Willbros Reports First Quarter 2013 Results from Continuing Operations

May 08, 2013, 17:52 ET from Willbros Group, Inc.

HOUSTON, May 8, 2013 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the first quarter of 2013. The Company reported a net loss from continuing operations of $11.6 million, or ($0.24) per share, on revenue of $487.4 million, compared to a net loss from continuing operations in the first quarter of 2012 of $21.2 million, or ($0.44) per share, on revenue of $373.7 million. The Company reported an improvement in operating income of $8.1 million, generating an operating loss of $1.6 million for the first quarter of 2013, compared to an operating loss of $9.7 million in the first quarter of 2012.  

Randy Harl, President and Chief Executive Officer, commented, "We are pleased that our operating performance demonstrated steady year-over-year improvement again this quarter. The management actions we have taken to address underperforming business units are delivering results. Canada's financial results over the past two quarters are the product of our commitment to improve performance. We intend to replicate this success by hiring additional management talent, strengthening our project management capabilities and expanding our training programs throughout the Company. Our primary objective for 2013 is to generate improved operating results, cash flow and margins."

At the beginning of the year, Willbros reported Professional Services as a fourth reporting segment. The successful expansion of this division has created the critical mass to warrant management oversight as a separate segment. Professional Services provides engineering, procurement, program management, integrity and field services to the oil and gas and electric utility industries. This segment has significant growth potential with opportunities for upstream, midstream and downstream engineering services, and Willbros is a full service provider in the emerging integrity market.

Segment Operating Results

Oil & Gas

For the first quarter of 2013, the Oil & Gas segment reported an operating loss of $14.6 million on revenue of $185.0 million, compared to an operating loss of $2.7 million in the first quarter 2012. Positive performance by our pipeline and facilities businesses was offset by project issues and the impact of poor weather conditions which caused delays and lower productivity in our regional delivery business. Our regional delivery business has experienced rapid growth and has reached an annualized contract revenue run rate in excess of $350 million. This business is the focal point in 2013 of management actions to improve its management oversight, systems and operating performance.

Utility T&D

The Utility T&D segment generated revenue of $113.2 million with $1.9 million of operating income, an improvement of approximately $5.5 million of operating income over the first quarter of 2012.  The operating income increase was led by improved results in both the electric transmission and distribution construction and maintenance businesses in Texas. Losses incurred in the Mid-Atlantic regions due to inclement weather negatively impacted first quarter 2013 results. We anticipate higher revenues and operating margins from new transmission construction backlog as we redeploy capacity currently completing CREZ projects in Texas to an expanded customer base.

Canada

The Canada segment reported operating income of $10.5 million, an improvement of $13.6 million over the first quarter of 2012, on revenue of $112.0 million. For the first quarter of 2013, contract revenue increased $78.0 million from the first quarter of 2012 and $24.1 million from the fourth quarter of last year. Canada delivered another strong quarter of operating results following a solid fourth quarter of 2012. The improvement in operating income was the result of management actions to add management talent, strengthen our project management capabilities and expand our training programs. Our project and specialty services unit as well as the completion of certain infrastructure replacement construction projects in Northern Alberta were the primary contributors to these results.

Professional Services

The Professional Services segment reported operating income of $613 thousand, an improvement of approximately $1.0 million relative to the first quarter of 2012. Revenue of $78.5 million was a marginal decline compared to the first quarter of 2012 due to lower volumes of Engineering, Procurement and Construction (EPC) projects. Operating income for the quarter was improved due to strong performance in our engineering services businesses. We continue to invest in geographic expansion to offer our line locating and other integrity services nationally.

Backlog(2)

At March 31, 2013, Willbros maintained backlog from continuing operations at $2.0 billion compared to $2.1 billion at December 31, 2012. Twelve month backlog of $880 million at March 31, 2013 compared to $1.0 billion at December 31, 2012.

