Willbros Reports First Quarter 2012 Results from Continuing Operations

HOUSTON, May 7, 2012 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the first quarter of 2012. The Company recorded a net loss from continuing operations in the first quarter of $23.0 million, or $0.48 per share, on revenue of $419.1 million compared to a loss from continuing operations of $37.4 million, or $0.79 per share, in the first quarter of 2011.

For the first quarter of 2012, the operating loss was $10.6 million, an improvement of almost 50 percent compared to a loss of $20.6 million in the first quarter of 2011. The operating improvement in the first quarter was attributed to better performance across all three segments, especially in the Oil & Gas segment which produced positive operating income in a seasonally weak quarter.

Randy Harl, President and Chief Executive Officer, commented, "We delivered improved first quarter results relative to last year, largely as a result of regional expansion of our Oil & Gas segment. Our objective to optimize our upstream model to produce positive results in the seasonally weak quarters is delivering the results we envisioned. We generated operating profit from our upstream businesses in the first quarter by taking advantage of growth in domestic hydrocarbon production and expanding our services and regional footprint into the liquids-rich regions in the United States.   Additionally, we are benefiting from broad improvements in our Utility T&D segment and margins for new work in Canada are expanding. Our Utility T&D segment posted a 31 percent improvement in operating results, driven largely by increased margins and higher resource utilization in the Texas market, where we continue to benefit from the CREZ build-out. In Canada, tighter cost controls and improved project management are having a positive impact on our operations in the oil sands.

"Looking ahead, we have good visibility with $2.3 billion of work in backlog. We booked over $639 million of new work during the first quarter, maintaining a positive book-to-bill ratio despite a revenue increase of 29 percent over last year, and we continue to experience higher levels of bid activity consistent with our exposure to the Canadian oil sands, the liquids-rich development plays in the United States and the robust expansion of the electric transmission grid. For the balance of 2012 we expect to see moderate growth in revenue, with emphasis on improving our execution of the work in backlog."

Backlog(2)

At March 31, 2012, Willbros reported backlog from continuing operations of $2.3 billion compared to $2.2 billion at December 31, 2011. Twelve month backlog increased 13% to $980.8 million at March 31, 2012 compared to $865.1 million at December 31, 2011.

Segment Operating Results

Oil & Gas

For the first quarter of 2012, the Oil & Gas segment reported operating income of $846 thousand on revenue of $246.9 million. First quarter results improved significantly over the $9.3 million operating loss on revenue of $167.6 million in the comparable period of 2011. The improvement is the result of our regional expansion strategy and the resurgence of our facilities construction business, but also a return to positive operating performance in downstream engineering We continue to experience increased demand for all of our services, especially for engineering, EPC and construction.

Utility T&D

For the first quarter of 2012, the Utility T&D segment reported an operating loss of $8.4 million on revenue of $139.3 million, a 31 percent operating improvement relative to the same period in 2011. This improvement was driven by higher utilization of resources in our transmission and cable restoration businesses and higher margins associated with work performed on the CREZ build-out. Additionally, recent cost reductions and productivity improvement initiatives in the Texas distribution business should contribute $3 to $5 million in savings by year-end.

Canada

For the first quarter of 2012, the Canada segment reported an operating loss of $3.1 million on revenue of $34.1 million, a substantial improvement compared to an operating loss of $5.1 million on revenue of $37.3 million in the first quarter of 2011. This improvement was attributable to improved margins and stronger project management.  In addition, future performance is anticipated to improve in the second half of this year as we add quality backlog with stronger embedded contract margins.

Liquidity

At March 31, 2012, the Company had $48.9 million of cash and cash equivalents and access to $25.0 million in cash under the revolver included in its Credit Facility. As part of the March 4, 2011 amendment to its Credit Facility, the Company agreed to limit its cash borrowings to $25.0 million plus amounts to pay the 6.5% Senior Notes that mature in December 2012 and $59.4 million paid to the 2.75% Senior Notes holders when they exercised their put rights in the first quarter of 2011. The $25.0 million borrowing restriction is lifted when the Company's total leverage ratio, as defined, reaches 3.0 to 1.0, or less. In the first quarter of 2012, the Company paid an additional $30.0 million against its term loan and the total leverage ratio for the period ending March 31, 2012 was 2.82.

Guidance

Van Welch, Willbros Chief Financial Officer, provided expectations for 2012, "We continue to see meaningful improvement in our year-over-year quarterly results as we reduce the impact of seasonality on our business model and improve our operating performance. Our second quarter results should register a significant operating improvement versus the second quarter of 2011 and we expect to deliver operating income in the range of $14.0 to $16.0 million.  We continue to expect annual revenue to range from $1.7 to $1.9 billion, full year positive operating income in all three segments and full year debt reduction of approximately $50.0 to $100.0 million by the end of the year."

Willbros Group, Inc. is an independent contractor serving the oil, gas, power, refining and petrochemical industries, providing engineering, construction, turnaround, maintenance, life-cycle extension services and facilities development and operations services to industry and government entities worldwide. 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  the potential for additional investigations and lawsuits; disruptions to the global credit markets; the untimely filing of financial statements; the global economic downturn; fines and penalties by government agencies; 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 integration and operation of InfrastruX; the consequences the Company may encounter if it is unable to make payments required of it pursuant to its settlement agreement of the West Africa 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 and indentures; 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; the effective tax rate of the different countries where the Company performs work; development trends of the oil, gas, power, refining and petrochemical industries; and changes in the political and economic environment of the countries in which the Company has operations; 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.

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SOURCE Willbros Group, Inc.