Willbros Reports Second Quarter 2013 Results from Continuing Operations

Aug 08, 2013, 17:00 ET from Willbros Group, Inc.

HOUSTON, Aug. 8, 2013 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the second quarter of 2013. The Company reported net income from continuing operations of $1.0 million, or $0.02 per share, on revenue of $487.9 million, compared to a net loss from continuing operations in the second quarter of 2012 of $2.0 million, or ($0.04) per share, on revenue of $450.4 million. The Company reported operating income of $9.4 million for the second quarter of 2013 compared to operating income of $7.5 million in the second quarter of 2012. 

Randy Harl, President and Chief Executive Officer, commented, "We are pleased with the strong operating results generated by our Utility T&D and Professional Services segments, and another consecutive quarter of solid performance in Canada. However, I am disappointed with the performance of our regional service lines in the Oil & Gas segment which negatively impacted our results again this quarter. We have taken actions to resolve the root causes of these issues in the first half of this year and results in the regions for the month of June were breakeven as the loss projects are essentially completed. I expect material improvement from these operations for the remainder of the year.

"Our second quarter results demonstrate the capability of our diversified business model to deliver improved results. The solid performance in three of our segments has generated positive consolidated results. Going forward, we expect continued solid performance in these segments and improved results in our Oil & Gas segment."

Segment Operating Results Oil & Gas For the second quarter of 2013, the Oil & Gas segment reported an operating loss of $18.8 million on revenue of $186.4 million, compared to an operating loss of $3.5 million in the second quarter 2012. The segment results were negatively impacted by additional losses incurred in the regional service lines, in addition to lower utilization in our cross-country pipeline construction operations. Revenue generated from our downstream construction and maintenance activities increased over 40 percent from the second quarter of 2012 as a result of greater turnaround activity, as well as higher utilization of shops and fabrication resources.

Utility T&D The Utility T&D segment generated revenue of $128.3 million, essentially flat compared to a year ago, and $15.6 million of operating income, an improvement of approximately $6.3 million of operating income over the second quarter of 2012. The increase in operating performance is primarily related to expanding margins in our transmission construction which benefited from storm restoration work in Texas and Oklahoma, successful completion of two more of the CREZ projects and the early start on a new transmission construction project in the Texas Panhandle.

Canada The Canada segment reported operating income of $4.3 million, an improvement of $7.2 million over the second quarter of 2012, on revenue of $87.4 million. Contract revenue increased $50.0 million from the second quarter of 2012 resulting in a $128.1 million increase for the first six months compared to last year. Canada delivered a third consecutive quarter of solid operating results as it continues to benefit from its focus on the oil sands mine sites and in situ extraction developments. The improvement in operating income compared to last year was attributable to our specialty construction and integrity services, ongoing infrastructure replacement construction projects and additional maintenance work performed for our key oil sands mining customers. 

Professional Services The Professional Services segment reported operating income of $8.2 million, or 9.4 percent operating margins, an improvement of approximately $3.6 million relative to the second quarter of 2012. Revenue of $87.4 million was a slight increase compared to the second quarter of 2012 largely due to increased activity in our locating service which we expanded into new geographies during the first quarter. In addition to benefiting from expanding our integrity services, including line locating services, operating income for the quarter also improved due to strong performance in our upstream and midstream engineering, right-of-way, survey and government services.

Backlog(2) At June 30, 2013, Willbros maintained backlog from continuing operations at $2.0 billion compared to $2.0 billion at March 31, 2013. Twelve month backlog increased to $919 million at June 30, 2013 compared to $880 million at March 31, 2013. Shortly after the close of the second quarter our Oil & Gas segment was awarded a contract to construct more than 150 miles of 30-inch pipeline from central Oklahoma to the Red River, and our Utility T&D segment won an additional 100+ miles of 345Kv line construction in western Oklahoma. Both projects will be recorded in third quarter backlog.

Credit Facility and Liquidity Effective August 7, 2013, the Company completed the refinancing of its Amended and Restated Credit Agreement by entering into a five-year $150.0 million asset based senior revolving credit facility (the "ABL Credit Facility") maturing in 2018 and a six-year $250.0 million term loan facility (the "2013 Term Loan Facility") maturing in 2019. Proceeds from the 2013 Term Loan Facility were used to repay all indebtedness under the existing term loan facility and revolving credit facility under the Amended and Restated Credit Agreement, to pay fees and expenses incurred in connection with the transactions and for working capital purposes. The ABL Credit Facility was undrawn at close.

Van Welch, Executive Vice President and Chief Financial Officer, commented, "We have completed our refinancing and, with extended debt maturity to 2019, greater flexibility under our covenants, and a $150 million revolver, we are financially sound and have adequate liquidity to execute our plan going forward."