Credit Facility and Liquidity

At March 31, 2013, the Company had $9.7 million of cash and cash equivalents. As of May 8, 2013, our cash in bank net of draw was approximately $57.4 million. Outstanding revolver borrowings were $45.4 million, a decrease of $59 million, with $57.7 million in letters of credit outstanding, resulting in $71.9 million remaining against our $175.0 million Revolving Credit Facility capacity. On June 30, the Revolving Credit Facility commitment will be reduced to $115 million. We believe that improving performance coupled with the additional sales of non-strategic assets and improved cash flow from operations will allow us to operate under the reduced commitment amount subsequent to June 30, 2013. We are currently considering opportunities to strengthen our overall balance sheet. These steps may include additional sales of non-strategic and under-performing assets (including equipment, real property and businesses) as well as accessing capital markets to reduce or refinance our indebtedness.

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Thursday, May 9, 2013 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

What:

Willbros First Quarter Earnings Conference Call

When:

Thursday, May 9, 2013 - 9:00 a.m. Eastern Time

How:

Live via phone - By dialing 480-629-9643 or 866-225-8754 a few minutes prior to the start time and asking for the Willbros' call. Or live over the Internet by logging on to the web address below.

Where:

http://www.willbros.com. The webcast can be accessed from the investor relations home page.

For those who cannot listen to the live call, a replay will be available through May 16, 2013, and may be accessed by calling 303-590-3030 or 800-406-7325 using pass code 4618335#.  Also, an archive of the webcast will be available shortly after the call on www.willbros.com.

Willbros is a specialty energy infrastructure contractor serving the oil, gas, refining, petrochemical and power industries. Our offerings include engineering, procurement and construction (either individually or as an integrated EPC service offering), turnarounds, maintenance, facilities development and operations services. For more information on Willbros, please visit our web site at www.willbros.com.

This announcement contains forward-looking statements.  All statements, other than statements of historical facts, which address activities, events or developments the Company expects or anticipates will or may occur in the future, are forward-looking statements.  A number of risks and uncertainties could cause actual results to differ materially from these statements, including  new legislation or regulations detrimental to the economic operation of refining capacity in the United States; the identification of one or more other issues that require restatement of one or more prior period financial statements; contract and billing disputes; the consequences the Company may encounter if it is unable to make payments required of it pursuant to its settlement agreement of the West African Gas Pipeline Company Limited lawsuit; the existence of material weaknesses in internal control over financial reporting; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; ability to remain in compliance with, or obtain waivers under, the Company's loan agreements; the promulgation, application, and interpretation of environmental laws and regulations; future E&P capital expenditures; oil, gas, gas liquids, and power prices and demand; the amount and location of planned pipelines; poor refinery crack spreads; delay of planned refinery outages and upgrades and development trends of the oil, gas, power, refining and petrochemical industries; as well as other risk factors described from time to time in the Company's documents and reports filed with the SEC.  The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

CONTACT:

Michael W. Collier

Connie Dever

Vice President Investor Relations

Director Investor Relations

Willbros

Willbros

713-403-8038

713-403-8035

TABLE TO FOLLOW

 

WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 Three Months Ended 

 March 31, 

2013

2012

Income Statement 

Contract revenue

Oil & Gas

$   184,984

$   148,705

Utility T&D

113,204

108,310

Canada

111,995

33,969

Professional Services

78,465

83,573

Eliminations

(1,289)

(851)

487,359

373,706

Operating expenses

Oil & Gas

199,555

151,391

Utility T&D

111,311

111,873

Canada

101,488

37,020

Professional Services

77,852

83,993

Eliminations

(1,289)

(851)

488,917

383,426

Operating income (loss)

Oil & Gas

(14,571)

(2,686)

Utility T&D

1,893

(3,563)

Canada

10,507

(3,051)

Professional Services

613

(420)

Operating loss

(1,558)

(9,720)

Other expense

Interest expense, net

(7,690)

(7,877)

Loss on early extinguishment of debt

-

(2,256)

Other, net

231

(324)

(7,459)

(10,457)

Loss from continuing operations before income taxes

(9,017)

(20,177)

Provision for income taxes

2,612

973

Loss from continuing operations

(11,629)

(21,150)

Income from discontinued operations net of provision (benefit) for income taxes

15,821

770

Net income (loss)

4,192

(20,380)

Less: Income attributable to noncontrolling interest

-

(344)

Net income (loss) attributable to Willbros Group, Inc.

