays or difficulties in the production, delivery or installation of products, and other risks detailed from time to time in Shaw's Securities and Exchange Commission filings. The Shaw Group Inc. assumes no obligation to update the information included in this press release.

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                  THE SHAW GROUP INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
                ($ in thousands, except per share data)

                               Three-Months Ended     Fiscal Year Ended
                                   August 31,             August 31,
                                 1996      1995          1996    1995

Income:
 Sales                       $70,443  $ 45,464      $222,598  $135,500
 Cost of sales                57,423    36,459       180,835   110,578
   Gross profit               13,020     9,005        41,763    24,922

General and administrative
 expenses                      7,588     4,628        25,202    15,022

 Operating income              5,432     4,377        16,561     9,900

Interest expense              (1,115)     (558)       (3,518)   (2,829)

Income before income taxes     4,317      3,819        13,043    7,071

Provision for income taxes     1,311      1,242         4,370    2,217
Income before earnings (loss) from
 unconsolidated entities       3,006      2,577         8,673    4,854

Earnings (loss) from unconsolidated
 entities                      (183)     (584)            103    (588)

   Net income                 $2,823  $  1,993       $  8,776  $ 4,266

Weighted average number of
 shares outstanding            9,822     8,552          9,325    8,552

Earnings per common share       $.29      $.23           $.94     $.50

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CONTACT: Bret M. Talbot

Chief Financial Officer

or

Laurie J. Schultz

Director of Investor Relations

504/296-1140