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

What:

Willbros Second Quarter Earnings Conference Call

When:

Friday, August 9, 2013 - 9:00 a.m. Eastern Time

How:

Live via phone - By dialing 480-629-9772 or 877-941-1466 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 August 16, 2013 and may be accessed by calling 303-590-3030 or 800-406-7325 using pass code 4633635#.  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 existing 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 

 Six Months Ended 

 June 30, 

 June 30, 

2013

2012

2013

2012

Income Statement 

Contract revenue

Oil & Gas

$   186,387

$   204,158

$   371,371

$352,863

Utility T&D

128,321

129,836

241,525

238,146

Canada

87,425

37,356

199,420

71,325

Professional Services

87,423

80,074

165,888

163,647

Eliminations

(1,692)

(1,002)

(2,981)

(1,853)

487,864

450,422

975,223

824,128

Operating expenses

Oil & Gas

205,145

207,697

404,700

359,088

Utility T&D

112,693

120,489

224,004

232,362

Canada

83,117

40,266

184,605

77,286

Professional Services

79,238

75,478

157,090

159,471

Eliminations

(1,692)

(1,002)

(2,981)

(1,853)

478,501

442,928

967,418

826,354

Operating income (loss)

Oil & Gas

(18,758)

(3,539)

(33,329)

(6,225)

Utility T&D

15,628

9,347

17,521

5,784

Canada

4,308

(2,910)

14,815

(5,961)

Professional Services

8,185

4,596

8,798

4,176

Operating income (loss)

9,363

7,494

7,805

(2,226)

Other expense

Interest expense, net

(6,922)

(7,113)

(14,612)

(14,990)

Loss on early extinguishment of debt

-

(1,149)

-

(3,405)

Other, net

(308)

(15)

(77)

(339)

(7,230)

(8,277)

(14,689)

(18,734)

Income (loss) from continuing operations before income taxes

2,133

(783)

(6,884)

(20,960)

Provision for income taxes

1,126

1,208

3,738

2,181

Income (loss) from continuing operations

1,007

(1,991)

(10,622)

(23,141)

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

(7,908)

5,699

7,913

6,469

Net income (loss)

(6,901)

3,708

(2,709)

(16,672)

Less: Income attributable to noncontrolling interest

-

(328)

-

(672)

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

$     (6,901)

$      3,380

$     (2,709)

$ (17,344)

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

Income (loss) from continuing operations

$      1,007

$     (1,991)

$    (10,622)

$ (23,141)

Income (loss) from discontinued operations

(7,908)

5,371

7,913

5,797

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

$     (6,901)

$      3,380

$     (2,709)

$ (17,344)

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

Continuing operations

$        0.02

$       (0.04)

$       (0.22)

$    (0.48)

Discontinued operations

(0.16)

0.11

0.17

0.12

$       (0.14)

$        0.07

$       (0.05)

$    (0.36)

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

Continuing operations

$        0.02

$       (0.04)

$       (0.22)

$    (0.48)

Discontinued operations

(0.16)

0.11

0.17

0.12

$       (0.14)

$        0.07

$       (0.05)

$    (0.36)

Cash Flow Data

Continuing operations

Cash provided by (used in)

Operating activities

$     32,067

$         894

$     17,473

$  10,178

Investing activities

$     (2,418)

$     (2,388)

34,634

1,972

Financing activities

$     14,889

$    (27,589)

(44,009)

(60,352)

Foreign exchange effects

$        (291)

$        (236)

(519)

(1,706)

Discontinued operations

$        (335)

$     18,838

(8,349)

24,944

Other Data (Continuing Operations)

Weighted average shares outstanding

Basic

48,587

47,995

48,447

47,888

Diluted

49,235

47,995

48,447

47,888

Adjusted EBITDA from continuing operations(1)

$     22,385

$     19,123

$     31,945

$  24,923

Purchases of property, plant and equipment

2,061

3,999

4,707

7,266

Reconciliation of Non-GAAP Financial Measure

Adjusted EBITDA from continuing operations (1)

Income (loss) from continuing operations attributable to Willbros Group, Inc.

$      1,007

$     (1,991)

$    (10,622)

$ (23,141)

Interest expense, net

6,922

7,113

14,612

14,990

Provision for income taxes

1,126

1,208

3,738

2,181

Loss on early extinguishment of debt

-

1,149

-

3,405

Depreciation and amortization

11,237

11,977

22,307

23,854

DOJ monitor cost

-

-

-

1,586

Stock based compensation

1,977

1,833

2,798

3,917

Restructuring and reorganization costs

58

34

154

136

(Gain) loss on disposal of property and equipment

58

(2,200)

(1,042)

(2,005)

Adjusted EBITDA from continuing operations(1)

$     22,385

$     19,123

$     31,945

$  24,923

Balance Sheet Data

6/30/2013

3/31/2013

12/31/2012

Cash and cash equivalents

$     53,610

$      9,698

$     48,778

Working capital

236,812

217,406

270,512

Total assets

863,054

888,168

978,246

Total debt  

264,842

249,968

303,820

Stockholders' equity

200,961

207,443

206,333

Backlog Data (2)

Total By Reporting Segment

Oil & Gas

$   241,347

$   212,358

$   293,495

Utility T&D

1,079,261

1,169,806

1,257,403

Canada

415,804

395,804

349,520

Professional Services

220,707

228,134

197,752

Total Backlog

$1,957,119

$2,006,102

$2,098,170

Total Backlog By Geographic Area

United States

$1,537,313

$1,606,046

$1,743,906

Canada

415,804

395,804

349,520

Other International

4,002

4,252

4,744

Total Backlog

$1,957,119

$2,006,102

$2,098,170

12 Month Backlog

$   918,974

$   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