$      4,192

$    (20,724)

Reconciliation of net income (loss) attributable to Willbros Group, Inc.

Loss from continuing operations

$    (11,629)

$    (21,150)

Income from discontinued operations

15,821

426

Net income (loss) attributable to Willbros Group, Inc.

$      4,192

$    (20,724)

Basic income (loss) per share attributable to Company shareholders:

Continuing operations

$       (0.24)

$       (0.44)

Discontinued operations

$        0.33

$        0.01

$        0.09

$       (0.43)

Diluted income (loss) per share attributable to Company shareholders:

Continuing operations

$       (0.24)

$       (0.44)

Discontinued operations

$        0.33

$        0.01

$        0.09

$       (0.43)

Cash Flow Data

Continuing operations

Cash provided by (used in)

Operating activities

$    (14,594)

$      9,284

Investing activities

37,052

4,360

Financing activities

(58,898)

(32,763)

Foreign exchange effects

(228)

(1,470)

Discontinued operations

(8,014)

6,106

Other Data (Continuing Operations)

Weighted average shares outstanding

Basic

48,307

47,781

Diluted

48,307

47,781

Adjusted EBITDA from continuing operations(1)

$      9,560

$      5,800

Purchases of property, plant and equipment

2,646

3,267

Reconciliation of Non-GAAP Financial Measure

Adjusted EBITDA from continuing operations (1)

Loss from continuing operations attributable to Willbros Group, Inc.

$    (11,629)

$    (21,150)

Interest expense, net

7,690

7,877

Provision for income taxes

2,612

973

Depreciation and amortization

11,070

11,877

Loss on early extinguishment of debt

-

2,256

DOJ monitor cost

-

1,586

Stock based compensation

821

2,084

Restructuring and reorganization costs

96

102

(Gain) loss on disposal of property and equipment

(1,100)

195

Adjusted EBITDA from continuing operations

$      9,560

$      5,800

Balance Sheet Data

3/31/2013

12/31/2012

Cash and cash equivalents

$      9,698

$     48,778

Working capital

217,406

270,512

Total assets

888,168

978,246

Total debt

249,968

303,820

Stockholders' equity

207,443

206,333

Backlog Data (2)

Total By Reporting Segment

Oil & Gas

$   212,358

$   293,495

Utility T&D

1,169,806

1,257,403

Canada

395,804

349,520

Professional Services

228,134

197,752

Total Backlog

$2,006,102

$2,098,170

Total Backlog By Geographic Area

United States

$1,606,046

$1,743,906

Canada

395,804

349,520

Other International

4,252

4,744

Total Backlog

$2,006,102

$2,098,170

12 Month Backlog

$   880,021

$1,010,365

(1)

Adjusted EBITDA from continuing operations is defined as income (loss) from continuing operations before interest expense, income tax expense (benefit) and depreciation and amortization, adjusted for items broadly consisting of selected items which management does not consider representative of our ongoing operations and certain non-cash items of the Company.  These adjustments are included in various performance metrics under our credit facilities and other financing arrangements.  Management uses Adjusted EBITDA from continuing operations as a supplemental performance measure for comparing normalized operating results with corresponding historical periods and with the operational performance of other companies in our industry and for presentations made to analysts, investment banks and other members of the financial community who use this information in order to make investment decisions about us. Adjusted EBITDA from continuing operations is not a financial measurement recognized under U.S. generally accepted accounting principles, or U.S. GAAP.  When analyzing our operating performance, investors should use Adjusted EBITDA from continuing operations in addition to, and not as an alternative for, net income, operating income, or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.  Because all companies do not use identical calculations, our presentation of Adjusted EBITDA from continuing operations may be different from similarly titled measures of other companies.

(2)

Backlog is anticipated contract revenue from uncompleted portions of existing contracts and contracts whose award is reasonably assured.  Master Service Agreement ("MSA") backlog is estimated for the remaining term of the contract.  MSA backlog is determined based on historical trends inherent in the MSAs, factoring in seasonal demand and projecting customer needs based on ongoing communications.

 

 

SOURCE Willbros Group, Inc.



RELATED LINKS

http://www.willbros.com